ANNUAL
COMPREHENSIVE
FINANCIAL
REPORT
YEAR ENDED JUNE 30, 2023
RIVERSIDE, CALIFORNIA
CITY OF RIVERSIDE, CALIFORNIA
ANNUAL COMPREHENSIVE FINANCIAL REPORT
FOR FISCAL YEAR ENDED JUNE 30, 2023
Prepared by the Finance Department
Kristie Thomas, Finance Director/Assistant Chief Financial Officer 3900 Main Street, Riverside, California 92522 (951) 826-5660
CITY OF RIVERSIDE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
Page
INTRODUCTORY SECTION
Letter of Transmittal................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................i GFOA Certificate of Achievement................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................viii Legislative and City Officials................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ix Organizational Chart................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................ix
FINANCIAL SECTION
Independent Auditors' Report................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................1 Management's Discussion and Analysis................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................5 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................20 Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................21 Fund Financial Statements:
Balance Sheet - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................22 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................23 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................24 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................25 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual - General Fund................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................26 Statement of Net Position - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................27 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................29 Statement of Cash Flows - Proprietary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................30 Statement of Net Position - Fiduciary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................32 Statement of Changes in Net Position - Fiduciary Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................33 Notes to Basic Financial Statements................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................34 Required Supplementary Information (Unaudited):
Schedule of Changes in Net Pension Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................83 Schedule of Pension Plan Contributions................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................85 Schedule of Changes in Total OPEB Liability and Related Ratios................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................86
CITY OF RIVERSIDE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
PAGE
Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Non-Major Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................88 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................90 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Non-Major Special Revenue Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................92 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual - Capital Project Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................95 Combining Statement of Net Position - Non-Major Enterprise Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................98 Combining Statement of Revenues, Expenses, and Changes in Net Position - Non-Major Enterprise Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................100 Combining Statement of Cash Flows - Non-Major Enterprise Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................101 Combining Statement of Net Position - Internal Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................104 Combining Statement of Revenues, Expenses, and Changes in Net Position - Internal Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................105 Combining Statement of Cash Flows - Internal Service Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................106 Balance Sheet - Combining General Fund Schedule................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................108 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Combining General Fund Schedule................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................109 Balance Sheet - Combining Capital Outlay Fund Schedule................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................110 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Combining Capital Outlay Fund Schedule................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................111
STATISTICAL SECTION
Net Position by Component................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................113 Changes in Net Position................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................114 Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................116 Changes in Fund Balances - Governmental Funds................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................117 Business-Type Activities - Electricity Revenues by Source................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................118 Governmental Activities - Tax Revenue by Source................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................119 Taxable Sales by Category................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................120
CITY OF RIVERSIDE
ANNUAL COMPREHENSIVE FINANCIAL REPORT
YEAR ENDED JUNE 30, 2023
TABLE OF CONTENTS
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Assessed Value and Estimated Actual Value of Taxable Property................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................121 Direct and Overlapping Property Tax Rates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................122 Principal Property Taxpayers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................123 Property Taxes Levies and Collections................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................124 Electricity Sold by Type of Customer................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................125 Electricity Rates................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................126 Top 10 Electricity Customers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................127 Ratios of Outstanding Debt by Type................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................128 Ratios of General Bonded Debt Outstanding................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................129 Direct and Overlapping Governmental Activities Debt................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................130 Legal Debt Margin Information................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................132 Pledged-Revenue Coverage................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................133 Demographic and Economic Statistics................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................134 Principal Employers................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................135 Full-Time Equivalent City Government Employees by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................136 Operating Indicators by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................137 Capital Asset Statistics by Function................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................................138
November 8, 2023
To the Honorable Mayor, Members of the City Council and Citizens of the City of Riverside:
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Riverside (the City) for the fiscal year ended June 30, 2023.
This report consists of management’s representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a rational basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the City ’s assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The City’s financial statements have been audited by Lance, Soll & Lunghard, LLP, a firm of certified public accountants. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion on the City’s financial statements for the fiscal year ended June 30, 2023. The independent auditors' report is presented as the first component of the financial section of this ACFR.
The independent audit of the financial statements of the City was part of the federally mandated “Single Audit” designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only o n the fair presentation of the financial statements, but also on internal controls and compliance with legal requirements, with emphasis on those involving the administration of federal awards/grants. These reports will become available in the City’s separately issued Single Audit Report.
Management has provided an overall analysis of the financial statements in the form of Management’s Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with this section. The City’s MD&A can be found immediately following the independent auditors’ report.
Profile of the City of Riverside
The City of Riverside, incorporated on October 11, 1883, is located in the western portion of Riverside County, about 60 miles east of Los Angeles. The City currently occupies a land area of 81.507 square miles.
The City operates under the council-manager form of government, with a seven-member council elected by ward for four-year overlapping terms. The mayor is elected at large for a four-year term and is the presiding officer of the Council but does not have a vote except in the case of a tie. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, City Attorney, and City Clerk. The City Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the City, and for appointing the heads of various departments. The Council is elected on a non-partisan basis. i
The City p rovides a full range of services which include general government, public safety ( police, fire, disaster preparedness, and building inspection), construction and maintenance of highways and streets, economic development, culture and recreation, electric, water, airport, refuse, sewer, and senior citizen/handicap transportation. In addition to general City a ctivities, the Council is financially a ccountable for the Riverside Housing Authority, Riverside Public Financing Authority, Riverside Municipal Improvements Corporation, and the Successor Agency, which was formed to hold the assets of the former Redevelopment Agency; therefore, these entities are included as an integral part of the City’s financial statements. Additional information on these legally separate entities can be found in Note 1 in the Notes to Basic Financial Statements.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for all departments within the general, special revenue, and capital project funds. Formal budgets are not employed for debt service funds because debt indenture provisions specify payments. The permanent fund is not budgeted.
Biennially, during the period December through February, department heads prepare estimates of required appropriations for the following two-year budget cycle. These estimates are compiled into a proposed operating budget that includes a summary of proposed expenditures and financial resources, as well as historical data for the preceding budget cycle. At least thirty-five days prior to the beginning of the fiscal year, the City Manager provides the proposed budget in writing to the City Council for review, followed by presentation at a City Council meeting. Following Council review, a public hearing is set to obtain citizen comments. The City C ouncil generally c onducts the public hearing and adopts the budget during one of its June meetings. The City Manager is legally authorized to transfer budgeted amounts between divisions and accounts within the same department and fund over the course of the fiscal year. Transfer of appropriations between departments or funds and increased appropriations must be authorized by the City Council. Expenditures may not legally exceed budgeted appropriations within a fund. All appropriations shall lapse at the end of the fiscal year to the extent they have not been expended or lawfully encumbered, except for appropriations for capital projects which shall continue to their completion. For the general fund, this comparison is presented on page 26 as part of the basic financial statements for the governmental funds. For governmental funds other than the general fund, with appropriated annual budgets, this comparison is presented in the governmental fund subsection of this report, which begins on page 92.
Local economy: The City is located in Inland Southern California, which consists of Riverside and San Bernardino Counties (the “MSA”). The population of Inland Southern California, at approximately 4.6 million, is larger than 26 states. The population of the City is 313,676 which places it as the 12th largest in California. As one of largest cities in the region, Riverside serves as a major economic hub and driver of growth. Its diverse economy encompasses a wide range of industries, including healthcare, education, manufacturing, and logistics, which not only provides local employment opportunities but also bolsters the broader Southern California economy. Additionally, Riverside's strategic location as a transportation and logistics hub, with access to major highways and distribution centers, demonstrates its critical role in facilitating the movement of goods within the region.
The City of Riverside saw an increase in the unemployment rate from 3.8% as of July 2022 to 4.5% as of July 2023. The City's unemployment rate remains lower than the State of California (4.8%) and the County of Riverside (5.0%), but higher than the United States (3.8%). The primary drivers for the decrease in employment in the Riverside metro area's nonfarm payrolls were in the categories of trade, transportation, and utilities; manufacturing; financial activities; and information, which saw decreases in employment from July 2022 to July 2023.
Consumer prices continue to increase at levels not seen in decades. In the Riverside metro area, there was an overall increase in the consumer price index of 3.4%, with food prices increasing by 5.4%, and energy prices decreasing by 9.1%, compared to the United States city average, which experienced an overall increase of 3.2%, with an increase of 4.9% in food prices, and a decrease of 12.5% in energy prices. ii
In September 2023, Riverside home prices were up 4.3% compared to last year, selling for a median price of $605,000. On average, homes in Riverside currently sell after 22 days on the market compared to 39 days last year. There were 151 homes sold in September this year, down from 236 last year.
Goals and Vision: On October 20, 2020, Council approved the Envision Riverside 2025 Strategic Plan, which is comprised of two components:
1. City Council Strategic Policy, which sets forth the priorities and policy direction of the City Council to advance Riverside’s potential and to frame the work efforts over the next five years including the Vision, Cross-Cutting Threads, Strategic Priorities, Indicators, and Goals; and
2. Operational Workplan, which sets forth envisioned actions to be carried out by City staff to implement the City Council Strategic Policy, as well as related metrics to track the trendlines of progress toward achieving City Council priorities and includes the Actions and Performance Measures which will be evaluated and updated by the City Manager on an as-needed basis in conjunction with the City’s budget cycle.
Envision Riverside 2025 Strategic Plan Vision: Riverside is a city where every person is respected and cherished, where equity is essential to community well-being, where residents support one another, and where opportunities exist for all to prosper. In Riverside, everyone comes together to help the community, economy, and environment reach their fullest potential for the public good.
Cross-Cutting Threads: Major themes that should be reflected in all our outcomes include Community Trust, Equity, Fiscal Responsibility, Innovation, and Sustainability and Resiliency.
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Strategic Priorities and Indicators
Arts, Culture and Recreation Indicators: Community Well-Being Indicators: Economic Opportunity Indicators:
Lifelong Learning Housing Supply and Attainability Workforce Development Shared Uses and Partnerships Public Safety Business Development and Success Arts and Cultural Opportunities Public Health Local Investment Access to Parks, Trails and Open Spaces Placemaking Regional Partnerships Programs and Amenities Homelessness Economic Mobility Household Resilience
Environmental Stewardship Indicators: High Performing Government Indicators:
Infrastructure, Mobility, and Connectivity
Indicators:
Water Quality, Supply, Efficiency and Reliability Community Centered Services Access to Transportation Choices Climate Resiliency, Carbon Footprint and Air Quality Adaptive Organization Infrastructure Quality and Reliability Usage, Condition and Quality of Public Lands Financial Health Outside Investment Local Food System Vitality Equity in Delivery of City Services Smart City Ecosystem Environmental Justice Civic Engagement Greening Facilities Renewable Resource Usage and Waste Reduction City Team Engagement Fleet and Systems With the adoption of the Priority Based Budgeting methodology, the City Council's Strategic Priorities assume a pivotal role in resource allocation decisions, guiding the budget development process for future fiscal years.
Long-term financial planning: The financial results for fiscal year 2022/23 underscore the City's substantial recovery from the impacts of the COVID-19 pandemic. Key revenue streams that bore the brunt of the pandemic's impact, including transient occupancy tax, recreation revenue, and developer fees, have rebounded to pre-pandemic activity l evels. After experiencing a pandemic-induced decline in fiscal year 2019/20, sales tax experienced an unconventional two-year surge in fiscal years 2020/21 and 2021/22, before returning to a more conventional growth rate of 3% in fiscal year 2022/23.
Nevertheless, the uptick in revenues has been somewhat overshadowed by the backdrop of persistently high inflation and corresponding interest rate hikes by the Federal Reserve, employed as a measure to mitigate the effects of escalating prices.
Since the pandemic, the City, along with other municipalities, has experienced recruitment and hiring challenges, resulting in substantial personnel savings.
As a result of these savings and the increase in sales tax revenue, in mid-2023 the City a llocated general fund resources of $10 million toward street improvement projects; $5 million to the refuse fund for the purchase of capital equipment; and $2 million to the parking fund to addres deferred maintenance needs. In April 2023, the City Council approved increased parking rates with the aim of achieving financial self-sustainability for the public parking fund.
The City adopted a biennial budget spanning fiscal years 2022/23 and 2023/24. As part of its biennial budget process, the City updates the second year of the budget before the beginning of the fiscal year. An update to the second year of an adopted biennial budget is necessary to ensure the City is proactive and responsive to financial and operational changes. Because the City operates on a biennial budget, amendments to the second fiscal year are typically minor and focus on the following:
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Reviewing and adjusting forecasts of major revenue sources. Incorporating the financial impact of City Council actions taken during the fiscal year. Addressing new and significant changes in the operating needs of City departments. Reviewing and re-prioritizing capital project funding.
The City's amended 2023/24 budget totals $1.38 billion, including the City's operating budget and planned capital projects. In the general fund, revised revenue estimates based on increased sales tax revenue and updated revenue trends added approximately $15 million in available resources. This enabled the City to expand library hours, allocate resources toward economic development, increase security at libraries and recreational facilities, and address other critical needs. The City continues to plan for the future with investments in reserves, including an infrastructure reserve balance of $20.6 million, technology reserve of $3 million, and budgeted contributions to the Section 115 Trust for the long-term management of retirement costs.
CalPERS investment gains of 21.3% in fiscal year 2020/21 resulted in a decrease in the City's required unfunded accrued liability (UAL) payment for fiscal year 2022/23. The City's independent actuary provided UAL payment projections that incorporated actual and potential CalPERS investment returns for fiscal years 2021/22 and 2022/23. As part of the 2023/24 budget amendment, staff analyzed the actuary's projections and the pension obligation bonds (POB) payment schedule, determining a feasible amount and optimal series of Section 115 Trust contributions and withdrawals to smooth the fiscal impact of the payment obligations. The proposed smoothing is projected to result in level payments in the general fund of $45 million annually for a period of 12 years, from fiscal year 2023/24 through fiscal year 2035/36. It is important to note that the required UAL contributions will vary based on actual CalPERS investment returns; Section 115 contributions will help to smooth the fiscal impact of spikes in the required UAL payments in future years.
In September 2023, the City Council approved new 5-year rate plans for the electric, water, and refuse funds. The rate increases will enhance the financial stability o f each of the enterprise funds, supporting increases in operational costs as well as investment in capital infrastructure. In conjunction with the adoption of the water rate plan, the City Council directed that all future water general fund transfer collections be placed in a reserve account pending the outcome of pending litigation (refer to Note 25 in the Notes to Basic Financial Statements). Staff will consider the impact of the approximate $8.5 million annual loss of revenue in the general fund during the development of the next biennial budget.
American Rescue Plan Act (ARPA): O n March 11, 2021, President Biden passed the $1.9 trillion American Rescue Plan Act (ARPA), which included sending checks to families and offering small business support to stimulate demand and counter the country’s high unemployment. The ARPA established the Coronavirus State and Local Fiscal Recovery Funds (SLFRF), which provide a combined $350 billion in assistance to eligible state, local, territorial, and Tribal governments to assist in the recovery f rom economic and health impacts of the COVID-19 pandemic by p roviding resources to address impacts resulting from the crisis. The City received one-time funding of approximately $73.5 million from ARPA with the first installment of $36.7 million received in June 2021 and $36.8 million received in June 2022. The City may use the funds to best support the needs of the community providing the use of the funds aligns with one of the following four statutory categories:
1. To respond to the COVID-19 public health emergency or its negative economic impacts;
2. To respond to workers performing essential work during the COVID-19 public health emergency by providing premium pay to eligible workers of the recipient that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work;
3. For the provision of government services, to the extent of the reduction in the revenue of such recipients due to the COVID-19 public health emergency , relative to revenues collected in the most recent full fiscal year of the recipient prior to the emergency; or
4. To make necessary investments in water, sewer, or broadband infrastructure. v
On November 9, 2021, the City Council approved the ARPA spending plan for the first allocation in the amount of $36.7 million. On February 7, 2023, the City Council approved the ARPA spending plan for the second allocation in the amount of $36.8 million. On October 10, 2023, the City Council approved the reallocation for various spending plan items based on a review of activity to date and in process, as well as reassessment of needs. Below is a consolidation of the funding breakdown by Expenditure Category
1. Public Health $ 2,108,117 %2.87
2. Negative Economic Impacts 27,675,000 37.64
3. Public Health Negative Economic Impacts: Public Sector Capacity 400,000 0.54
4. Premium Pay - -
5. Infrastructure 10,000 0.01
6. Revenue Replacement 43,022,071 58.51
7. Administration 320,000 0.44
Total $ 73,535,188 %100.00
The Final Rule was issued on January 6, 2022 and became effective on April 1, 2022. Some key changes include:
The final rule offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation.
In some cases, enumerated eligible uses included in the interim f inal rule under responding to the public health emergency h ave been re- categorized in the organization of the final rule to enhance clarity. In addition to programs and services, the final rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID- 19 public health or economic response.
The final rule provides an expanded set of households and communities that are presumed to be “impacted” and “disproportionately impacted” by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities without requiring additional analysis. The final rule provides a broader set of uses available for these communities as part of COVID-19 public health and economic response in all impacted communities and making certain community d evelopment and neighborhood revitalization activities eligible for disproportionately impacted communities.
The final rule also allows for a broader set of uses to restore and support government employment, including hiring above a recipient’s pre- pandemic baseline, providing funds to employees that experienced pay cuts or furloughs, avoiding layoffs, and providing retention incentives.
On August 10, 2023, the U.S. Department of Treasury r eleased the 2023 Interim Final Rule that implements three new eligible uses authorized in the Consolidated Appropriations Act, 2023. The new eligible uses allow recipients to use SLFRF funds for emergency relief from natural disasters, community development, and surface transportation projects. The existing eligible uses are generally unchanged, and recipients may continue to use SLFRF funds in accordance with the 2022 Final Rule.
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Awards and Acknowledgements
The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting (Program) to the City for its annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2022. This was the seventeenth consecutive year that the City has received this prestigious award. The City received this award for publishing an easily readable and efficiently organized ACFR that satisfied both Generally Accepted Accounting Principles (GAAP) and applicable legal requirements. The award is valid for a period of one year only. We believe that our current ACFR continues to meet the Program’s requirements and we are submitting it to the GFOA again this year.
The City is pending the Government Finance Officers Association (GFOA) Award for Outstanding Achievement in Popular Annual Financial Reporting for its Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2022. The City expects to receive this award for the sixth time for the June 30, 2022 report once reviewed and received by t he GFOA. This is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. The Award is valid for a period of one year only. We believe that our current PAFR continues to meet the Program's requirements and we are submitting it to the GFOA again this year.
The City r eceived the GFOA’s Distinguished Budget Presentation Award for its 2022-2024 Biennial Budget document, which covers the fiscal years commencing on July 1, 2022 and concluding June 30, 2024. To earn this distinguished recognition, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication tool.
The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department and oversight from the City Manager’s Office. We would like to express our appreciation to all members of the department who assisted and contributed to its preparation. Credit also must be given to the Budget Engagement Commission and the Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City’s finances.
Respectfully submitted,
Kristie Thomas
Finance Director/Assistant Chief Financial Officer
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The Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of
Achievement for Excellence in Financial Reporting to the City of Riverside for our Annual Comprehensive Financial Report for the fiscal year ended June 30, 2022.
In order to be awarded a Certificate of Achievement, a
governmental unit must publish an easily readable and efficiently organized Annual Comprehensive Financial Report, whose
contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements.
A Certificate of Achievement is valid for a period of one year only. We believe our current report continues to meet the Certificate of Achievement Program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.
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LEGISLATIVE OFFICIALS
Patricia Lock Dawson ......................................................................Mayor Erin Edwards ....................................................Councilmember – Ward 1 Clarissa Cervantes ...........................................Councilmember – Ward 2 Ronaldo Fierro ..................................................Councilmember – Ward 3 Chuck Conder ...................................................Councilmember – Ward 4 Gaby Plascencia ...............................................Councilmember – Ward 5 Jim Perry ...........................................................Councilmember – Ward 6 Steve Hemenway ..............................................Councilmember – Ward 7
CITY OFFICIALS
Mike Futrell ..........................................................................City Manager* Rafael Guzman......................................................Assistant City Manager Kris Martinez..........................................................Assistant City Manager Edward Enriquez ........................Assistant City Manager, CFO/Treasurer Donesia Gause..........................................................................City Clerk* Phaedra Norton ....................................................................City Attorney* Todd Corbin ..........................................General Manager - Public Utilities Larry V. Gonzalez................................................................Chief of Police Carl Carey.........................................................General Services Director Erin Christmas ................................................................... Library Director Pamela Galera..................Parks, Recreation & Community Svcs Director Kristie Thomas ........................................Finance Director/Assistant CFO Rene Goldman ...............................................Human Resources Director George Khalil .......................................................Chief Innovation Officer Gilbert Hernandez ...................................................Public Works Director Michael Moore ............................................................................ Fire Chief Robyn Peterson..............................................................Museum Director Jennifer Lilley...................Community & Economic Development Director *Appointed by City Council
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Opinions
Basis for Opinions
Government Auditing Standards
Emphasis of Matter
Change in Accounting Principle
Subscription Based Information Technology Arrangements
1 Responsibilities of Management for the Financial Statements Auditor’s Responsibilities for the Audit of the Financial Statements Government Auditing Standards
Government Auditing Standards
2 Required Supplementary Information
Supplementary Information
Other Information
3 Government Auditing Standards
Government Auditing Standards
Government Auditing Standards
4 Management's Discussion and Analysis
(Unaudited)
As management of the City, we offer this narrative overview and analysis of financial activities for the fiscal year ended June 30, 2023. We encourage readers to consider the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found on page i of this report.
All amounts, unless otherwise indicated, are expressed in thousands of dollars (0,000).
Overview of the Financial Statements
This discussion and analysis is intended to serve as an introduction to the City’s basic financial statements, comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also contains certain supplementary information.
Government-wide financial statements - The government-wide financial statements are designed to provide readers with a broad overview of the City’s finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City’s assets, liabilities, and deferred inflows and outflows of resources, with the difference reported as net position. Over time, increases or decreases in the City ’s net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City’s net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide financial statements distinguish functions of the City t hat are principally s upported by t axes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, highways and streets, and culture and recreation. The business-type activities of the City include Electric, Water, Sewer, Airport, Refuse, Transportation, Public Parking, and Civic Entertainment Funds.
The government-wide financial statements include the activities of the City and three blended component units, which consist of the Riverside Housing Authority, Riverside Public Financing Authority, and the Riverside Municipal Improvements Corporation. Although legally s eparate, these entities function for all practical purposes as departments of the City and therefore have been blended as part of the primary government. The Successor Agency to the Redevelopment Agency of the City of Riverside (Successor Agency) is also included as a fiduciary component unit since it would be misleading to exclude the Successor Agency due to the nature and significance of the relationship between the City and the Successor Agency. The activity of the Successor Agency is reported with the City’s fiduciary funds, which is not included in the government-wide statements since the resources of those funds are not available to support the City’s own programs.
Both the Governmental Activities and the Business-Type Activities are presented on the accrual basis of accounting, a basis of accounting that differs from the modified accrual basis of accounting used in presenting governmental fund financial statements. Note 1 of the Notes to Basic Financial Statements fully describes these bases of accounting. Proprietary funds, discussed below, also follow the accrual basis of accounting.
The government-wide financial statements can be found on pages 20 - 21 of this report.
Fund financial statements - A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental, proprietary, and fiduciary. 5 Governmental funds - Governmental funds a re used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year.
It is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. Reconciliations to facilitate this comparison are provided for both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances. The major reconciling items relate to capital assets and debt. In the Governmental Funds, acquisitions of capital assets are treated as “expenditures” because upon purchase of a capital asset, cash used for the acquisition is no longer available for other purposes.
The issuance of debt provides cash, which is now available for specified purposes. Accordingly, at the end of the fiscal year, the unrestricted fund balances of the Governmental Funds reflect spendable resources available for appropriation by t he City C ouncil. Spendable balances are not presented on the face of the government-wide financial statements.
The City maintains fifteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Capital Outlay Fund, and General Debt Service Fund which are major funds. Data from the other twelve governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and can be found on pages 88 - 96 in this report.
The City adopted an annual appropriated budget for its General Fund for the Year ended June 30, 2023. A budgetary comparison statement has been provided to demonstrate compliance with this budget.
The governmental fund financial statements can be found on pages 22 - 25 of this report.
Proprietary funds - The City maintains two different types of proprietary funds, enterprise and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for Electric, Water, Sewer, Airport, Refuse, Transportation, Public Parking, and Civic Entertainment services. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for self-insured insurance programs, central stores, and its fleet of vehicles. Because these services predominantly b enefit governmental rather than business-type functions, they h ave been included within governmental activities in the government-wide financial statements. Internal service funds are presented as proprietary funds because both enterprise and internal service funds follow the accrual basis of accounting.
Proprietary funds provide the same type of information as the government-wide financial statements (business-type activities), only in more detail. The proprietary fund financial statements provide separate information for the Electric, W ater, and Sewer operations, all of which are considered to be major funds of the City . The five remaining proprietary f unds noted above are combined into a single, aggregated presentation. All internal service funds are also combined into a single, aggregated presentation in the proprietary f und financial statements. Individual fund data for the non-major enterprise funds and the internal service funds is provided in the form of combining statements and can be found on pages 98 - 106 in this report.
The basic proprietary fund financial statements can be found on pages 27 - 31 of this report.
Fiduciary fund - Fiduciary funds are used to account for situations where the City’s role is purely custodial. Fiduciary funds are not reflected in the government- wide financial statement because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The fiduciary fund financial statements can be found on page 32 - 33 of this report. 6 Notes to Basic Financial Statements - The notes provide additional information that is essential to a full understanding of the data provided in the government- wide and fund financial statements. The Notes to Basic Financial Statements begin on page 34 of this report.
Governmental Accounting Standards Board No. 96, Subscription-Based Information Technology Arrangements (GASB 96) - For the year ended June 30, 2023, the financial statements include the adoption of GASB Statement No. 96, Subscription-Based Information Technology Arrangements ( SBITA). This Statement defines SBITA as a contract that conveys control of the right-to-use another party's information technology software, alone or in a combination with tangible capital assets, as specified in a contract for a period of time in an exchange or exchange-like transaction. For additional information, refer to Notes 1, 5, and 6.
Government-wide Financial Analysis
The following table presents a summarization of the City’s assets, liabilities, deferred inflows and outflows, and net position for its governmental and business-type activities. As noted earlier, a government’s net position may serve over time as a useful indicator of its financial position. (in thousands)
Governmental
Activities
Business-Type
Activities Total
2023 2022 2023 2022 2023 2022
Assets:
Current and other assets $ 633,853 $ 711,511 $ 856,258 $ 856,015 $ 1,490,111 $ 1,567,526 Capital, lease, and subscription assets, net 1,343,379 1,330,850 1,958,937 1,975,600 3,302,316 3,306,450 Total assets 1,977,232 2,042,361 2,815,195 2,831,615 4,792,427 4,873,976 Deferred Outflows of Resources 196,336 67,430 77,898 41,648 274,234 109,078 Liabilities:
Current liabilities 172,713 209,289 139,888 137,657 312,601 346,946 Long-term liabilities 780,515 601,939 1,469,858 1,414,352 2,250,373 2,016,291 Total liabilities 953,228 811,228 1,609,746 1,552,009 2,562,974 2,363,237 Deferred Inflows of Resources 25,610 204,023 112,733 176,142 138,343 380,165 Net Position
Net investment in capital assets 1,198,815 1,176,215 790,844 774,469 1,989,659 1,950,684 Restricted - Expendable 237,159 199,456 96,638 85,666 333,797 285,122 Restricted - Nonexpendable 1,642 3,582 - - 1,642 3,582
Unrestricted/(deficit) (242,886) (284,713) 283,132 284,977 40,246 264 Total net position $ 1,194,730 $ 1,094,540 $ 1,170,614 $ 1,145,112 $ 2,365,344 $ 2,239,652 The City’s assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $2,365,344 a t June 30, 2023, an increase o f $125,692 from June 30, 2022.
The City’s net position reflects its investment in capital assets (i.e., land, buildings, machinery, equipment, and infrastructure), net of any r elated debt (net investment in capital assets) that is still outstanding used to acquire those assets and net of unspent bond proceeds and cash held in bond reserve accounts. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending. 7 An additional 14% of the City's net position represents resources that are subject to external restrictions on how they may be used. The remaining unrestricted net position may be used to meet the government’s ongoing obligations to citizens and creditors. Of this amount, $(242,886) net deficit is held by the governmental activities and $283,132 is held by the business-type activities.
Unrestricted net position in the amount of $40,246, a net position increase of 15,145% from prior year, is the change in resources available to fund City programs to citizens and debt obligations to creditors. The positive increase in unrestricted net position is primarily t he result of the increases in sales tax, property t ax, investment income, and miscellaneous one-time revenues.
Governmental activities increased the City’s net position by $100,190 to $1,194,730 for the year ended June 30, 2023.
On the following page is a condensed summary of activities of the City’s governmental and business-type operations for the period ended June 30, 2023 with the prior fiscal year presented for comparative purposes. Also included in the following analysis are revenue and expense graphs to aid in understanding the results of the current year’s activities.
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8 (in thousands)
Governmental
Activities
Business-Type
Activities Total
2023 2022 2023 2022 2023 2022
Revenues:
Program revenues:
Charges for services $ 43,087 $ 41,072 $ 628,084 $ 598,474 $ 671,171 $ 639,546 Operating grants and contributions 59,368 50,378 4,374 5,866 63,742 56,244 Capital grants and contributions 34,305 38,508 15,483 20,527 49,788 59,035 General revenues:
Sales taxes 177,722 173,933 - - 177,722 173,933
Property taxes 84,751 79,790 - - 84,751 79,790
Other taxes and fees 49,972 47,183 - - 49,972 47,183
Intergovernmental, unrestricted 467 661 - - 467 661
Rental and investment income 8,817 (7,613) 11,191 (13,324) 20,008 (20,937) Miscellaneous 10,331 3,880 10,049 12,639 20,380 16,519
Total revenues 468,820 427,792 669,181 624,182 1,138,001 1,051,974 Expenses:
General government 34,258 66,937 - - 34,258 66,937
Public safety 239,744 169,742 - - 239,744 169,742
Highways and streets 50,588 41,125 - - 50,588 41,125
Cultural and recreation 50,863 38,885 - - 50,863 38,885 Interest on long-term debt and fiscal
charges 18,598 19,806 - - 18,598 19,806
Electric - - 401,427 349,004 401,427 349,004
Water - - 76,475 69,303 76,475 69,303
Sewer - - 67,195 59,060 67,195 59,060
Airport - - 2,385 1,944 2,385 1,944
Refuse - - 32,777 28,449 32,777 28,449
Transportation - - 4,808 3,758 4,808 3,758
Public Parking - - 5,493 4,566 5,493 4,566
Civic Entertainment - - 27,698 21,804 27,698 21,804
Total expenses 394,051 336,495 618,258 537,888 1,012,309 874,383 Increase (decrease) in net position 74,769 91,297 50,923 86,294 125,692 177,591 Extraordinary items - - - (5,748) - (5,748)
Transfers 25,421 34,915 (25,421) (34,915) - -
Changes in net position 100,190 126,212 25,502 45,631 125,692 171,843 Net Position:
Beginning of year, as previously stated 1,094,540 968,328 1,145,112 1,098,838 2,239,652 2,067,166 Prior period adjustment - - - 643 - 643
Beginning of year, as restated 1,094,540 968,328 1,145,112 1,099,481 2,239,652 2,067,809 End of year $ 1,194,730 $ 1,094,540 $ 1,170,614 $ 1,145,112 $ 2,365,344 $ 2,239,652 9 Governmental Activities - The total change in net position for governmental activities decreased by $26.0 million. Key elements of this year’s activity in relation to the prior year are as follows:
Revenues:
While variances between years exist for the various revenue categories, the total net increase was approximately $41.0 million or 10%. The increase is largely attributable to the $3.8 million increase in sales taxes, primarily stemming from increased sales in the categories of autos and transportation; state and county pools; business and industry; and restaurants and hotels. The increase i n property t axes of $5 m illion was mainly d ue to increased property v alues. The increase in investment income of $16.4 million was primarily due to an economic rebound that produced higher interest earnings on investments. The increase in miscellaneous revenue of $6.5 million was predominantly from a sale of land from the dissolution of the March Joint Powers Authority for $3.9 million and a $2.5 million insurance reimbursement for a fire caused at a vacant City-owned building.
Expenses:
While variances between years exist for the various expense functions, the total net increase was approximately $57.6 million or 17%. This is primarily related to an increase to personnel related costs of $67.8 million in public safety; highway and streets; and culture and recreation resulting from the adjustment of the net pension liability in fiscal year 2022-23.
10 Program Revenues and Expenses - Governmental Activities - Fiscal Year Comparison 2023 vs. 2022 11 Revenues by Source - Governmental Activities - Fiscal Year Comparison 2023 vs. 2022 Business-Type Activities - Total net position for business-type activities increased by $25.5 as compared to the prior year. Key elements of this year’s activity in relation to the prior year are as follows:
Charges for services increased from the prior year, resulting in an increase of $29.6 million or 5%. Electric Fund charges for services increased by $21.4 million primarily due to an increase in consumption, rate plan increases, and decreased uncollectibles. The Civic Entertainment Fund charges for services increased by $6.3 million due to an increase in entertainment venue events compared to the prior year. Overall expenses increased by $80.4 million or 14.9%. The Electric Fund, Water Fund, and Sewer Fund had an increase in operating expenses of $53.7 million, $6.0 million, and $8.6 million, respectively, primarily due to an increase in personnel related costs resulting from the adjustment to the net pension liability in fiscal year 2022-23. The Electric Fund production and purchased power expenses increased primarily due to a combination of exceptionally elevated winter natural gas prices and elevated power prices, along with global market disturbances. The Water Fund operating expenses increased primarily due to an increase in personnel related costs resulting from the adjustement to the net pension liability, along with increases in administrative and general operating expenses. The Sewer Fund operating expenses increased primarily due to an increase in personnel related costs resulting from the adjustement to the net pension liability, along with increases in maintenance and operation expenses. 12 Revenues by Source - Business-Type Activities - Fiscal Year Comparison 13 Financial Analysis of the City's Funds
Governmental funds - The focus of the City’s governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources.
Such information is useful in assessing the City ’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.
The following table summarizes the balance sheet of the City’s General Fund, Capital Outlay Fund, and Non-Major Governmental Funds. As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. (in thousands)
General Fund Capital Outlay Fund
General Debt Service
Fund
Non-Major
Governmental Funds
Total
Governmental Funds
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Assets $ 307,324 $ 280,565 $ 85,412 $ 57,636 $ 15,254 $ 13,231 $ 178,867 $ 201,206 $ 586,857 $ 552,638 Liabilities $ 41,440 $ 42,541 $ 2,457 $ 4,612 $ 1,195 $ 1,552 $ 69,685 $ 96,882 $ 114,777 $ 145,587 Deferred inflows of resources 12,507 10,806 154 520 - - 48,669 49,832 61,330 61,158 Fund Balances
Nonspendable 2,115 2,087 - - - - 1,736 1,495 3,851 3,582 Restricted 32,695 30,715 82,801 52,504 14,059 11,679 58,777 54,212 188,332 149,110 Committed 111,301 82,801 - - - - - - 111,301 82,801
Assigned 35,566 41,707 - - - - - - 35,566 41,707
Unassigned 71,700 69,908 - - - - - (1,215) 71,700 68,693 Total fund balances 253,377 227,218 82,801 52,504 14,059 11,679 60,513 54,492 410,750 345,893 Total liabilities, deferred
inflows, and fund
balances $ 307,324 $ 280,565 $ 85,412 $ 57,636 $ 15,254 $ 13,231 $ 178,867 $ 201,206 $ 586,857 $ 552,638 As of the end of the current fiscal year, the City’s governmental funds reported combined ending fund balances of $410,750, an increase of $64,857 compared to the prior year. Additionally, 1% of the fund balance, or $3,851, is nonspendable, which comprises the portion of fund balance that cannot be spent due to form. $188,332, or 46%, of fund balance is restricted, which represents the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation, or limitations imposed by c reditors or grantors. Committed fund balance of $111,301, or 27% o f the fund balance, was set aside for economic contingencies. Committed for economic contingencies consists of 20% of the 2023-24 G eneral Fund adopted expenditure budget of $327 m illion, or $65,500; $5,000 f or General Fund – Measure Z; $20,617 for future capital projects; $15,000 for balancing measures; $3,000 for technology related projects; $2,000 for insurance proceeds; and $184 for public works equipment. $35,566, or 9%, of fund balance is constrained by the City’s intent to utilize fund balance for specific purposes, which is reported within the fund balance classification assigned. The remainder of the fund balance, $71,700, or 17%, is unassigned, meaning it is available for spending at the City’s discretion including $47,000 in the Measure Z Fund. The City’s governmental funds reported combined total assets of $586,857 at June 30, 2023, an increase of $34,219 compared to the prior year. Liabilities and deferred inflows of resources amounted to $176,107, a decrease of $30,638 from the prior year.
The General Fund is the principal operating fund of the City. At the end of the current fiscal year, total fund balance equaled $253,377, in comparison to $227,218 in the prior year. The increase in fund balance is primarily due to increase sales taxes of $3.8 million; property taxes of $5.0 million; utility users' taxes of $2.5 million; and rental and investment income of $9 million. The Capital Outlay Fund is used to account for the acquisition or construction of major capital facilities. The total fund balance was $82,801, compared to $52,504 in the prior year. The increase was due to increased transfers in for street and other future capital projects. The General Debt Service Fund accounts for the accumulation of resources and payment of long-term debt principal and interest. The total fund balance was $14,059, compared to $11,679 in the prior year. The Non-Major Governmental Funds fund balance was $60,513, compared to $54,492 in the prior year. 14 Proprietary funds - The City’s proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.
The unrestricted net position of the Electric, Water, and Sewer Funds at the end of the year amounted to $174,199, $19,375, and $77,165, respectively. The unrestricted net position for the Electric, W ater, and Sewer Funds in the prior year was $194,443, $17,675, and $74,034, respectively. The decrease in unrestricted net position of the Electric Fund $(20,244) was primarily due to a decrease in operating income mainly as a result of higher power costs and the use of reserves to fund ongoing capital projects and decommissioning trusts, offset by an increase in investment income. The increase in unrestricted net position of the Water Fund in the amount of $1,700 was primarily attributable to positive operating results, and an increase in investment income. The increase in unrestricted net position for the Sewer Fund totaling $3,131 is primarily a result of increased investment income.
Electric Water Sewer
Non-Major Enterprise
Funds
Total Business-Type
Funds
2023 2022 2023 2022 2023 2022 2023 2022 2023 2022
Assets $ 1,239,900 $ 1,297,992 $ 731,921 $ 682,884 $ 646,557 $ 657,568 $ 196,817 $ 193,171 $ 2,815,195 $ 2,831,615 Deferred outflows of resources 45,624 24,943 16,990 9,647 8,309 2,571 6,975 4,487 77,898 41,648 Liabilities 764,935 763,893 335,124 272,013 400,776 403,320 108,911 112,783 1,609,746 1,552,009 Deferred inflows of resources 17,237 53,479 86,374 98,214 1,959 11,145 7,163 13,304 112,733 176,142 Net position
Net investment in capital assets 254,990 246,698 295,560 293,641 167,469 163,884 72,825 70,246 790,844 774,469 Restricted 74,163 64,422 12,478 10,988 7,497 7,756 2,500 2,500 96,638 85,666 Unrestricted/(deficit) 174,199 194,443 19,375 17,675 77,165 74,034 12,393 (1,175) 283,132 284,977 Total net position $ 503,352 $ 505,563 $ 327,413 $ 322,304 $ 252,131 $ 245,674 $ 87,718 $ 71,571 $ 1,170,614 $ 1,145,112 15 General Fund Budgetary Highlights
Original
Budget
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Revenues $ 318,356 $ 341,329 $ 352,492 $ 11,163
Expenditures:
Current:
General government 24,767 37,047 16,703 20,344
Public safety 212,351 230,696 207,820 22,876
Highways and streets 24,371 28,840 21,274 7,566
Culture and recreation 35,766 41,710 36,259 5,451
Capital outlay 3,357 22,143 16,815 5,328
Debt service - - 2,331 (2,331)
Total expenditures 300,612 360,436 301,202 59,234
Excess/(deficiency) of revenues over/(under) expenditures 17,744 (19,107) 51,290 70,397 Other Financing Sources/(Uses): (18,914) (33,790) (25,131) 8,659 Net change in fund balance (1,170) (52,897) 26,159 79,056 Fund Balance:
Beginning of year 227,218 227,218 227,218 -
End of year $ 226,048 $ 174,321 $ 253,377 $ 79,056
The reason for the increase in final budgeted revenues compared to the Original Budget is primarily due to an $18.6 million budget adjustment for updated sales and use tax revenue projections and other mid-year updates to revenue projections based on prior year actuals and trend data. The Final Budget for expenditures is higher than the Original Budget due to prior year encumbrances and carryovers totaling $42.3 million as well as supplemental appropriations approved by the City Council during the fiscal year. Supplemental appropriations in expenditures and other financing sources/uses (in the form of transfers out) leveraged higher revenue projections and personnel savings to fund an additional $12.6 million in street and other capital projects; $18.7 million in the projected fiscal impact from revisions to various labor memorandums of understanding and employees' compensation and benefits packages; a $5 million transfer to the Refuse Fund for the purchase of capital equipment; a $2 million transfer to the Public Parking Fund to address deferred maintenance needs; and other miscellaneous budget adjustments. Also included in the other financing sources/uses is a $15.9 million transfer in for revenue replacement funds from the American Rescue Plan Act.
Actual revenues exceeded Final Budget projections due to higher-than-anticipated revenues from numerous sources, such as property tax and interest earnings, and due to unbudgeted revenues, including an insurance reimbursement ($2.5 million) and land sale ($3.9 million). Actual expenditures were less than f inal budgeted amounts by approximately $59.2 million. This is primarily attributable to fiscal year-end encumbrances totaling $16.8 million; $17.2 million in personnel savings due to recruitment and hiring challenges experienced by t he City a longside the increase in appropriations for employees' compensation and benefits packages; and other unexpended funds at fiscal year-end, some of which are expected to be carried over to the next fiscal year.
Capital Assets and Debt Administration
Capital Assets - T he City’s capital assets for governmental and business-type activities as of June 30, 2023 a mounted to $3,298,912 ( net of accumulated depreciation). This investment includes land, intangibles, buildings and improvements, machinery and equipment, park facilities, roads, highways, and bridges. The City's net capital assets for the current fiscal year decreased by $5,708, comprised of an increase of $10,815 for governmental activities and a decrease of $16,523 for business-type activities primarily caused by depreciation expense exceeding capital asset additions. 16 Major capital improvements during the current fiscal year included ongoing projects for governmental activities consisting primarily o f roads of $30.3 million; purchase of vehicles, trailers and/or heavy equipment ($3.7 million); and storm drains of $2.5 million. Capital improvements in business-type activities included $25.5 m illion in Electric Utility c apital improvements primarily r elated to transformer replacements, improvements to communications network, underground improvements, metering infrastructure, and major streetlight projects; and $16.3 m illion in Water Utility projects primarily related to main replacements, system expansion, transmission pipelines, distribution facilities, and water well projects.
Additional information on the City’s capital assets can be found in Note 5 on page 49 of this report.
City of Riverside's Capital Assets
(net of depreciation)
(in thousands)
Governmental
Activities
Business-Type
Activities Total
2023 2022 2023 2022 2023 2022
Land $ 383,379 $ 376,787 $ 103,456 $ 100,111 $ 486,835 $ 476,898 Construction in progress 51,002 52,051 131,870 128,123 182,872 180,174 Buildings 102,405 106,726 451,277 465,740 553,682 572,466 Improvements other than buildings 94,884 103,649 1,209,419 1,216,016 1,304,303 1,319,665 Machinery and equipment 31,193 32,060 32,712 32,994 63,905 65,054 Intangibles - - 29,565 31,838 29,565 31,838
Infrastructure 677,750 658,525 - - 677,750 658,525
Total $ 1,340,613 $ 1,329,798 $ 1,958,299 $ 1,974,822 $ 3,298,912 $ 3,304,620 Lease and Subscription Assets - T he City's investment in lease and subscription assets for governmental and business-type activities as of June 30, 2023 amounted to $3,404 ( net of accumulated amortization). The lease and subscription assets investment includes land, buildings, machinery and equipment, and subscription-based information technology arrangements (SBITA).
Additional information on the City’s lease and subscription assets can be found in Note 5 on page 49 of this report.
City of Riverside's Lease and Subsciption Assets
(net of amortization)
(in thousands)
Governmental
Activities
Business-Type
Activities Total
2023 2022 2023 2022 2023 2022
Land $ - $ - $ 163 $ 238 $ 163 $ 238
Buildings 398 617 199 273 597 890
Machinery and equipment 290 435 189 267 479 702
SBITA 2,078 - 87 - 2,165 -
Total $ 2,766 $ 1,052 $ 638 $ 778 $ 3,404 $ 1,830
17 Long-term debt - At the end of the current fiscal year, the City had total debt outstanding of $1,954,665 which includes bonded debt of $1,768,632.
City of Riverside's Long-Term Debt
(in thousands)
Governmental
Activities
Business-Type
Activities Total
2023 2022 2023 2022 2023 2022
Lease revenue bonds $ 65,093 $ 68,855 $ 6,168 $ 6,625 $ 71,261 $ 75,480 General obligation bonds 3,411 4,987 - - 3,411 4,987
Pension obligation bonds 321,413 338,264 103,705 110,718 425,118 448,982 Certificates of participation 80,584 85,477 24,582 25,912 105,166 111,389 Revenue bonds - - 1,163,676 1,139,100 1,163,676 1,139,100 Notes payable - - 55,070 59,948 55,070 59,948
Contracts payable - - 933 933 933 933
Financed purchased 19,230 22,294 1,476 2,176 20,706 24,470 Compensated absences 31,425 29,994 12,084 11,855 43,509 41,849 Claims and judgments 53,112 78,790 - - 53,112 78,790
Landfill capping - - 9,425 9,820 9,425 9,820
Lease liability 699 1,060 563 787 1,262 1,847
SBITA liability 1,930 - 86 - 2,016 -
Total $ 576,897 $ 629,721 $ 1,377,768 $ 1,367,874 $ 1,954,665 $ 1,997,595 The City’s total debt decrease by $44,361 or 51.3% during the current fiscal year. The net decrease is primarily related to payments on long-term debt.
The City’s Water Utility m aintains “AA+” and “AA+” ratings from S&P Global Ratings and Fitch, respectively, for their revenue bonds, while the Electric Utility maintains “AA-” ratings from both rating agencies for fixed rate bonds. The City’s general obligation bond ratings from S&P Global Ratings and Fitch are “AA” and “AA,” respectively.
State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total adjusted assessed valuation. The legal debt limit was $967,896 at June 30, 2023, which applies only to general obligation debt. At June 30, 2023, the City had $3,411 of general obligation debt, resulting in available legal debt capacity of $964,485.
Additional information on the City’s long-term debt can be found in Note 9 beginning on page 55 of this report.
Economic Factors and Next Year's Budget
The City has experienced a 30% increase in the City's sales tax base since fiscal year 2018-19 as consumers changed their spending habits during the pandemic.
This one-time anomaly provided a new foundation for future sales tax projections in the General Fund and allowed the City to fund new salary and benefit packages negotiated for City employees, as well as reserve funding for future infrastructure and technology needs. However, inflationary pressures are expected to influence the City's financial landscape in the coming fiscal year, impacting both income and expenditures. Inflation is driving up costs in all City funds in areas such as personnel, supplies, purchased services, and capital investments. In addition to inflation, unemployment, which increased from 3.8% last year to 4.5% this year, is expected to lead to a reduction in sales tax and other City revenues as consumers cut back on discretionary spending.
Rising retirement costs continue to have a significant impact on the City’s long-term financial stability. CalPERS investment returns have fluctuated significantly over 18 the last ten years, leading to swings in funding levels reported in CalPERS actuarial reports and projected payments toward the unfunded accrued liability (UAL).
The CalPERS discount rate, comparable to an assumed annual rate of return, is 6.8%. As of June 30, 2023, CalPERS reported a preliminary net return of 5.8% on its investments for the 12-month period ending June 30, 2023. The preliminary 5.8% net investment return stands in contrast to the prior fiscal year, when global financial volatility led to the fund's first negative (6.1%) return since the Great Recession. As of June 30, 2023, total fund annualized returns for the 5-year period stood at 6.1%, the 10-year period at 7.1%, the 20-year period at 7.0%, and the 30-year period at 7.5%.
CalPERS transitioned to collecting employer contributions for the plan's unfunded liability as fixed dollar amounts effective on July 1, 2018, moving away from the previous method that combined a contribution rate with the normal cost rate. Additionally, in the fiscal year 2019-20, the City issued a pension obligation bond to help reduce future pension contributions. The fiscal year 2023-24 required unfunded liability contribution and funded status as reported in the Annual Valuation Report as of June 30, 2021 were informed by fiscal year 2020-21 CalPERS investment returns of 21.3%. The negative CalPERS investment return of 6.1% in fiscal year 2021-22 caused a swing in the unfunded accrued liability contribution and funded status as reported in the Annual Valuation Report as of June 30, 2022:
Annual Valuation Report as of June 30, 2021 Annual Valuation Report as of June 30, 2022 Miscellaneous Plan Miscellaneous Plan
Unfunded Liability Payment: $0 Unfunded Liability Payment (Prepayment option): $4,929 Funded Status: 104.3% Funded Status 89.9%
Safety Plan Safety Plan
Unfunded Liability Payment (Prepayment option): $9,967 Unfunded Liability Payment (Prepayment option): $10,645 Funded Status: 99.6% Funded Status: 86.4%
Recognizing the anomalous investment returns of fiscal year 2020-21, the City did not eliminate the budgeted UAL payments during the amendment of the fiscal year 2023-24 budget, but rather shifted those budgeted payments to the Section 115 Trust for the long-term management of rising pension costs. The Section 115 Trust will aid the City in mitigating the impact of rising pension costs in future years and ensuring maintenance of City service levels.
On June 21, 2022, the City Council adopted the City's Fiscal Year 2022-24 Biennial Budget. Within the adoption, the fiscal year 2023-24 citywide budget totaled $1.32 billion in funding for citywide operations, including $115.2 million for capital projects. On June 27, 2023, the City Council adopted an amended Fiscal Year 2023-24 budget totaling $1.38 billion for citywide operations, including $140.5 million for capital projects. The amended fiscal year 2023-24 General Fund budget, exlcuding Measure Z, represents a 6.9% increase over the adopted fiscal year 2022-23 budget. The increase is primarily attributable to rising personnel costs resulting from negotiated increases in employee salary and benefit packages and the addition of 41.75 full-time equivalent positions, as well as program expansions in various City departments.
Request for information
This financial report is designed to provide a general overview of the City ’s finances for all those with an interest in the City’s finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 3900 Main Street City of Riverside, California 92522.
19 CITY OF RIVERSIDE
STATEMENT OF NET POSITION
JUNE 30, 2023
(amounts expressed in thousands)
Primary Government
Governmental
Activities
Business-Type
Activities Total
Assets:
Cash and investments $ 435,813 $ 436,977 $ 872,790
Receivables, net of allowance for uncollectible 124,449 68,309 192,758 Leases receivable 9,213 102,048 111,261
Inventory 9,068 4,786 13,854
Prepaid items 2,026 17,397 19,423
Deposits - 1,713 1,713
Other assets - 2,925 2,925
Internal balances (1,131) 1,131 -
Restricted assets:
Cash and cash equivalents - 145,412 145,412
Cash and investments 51,814 58,135 109,949
Benefit/Conservation Programs receivable - 1,204 1,204
Regulatory assets - 13,130 13,130
Derivative instruments - 1,088 1,088
Land and improvements held for resale 2,601 - 2,601
Advances to Successor Agency Trust Fund - 2,003 2,003
Capital assets:
Capital assets, not depreciated 434,381 256,822 691,203 Capital assets, net of depreciation 906,232 1,701,477 2,607,709 Lease and subscription assets, net of amortization 2,766 638 3,404 Total assets 1,977,232 2,815,195 4,792,427
Deferred Outflows of Resources:
Changes in derivative values 1,948 2,415 4,363
Deferred charge on refunding 1,886 12,867 14,753
Pension related items 186,736 59,595 246,331
OPEB related items 5,766 3,021 8,787
Total deferred outflows of resources 196,336 77,898 274,234 Liabilities:
Current liabilities:
Accounts payable and other current liabilities 40,177 36,997 77,174 Unearned revenue 61,973 1,085 63,058
Deposits 11,805 13,456 25,261
Accrued interest 1,716 14,164 15,880
Long-term obligations 21,446 52,686 74,132
Compensated absences 19,673 9,602 29,275
Claims and judgments 12,834 - 12,834
Landfill capping - 559 559
Decommissioning liability - 10,227 10,227
OPEB liability 1,113 812 1,925
Lease liability 379 226 605
SBITA liability 1,597 74 1,671
Non-current liabilities:
Long-term obligations 468,285 1,302,924 1,771,209
Compensated absences 11,752 2,482 14,234
Claims and judgments 40,278 - 40,278
Landfill capping - 8,866 8,866
Decommisioning liability - 38,646 38,646
Regulatory liability - 25,176 25,176
Derivative instruments 3,381 6,939 10,320
Net pension liability 230,991 66,107 297,098
OPEB liability 25,175 18,369 43,544
Lease liability 320 337 657
SBITA liability 333 12 345
Total liabilities 953,228 1,609,746 2,562,974
Deferred Inflows of Resources
Change in derivative values - 1,260 1,260
Deferred charges on refunding - 585 585
Pension related items 8,746 6,103 14,849
OPEB related items 7,703 4,208 11,911
Lease related items 9,161 100,577 109,738
Total deferred inflows of resources 25,610 112,733 138,343 Net Position:
Net investment in capital assets 1,198,815 790,844 1,989,659 Restricted - Expendable:
Housing 41,780 - 41,780
Debt service 14,059 33,172 47,231
Public works 40,269 - 40,269
Capital projects 91,736 - 91,736
Landfill capping - 2,500 2,500
Programs and regulatory requirements - 60,966 60,966
Economic development 16,620 - 16,620
Unfunded accrued liability 32,695 - 32,695
Restricted - Nonexpendable:
Permanent fund principal 1,642 - 1,642
Unrestricted/(deficit) (242,886) 283,132 40,246
Total net position $ 1,194,730 $ 1,170,614 $ 2,365,344
See Notes to Financial Statements
20 CITY OF RIVERSIDE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Program Revenues Net (Expenses) Revenues and Changes in Net Position Primary Government
Expenses
Indirect Expenses
Allocation
Charges for
Services
Operating
Contributions
and Grants
Capital
Contributions
and Grants
Governmental
Activities
Business-Type
Activities Total
Function/Programs
Primary Government:
Governmental Activities:
General government $ 34,258 $ (19,676) $ 14,046 $ 50,198 $ 997 $ 50,659 $ - $ 50,659 Public safety 239,744 13,218 14,963 7,618 - (230,381) - (230,381) Highways and streets 50,588 2,945 7,288 1,206 32,215 (12,824) - (12,824) Culture and recreation 50,863 3,513 6,790 346 1,093 (46,147) - (46,147) Interest on long-term debt and fiscal charges 18,598 - - - - (18,598) - (18,598) Total governmental activities 394,051 - 43,087 59,368 34,305 (257,291) - (257,291) Business-Type Activities:
Electric 401,427 - 419,392 - 9,854 - 27,819 27,819
Water 76,475 - 78,703 - 4,149 - 6,377 6,377
Sewer 67,195 - 72,140 - - - 4,945 4,945
Airport 2,385 - 1,872 12 194 - (307) (307)
Refuse 32,777 - 31,477 - - - (1,300) (1,300)
Transportation 4,808 - 258 4,150 99 - (301) (301)
Public Parking 5,493 - 6,084 - - - 591 591
Civic Entertainment 27,698 - 18,158 212 1,187 - (8,141) (8,141) Total business-type activities 618,258 - 628,084 4,374 15,483 - 29,683 29,683 Total primary government $ 1,012,309 $ - $ 671,171 $ 63,742 $ 49,788 $ (257,291) $ 29,683 $ (227,608) General Revenues:
Taxes:
Sales taxes 177,722 - 177,722
Property taxes 84,751 - 84,751
Utility users' taxes 34,963 - 34,963
Franchise taxes 6,422 - 6,422
Transient occupancy taxes 8,587 - 8,587
Intergovernmental, unrestricted 467 - 467
Rental and investment income 8,817 11,191 20,008
Miscellaneous 10,331 10,049 20,380
Transfers 25,421 (25,421) -
Total general revenues and transfers 357,481 (4,181) 353,300 Change in net position 100,190 25,502 125,692
Net Position:
Beginning of year 1,094,540 1,145,112 2,239,652
End of year $ 1,194,730 $ 1,170,614 $ 2,365,344
See Notes to Financial Statements
21 CITY OF RIVERSIDE
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
General Fund
Capital Outlay
Fund
General Debt
Service Fund
Non-Major
Governmental
Funds
Total
Governmental
Funds
Assets:
Cash and investments $ 196,190 $ 80,744 $ 7,650 $ 111,057 $ 395,641 Cash and investments with fiscal agent 43,967 - 7,517 330 51,814 Receivables, net of allowance for uncollectible
Interest 694 272 7 375 1,348
Property taxes 1,988 - 80 90 2,158
Sales taxes 30,918 - - - 30,918
Utility billed 2,320 - - - 2,320
Utility unbilled 945 - - - 945
Accounts 12,693 455 - 117 13,265
Intergovernmental 4,615 3,941 - 17,676 26,232
Notes 10 - - 46,702 46,712
Leases receivable 9,213 - - - 9,213
Prepaid items 1,930 - - 94 2,024
Due from other funds 1,666 - - - 1,666
Land and improvements held for resale 175 - - 2,426 2,601 Total assets $ 307,324 $ 85,412 $ 15,254 $ 178,867 $ 586,857 Liabilities, Deferred Inflows of Resources, and Fund
Balances:
Liabilities:
Accounts payable $ 14,250 $ 2,113 $ 64 $ 6,290 $ 22,717 Accrued payroll 15,240 - - 40 15,280
Retainage payable 6 79 - 621 706
Intergovernmental 139 - - 5 144
Unearned revenue - 265 - 61,708 61,973
Deposits 11,805 - - - 11,805
Due to other funds - - - 1,021 1,021
Advances from other funds - - 1,131 - 1,131
Total liabilities 41,440 2,457 1,195 69,685 114,777
Deferred Inflows of Resources:
Unavailable revenue 3,346 154 - 48,669 52,169
Lease related items 9,161 - - - 9,161
Total deferred inflows of resources 12,507 154 - 48,669 61,330 Fund Balances:
Nonspendable:
Inventories, prepaids, notes, and deposits 1,940 - - 94 2,034 Land and improvements held for resale 175 - - - 175
Permanent fund principal - - - 1,642 1,642
Restricted:
Housing and redevelopment - - - 11,252 11,252
Debt service - - 14,059 - 14,059
Transportation and public works - 82,801 - 38,742 121,543 Other purposes - - - 8,783 8,783
Unfunded accrued liability 32,695 - - - 32,695
Committed:
Economic contingency 70,500 - - - 70,500
Other purposes 40,801 - - - 40,801
Assigned:
General government 4,597 - - - 4,597
Public safety 5,914 - - - 5,914
Highways and streets 4,885 - - - 4,885
Culture and recreation 1,427 - - - 1,427
Continuing projects 18,743 - - - 18,743
Unassigned 71,700 - - - 71,700
Total fund balances 253,377 82,801 14,059 60,513 410,750 Total liabilities, deferred inflows of resources, and
fund balances $ 307,324 $ 85,412 $ 15,254 $ 178,867 $ 586,857 See Notes to Financial Statements
22 CITY OF RIVERSIDE
RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS
TO THE STATEMENT OF NET POSITION
JUNE 30, 2023
(amounts expressed in thousands)
Total fund balances - governmental funds $ 410,750
Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore, are not reported as assets in the governmental funds 1,332,569
Lease and subscription assets, net of accumulated amortization, used in governmental activities and are not current financial resources and, therefore, are not reported as assets in the governmental funds 2,744 Deferred outflows on refunding charges are not available resources and, therefore, are not reported on the funds 1,886 Deferred outflows on pension related items 183,852
Deferred outflows on OPEB related items 5,578
Deferred inflows on pension related items (8,450)
Deferred inflows on OPEB related items (7,467)
Revenue not available to pay for current period expenditures are reported as unavailable revenue in the governmental funds 52,169 Accrued interest payable for the current portion of interest due on various debt issues has not been reported in the governmental funds (1,716) Long-term liabilities, as listed below, are not due and payable in the current period and, therefore, are not reported in the governmental funds General obligation bonds (3,411)
Pension obligation bonds (317,126)
Certificates of participation (80,584)
Lease revenue bonds (65,093)
Financed purchase (18,799)
Compensated absences (30,960)
Net pension liability (227,792)
OPEB liability (25,145)
Lease liability (684)
SBITA liability (1,925) (771,519)
The City uses derivative instruments to hedge its exposure to changing interest rates through the uses of interest swaps. The following related items have been reflected in the Statement of Net Position:
Net fair value of interest rate swaps (3,381)
Deferred amount related to the hedgeable portion of derivative instrument 1,948 (1,433) Internal service funds are used by management to charge the costs of insurance, centralized purchasing and fleet management to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the Statement of Net Position. (4,233) Net position of governmental activities $ 1,194,730
See Notes to Financial Statements
23 CITY OF RIVERSIDE
STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
General Fund
Capital Outlay
Fund
General Debt
Service Fund
Non-Major
Governmental
Funds
Total
Governmental
Funds
Revenues:
Taxes $ 310,520 $ - $ 1,925 $ - $ 312,445
Licenses and permits 12,446 - - 3,448 15,894
Intergovernmental 2,720 14,853 - 77,832 95,405
Charges for services 16,393 - - 1,585 17,978
Fines and forfeitures 1,131 - - - 1,131
Special assessments 305 542 1,238 5,999 8,084
Rental and investment income 4,632 668 265 2,489 8,054
Miscellaneous 4,345 249 - 1,446 6,040
Total revenues 352,492 16,312 3,428 92,799 465,031
Expenditures:
Current:
General government 16,703 - - 10,560 27,263
Public safety 207,820 - - 11,739 219,559
Highways and streets 21,274 - - 1,050 22,324
Culture and recreation 36,259 - - 3,232 39,491
Capital outlay 16,815 20,982 - 36,041 73,838
Debt service:
Principal 2,103 - 29,788 93 31,984
Interest and fiscal charges 228 - 18,804 44 19,076
Total expenditures 301,202 20,982 48,592 62,759 433,535 Excess/(deficiency) of revenues
over/(under) expenditures 51,290 (4,670) (45,164) 30,040 31,496 Other Financing Sources/(Uses):
Transfers in 67,229 38,115 48,128 1,784 155,256
Transfers out (100,281) (3,148) (584) (25,822) (129,835) Proceeds from sale of capital assets 4,228 - - 7 4,235
Issuance of debt related to leases and
subscriptions 3,693 - - 12 3,705
Total other financing sources/(uses) (25,131) 34,967 47,544 (24,019) 33,361 Net change in fund balances 26,159 30,297 2,380 6,021 64,857 Fund Balances:
Beginning of year 227,218 52,504 11,679 54,492 345,893
End of year $ 253,377 $ 82,801 $ 14,059 $ 60,513 $ 410,750 See Notes to Financial Statements
24 CITY OF RIVERSIDE
RECONCILIATION OF THE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES OF GOVERNMENTAL FUNDS TO THE
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Net change in fund balances - total governmental funds $ 64,857 Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives as depreciation and amortization expense.
Capital outlay $ 67,674
Depreciation expense (51,492)
Lease and subscription amortization expense (2,218)
Gain/(Loss) on sale of capital assets (2,333) 11,631
Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.
Whereas, issuance of long-term debt is a current financial resource in the governmental funds, but the issuance increase long-term debt in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and deferral on loss of refunding when the debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities
Issuance of long-term debt (3,708)
Principal repayments
General obligation bonds 1,560
Pension obligation bonds 16,600
Certificates of participation 4,830
Lease revenue bonds 3,384
Financed purchase 3,495
Lease liability 414
SBITA liability 1,700
Amortization of bond premium/discount 491 28,766
Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.
Changes in accrued interest 140
Changes in compensated absences (1,423)
Changes in net pension liability and related deferred outlows and inflows of resources (11,024) Changes in OPEB liability and related deferred outflows and inflows of resources (1,442) (13,749) Revenues reported as unavailable revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity (1,265)
Internal service funds are used by management to charge the costs of insurance, central purchasing and fleet management to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities 9,950 Change in net position of governmental activities $ 100,190 See Notes to Financial Statements
25 CITY OF RIVERSIDE
STATEMENT OF REVENUES, EXPENDITURES AND CHANGES, IN FUND BALANCE - BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Budgeted Amounts Actual
Variance to
Final Budget
Positive
Original Final Amounts (Negative)
Revenues:
Taxes $ 284,923 $ 306,594 $ 310,520 $ 3,926
Licenses and permits 10,628 11,128 12,446 1,318
Intergovernmental 1,441 1,441 2,720 1,279
Charges for services 15,177 15,104 16,393 1,289
Fines and forfeitures 1,894 1,894 1,131 (763)
Special assessments 542 542 305 (237)
Rental and investment income 2,946 2,946 4,632 1,686
Miscellaneous 805 1,680 4,345 2,665
Total revenues 318,356 341,329 352,492 11,163
Expenditures:
General government:
Mayor 1,107 1,191 1,110 81
Council 1,730 1,904 1,771 133
Manager 9,697 14,688 7,990 6,698
Attorney 6,710 7,343 6,646 697
Clerk 1,719 2,118 1,927 191
Community development 20,432 30,924 17,493 13,431
Human resources 4,810 5,623 4,734 889
General services 7,333 8,099 6,822 1,277
Finance 10,233 1,972 9,908 (7,936)
Innovation and technology 15,113 17,311 12,484 4,827
Subtotal 78,884 91,173 70,885 20,288
Allocated expenditures - General Government (54,117) (54,126) (54,182) 56 Total general government 24,767 37,047 16,703 20,344
Public safety:
Police 135,747 147,506 129,634 17,872
Fire 69,170 74,448 69,754 4,694
Animal regulation 3,442 4,407 4,595 (188)
Building and zoning inspection 3,992 4,335 3,837 498
Total public safety 212,351 230,696 207,820 22,876
Highways and streets 24,371 28,840 21,274 7,566
Culture and recreation:
Library 8,516 9,933 8,191 1,742
Museum and cultural affairs 2,393 2,826 1,955 871
Parks, recreation and community services 24,857 28,951 26,113 2,838 Total culture and recreation 35,766 41,710 36,259 5,451 Capital outlay 3,357 22,143 16,815 5,328
Debt service:
Principal - - 2,103 (2,103)
Interest and fiscal charges - - 228 (228)
Total expenditures 300,612 360,436 301,202 59,234
Other Financing Sources/(Uses):
Transfers in 51,704 77,964 67,229 (10,735)
Transfers out (70,618) (111,754) (100,281) 11,473
Proceeds from sale of capital assets - - 4,228 4,228
Issuance of debt related to leases and subscriptions - - 3,693 3,693 Total other financing sources/(uses) (18,914) (33,790) (25,131) 8,659 Net change in fund balance (1,170) (52,897) 26,159 79,056 Fund Balance:
Beginning of year 227,218 227,218 227,218 -
Ending of year $ 226,048 $ 174,321 $ 253,377 $ 79,056
See Notes to Financial Statements
26 CITY OF RIVERSIDE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds Governmental Electric Water Sewer
Non-Major
Enterprise
Funds
Total
Enterprise
Funds
Activities -
Internal Service
Funds
Assets:
Current assets:
Cash and investments $ 247,831 $ 49,191 $ 112,833 $ 27,122 $ 436,977 $ 40,172 Receivables, net of allowance for
uncollectible
Interest 1,033 343 396 123 1,895 140
Utility billed 17,783 4,478 5,207 2,176 29,644 -
Utility unbilled 13,617 3,406 2,414 1,102 20,539 -
Accounts 5,810 1,621 367 1,346 9,144 125
Property taxes - - - 1 1 -
Intergovernmental 50 1,514 2,170 3,352 7,086 286
Leases receivable 1,359 1,001 27 474 2,861 -
Inventory 1,464 - 3,233 89 4,786 9,068
Prepaid items 5,421 212 17 83 5,733 2
Deposits 1,413 - - 300 1,713 -
Other current assets - 300 - - 300 -
Restricted assets:
Cash and cash equivalents
Rate stabilization cash and cash
equivalents - - 1,000 - 1,000 -
Other restricted cash and cash
equivalents 73,946 12,478 - 2,500 88,924 -
Benefit/Conservation Programs
receivable 1,070 134 - - 1,204 -
Total current assets 370,797 74,678 127,664 38,668 611,807 49,793 Noncurrent assets:
Restricted assets:
Cash and cash equivalents at fiscal
agent - 55,488 - - 55,488 -
Cash and investments at fiscal agent 58,135 - - - 58,135 - Leases receivable 10,407 84,385 - 4,395 99,187 -
Prepaid items noncurrent 11,664 - - - 11,664 -
Other noncurrent assets - 2,625 - - 2,625 -
Advances to other funds - - 1,131 - 1,131 -
Regulatory assets 1,573 1,404 1,129 9,024 13,130 -
Derivative instruments - - - 1,088 1,088 -
Advances to Successor Agency Trust
Fund 2,003 - - - 2,003 -
Capital assets, net of accumulated
depreciation 784,916 513,313 516,610 143,460 1,958,299 8,043 Lease and subscription assets, net of
amortization 405 28 23 182 638 22
Total noncurrent assets 869,103 657,243 518,893 158,149 2,203,388 8,065 Total assets 1,239,900 731,921 646,557 196,817 2,815,195 57,858 Deferred Outflows of Resources:
Changes in derivative values 1,571 - - 844 2,415 -
Deferred charge on refunding 7,530 4,758 - 579 12,867 - Pension related items 34,931 11,588 7,892 5,184 59,595 2,884 OPEB related items 1,592 644 417 368 3,021 188
Total deferred outflows of
resources 45,624 16,990 8,309 6,975 77,898 3,072
See Notes to Financial Statements
27 CITY OF RIVERSIDE
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds Governmental Electric Water Sewer
Non-Major
Enterprise
Funds
Total
Enterprise
Funds
Activities -
Internal Service
Funds
Liabilities:
Current liabilities:
Accounts payable 17,617 2,564 3,862 7,856 31,899 1,233
Accrued payroll 1,202 405 257 206 2,070 96
Retainage payable 765 944 155 163 2,027 -
Unearned revenue 314 52 - 719 1,085 -
Deposits 11,734 1,034 6 682 13,456 -
Accrued interest 5,083 2,609 6,427 45 14,164 -
Due to other funds - - - - - 645
Benefit/Conservation Programs
payable 866 135 - - 1,001 -
Long-term obligations 22,633 11,476 12,480 6,097 52,686 455 Compensated absences 5,589 1,958 1,400 655 9,602 339
Claims and judgments - - - - - 12,834
Landfill capping - - - 559 559 -
Decommissioning liability 10,227 - - - 10,227 -
OPEB liability 417 171 120 104 812 48
Lease liability 137 5 5 79 226 5
SBITA liability 42 15 11 6 74 4
Total current liabilities 76,626 21,368 24,723 17,171 139,888 15,659 Noncurrent liabilities:
Long-term obligations 590,602 290,760 348,423 73,139 1,302,924 4,263 Compensated absences 1,889 527 45 21 2,482 126
Claims and judgments - - - - - 40,278
Landfill capping - - - 8,866 8,866 -
Decommissioning liability 38,646 - - - 38,646 -
Regulatory liability 4,675 4,357 16,102 42 25,176 -
Derivative instruments 4,097 1,377 - 1,465 6,939 -
Net pension liability 38,748 12,854 8,754 5,751 66,107 3,199 OPEB liability 9,420 3,872 2,721 2,356 18,369 1,095
Lease liability 225 7 6 99 337 10
SBITA liability 7 2 2 1 12 1
Total noncurrent liabilities 688,309 313,756 376,053 91,740 1,469,858 48,972 Total liabilities 764,935 335,124 400,776 108,911 1,609,746 64,631 Deferred Inflows of Resources:
Change in derivative values - 196 - 1,064 1,260 -
Deferred charges on refunding - - 585 - 585 -
Pension related items 3,577 1,187 808 531 6,103 296
OPEB related items 2,266 889 539 514 4,208 236
Lease related items 11,394 84,102 27 5,054 100,577 -
Total deferred inflows of
resources 17,237 86,374 1,959 7,163 112,733 532
Net position:
Net investment in capital assets 254,990 295,560 167,469 72,825 790,844 8,045 Restricted net position:
Debt service 19,332 8,933 4,907 - 33,172 -
Landfill capping - - - 2,500 2,500 -
Regulatory requirements 25,502 - 2,590 - 28,092 -
Public Benefit Programs 29,329 - - - 29,329 -
Water Conservation Program - 3,545 - - 3,545 -
Unrestricted/(deficit) 174,199 19,375 77,165 12,393 283,132 (12,278) Total net position $ 503,352 $ 327,413 $ 252,131 $ 87,718 $ 1,170,614 $ (4,233) See Notes to Financial Statements
28 CITY OF RIVERSIDE
STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds Governmental Electric Water Sewer
Non-Major
Enterprise
Funds
Total
Enterprise
Funds
Activities -
Internal Service
Funds
Operating Revenues:
Charges for services $ 419,392 $ 78,703 $ 72,140 $ 57,849 $ 628,084 $ 31,564 Total operating revenues 419,392 78,703 72,140 57,849 628,084 31,564 Operating Expenses:
Personnel services 56,311 18,412 12,868 10,349 97,940 5,376 Contractual services 7,408 2,373 1,142 17,710 28,633 885 Maintenance and operation 260,039 11,546 12,178 12,782 296,545 3,441 General 10,919 15,155 4,407 20,059 50,540 7,630
Materials and supplies 1,157 927 6,104 2,171 10,359 184 Claims/Insurance 3,415 986 1,400 711 6,512 4,198
Depreciation 38,189 16,367 15,034 5,884 75,474 936
Amortization 214 20 77 650 961 10
Total operating expenses 377,652 65,786 53,210 70,316 566,964 22,660 Operating income/(loss) 41,740 12,917 18,930 (12,467) 61,120 8,904 Nonoperating Revenues/(Expenses):
Grant subsidies - - - 4,374 4,374 -
Interest revenue 5,952 3,613 1,409 217 11,191 763
Interest expense and fiscal charges (23,775) (10,689) (13,985) (2,845) (51,294) (153) Capital improvement fees - - 374 - 374 -
Other 5,387 3,170 (364) 299 8,492 146
Gain/(loss) on disposal of capital assets 957 119 93 14 1,183 51 Total nonoperating
revenues/(expenses) (11,479) (3,787) (12,473) 2,059 (25,680) 807 Income/(loss) before
contributions and operating
transfers 30,261 9,130 6,457 (10,408) 35,440 9,711
Capital contributions 9,854 4,149 - 1,480 15,483 239
Transfers in - - - 25,075 25,075 -
Transfers out (42,326) (8,170) - - (50,496) -
Change in net position (2,211) 5,109 6,457 16,147 25,502 9,950 Net Position:
Beginning of year 505,563 322,304 245,674 71,571 1,145,112 (14,183) End of year $ 503,352 $ 327,413 $ 252,131 $ 87,718 $ 1,170,614 $ (4,233) See Notes to Financial Statements
29 CITY OF RIVERSIDE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds Governmental Electric Water Sewer
Non-Major
Enterprise
Funds
Total
Enterprise
Funds
Activities -
Internal Service
Funds
Cash Flows from Operating Activities:
Cash received from customers and users $ 430,913 $ 79,617 $ 73,549 $ 59,056 $ 643,135 $ - Cash received from interfund services provided - - - - - 31,702 Cash paid to suppliers for goods or services (290,354) (31,432) (23,691) (54,628) (400,105) (43,183) Cash paid to employees for services (56,730) (18,778) (13,086) (10,387) (98,981) (5,441) Net cash provided/(used) by operating
activities 83,829 29,407 36,772 (5,959) 144,049 (16,922) Cash Flows from Non-Capital Financing
Activities:
Transfers in - - - 25,075 25,075 -
Transfers out (42,326) (8,170) - - (50,496) -
Payment made to other funds - - - - - 606
Payment receipt from advances to other funds 451 - 311 - 762 - Debt service payment on pension obligation
bonds (4,232) (1,363) (849) (567) (7,011) (290)
Other non-operating receipts 5,140 484 (364) 411 5,671 146 Grant subsidies - - - 5,900 5,900 -
Net cash provided/(used) by non-capital
financing activities (40,967) (9,049) (902) 30,819 (20,099) 462 Cash Flows from Capital and Related Financing
Activities:
Purchase of capital assets (27,183) (20,181) (6,898) (3,306) (57,568) (1,189) Proceeds from sales of capital assets 5,673 130 100 14 5,917 51 Proceeds from revenue bonds, including
premium - 63,596 - - 63,596 -
Principal paid on long-term obligations (17,124) (7,148) (9,770) (5,228) (39,270) - Interest paid on long-term obligations (26,149) (10,074) (16,087) (2,903) (55,213) (154) Bond issuance costs - (582) - - (582) -
Capital improvement fees - - 308 - 308 -
Contributions 4,951 2,932 - 1,480 9,363 -
Lease and subscription payments (215) (20) (78) (88) (401) (16) Net cash provided/(used) by capital and
related financing activities (60,047) 28,653 (32,425) (10,031) (73,850) (1,308) Cash Flows from Investing Activities:
Proceeds/(purchase) from/(of) investment
securities (4,350) - - - (4,350) -
Interest from investments 5,582 3,517 1,238 133 10,470 738 Net cash provided/(used) by investing
activities 1,232 3,517 1,238 133 6,120 738
Net increase/(decrease) in cash and cash
equivalents (15,953) 52,528 4,683 14,962 56,220 (17,030) Cash and cash equivalents at beginning of year
(excluding $53,785 in restricted investments for
Electric) 337,730 64,629 109,150 14,660 526,169 57,202
Cash and cash equivalents at end of year
(excluding $58,135 restricted investments for
Electric) $ 321,777 $ 117,157 $ 113,833 $ 29,622 $ 582,389 $ 40,172 See Notes to Financial Statements
30 CITY OF RIVERSIDE
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds Governmental Electric Water Sewer
Non-Major
Enterprise
Funds
Total
Enterprise
Funds
Activities -
Internal Service
Funds
Reconciliation of Operating Income to Net Cash
Provided/(Used) by Operating Activities:
Operating income/(loss) $ 41,740 $ 12,917 $ 18,930 $ (12,467) $ 61,120 $ 8,904 Adjustments to Reconcile Operating
Income/(Loss) Net Cash Provided/(Used) by
Operating Activities:
Depreciation 38,189 16,367 15,034 5,884 75,474 936
Amortization 214 20 77 650 961 10
(Increase)/decrease in utility billed receivable 9,137 1,782 1,504 1,282 13,705 - (Increase)/decrease in utility unbilled receivable 2,985 243 113 (49) 3,292 - (Increase)/decrease in accounts receivable 732 (146) 1,135 1,472 3,193 - (Increase)/decrease in property tax receivable - - - 20 20 - (Increase)/decrease in intergovernmental
receivable (20) 106 (1,345) (89) (1,348) 129
(Increase)/decrease in inventory (979) - (113) (10) (1,102) (871) (Increase)/decrease in prepaid items 679 (13) 12 (45) 633 - (Increase)/decrease in deposits (79) - - 6 (73) -
(Increase)/decrease in Benefit/Conservation
Programs receivable 415 38 - - 453 -
Increase/(decrease) in accounts payable (3,494) (928) 1,606 (410) (3,226) (287) Increase/(decrease) in accrued payroll 192 28 43 53 316 19 Increase/(decrease) in retainage payable 164 403 37 (334) 270 (6) Increase/(decrease) in unearned revenue (1,097) (1,093) - (1,461) (3,651) - Increase/(decrease) in deposits payable (154) 12 - 34 (108) - Increase/(decrease) in Benefit/Conservation
Programs payable 242 64 - - 306 -
Increase/(decrease) in compensated absences 278 (88) (31) 70 229 8 Increase/(decrease) in claims and judgments - - - - - (25,678) Increase/(decrease) in landfill capping liability - - - (396) (396) - Increase/(decrease) in decommissioning liability (4,438) - - - (4,438) - Changes in net pension liability/(asset) and
related deferred inflows/(outflows) of resources (1,308) (472) (328) (269) (2,377) (130) Changes in OPEB liability and related deferred
inflows/(outflows) of resources 431 167 98 100 796 44
Total adjustments 42,089 16,490 17,842 6,508 82,929 (25,826) Net cash provided/(used) by operating
activities $ 83,829 $ 29,407 $ 36,772 $ (5,959) $ 144,049 $ (16,922) Non-Cash Investing, Capital, and Financing
Activities:
Capital contributions - capital assets $ 4,903 $ 1,218 $ - $ - $ 6,121 $ - Payment on note payable offset by rent credit - 1,974 - - 1,974 - Increase (decrease) in fair value of investments (529) - - - (529) - See Notes to Financial Statements
31 CITY OF RIVERSIDE
STATEMENT OF NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Private-Purpose
Trust Fund
Successor
Agency Trust
Fund Custodial Fund
Assets:
Cash and investments $ 33,194 $ 2,307
Cash and investments with fiscal agent 4,112 7,531
Receivables, net of allowance for uncollectible
Interest 108 5
Property taxes - 150
Accounts 507 -
Intergovernmental 795 -
Notes 1,758 -
Direct financing receivable 5,245 -
Leases receivable 618 -
Deposits 2 -
Land and improvements held for resale 5,359 -
Capital assets:
Capital assets, not depreciated 185 -
Total assets 51,883 9,993
Liabilities:
Current liabilities:
Accounts payable 26 -
Accrued interest 2,312 -
Long-term obligations 12,874 -
Due to bond holders - 9,838
Noncurrent liabilities:
Advances from City 2,003 -
Long-term obligations 157,476 -
Total liabilities 174,691 9,838
Deferred Inflows of Resources:
Deferred charges on refunding 588 -
Lease related items 608 -
Total deferred inflows of resources 1,196 -
Net Position:
Restricted for other governments (124,004) 155
Total net position $ (124,004) $ 155
See Notes to Financial Statements
32 CITY OF RIVERSIDE
STATEMENT OF CHANGES IN NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Private-Purpose
Trust Fund
Successor
Agency Trust
Fund Custodial Fund
Additions:
Property taxes $ 18,673 $ -
Special assessments - 4,645
Rental and investment income 715 93
Miscellaneous 105 327
Total additions 19,493 5,065
Deductions:
Professional services and other deductions 3,231 4,436
Redevelopment projects 122 -
Principal - 2,615
Interest and fiscal charges 5,899 1,856
Total deductions 9,252 8,907
Changes in Net Position 10,241 (3,842)
Net Position:
Beginning of year, as previously stated (134,245) 13,834 Prior period adjustment - (9,837)
Beginning of year, as restated (134,245) 3,997
End of year $ (124,004) $ 155
See Notes to Financial Statements
33 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Note 1. Summary of Significant Accounting Policies
The City of Riverside (City) was incorporated on October 11, 1883 as a Charter City a nd operates under a Council-Manager form of Government. The more significant accounting policies reflected in the financial statements are summarized as follows:
A. Reporting Entity
The financial statements present the City and its component units, entities for which the City is financially accountable. Blended component units are legally separate entities, but in substance are part of the City's operations and their data is combined with that of the City's. The City has no component units that meet the criteria for discrete presentation. All of the City's component units have a June 30 year-end.
Blended Component Units
Riverside Housing Authority (Housing Authority) was established in 2006 by the City. The Housing Authority’s primary p urpose is to provide safe and sanitary housing accommodations for persons with low or moderate income. The Housing Authority’s activity h as been combined with that of the primary government because City C ouncil members serve as the Housing Authority’s commissioners and because the City i s financially a ccountable and operationally responsible for all matters.
Riverside Public Financing Authority (Public Financing Authority) was organized in December 1987 by t he City a nd the Redevelopment Agency. Pursuant to Assembly Bill 1X 26 (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies were dissolved effective February 1 , 2012. Subsequently, the City b ecame the Successor Agency t o the Redevelopment Agency. The Parking Authority o f the City o f Riverside was added as an additional member of the Public Financing Authority on August 14, 2012. The Public Financing Authority’s activity has been combined with that of the primary g overnment because City C ouncil members serve as the Public Financing Authority’s board members and because the Public Financing Authority exclusively provides financing assistance to the primary government.
The City i s also financially a ccountable and operationally r esponsible for all matters.
Riverside Municipal Improvements Corporation ( Municipal Improvements Corporation) was created in 1978 and operates under provisions of the Nonprofit Public Benefit Corporation Law of the State of California. The Municipal Improvements Corporation's primary purpose is to provide financing assistance by obtaining land, property and equipment on behalf of the City. The activity of the Municipal Improvements Corporation has been combined with that of the primary government because three members of the City Council serve as the Municipal Improvements Corporation’s directors and because the Municipal Improvements Corporation exists to serve exclusively the primary government.
The City is financially accountable and operationally responsible for all matters.
Fiduciary Component Unit
Successor Agency t o the Redevelopment Agency o f the City o f Riverside (Successor Agency) is a separate legal entity, which was formed to hold the assets and liabilities of the former Redevelopment Agency p ursuant to City Council actions taken on March 15, 2011 and January 10, 2012. The activity of the Successor Agency i s overseen by a n Oversight Board comprised of individuals appointed by various government agencies and the City of Riverside as Successor Agency o f the former Redevelopment Agency. In 2018, the oversight was transferred to the Riverside Countywide Oversight Board, as a result of state legislation that consolidated all oversight boards to successor agencies. The Countywide Oversight Board was created to oversee the winddown activities of the various successor agencies in Riverside County. The nature and significance of the relationship between the City and the Successor Agency is such that it would be misleading to exclude the Successor Agency from the City’s financial statements. The Successor Agency is presented herein in the City’s fiduciary funds as a private-purpose trust fund.
Complete financial statements are prepared for the Riverside Public Financing Authority and the Successor Agency to the Redevelopment Agency of the City of Riverside, which can be obtained from the City's Finance Department, 3900 Main Street, Riverside, California, 92522 or online at www.riversideca.gov.
B. Government-wide and Fund Financial Statements
The government-wide financial statements report information on all of the non- fiduciary a ctivities of the City a nd its component units. I nterfund activity h as been removed from these statements except for utility charges, as this would distort the presentation of function costs and program revenues. Governmental activities, which normally a re supported by t axes and intergovernmental revenues, are reported separately from business type activities, which rely to a significant extent on fees and charges for support.
34 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
The statement of net position presents financial information on all of the City’s assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City i s improving or deteriorating.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly i dentifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly i ncluded among program revenues are reported instead as general revenues. Indirect expenses are allocated to the various functions based on a proportionate utilization of the services rendered. Such allocations consist of charges for accounting, human resources, information technology and other similar support services.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary f unds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation
The government-wide, proprietary and fiduciary funds financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability i s incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied on the property. Grants and similar items are recognized as revenue as soon as all eligibility r equirements have been met. An allowance for doubtful accounts is maintained for the utility and other miscellaneous receivables.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they a re collectible within the current period or soon enough thereafter to pay liabilities of the current period.
Revenues are considered to be available if they are generally collected within 60 days after year end, except for revenue associated with neglected property abatement which is eleven (11) months and except for grant revenue, including reimbursement received from Transportation Uniform Mitigation Fees, which is six (6) months. Grant revenue is recognized if received within six (6) months of year end to enable the matching of revenue with applicable expenditures.
Expenditures generally a re recorded when a liability is incurred under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Property t axes, special assessments, sales taxes, franchise taxes, licenses, charges for services, amounts due from other governments and interest associated with the current fiscal period are all considered to be susceptible to accrual. Other revenue items such as fines and permits are considered to be measurable and available only w hen the government receives cash and are therefore not susceptible to accrual.
The government reports the following major governmental funds:
The General fund is the government’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The Capital Outlay f und accounts for the construction and installation of street and highway c apital improvements for the City, including improvements funded by the ½% sales tax approved by Riverside County in 1988.
The General Debt Service fund accounts for the accumulation of resources and payment of long-term debt obligations of the City and related entities.
The government reports the following major proprietary funds:
The Electric fund accounts for the activities of the City ’s electric distribution operations.
The Water fund accounts for the activities of the City’s water distribution operations.
The Sewer fund accounts for the activities of the City’s sewer systems. 35 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Additionally, the government reports the following fund types:
Special Revenue funds account for proceeds of specific revenue sources that are legally restricted or otherwise committed or assigned for specific purposes.
Capital Projects funds account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
Internal Service funds account for self-insurance, central stores, and central garage on a cost reimbursement basis.
Fiduciary f unds include private-purpose trust and custodial funds. The private-purpose trust fund accounts for assets and activities of the dissolved Redevelopment Agency, which is accounted for in the Successor Agency T rust. The custodial funds are used to account for special assessments that service no-commitment debt.
The Permanent fund is a governmental fund that is used to report resources that are legally r estricted to the extent that only e arnings, and not principal, may be used for purposes that support the City’s Library programs. Non-expendable net position on the Statement of Net Position includes $1.6 m illion of permanent fund principal which are considered nonexpendable.
Amounts reported as program revenues include 1) charges to customers for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary f unds distinguish operating revenues and expenses from non- operating items. Operating revenues and expenses generally r esult from providing services and producing and delivering goods in connection with a proprietary f und’s principal ongoing operations. The Sewer fund also recognizes, as operating revenue, the portion of connection fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
D. Cash and Investments
The City values its cash and investments in accordance with the provisions of Governmental Accounting Standards Board Statement No. 72 (GASB 72), Fair Value Measurement and Application, which requires governmental entities to use valuation techniques that are appropriate under the circumstances and for which sufficient data are available to measure fair value.
The techniques should be consistent with one or more of the following approaches: the market approach, the cost approach or the income approach.
Cash accounts of all funds are pooled for investment purposes to enhance safety and liquidity while maximizing interest earnings. Investments are stated at fair value except for investments in investment contracts which are recorded at contract value. All highly liquid investments (including restricted assets) with a maturity of 90 days or less when purchased are considered cash equivalents.
Cash and investments held on behalf of proprietary funds by the City Treasurer are considered highly l iquid and are classified as cash equivalents for the purpose of presentation in the statement of cash flows.
E. Restricted Cash and Investments
Certain proceeds of long-term indebtedness, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by a pplicable bond covenants.
Restricted cash and investments also include cash set aside for nuclear decommissioning, public benefit programs, regulatory r equirements and rate stabilization because their use is legally r estricted to a specific purpose.
Unspent proceeds received from the City’s landfill capping surcharge are also recorded as restricted assets.
F. Allowance for Doubtful Accounts
Management determines the allowance for doubtful accounts by a nalyzing customer accounts for all balances over 60 days old. The allowance for doubtful accounts is then adjusted at fiscal year-end based on the amount equal to the annual uncollectible accounts. Utility customer closed accounts are written off when deemed uncollectible. Recoveries to utility c ustomer receivables previously w ritten off are recorded when received. For non-utility a ccounts receivables, delinquent notices after 60 days are sent to customers with outstanding balances. After 120 days, accounts still outstanding are referred to the City’s collection agency. As of June 30, 2023, the City had an allowance for doubtful account balance of $10,750 for all accounts receivables. 36 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
G. Land and Improvements Held of Resale
Land and improvements held for resale were generally a cquired for future development projects. The properties are carried at the lower of cost or net realizable value.
H. Inventory
Supplies are valued at cost using the average-cost method. Costs are charged to user departments when consumed rather than when purchased.
I. Prepaid Items
Payments to vendors for services benefiting future periods are recorded as prepaid items and expenditures are recognized when items are consumed.
J. Capital Assets
Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, right of way, and similar items), are reported in the applicable governmental activities and business-type activities of the government-wide financial statements and in the proprietary funds and the fiduciary private-purpose trust fund statements of net position. The government defines capital assets as assets with an initial, individual cost of more than five thousand dollars and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Costs include: labor; materials; allocated indirect charges such as engineering, construction and transportation equipment, retirement plan contributions and other fringe benefits. Donated capital assets or donated works of art and similar items are recorded at acquisition cost at the date of donation.
Capital assets received in a service concession arrangement are recorded at acquisition value. Intangible assets that cost more than one hundred thousand dollars with useful lives of at least three years are capitalized and are recorded at cost. Interest incurred during the construction phase is expensed in the period incurred.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets other than land are depreciated using the straight-line method. Estimated useful lives used to compute depreciation are as follows:
Buildings and improvements 30-50 years
Improvements other than buildings 20-99 years
Intangibles, depreciable 3-15 years
Machinery and equipment 3-15 years
Infrastructure 20-100 years
K. Leases and Subscription-Based Information Technology Arrangements Leases are defined by the general government as the right-to-use an underlying asset. As lessee, the City r ecognizes a lease liability a nd an intangible lease asset at the beginning of a lease unless the lease is considered a short-term lease or transfers ownership of the underlying asset. Lease assets are measured based on the net present value of the future lease payments at inception, using the weighted average cost of capital, which approximate the incremental borrowing rate. Re-measurement of a lease liability o ccurs when there is a change in the lease term and/or other changes that are likely to have a significant impact on the lease liability. The City calculates the amortization of the discount on the lease liability a nd report that amount as outflows of resources. Payments are allocated first to accrued interest liability and then to the lease liability. Variable lease payments based on the usage of the underlying assets are not included in the lease liability calculations but are recognized as outflows of resources in the period in which the obligation was incurred. As lessor, the City r ecognizes a lease receivable. The lease receivable is measured using the net present value of future lease payments to be received for the lease term and deferred inflow of receivables at the beginning of the lease term. Periodic amortization of the discount on the receivable are reported as interest revenue for that period. Deferred inflows of resources are recognized as inflows on a straight-line basis over the term of the lease. This recognition does not apply to short-term leases, contracts that transfer ownership, leases of assets that are investments, or certain regulated leases. Any initial direct costs are reported as an outflow of resources for that period. Re-measurement of lease receivables occur when there are modifications, including but not limited to changes in the contract price, lease term, and adding or removing an underlying asset to the lease agreements. In the case of a partial or full lease termination, the carrying value of the lease receivable and the related deferred inflow of resources will be reduced and will include a gain or loss for the difference. For lease contracts that are short-term, the City r ecognizes short- term lease payments as inflows of resources (revenues) based on the payment provisions of the lease contract. Liabilities are only recognized if payments are received in advance, and receivables are only r ecognized if payments are received subsequent to the reporting period. Leases between the Airport 37 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
System and air carriers and other aeronautical users are subject to external laws and regulations. As permitted by GASBS No. 87, paragraph 43, the Airport System recognizes inflows of resources based on the payment provisions of the lease contract, and the accounting policies do not apply to regulated leases.
Subscription-Based Information Technology A rrangements (SBITAs) are contracts that convey c ontrol of the right-to-use another party’s information technology (IT) software, alone or in combination with tangible capital assets, as specified in the contract for a period of time in an exchange or exchange-like transaction. To determine whether a contract conveys control of the right-to-use the underlying IT assets, the City assesses both the right to obtain the present service capacity from use of the underly ing IT assets and the right to determine the nature and manner of use of the underlying IT assets as specified in the contract. Contracts that solely provide IT support services are excluded from the definition of a SBITA. The subscription term is the period during which the City has a noncancellable right-to-use the underlying IT assets, plus the periods covered by t he City’s option to extend the SBITA if it is reasonably c ertain, based on all relevant factors, that the government will exercise that option.
Periods for which both the government and the SBITA vendor have an option to terminate the SBITA without permission from the other party (or if both parties have to agree to extend) are cancellable periods and are excluded from the subscription term.
L. Compensated Absences
City e mployees receive 10 to 25 vacation days a year based upon length of service. A maximum of two years' vacation accrual may be accumulated, any excess vacation must be used in accordance to policy, and unused vacation is paid in cash upon separation.
City e mployees generally r eceive one day o f sick leave for each month of employment with unlimited accumulation. Upon retirement or death, certain employees or their estates receive a percentage of unused sick leave paid in a lump sum based on longevity. The General, Electric and Water funds have been primarily used to liquidate such balances.
The liability associated with these benefits is reported in the government-wide statements. Vacation and sick leave of proprietary f unds is recorded as an expense and as a liability of those funds as the benefits accrue to employees.
M. Derivative Instruments
The City’s derivative instruments are accounted for in accordance with Government Accounting Standards Board Statement No. 53 (GASB 53), Accounting and Financial Reporting for Derivative Instruments, which requires the City to report its derivative instruments at fair value. Changes in fair value for effective hedges that are achieved with derivative instruments are reported as deferrals in the statements of net position.
The City uses derivative instruments to hedge its exposure to changing interest rates through the use of interest rate swaps. The City had debt that was layered with “synthetic fixed rate” swaps, which was refunded in 2008 and 2011. The balance of the deferral account for each swap is included as part of the deferred charge on refunding associated with the new bonds. The swaps were also employed as a hedge against the new debt. Hedge accounting was applied to that portion of the hedging relationship, which was determined to be effective.
The negative fair value of the interest rate swaps related to the new hedging relationship has been recorded and deferred on the statement of net position.
See Note 7 for further discussion related to the City’s interest rate swaps.
Various transactions permitted in the Utility’s Power Resources Risk Management Policies may be considered derivatives, including energy a nd/or gas transactions for swaps, options, forward arrangements and congestion revenue rights. The City h as determined that all of its contracts including congestion revenue rights fall under the scope of “normal purchases and normal sales” and are exempt from GASB 53.
N. Long-Term Obligations
Long-Term Debt
Long-term debt and other long-term obligations are reported as liabilities in the applicable governmental and business-type activities columns in the government-wide financial statements and in the proprietary funds and fiduciary funds statements of net position. Bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method.
Bonds payable are reported net of the applicable bond premium or discount.
In the fund financial statements, government fund types recognize bond issuance costs as expenditures during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuance are reported as other financing uses.
38 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Decommissioning
The City h as a 1.79 percent undivided ownership interest in Units 2 and 3 of San Onofre Nuclear Generating Station (SONGS), located south of the City of San Clemente in northern San Diego County. Both Units 2 and 3 of SONGS were permanently retired on June 2013. Consequently, the units are no longer a source of supply for the Electric Utility, but remain associated with certain of its costs, including those associated with the units' shutdown and decommissioning (see Note 13 for nuclear decommissioning liability).
The other owners are SCE, with a 78.21 percent interest (including the 3.16 percent interest it acquired from the City of Anaheim in 2006), and San Diego Gas & Electric Company (SDG&E), with a 20.00 percent interest.
In 2005, the California Public Utilities Commission (CPUC) authorized a project to install four new steam generators in Units 2 and 3 at SONGS and remove and dispose of the predecessor generators. SCE completed the installation of these steam generators in 2010 and 2011 for Units 2 and 3, respectively. The Electric Utility's share of the cost to replace the steam generators was approximately $ 13.4 million. Replacement of the steam generators was expected to enable plant operations to continue through at least 2022, and perhaps beyond, subject to the approval of the NRC.
In January 2012, a water leak occured in one of the heat transfer tubes of Unit 3's steam generators, causing it to be shut down. At that time, Unit 2 was off- line for a planned outage when unexpected wear in areas of tube-to-support structure was found. Units 2 and 3 remained offline for extensive inspections, testing and analysis of their system generators. On June 7, 2013, SCE unilaterally announced its plan to retire Units 2 and 3 permanently.
As a result of SCE's decision to permanently retire SONGS Units 2 and 3, the decommissioning phase of the plant began in June 2013. The process of decommissionining the nuclear power plant is expected to take many years and is governed by N RC regulations. According to SCE's decommissioning cost estimate document as of March 2018 in 2017 dollars, total decommissioning costs for Units 2 and 3 were estimated at $4.7 billion, of which the Electric Utility's share was $84 million.
In August 2021, SCE provided the updated decommissioning cost estimate document in 2020 dollars. According to the update, total decommissioning costs for Units 2 and 3 are estimated at $5.2 billion, of which the Electric Utility's share is $93.8 million.
As of June 30, 2023, the Electric Utility h as set aside $47,110 i n cash investments with the trustee and $8,644 i n an designated decommissioning reserve for the Electric Utility’s estimated share of the decommissioning costs.
Increases to the funds held for decommissioning liability a re from investment earnings. The investment earnings are included in investment income in the Electric Utility’s financial statements. An equivalent amount is reflected as decommissioning expense, which is considered part of production and purchased power. Decreases to the funds held for decommissioning liability are from actual funds drawn from the trust for decommissioning costs invoiced by SCE.
On February 2 3, 2016, the City C ouncil adopted a resolution authorizing the commencement of SONGS decommissioning effective June 7, 2013. This resolution allows the Electric Utility to access the decommissioning trust funds to pay for its share of decommissioning costs. The Electric Utility began drawing decommissioning trust funds to pay for decommissioning costs in the fiscal year ended June 30, 2017. As of June 30, 2023, the Electric Utility has paid to date $45,884 i n decommissioning obligations which have been reimbursed by t he trust funds.
O. Claims and Judgments Payable
Claims and judgments payable are recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Such claims, including an estimate for claims incurred but not reported at year end, are recorded as liabilities in the self-insurance internal service fund. As of June 30, 2023, the City had an obligation related to claims and judgments which is reflected as a liability o n the government-wide statements and is more fully described in Note 11.
P. Fund Equity
In the fund financial statements, governmental fund balance is made up of the following components:
Nonspendable fund balance is the portion of fund balance that cannot be spent due to form. Examples include inventories, prepaid amounts, long-term loans, and notes receivable, unless the proceeds are restricted, committed or assigned. Also, amounts that must be maintained intact legally o r contractually, such as the principal of a permanent fund are reported within the nonspendable category. 39 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Restricted fund balance is the portion of fund balance that is subject to externally e nforceable limitations by l aw, enabling legislation or limitations imposed by creditors or grantors.
Committed fund balance is the portion of fund balance that can only be used for specific purposes due to formal action of the City C ouncil through adoption of a resolution prior to the end of the fiscal year.
Once adopted, the limitation imposed by r esolution remains in place until a similar action is taken (the adoption of another resolution) to remove or revise the limitation. On September 6, 2016, the City Council approved the General Fund Reserve Policy s etting a 10% minimum i n the Emergency R eserve and 5% in the Contingency Reserve with an aspirational goal of 15% in the Emergency Reserve.
The Emergency R eserve was established for the purpose of addressing any e xtremely u nusual and infrequent occurrences, such as a major natural disaster or a major unforeseen settlement.
Utilization of the Emergency R eserve requires declaration of an emergency b y a two-thirds majority o f the City C ouncil, and specification of the maximum dollar amount to be used. The Contingency R eserve was established for the purpose of providing a “bridge” to facilitate a measured and thoughtful reduction in expenditures during times of economic downturn, rather than making immediate and drastic budget reductions without the time for proper evaluation. Utilization of the Contingency R eserve, including specification of the maximum dollar amount to be used, requires approval by a t wo-thirds majority o f the City C ouncil. The reserves committed at June 30, 2023 w ere calculated utilizing fiscal year 2023-2024 a dopted General Fund expenditure budget, including appropriation adjustments, of $327,087.
On April 2, 2019, the City C ouncil approved the General Fund - Measure Z Contingency R eserve Policy s etting a required $5,000 i n the Contingency Reserve. The Contingency Reserve was established to cover necessary expenses in order to provide time for a measured and thoughtful reduction in expenditures during times of economic downturn, rather t han making immediate and drastic budget reductions without the time for proper evaluation.
Utilization of the Contingency R eserve, including specification of the maximum dollar amount to be used, requires the affirmative votes of at least five members of the City Council.
Assigned fund balance reflects the City’s intended use of resources.
Intent can be expressed by the City Council or by an official to which the City C ouncil delegates the authority. On February 2 2, 2011, the City C ouncil approved a policy w hereby t he authority t o assign fund balance was delegated to the City’s Chief Financial Officer, which authorized the assignment of fund balance for specific programs or purposes in accordance with City C ouncil directives. The City a lso uses budget and finance policy t o authorize the assignment of fund balance, which is done through the adoption of the budget and subsequent budget amendments throughout the year.
Unassigned fund balance is the residual classification that includes all spendable amounts in the General Fund not contained in other classifications.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned or unassigned) fund balances are available, the City’s policy i s to use restricted amounts before unrestricted amounts.
Within unrestricted resources, committed resources are used first followed by assigned resources, and finally unassigned resources.
Q. Net Position
Net position represents the difference between assets and deferred outflows less liabilities and deferred inflows. Net position invested in capital assets consists of capital assets, net of accumulated depreciation, lease and subscription assets, net of amortization reduced by the outstanding balances of any borrowings used for the related acquisition, construction or improvement of those assets excluding unspent debt proceeds. Restricted net position represents restricted assets less liabilities and deferred inflows related to those assets. Restricted assets are recorded when there are limitations imposed on their use either through legislation adopted by t he City o r through external restrictions imposed by c reditors, grantors or laws or regulations of other governments. Restricted resources are used first to fund appropriations. 40 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
R. Interfund Transactions
Interfund transactions are accounted for as revenues and expenditures or expenses. Transactions, which constitute reimbursements, are eliminated in the reimbursed fund and accounted for as expenditures or expenses in the fund to which the transaction is applicable.
During the year, transactions occur between individual funds for goods provided or services rendered. Related receivables and payables are classified as "due from/to other funds" on the accompanying fund level statements. The noncurrent portion of long-term interfund loans receivable are reported as advances and, for governmental fund types, are equally offset by nonspendable fund balance to indicate that the receivable is not in spendable form.
Any r esidual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “internal balances.”
S. Unearned Revenue
Unearned revenues arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to meeting all eligibility r equirements. In subsequent periods, when both revenue recognition criteria are met, or when the government has a legal claim to the resources, revenue is recognized.
T. Unavailable Revenue
Unavailable revenue arises only under a modified accrual basis of accounting.
Accordingly, unavailable revenue is reported only i n the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of resources (revenue) in the period that the amounts become available.
U. Deferred Outflows and Deferred Inflows of Resources
When applicable, the statement of net position and the balance sheet will report a separate section for deferred outflows of resources. Deferred outflows of resources represent outflows of resources (consumption of net assets) that apply to future periods and that, therefore will not be recognized as an expense or expenditure until that time.
Conversely, deferred inflows of resources represent inflows of resources (acquisition of net assets) that apply to future periods and that, therefore, are not recognized as an inflow of resources (revenue) until that time.
V. Regulatory Assets and Deferred Regulatory Charges
In accordance with GASB Statement No. 62, enterprise funds that are used to account for rate-regulated activities are permitted to defer certain expenses and revenues that would otherwise be recognized when incurred, provided that the City i s recovering or expects to recover or refund such amounts in rates charged to its customers. Accordingly, regulatory a ssets and/or deferred regulatory c harges have been recorded in the Electric, Water, Sewer and Refuse funds.
W. Property Tax Calendar
Under California law, general property taxes are assessed for up to 1% of the property’s assessed value. General property taxes are collected by the counties along with other special district taxes and assessments and voter approved debt. General property t ax revenues are collected and pooled by t he county throughout the fiscal year and then allocated and paid to the county, cities and school districts based on complex formulas prescribed by State statutes.
Property t axes are calculated on assessed values as of January 1 f or the ensuing fiscal year. On January 1 of the fiscal year the levy is placed and a lien is attached to the property. Property taxes are due in two installments. The first installment is due November 1 and is delinquent after December 10. The second installment is due February 1 and is delinquent after April 10. The City generally a ccrues only t hose taxes, which are received within sixty days after the year-end. Under the Teeter plan, the County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy.
X. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally a ccepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenditures.
Specifically, the City h as made certain estimates and assumptions relating to the revenues due and expenditures incurred through fiscal year end, collectability o f its receivables, the valuation of property h eld for resale, the useful lives of capital assets, and the ultimate outcome of claims and judgments. Actual results may differ from those estimates and assumptions. 41 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Y. Pensions
For purposes of measuring the net pension asset/liability a nd deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary n et position of the City o f Riverside California Public Employees’ Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans’ fiduciary n et position have been determined on the same basis as they a re reported by C alPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Z. Other Post-Employment Benefit (OPEB)
OPEB refers to the benefits, other than pensions, that the City provides as part of an employee’s retirement benefits. The OPEB liability i s defined as the liability of employers contributing to employees for benefits provided through a defined benefit OPEB plan that is administered through a trust.
AA. New Accounting Pronouncements
The following new Governmental Accounting Standards Board (GASB) pronouncements were effective and have been implemented for fiscal year 2022-2023 audit:
GASB Statement No. 91, C onduit Debt Obligations - This Statement clarifies the existing definition of a conduit debt obligation; establishes that a conduit debt obligation is not a liability o f the issuer; establishes standards for accounting and financial reporting of additional commitments and voluntary commitments extended by i ssuers and arrangements associated with conduit debt obligations; and improves required note disclosures.
GASB Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangement - A Public-Private and Public-Public Partnerships ( PPP) is an arrangement in which a government (the transferor) contracts with an operator (a governmental or nongovernmental entity) to provide public services by c onveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction.
Some PPPs meet the definition of a service concession arrangement (SCA) in which (1) the operator collects and is compensated by fees from third parties; (2) the transferor determines or has the ability t o modify o r approve which services the operator is required to provide, to whom the operator is required to provide the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement. This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). An APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time in an exchange or exchange-like transaction.
GASB Statement No. 96, Subscription-Based Information Technology Arrangements – This Statement defines Subscription-Based Information Technology A rrangements (SBITA) as a contract that conveys control of the right to use another party’s (a SBITA vendor’s) information technology ( IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction. This Statement establishes that a SBITA results in a subscription asset—an intangible asset—and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. T he standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.
The following GASB pronouncements are effective in the following fiscal years:
Fiscal Year 2024
GASB Statement No. 99, Omnibus 2022 - This Statement- provide clarification on previously i ssued Statement including classification and reporting of derivative instruments within the scope of Statement No. 53 Accounting and Financial Reporting for Derivative Instruments, that do not meet the definition of either an investment derivative instrument or a hedging derivative instrument, clarification of provisions in Statement No. 87, Leases, as amended, related to the determination of the lease term, classification of a lease as a short-term lease, recognition and measurement of a lease liability and a lease asset, and identification of lease incentives, clarification of provisions in Statement No. 94, Public-Private and Public-Public Partnerships and Availability P ayment Arrangements, related to (a) the determination of the public-private and public- public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset, clarification of provisions in Statement No. 96, Subscription-Based Information Technology Arrangements, related to the subscription-based information technology 42 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
arrangement (SBITA) term, classification of a SBITA as a short-term SBITA, and recognition and measurement of a subscription liability, extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt, accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP), disclosures related to nonmonetary transactions, pledges of future revenues when resources are not received by t he pledging government, clarification of provisions in Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, as amended, related to the focus of the government-wide financial statements, terminology u pdates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and terminology used in Statement 53 to refer to resource flows statements.
GASB Statement No. 100, Accounting Changes and Error Corrections. - This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity a nd describes the transactions or other events that constitute those changes. It prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections, and requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by a djusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period.
Fiscal Year 2025
GASB Statement No. 101, Compensated Absences - This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. It also requires that a liability for certain types of compensated absences—including parental leave, military l eave, and jury duty leave—not be recognized until the leave commences. This Statement also requires that a liability f or specific types of compensated absences not be recognized until the leave is used. Further, this Statement establishes guidance for measuring a liability f or leave that has not been used, generally u sing an employee’s pay rate as of the date of the financial statements.
Note 2. Legal Compliance - Budgets
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for all departments within the general, special revenue and capital project funds. Formal budgets are not employ ed for debt service funds because debt indenture provisions specify p ayments. The permanent fund is not budgeted.
Biennually, during the period December through February, department heads prepare estimates of required appropriations for the following two-year budget cycle. These estimates are compiled into a proposed operating budget that includes a summary o f proposed expenditures and financial resources and historical data for the preceding budget cycle. At least thirty-five days prior to the beginning of the fiscal year, the City Manager provides the proposed budget in writing to the City Council for review. Following Council review, a public hearing is set to obtain citizen comments. The City C ouncil generally c onducts the public hearing and adopts the budget during one of its June meetings. The City Manager is legally authorized to transfer budgeted amounts between divisions and accounts within the same department. Transfer of appropriations between departments or funds and increased appropriations must be authorized by the City C ouncil. Expenditures may not legally e xceed budgeted appropriations within a fund. All appropriations shall lapse at the end of the fiscal year to the extent they h ave not been expended or lawfully e ncumbered, except for appropriations for capital projects which shall continue to their completion. 43 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Note 3. Cash and Investments
Cash and investments at fiscal year-end consist of the following:
Investments $ 941,611
Investments with fiscal agent 163,996
1,105,607
Cash on hand and deposits with financial institutions 69,688 Total $ 1,175,295
The amounts are reflected in the statements of net position of the government- wide and fiduciary fund financial statements:
Cash and investments $ 872,790
Restricted cash and cash equivalents 145,412
Restricted cash and investments 109,949
Total per statement of net position 1,128,151
Fiduciary fund cash and investments 35,501
Fiduciary fund cash and investments with fiscal agent 11,643 Total $ 1,175,295
The City follows the practice of pooling cash and investments of all funds except for funds required to be held by o utside fiscal agents under the provisions of bond indentures, which are administered by outside agencies.
Interest income earned on pooled cash and investments is allocated monthly to funds based on the beginning and month-end balances. Interest income from cash and investments held at fiscal agents is credited directly t o the related account. Bank deposits are covered by federal depository insurance for the first $250 or by collateral held in the pledging bank’s trust department in the name of the City.
Authorized Investments
Under provisions of the City's investment policy, and in accordance with California Government Code Section 53601, the City T reasurer may invest or deposit in the following types of investments:
Max
Maturity
Max % of
Portfolio
Max % in
One Issuer
Local Agency Investment Fund (State Pool) N/A N/A N/A
Money Market Mutual Funds N/A %20 %N/A
Mutual Funds N/A %20 %10
Joint Powers Authority Pools N/A N/A N/A
Medium-Term Corporate Notes1 5 years %30 %5
Municipal Bonds1 5 years %30 %5
Negotiable Certificates of Deposit2 5 years %30 %5
Mortgage Pass-Through and Asset-Backed Securities3 5 years %20 %5 Certificates of Deposit Placement Services4 5 years %30 %5 Collateralized Time Deposits4 5 years %30 %5
Federally Insured Time Deposits 5 years %30 %5
Supranational Securities3 5 years %30 %10
Federal Agency Obligations 5 years N/A %25
U.S. Treasury Obligations 5 years N/A N/A
Repurchase Agreements 1 year N/A N/A
Commercial Paper of "prime" quality5 270 days %25 %5
Bankers' Acceptance2 180 days %10 %5
Reverse Repurchase Agreements6 92 days %20 N/A
1 Minimum c redit rating of A (or its equivalent) by a t least one nationally recognized statistical rating organization at the time of purchase 2 Issued by o rganizations having short-term obligations rated A-1 (or its equivalent) and long-term obligations rated A (or its equivalent) by at least one nationally recognized statistical rating organization
3 Minimum c redit rating of AA (or its equivalent) by a t nationally r ecognized statistical rating organization
4 Or no more than 15% of the portoflio may be invested in any combination of non-negotiable certificates of deposit as set forth in Federally I nsured Time Deposits, Collaterized Time Deposits, and Certificate of Deposit Placement Services. No more than 30% of the portfolio may be invested in any combination of non-negotiable or negotiable certificates of deposit 5 Or no more than 10% of outstanding commercial paper of any single issuer may be purchased
6 Securities sold pursuant to a reverse purchase agreement must have been owned and fully paid for by the City for a minimum of 30 days prior to sale 44 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
The City’s investment policy p rovides the following three exceptions to the above: (1) investments authorized by debt agreements, (2) investments in the City o f Riverside - 115 Trust for Pension and (3) funds reserved in the San Onofre Nuclear Generating Station Decommissioning Account for which the five-year maturity l imitation may be extended to the term of the operating license.
Investments Authorized by Debt Agreements
Provisions of debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy, govern investments of debt proceeds held by b ond fiscal agents. Permitted investments are specified in related trust agreements and include the following:
Securities with Direct Obligations of the U.S. Government and its sponsored agencies
Bankers' Acceptances rated in the single highest classification Commerical Paper rated AA or higher at the time of purchase Investments in money m arket funds rated in the single highest classification, except for certain debt proceeds which have no minimum rating requirement
Municipal obligations rated Aaa/AAA or general obligations of states with ratings of at least Aa2/AA or higher by both Moody's and S&P Investment Agreements
No maximum percentage of the related debt issue or maximum investment in one issuer is specified.
Investments in the City of Riverside - 115 Trust for Pension The City has established the City of Riverside - 115 Trust for Pension (the Plan) to accumulate resources for future contributions to CalPERS. As of June 30, 2023, the City had $32,695 of restricted cash and investments reported in the General Fund in a Section 115 Trust restricted for future pension contributions.
The City h as retained US Bank as the trustee. US Bank has delegated investment authority t o HighMark Capital Management, an SEC-registered investment adviser, with the full investment discretion over the managed assets in the account. The goal of the Plan’s investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay t he present and future obligations of the Plan.
Investment Time Horizon: Intermediate-Term 5 - 7 years Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of future rate increases from CalPERS.
Investment Objective: Moderately - Passive
Risk Tolerance: Moderate
Portfolio Type: Index Plus (passive)
Strategic Asset Allocation:
Strategic Asset
Allocation Ranges Policy
Cash 0% - 20% 5%
Fixed income 40% - 60% 45%
Equity 40% - 60% 50%
Investment Limitations: The following investment transactions are prohibited:
Direct investments in precious metals (precious metals mutual funds and exchange-traded funds are permissible).
Venture Capital
Short sales*
Purchases of Letter Stock, Private Placements, or direct payments Leveraged Transactions*
Commodities Transactions Puts, calls, straddles, or other option strategies*
Purchases of real estate, with the exception of REITs Derivatives, with exception of Exchange Traded Funds (ETFs)* * Permissible in diversified mutual funds and exchange-traded funds Disclosures Relating to Fair Value Measurement and Application Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy t hat prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identifcal assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy a re described as follows:
45 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in an active market
Level 2 – Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in markets that are inactive;
Inputs other than quoted prices that are observable for the asset or liability;
Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 – Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the City's own assumptions about the inputs market participants would use in pricing the asset or liability ( including assumptions about risk). The unobservable inputs are developed based on the best information available in the circumstances and may include the City's own data.
The fair value of the City's investments in categorized within Level 2 of the fair value hierarchy u sing the institutional bond quotes with evaluations based on various market and industry inputs.
The City h as the following recurring fair value measurements as of June 30, 2023:
Total
Quoted
Prices in
Active
Markets for
Identical
Assets
(Level 1)
Significant
Other
Observable
Inputs
(Level 2)
Significant
Unobservable
Inputs
(Level 3)
Mortgage Pass-Through Securities $ 31,006 $ - $ 31,006 $ - Asset-Backed Securities 78,704 - 78,704 -
U.S. Treasury Obligations 272,588 - 272,588 -
Federal Agency Obligations 130,361 - 130,361 -
Medium-Term Corporate Notes 196,191 - 196,191 -
Supranational Securities 34,071 - 34,071 -
Held by Fiscal Agent:
Asset-Backed Securities 3,854 - 3,854 -
U.S. Treasury Obligations 34,553 - 34,553 -
Federal Agency Obligations 3,407 - 3,407 -
Medium-Term Corporate Notes 11,263 - 11,263 -
Supranational Securities 3,522 - 3,522 -
Total 799,520 $ - $ 799,520 $ -
Investments not subject to
fair value hierarchy:
Joint Powers Authority 181,643
Local Agency Investment Fund 1,249
Mutual Funds 30,925
Money Market Mutual Funds 81,509
Investment Contracts 10,761
Total Investments $ 1,105,607
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 o f its fair value to changes in market interest rates. The City’s investment policy r equires that the interest rate risk exposure be managed by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity e venly o ver time as necessary to provide the cash flow and liquidity needed for operations. 46 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Information about the sensitivity o f the fair values of the City’s investments (including investments held by fiscal agent) to market interest rate fluctuations is provided by t he following table that shows the distribution of the City’s investments by maturity:
Remaining Maturity (in Months)
Total
12 Months
or Less
13 to 36
Months
37 to 60
Months
More than
60 Months
Money Market Mutual Funds $ 17,046 $ 17,046 $ - $ - $ - Joint Powers Authority Pools 181,643 181,643 - - -
Local Agency Investment Fund 1 1 - - -
Mortgage Pass-Through Securities 31,006 4,881 11,256 14,869 - Asset-Backed Securities 78,704 871 35,109 42,724 -
U.S. Treasury Obligations 272,588 44,859 80,523 147,206 - Federal Agency Obligations 130,361 30,938 79,192 20,231 - Medium-Term Corporate Notes 196,191 9,793 106,758 79,640 - Supranational Securities 34,071 - 34,071 - -
Held by Fiscal Agent
Money Market Mutual Funds 64,463 64,463 - - -
Mutual Funds 30,925 30,925 - - -
Local Agency Investment Fund 1,248 1,248 - - -
Asset-Backed Securities 3,854 - 2,066 1,788 -
Investment Contracts 10,761 - - - 10,761
U.S. Treasury Obligations 34,553 13,067 13,995 7,301 190 Federal Agency Obligations 3,407 - 3,407 - -
Medium-Term Corporate Notes 11,263 1,311 8,898 1,054 -
Supranational Securities 3,522 - 3,522 - -
Total $ 1,105,607 $ 401,046 $ 378,797 $ 314,813 $ 10,951 The City assumes that callable investments will not be called.
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 actual rating as of year-end for each investment type:
Ratings as of Year End *
Total AAA AA A Unrated
Money Market Mutual Funds $ 17,046 $ 17,046 $ - $ - $ - Joint Powers Authority Pools 181,643 - - - 181,643
Local Agency Investment Fund 1 - - - 1
Mortgage Pass-Through Securities 31,006 31,006 - - -
Asset-Backed Securities 78,704 59,518 - - 19,186
U.S. Treasury Obligations 272,588 272,588 - - -
Federal Agency Obligations 130,361 110,378 - - 19,983
Medium-Term Corporate Notes 196,191 6,203 67,890 95,788 26,310 Supranational Securities 34,071 17,543 - - 16,528
Held by Fiscal Agent
Money Market Mutual Funds 64,463 61,098 - - 3,365
Mutual Funds 30,925 - - - 30,925
Local Agency Investment Fund 1,248 - - - 1,248
Asset-Backed Securities 3,854 2,815 - - 1,039
Investment Contracts 10,761 - - - 10,761
U.S. Treasury Obligations 34,553 26,060 - 8,493 -
Federal Agency Obligations 3,407 1,376 - - 2,031
Medium-Term Corporate Notes 11,263 - 2,753 6,612 1,898
Supranational Securities 3,522 1,850 - - 1,672
Total $ 1,105,607 $ 607,481 $ 70,643 $ 110,893 $ 316,590 *Fitch rating used with "-" and "+" removed for simplicity Concentration on Credit Risk
The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stated above. For fiscal year ended June 30, 2023, the City did not have any investments in any one issuer (other than U.S. Treasury s ecurities, money m arket funds, and external investment pools) that represent 5% or more of total City investments.
Custodial Credit Risk
Custodial credit risk for deposits is the risk that, in the event of the failure of a depository f inancial institution, a government will not be able to recover its deposits 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 the 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 City’s investment policy r equires that a third-party b ank trust department hold all 47 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
securities owned by t he City. All trades are settled on a delivery vs. payment basis through the City’s safekeeping agent. The City h as no deposits with financial institutions; bank balances are swept daily i nto a money m arket account.
The pledge to secure deposits is administered by the California Commissioner of Business Oversight. Collateral is required for demand deposits at 110% of all deposits not covered by federal depository insurance (FDIC) if obligations of the United States and its agencies, or obligations of the State or its municipalities, school districts, and district corporations are pledged. Collateral of 150% is required if a deposit is secured by f irst mortgages or first trust deeds upon improved residential real property l ocated in California. All such collateral is considered to be held by the pledging financial institutions’ trust departments or agents in the name of the City. Obligations pledged to secure deposits must be delivered to an institution other than the institution in which the deposit is made; however, the trust department of the same institution may hold them.
Written custodial agreements are required to provide, among other things, that the collateral securities are held separate from the assets of the custodial institution.
Investment in State Investment Pool
The City is a voluntary participant in the Local Agency Investment Fund (LAIF) that is regulated by C alifornia Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio).
The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
Investment in Joint Powers Authority
The City is a voluntary participant in the California Asset Management Program (CAMP). CAMP is an investment pool offered by t he California Asset Management Trust and created through a joint powers agency a s a pooled short-term porfolio and cash management vehicle for California public agencies under California Government Code Section 53601(p). CAMP is governed by a seven-member Board of Trustees comprised of finance directors and treasurers of California public agencies. The City reports its investments in CAMP at the fair value amounts provided by C AMP, and is exempt from the fair value hierarchy.
Note 4. Direct Financing Receivable
The former Redevelopment Agency had a direct financing arrangement with the State of California (the State) for a twelve-story o ffice building, which was transferred to the Successor Agency. The term is for thirty years and the State takes ownership of the facility a t the conclusion of that term. The financing arrangement calls for semi-annual payments not less than the debt service owed on the related lease revenue bonds issued by the former Redevelopment Agency for the purchase and renovation of the building.
The future minimum payments to be received are as follows:
Fiscal Year
2024 $ 2,786
2025 2,823
Total due 5,609
Less: amount applicable to interest (364)
Total direct financing receivable $ 5,245
48 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Note 5. Capital, Lease, and Subscription Assets
The following is a summary o f changes in the capital assets during the fiscal year ended June 30, 2023:
Governmental Activities:
Beginning
Balance
Additions/
Transfers In
Deletions/
Transfers Out Reclassifications
Ending
Balance
Capital assets, not depreciated:
Land $ 376,787 $ 6,629 $ (37) $ - $ 383,379
Construction in progress 52,051 27,477 - (28,526) 51,002 Total capital assets, not
depreciated 428,838 34,106 (37) (28,526) 434,381
Capital assets, being depreciated:
Buildings 190,232 2,544 (2,574) - 190,202
Improvements other than buildings 271,383 78 (44) 2,460 273,877 Machinery and equipment 120,343 7,490 (3,948) 389 124,274 Intangibles, depreciable 219 - - - 219
Infrastructure 1,170,193 21,358 - 25,677 1,217,228
Total capital assets, being
depreciated 1,752,370 31,470 (6,566) 28,526 1,805,800
Less: accumulated depreciation
for:
Buildings (83,506) (4,871) 580 - (87,797)
Improvements other than buildings (167,734) (11,283) 24 - (178,993) Machinery and equipment (88,283) (8,464) 3,666 - (93,081) Intangibles, depreciable (219) - - - (219)
Infrastructure (511,668) (27,810) - - (539,478)
Total accumulated
depreciation (851,410) (52,428) 4,270 - (899,568)
Total capital assets being
depreciated, net 900,960 (20,958) (2,296) 28,526 906,232 Governmental Activities
capital assets, net $ 1,329,798 $ 13,148 $ (2,333) $ - $ 1,340,613 Lease and subscription assets,
being amortized
Buildings 1,159 82 (341) - 900
Machinery and equipment 580 - - - 580
Subscription-based information
technology arrangements - 3,887 (126) - 3,761
Total lease and
subscription assets 1,739 3,969 (467) - 5,241
Less accumulated amortization
Buildings (542) (274) 314 - (502)
Machinery and equipment (145) (145) - - (290)
Subscription-based information
technology arrangements - (1,809) 126 - (1,683)
Total lease and
subscription assets
accumulated
amortization (687) (2,228) 440 - (2,475)
Total lease and
subscription assets, net 1,052 1,741 (27) - 2,766
Capital, lease, and
subscription assets, net $ 1,330,850 $ 14,889 $ (2,360) $ - $ 1,343,379 Business-Type Activities:
Beginning
Balance
Additions/
Transfers In
Deletions/
Transfers Out Reclassifications
Ending
Balance
Capital assets, not depreciated:
Land $ 100,111 $ 3,343 $ - $ 2 $ 103,456
Intangible assets 21,495 - - 1 21,496
Construction in progress 128,123 57,623 (46) (53,830) 131,870 Total capital assets, not
depreciated 249,729 60,966 (46) (53,827) 256,822
Capital assets, being depreciated:
Buildings 678,569 - - 179 678,748
Improvements other than buildings 2,007,017 2,778 (10,508) 46,981 2,046,268 Machinery and equipment 113,498 - (6,234) 5,963 113,227 Intangibles, depreciable 30,263 - (119) 704 30,848
Total capital assets, being
depreciated 2,829,347 2,778 (16,861) 53,827 2,869,091
Less: accumulated depreciation
for:
Buildings (212,829) (14,642) - - (227,471)
Improvements other than buildings (791,001) (51,840) 5,992 - (836,849) Machinery and equipment (80,504) (6,021) 6,010 - (80,515) Intangibles, depreciable (19,920) (2,971) 112 - (22,779) Total accumulated
depreciation (1,104,254) (75,474) 12,114 - (1,167,614)
Total capital assets being
depreciated, net 1,725,093 (72,696) (4,747) 53,827 1,701,477 Business-Type activities
capital assets, net $ 1,974,822 $ (11,730) $ (4,793) $ - $ 1,958,299 Lease and subscription assets,
being amortized
Land 312 - - - 312
Buildings 348 - - - 348
Machinery and equipment 345 - - - 345
Subscription-based information
technology arrangements - 257 (96) - 161
Total lease and
subscription assets 1,005 257 (96) - 1,166
Less accumulated amortization
Land (74) (75) - - (149)
Buildings (75) (74) - - (149)
Machinery and equipment (78) (78) - - (156)
Subscription-based information
technology arrangements - (170) 96 - (74)
Total lease and
subscription assets
accumulated
amortization (227) (397) 96 - (528)
Total lease and
subscription assets, net 778 (140) - - 638
Capital, lease, and
subscription assets, net $ 1,975,600 $ (11,870) $ (4,793) $ - $ 1,958,937 49 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Depreciation expense was charged to various functions as follows:
Governmental Activities:
General government $ 4,056
Public safety 7,719
Highways and streets 28,524
Culture and recreation 11,193
Internal service funds 936
Total depreciation expense - Governmental
Activities $ 52,428
Business-Type Activities:
Electric $ 38,189
Water 16,367
Sewer 15,034
Airport 737
Refuse 862
Transportation 281
Public Parking 972
Civic Entertainment 3,032
Total depreciation expense -
Business-Type Activities $ 75,474
Amortization expense was charged to various functions as follows:
Governmental Activities:
General government $ 1,808
Public safety 94
Highways and streets 11
Culture and recreation 305
Internal service funds 10
Total amortization expense - Governmental
Activities $ 2,228
Business-type Activities:
Electric $ 214
Water 20
Sewer 77
Airport 3
Refuse 6
Transportation 2
Public Parking 75
Total amortization expense - Governmental
Activities $ 397
Note 6. Leases and Subscription-Based Information Technology Arrangements
Leases Receivable
Leases are financings of the right-to-use an underlying asset and a lessor is required to recognize a lease receivable and a deferred inflow of resources.
The City of Riverside has 114 leases as a Lessor for the use of various land, building and equipment as of the end of the fiscal year. The terms range from 2 to 110 years beginning on the contract commencement date. As of June 30, 2023, the value of the lease receivable is $111,261. The leases have interest rates ranging from 0.52% to 3.35%. The value of the deferred inflow of resources as of June 30, 2023 w as $109,738, and the City r ecognized lease revenue of $5,382 during the fiscal year.
Governmental Activities
Fiscal Year Principal Interest Total Payments
2024 $ 1,132 $ 158 $ 1,290
2025 1,114 139 1,253
2026 1,145 120 1,265
2027 1,117 101 1,218
2028 1,062 82 1,144
2029-2033 3,150 171 3,321
2034-2038 200 34 234
2039-2043 166 19 185
2044-2048 127 4 131
Total $ 9,213 $ 828 $ 10,041
50 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities
Fiscal Year
Principal
Payments
Interest
Payments Total Payments
2024 $ 2,861 $ 1,739 $ 4,600
2025 2,675 1,699 4,374
2026 2,574 1,664 4,238
2027 2,296 1,630 3,926
2028 1,743 1,612 3,355
2029-2033 5,179 7,780 12,959
2034-2038 4,578 7,367 11,945
2039-2043 3,600 6,997 10,597
2044-2048 3,333 6,711 10,044
2049-2053 3,963 6,381 10,344
2054-2058 4,574 5,996 10,570
2059-2063 5,074 5,565 10,639
2064-2068 5,501 5,084 10,585
2069-2073 3,068 4,704 7,772
2074-2078 3,046 4,433 7,479
2079-2083 3,331 4,148 7,479
2084-2088 3,641 3,838 7,479
2089-2093 3,984 3,494 7,478
2094-2098 4,357 3,121 7,478
2099-2103 4,766 2,711 7,477
2104-2108 5,209 2,267 7,476
2109-2113 5,698 1,777 7,475
2114-2118 6,232 1,243 7,475
2119-2123 6,815 659 7,474
2124-2128 3,950 118 4,068
Total $ 102,048 $ 92,738 $ 194,786
Lease Liability
Leases are financings of the right-to-use an underlying asset and a lessee is required to recognize a lease liability and an intangible lease asset.
The City o f Riverside h as 23 l eases as Lessee for the use of various land, building and equipment as of the end of the fiscal year. The City is required to make principal and interest payments through fiscal year 2027. As of June 30, 2023, the value of the lease liability is $1,262. The leases have an interest rate of 0.52%. The value of the lease asset as of June 30, 2023 o f $2,485 w ith accumulated amortization of $1,246 a nd is included with land, buildings, and machinery and equipment on the table below:
Amount of Lease Assets by
Major Classes of Underlying
Asset
Asset Class
Lease Asset
Value
Accumulated
Amortization
Land $ 312 $ (149)
Buildings 1,248 (651)
Machinery and equipment 925 (446)
$ 2,485 $ (1,246)
Governmental Activities:
Beginning
Balance Additions Reclass Reductions
Ending
Balance
Due Within
One Year
Lease liability $ 1,060 $ 83 $ - $ (444) $ 699 $ 379
Business-Type Activities::
Beginning
Balance Additions Reclass Reductions
Ending
Balance
Due Within
One Year
Lease liability $ 787 $ - $ - $ (224) $ 563 $ 226
Governmental Activities
Fiscal Year Principal Interest Total Payments
2024 $ 379 $ 2 $ 381
2025 204 1 205
2026 102 - 102
2027 14 - 14
Total $ 699 $ 3 $ 702
51 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities
Fiscal Year
Principal
Payments
Interest
Payments Total Payments
2024 $ 226 $ 2 $ 228
2025 223 1 224
2026 114 - 114
Total $ 563 $ 3 $ 566
Subscription-Based Information Technology Arrangements Liability The City o f Riverside h as 23 s ubscription-based information technology arrangement (SBITA) for the use of various software as of the end of the fiscal year. The City is required to make principal and interest payments through fiscal year 2028. An initial lease liability was recorded in the amount of $3,582. As of June 30, 2023, the value of the subscription liability w as $2,016. The subscriptions have interest rates ranging from 0.52% to 2.31%. The value of the subscription asset as of June 30, 2023 is $3,922 with accumulated amortization of $1,757.
Governmental Activities:
Beginning
Balance Additions Reclass Reductions
Ending
Balance
Due Within
One Year
SBITA liability $ - $ 3,634 $ - $ (1,704) $ 1,930 $ 1,597 Business-Type Activities::
Beginning
Balance Additions Reclass Reductions
Ending
Balance
Due Within
One Year
SBITA liability $ - $ 163 $ - $ (77) $ 86 $ 74
Governmental Activities
Fiscal Year Principal Interest Total Payments
2024 $ 1,597 $ 13 $ 1,610
2025 185 4 189
2026 103 2 105
2027 43 1 44
2028 2 - 2
Total $ 1,930 $ 20 $ 1,950
Business-Type Activities
Fiscal Year Principal Interest Total Payments
2024 $ 74 $ 1 $ 75
2025 6 - 6
2026 4 - 4
2027 2 - 2
Total $ 86 $ 1 $ 87
Note 7. Derivative Instruments
Interest Rate Swaps
The City has six cash flow hedging derivative instruments, which are pay-fixed swaps. These swaps were employed as a hedge against debt that was refunded in 2008 and 2011 and against debt issued in 2012. The balance of the deferral account for each swap is included as part of the deferred charge on refunding associated with the new bonds. The swaps were also employed as a hedge against the new debt. Hedge accounting was applied to that portion of the hedging relationship, which was determined to be effective. Hedge accounting was also applied to the swap associated with the debt issued in 2012, which was also determined to be effective.
The following is a summary of the derivative activity for the year ended June 30, 2023:
Notional
Amount
Fair Value
as of
06/30/23
Change in
Fair Value
for Fiscal
Year
Governmental Activities
2008 Renaissance Certificates of Participation* $ 56,097 $ (3,381) $ 2,907 Business-Type Activities
2008 Renaissance Certificates of Participation* 25,203 (1,465) 1,260 2008 Electric Refunding/Revenue Bonds Series A 34,465 (491) 1,394 2008 Electric Refunding/Revenue Bonds Series C 32,150 (1,809) 1,686 2011 Electric Refunding/Revenue Bonds Series A 33,600 (1,797) 1,728 2011 Water Refunding/Revenue Bonds Series A 24,050 (1,377) 1,269 2012 Convention Center Financing 25,849 1,088 820
* The 2008 Riverside Renaissance Certificates of Participation were distributed between Governmental Activities and Business-Type Activities to properly reflect thier proportional share. 52 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Objective: In order to lower borrowing costs as compared to fixed-rate bonds, the City e ntered into interest rate swap agreements in connection with its $141,840 2008 Electric Revenue Bonds (Series A and C), $56,450 2011A Electric Revenue Bonds, $59,000 2011A Water Revenue Bonds and $128,300 2008 Certificates of Participation (“COP”). Also, in 2012, the City entered into an additional interest rate swap agreement in connection with the $41,650 Convention Center financing with PNC Bank, N.A.
Terms: Per the existing swap agreements, the City pays a counterparty a fixed payment and receives a variable payment computed as 62.68% of the London Interbank Offering Rate (LIBOR) one month index plus 12 basis points for the Electric and Water swaps. For the COP swap, the City pays a fixed payment and receives a variable payment computed as 63.00% of the LIBOR one-month index plus 7 basis points. The Convention Center financing consists of an initial 21-month variable rate interest only period during construction, which swaps to a fixed rate for the remaining 20-year amortization whereby the City will pay a fixed payment and will receive a variable payment computed at 65.01% of the LIBOR one month index plus 150 basis points. The notional value of the swaps and the principal amounts of the associated debt decline at a smaller rate until the debt is completely retired in fiscal year 2037.
The bonds and the related swap agreements for the 2008A Electric Revenue Bonds mature on October 1, 2029, 2008C Electric and 2011A Electric and 2011A Water Revenue/Refunding Bonds mature on October 1, 2035. The 2008 Certificates of Participation mature on March 1, 2037. The loan with PNC Bank, N.A. will be paid in full on April 1, 2034.
As of June 30, 2023, rates were as follows:
2008 Electric
Refunding/
Revenue
Bonds
Series A
2008 Electric
Refunding/
Revenue
Bonds
Series C
2011 Electric
Refunding/
Revenue
Bonds
Series A
Rates Rates Rates
Interest rate swap:
Fixed payment to counterparty %3.11100 %3.20400 %3.20100 Variable payment from counterparty %(0.69885) %(0.69911) %(0.75953) Net interest rate swap payments %2.41215 %2.50489 %2.44147 Variable rate bond coupon payments %0.56351 %0.57077 %0.68005 Synthetic interest rate on bonds %2.97566 %3.07566 %3.12152 2011 Water
Refunding/
Revenue
Bonds
Series A
2008
Renaissance
COPs
2012
Convention
Center
Financing
Rates Rates Rates
Interest rate swap:
Fixed payment to counterparty %3.20000 %3.36200 %3.24000 Variable payment from counterparty %(0.72101) %(0.65803) %(2.26771) Net interest rate swap payments %2.47899 %2.70397 %0.97229 Variable rate bond coupon payments %0.65145 %0.58813 %2.26771 Synthetic interest rate on bonds %3.13044 %3.29210 %3.24000 Fair Value: As of June 30, 2023, in connection with all swap arrangements, the transactions had a combined net negative fair value of $9,232. Because the coupons on the City’s variable-rate bonds adjust to changing interest rates, the bonds do not have a corresponding fair value decrease. The fair value was developed by a p ricing service using the zero-coupon method. This method calculates the future net settlement payments required by the swap, assuming that the current forward rates implied by t he yield curve correctly a nticipate future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due on the date of each future net settlement of the swap.
Credit risk: The City i s not exposed to substantial credit risk because each swap, with the exception of the Convention Center Financing swap have a negative fair value. The swap counterparties, Bank of America, N.A., Merrill Lynch Capital Services, Inc., PNC Financial Services Group, Inc. and J.P.
Morgan Chase & Co. were rated A+, A-, A and A- respectively by Standard & Poor’s. To mitigate the potential for credit risk for these swaps, the swap agreements require the fair value of the swap to be collateralized by t he counterparty w ith U.S. Government securities if the counterparties’ rating decreases to negotiated trigger points. Collateral would be posted with a third- party custodian. At June 30, 2023, there is no requirement for collateral posting for any of the outstanding swaps.
Basis risk: The City is exposed to basis risk on its pay-fixed interest rate swap and rate cap hedging derivative instruments because the variable-rate payments received by t he City o n these hedging derivative instruments are based on a rate or index other than interest rates the city pays on its hedged variable-rate debt. If a change occurs that results in the rates’ moving to convergence, the expected cost savings may not be realized. 53 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Termination risk: The derivative contract uses the International Swap Dealers Association Master Agreement, which includes standard termination events, such as failure to pay and bankruptcy. The Schedule to the Master Agreement includes an “additional termination event.” That is, a swap may be terminated by the City i f either counterparty’s credit quality f alls below “BBB-" as issued by Standard and Poor’s. The City or the counterparty may terminate a swap if the other party f ails to perform under the terms of the contract. If a swap is terminated, the variable-rate bond would no longer carry a s ynthetic interest rate. Also, if at the time of termination, a swap has a negative fair value, the City would be liable to the counterparty for a payment equal to the swap’s fair value.
Swap payments and associated debt: As of June 30, 2023, the debt service requirements of the variable-rate debt and net swap payments assuming current interest rates remain the same, for their term are summarized in the following table. As rates vary, variable-rate bond interest payments and net swap payments will vary.
Variable-Rate Bonds
Fiscal Year Principal Interest
Interest Rate
Swaps, Net Total
2024 $ 7,495 $ 1,994 $ 6,177 $ 15,666
2025 7,669 1,828 5,624 15,121
2026 8,662 1,711 5,323 15,696
2027 14,906 1,581 4,963 21,450
2028 15,639 1,444 4,587 21,670
2029-2033 107,314 4,776 15,933 128,023
2034-2038 71,290 771 3,199 75,260
Total $ 232,975 $ 14,105 $ 45,806 $ 292,886
Note 8. Letters of Credit
The City’s 2008 Certificates of Participation, 2008 Electric Revenue Bonds (Series A and C), and 2011 Electric Revenue Bonds (Series A) require an additional layer of security b etween the City a nd the purchaser of the bonds.
The City h as entered into the following letters of credit (“LOC”) in order to provide liquidity should all or a portion of the debt be optionally tendered to the remarketer without being successfully remarketed:
Debt Issue LOC Provider
LOC
Expiration
Date
Annual
Commitment
Fee
2008 Certificates of Participation Bank of America, N.A. 2026 0.350% 2008A Electric Revenue Bonds Barclays Bank, PLC 2024 0.395% 2008C Electric Revenue Bonds Barclays Bank, PLC 2024 0.395% 2011A Electric Revenue Bonds Bank of America, N.A. 2026 0.350% To the extent that remarketing proceeds are insufficient or not available, tendered amounts will be paid from drawings made under an irrevocable direct- pay letter of credit.
Liquidity advances drawn against the LOC that are not repaid will be converted to an installment loan with principal to be paid quarterly not to exceed a 5-year period. The City would be required to pay annual interest equal to the highest of
8.0%, the Prime Rate plus 2.50%, the Federal Funds Rate plus 2.50% and 150% of the yield on the 30-year U.S. Treasury Bond. No amounts have ever been drawn against the four letters of credit due to a failed remarketing. The various indentures allow the City to convert the mode of the debt in the case of a failed remarketing.
On February 1 , 2019, the City e ntered into a subordinate letter of credit agreement with U.S. Bank, National Association. The agreement was renewed on February 1 , 2022. The Subordinate Letter of Credit is a tool approved through the Electric and Water Utility F ive-Year Rate Plan to manage rate increases by enabling the Electric Utility and Water Utility to reduce cash levels while maintaining compliance with the Riverside Public Utilities Cash Reserve Policy. Under the terms and conditions of the agreement, the City may borrow up to $35,000 for purposes of the capital or operating financial needs of the Electric System and $25,000 for purposes of the capital or operating financial needs of the Water System. There were no borrowings against the LOC as of June 30, 2023.
54 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Note 9. Long-Term Obligations
Changes in Long-Term Obligations:
Below is a summary of changes in long-term obligations during the fiscal year:
Governmental Activities:
Beginning
Balance Additions Reclass Reductions
Ending
Balance
Due Within
One Year
General obligation bonds $ 4,987 $ - $ - $ (1,576) $ 3,411 $ 1,640 Pension obligation bonds 338,264 - - (16,851) 321,413 7,624 Certificates of participation 85,477 - - (4,893) 80,584 5,054 Lease revenue bonds 68,855 - - (3,762) 65,093 3,539
Direct borrowings:
Financed purchase 22,294 461 - (3,525) 19,230 3,589
$ 519,877 $ 461 $ - $ (30,607) $ 489,731 $ 21,446
Business-Type Activities:
Beginning
Balance Additions Reclass Reductions
Ending
Balance
Due Within
One Year
Revenue bonds $ 1,139,100 $ 63,596 $ - $ (39,020) $1,163,676 $ 36,925 Pension obligation bonds 110,718 - - (7,013) 103,705 8,454 Certificates of participation 25,912 - - (1,330) 24,582 1,391 Lease revenue bonds 6,625 - - (457) 6,168 480
Direct borrowings:
Notes payable 59,948 - - (4,878) 55,070 4,944
Contracts payable 933 - - - 933 150
Financed purchase 2,176 - - (700) 1,476 342
$ 1,345,412 $ 63,596 $ - $ (53,398) $1,355,610 $ 52,686 Governmental Activities:
General Obligation Bonds - Governmental Activities:
Principal
Outstanding
$20,000 Fire Facility P rojects, Election of 2003 General Obligation Bond; 3.0% to 5.5%, due in annual installments from $410 to $1,740 through August 1, 2024. $ 3,380
Add: unamortized bond premium 31
Total general obligation bonds $ 3,411
Remaining general obligation bond debt service payments will be made from unrestricted revenues of the General Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 1,640 $ 141 $ 1,781
2025 1,740 48 1,788
Premium 31 - 31
Total $ 3,411 $ 189 $ 3,600
Pension Obligation Bonds - Governmental Activities:
Principal
Outstanding
In 2018, the 2017 Taxable Pension Obligation Bonds were distributed between Governmental Activities, Business-Type Activities and the Successor Agency t o properly r eflect their proportional share. Pension Obligation bonds are not
collateralized by assets, nor do they constitute an obligation of the City o f Riverside whereby t he City i s obligated to levy o r pledge any form of taxation.
In 2020, the 2017 Taxable Pension Obligation Bonds
outstanding balances in the Successor Agency were distributed between Governmental Activities and Business-Type Activities. $31,960 2017 Taxable Pension Obligation Bonds Series A;
1.25% to 3.125%, due in annual installments from $2,910 to $3,580 through June 1, 2027; $15,299 relates to Governmental Activities. $ 6,565
55 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
$432,165 2020 Taxable Pension Obligation Bonds Series A;
1.646% to 3.857% due in annual installments from $2,920 to $28,310 through June 1, 2045. $324,582 relates to
Governmental Activities 315,001
Subtotal 321,566
Less: unamortized bond discount (153)
Total pension obligation bonds $ 321,413
Remaining pension obligation bond debt service payments will be made from unrestricted revenues of the General Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 7,624 $ 11,523 $ 19,147
2025 9,839 11,353 21,192
2026 9,884 11,123 21,007
2027 10,966 10,868 21,834
2028 10,343 10,570 20,913
2029-2033 69,906 47,456 117,362
2034-2038 107,923 31,014 138,937
2039-2043 84,076 10,858 94,934
2044-2048 11,005 537 11,542
Discount (153) - (153)
Total $ 321,413 $ 145,302 $ 466,715
Certificates of Participation – Governmental Activities:
Principal
Outstanding
In 2019, the 2008 Riverside Renaissance Certificates of Participation were distributed between Governmental Activities and Business-Type Activities to properly reflect their proportional share.
$19,945 2006 Galleria at Tyler Public Improvements Certificates of Participation are secured with collateral of the two level 912 space parking structure located near Tyler Street and Nordstrom store, the Tyler Mall North Plaza, the North Plaza parking, storm drains related to those improvements, and portions of two arterial streets; 4.0% to 5.0%, due in annual installments from $435 to $1,270 through September 1, 2036. $ 5
$128,300 2008 Riverside Renaissance Certificates of
Participation are secured with collateral of the Adulka Park, Fairmount Park and Golf Course, Arlington Heights Sports Park, Orange Terrace Park, Orange Terrace Community Center and Orange Terrace Library; issued at a variable rate; however, the City e ntered into an agreement to convert to a fixed rate of
3.4%. For information on the swap agreement see Note 6. Due in annual installments from $2,900 to $7,200 through March 1, 2037; $71,159 relates to Governmental Activities. 56,718 $35,235 2013 Pavement Rehab Certificates of Participation are secured by Measure A Sales Tax receipts; 4.0% to 5.0%, due in annual installments from $1,285 to $2,855 through June 1, 2033. 23,225
Subtotal 79,948
Plus: unamortized bond premium 636
Total certificates of participation $ 80,584
Remaining Certificates of Participation debt service payments will be made from unrestricted revenues of the Debt Service Fund. Annual debt service requirements to maturity are as follows:
56 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Fiscal Year Principal Interest Total
2024 $ 5,054 $ 3,031 $ 8,085
2025 5,224 2,826 8,050
2026 5,463 2,612 8,075
2027 5,713 2,389 8,102
2028 5,947 2,171 8,118
2029-2033 33,426 7,163 40,589
2034-2038 19,121 1,475 20,596
Premium 636 - 636
Total $ 80,584 $ 21,667 $ 102,251
Lease Revenue Bonds - Governmental Activities:
Principal
Outstanding
In 2019, the Series 2012A Lease Revenue Refunding Bonds were distributed between Governmental Activities, Business- Type Activities, and Successor Agency t o properly r eflect their proportional share.
On August 15, 2012, the City i ssued the Series 2012A Lease Revenue Refunding Bonds in the amount of $41,240. T he bonds are secured by lease payments on a portion of the City Hall Complex and the Lincoln Police Patrol Center. The bonds were issued to refinance the 2003 Certificates of Participation.
Interest on the bonds is payable semi-annually o n May 1 a nd November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum d epending on maturity d ate. P rincipal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and ending November 1, 2033. I n the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. $23,683 relates to
Governmental Activities. $ 17,724
$15,980 2019A Lease Revenue Refunding Bonds (Galleria at Tyler Public Improvements) are secured by lease payments on the two level 912 space parking structure located near Tyler Street and Nordstrom store, the Tyler Mall North Plaza, the North Plaza parking, storm drains related to those
improvements, and portions of two arterial streets. The bonds were issued to refinance all but $5 of the outstanding 2006 Lease Revenue Certificates of Participation (Galleria at Tyler Public Improvements); 2.75% to 4.0%, due in annual
installments from $605 to $1,180 through November 1, 2036.
The refunding transaction resulted in a total net present value savings of $1,140. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. 13,225
$33,505 2019B Lease Revenue Refunding Bonds (Main Library Project); 3.0% to 5.0%, due in annual installments from $1,245 to $2,645 through November 1, 2036. The bonds are secured by an amendment to the Ground Lease entered into by t he City upon issuance of the 2012A Lease Revenue Bonds. It adds the remainder of the City H all Complex, the Corporation Yard Administration Building and annex, Bobby Bonds Park, and the Main Library site. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. 27,475
Subtotal 58,424
Add: unamortized bond premium 6,669
Total lease revenue bonds $ 65,093
Remaining lease revenue bond debt service payments will be made from unrestricted revenues of the Debt Service Fund. Annual debt service requirements to maturity are as follows:
57 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Fiscal Year Principal Interest Total
2024 $ 3,539 $ 2,542 $ 6,081
2025 3,587 2,389 5,976
2026 3,733 2,242 5,975
2027 3,896 2,078 5,974
2028 4,074 1,895 5,969
2029-2033 23,311 6,439 29,750
2034-2038 16,284 1,420 17,704
Premium 6,669 - 6,669
Total $ 65,093 $ 19,005 $ 84,098
Business-Type Activities:
The following debt has been issued for the purpose of generating capital resources for use in acquiring or constructing municipal facilities or infrastructure projects.
Revenue Bonds - Business-Type Activities:
Principal
Outstanding
Electric
All electric revenue bonds are covenanted per the Amended and Restated Resolution No. 17662 (Electric) Master Resolution that upon the occurrence and continuation of an event of default, the owners of 25% in aggregate amount of Bond Obligation may, by written notice to the City, declare the entire unpaid principal and accreted value of the bonds due and payable should the City fail to pay its debts as they b ecome due or upon the entry of any decree or order of bankruptcy of the City.
$141,840 2008 Electric Refunding/Revenue Bonds; Series A & C. The bonds were issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.1% and
3.2% for the Series A & C bonds, respectively. See Note 6 for information on the swap agreements. Bonds are due in annual installments from $700 to $7,835 through October 1, 2035. In 2019, the Electric Fund refunded $40,425 of the outstanding balance. $ 66,615
$140,380 2010 Electric Revenue Bonds fixed rate bonds, 3% to
7.65%, due in annual installments from $95 to $33,725 through October 1, 2040. 126,110
$56,450 2011 Electric Revenue Refunding Bonds; Series A.
The bonds were issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.2%.
For information on the swap agreements see Note 6. Bonds are due in annual installments from $725 to $5,175 through October 1, 2035. Upon event of default, the bank may declare the outstanding amount of the obligations payable to be due immediately. D uring fiscal year 2019-20, the bonds originally issued as private placement bonds were remarketed as public securities in order to obtain a lower rate. The structure is the same and the existing swap is the same. 33,600
$79,080 2013 Electric Revenue Refunding Bonds; Series A fixed rate bonds, 3% to 5.25%, due in annual installments from $795 to $12,685 through October 1, 2043. 35,385
$283,325 2019 Electric Refunding/Revenue Bonds; Series A, fixed rate bonds, 5.0%, due in annual installments from $3,545 to $24,005 through October 1, 2048. The bonds refunded the 2008 Electric Revenue Bonds Series D and partially r efunded the 2008 Electric Revenue Bonds Series A and C. The refunding transactions resulted in a total net present value savings of $36,810. 245,660
Subtotal 507,370
Add: Unamortized bond premium 42,457
Subtotal - Electric 549,827
Water
All water revenue bonds are covenanted per the Amended and Restated Resolution No. 17664 (Water) Master Resolution that upon the occurrence and continuation of an event of default, the owners of 25% in aggregate amount of Bond Obligation may, by written notice to the City, declare the entire unpaid principal and accreted value of the bonds due and payable should the City fail to pay its debts as they b ecome due or upon the entry of any decree or order of bankruptcy of the City.
58 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
$67,790 2009 Water Revenue Bonds; Series B fixed rate bonds,
5.1% to 6.3%, due in annual installments from $2,475 to $4,985 through October 1, 2039. 62,760
$59,000 2011 Water Refunding/Revenue Bonds; Series A. The bonds were issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.2%. F or information on the swap agreements see Note 6. B onds are due in annual installments from $600 to $3,950 through October 1, 2035. 24,050
$114,215 2019 Water Refunding/Revenue Bonds; Series A,
fixed rate bonds, 5.0%, due in annual installments from $1,680 to $8,455 through October 1, 2048. T he bonds refunded the 2008 Water Revenue Bonds Series B and partially refunded and partially unwound the swap on the 2011 Water Revenue Bonds Series A. The refunding transactions resulted in a total net present value savings of $10,759. 98,465
$58,025 2022 Water Revenue Bonds; Series A fixed rate bonds,
5.0%, due in annual installments from $3,618 to $3,695 through October 1, 2052. 58,025
Subtotal 243,300
Add: Unamortized bond premium 21,994
Subtotal - Water 265,294
Sewer
All sewer revenue bonds are covenanted per Resolution No. 21860 Sewer Master Resolution that upon the occurrence and continuation of an event of default, the owners of 25% in aggregate amount of Bond Obligation may, by written notice to the City, declare the entire unpaid principal and accreted value of the bonds due and payable should the City fail to pay its debts as they become due or upon the entry of any decree or order of bankruptcy of the City.
$200,030 2015 Sewer Revenue Bonds; Series A fixed rate
bonds, 4% to 5%, due in annual installments from $4,790 to $14,175 through August 1, 2040. 173,610
$153,670 2018 Sewer Revenue Bonds; Series A fixed rate
bonds, 4% to 5%, due in annual installments from $2,905 to $11,775 through August 1, 2039. T he bonds advanced
refunded the 2009 Direct Pay B uild America Bonds Series B.
The refunding transaction resulted in a total net present value savings of $18,932. 139,475
Subtotal 313,085
Add: unamortized bond premium 35,470
Subtotal - Sewer 348,555
Total revenue bonds $ 1,163,676
Remaining revenue bond debt service payments will be made from revenues of the Electric, Water and Sewer Enterprise funds. Annual debt service requirements to maturity are as follows:
Electric
Fiscal Year Principal Interest Total
2024 $ 17,515 $ 23,362 $ 40,877
2025 18,335 22,488 40,823
2026 19,305 21,580 40,885
2027 20,085 20,742 40,827
2028 20,960 19,864 40,824
2029-2033 118,900 84,562 203,462
2034-2038 138,570 55,605 194,175
2039-2043 121,770 19,283 141,053
2044-2048 26,430 4,532 30,962
2049-2053 5,500 138 5,638
Premium 42,457 - 42,457
Total $ 549,827 $ 272,156 $ 821,983
59 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Water
Fiscal Year Principal Interest Total
2024 $ 7,950 $ 11,050 $ 19,000
2025 8,460 10,664 19,124
2026 8,840 10,257 19,097
2027 9,245 9,831 19,076
2028 9,665 9,385 19,050
2029-2033 54,430 39,883 94,313
2034-2038 66,100 27,022 93,122
2039-2043 35,515 13,817 49,332
2044-2048 24,110 7,878 31,988
2049-2053 18,985 2,193 21,178
Premium 21,994 - 21,994
Total $ 265,294 $ 141,980 $ 407,274
Sewer
Fiscal Year Principal Interest Total
2024 $ 11,460 $ 15,139 $ 26,599
2025 12,050 14,551 26,601
2026 12,670 13,933 26,603
2027 13,320 13,283 26,603
2028 14,000 12,600 26,600
2029-2033 81,540 51,465 133,005
2034-2038 104,525 28,483 133,008
2039-2043 63,520 4,212 67,732
Premium 35,470 - 35,470
Total $ 348,555 $ 153,666 $ 502,221
Pension Obligation Bonds - Business Type Activities:
Principal
Outstanding
In 2018, the 2017 Taxable Pension Obligation Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency t o properly r eflect their proportional share. Pension Obligation Bonds are not
collateralized by assets, nor do they constitute a debt of the City of Riverside whereby the City is obligated to levy or pledge any form of taxation.
In 2020, the 2017 Taxable Pension Obligation Bonds
outstanding balances in the Successor Agency were distributed between Governmental Activities and Business-Type Activities. $31,960 2017 Taxable Pension Obligation Bonds Series A;
1.25% to 3.125%, due in annual installments from $2,910 to $3,580 through June 1, 2027. $16,661 relates to Business Type Activities. $ 7,150
$432,165 2020 Taxable Pension Obligation Bonds Series A;
1.646% to 3.857% due in annual installments from $2,920 to $28,310 through June 1, 2045. $107,583 relates to Business- Type Activities. 96,555
Total pension obligation bonds $ 103,705
Remaining pension obligation bond debt service payments will be made from unrestricted revenues of the Business-Type Activities funds. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 8,454 $ 3,342 $ 11,796
2025 9,364 3,153 12,517
2026 9,636 2,932 12,568
2027 9,244 2,683 11,927
2028 6,182 2,430 8,612
2029-2033 22,399 9,940 32,339
2034-2038 25,232 5,403 30,635
2039-2043 13,194 1,174 14,368
Total $ 103,705 $ 31,057 $ 134,762
Certificates of Participation – Business Type Activities:
Principal
Outstanding
In 2019, the 2008 Riverside Renaissance Certificates of Participation were distributed between Governmental Activities and Business-Type Activities to properly reflect their proportional shares.
60 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
$128,300 2008 Riverside Renaissance Certificates of
Participation are secured with collateral of the Andulka Park, Fairmount Park and Golf Course, Arlington Heights Sports Park, Orange Terrace Park, Orange Terrace Community Center, and Orange Terrace Library; issued at a variable rate; however, the City e ntered into an agreement to convert to a fixed rate of
3.4%. For information on the swap agreement see Note 6. Due in annual installments from $2,900 to $7,200 through March 1, 2037; $30,841 relates to the Civic Entertainment Fund. $ 24,582 Total certificates of participation $ 24,582
Remaining certificates of participation debt service payments will be made from unrestricted revenues of the Civic Entertainment Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 1,391 $ 815 $ 2,206
2025 1,420 768 2,188
2026 1,482 719 2,201
2027 1,542 669 2,211
2028 1,603 617 2,220
2029-2033 8,859 2,235 11,094
2034-2038 8,285 639 8,924
Total $ 24,582 $ 6,462 $ 31,044
Lease Revenue Bonds – Business Type Activities:
Principal
Outstanding
In 2019, the Series 2012A Lease Revenue Refunding Bonds were distributed between Governmental Activities, Business- Type Activities, and the Successor Agency t o properly r eflect their proportional share.
On August 15, 2012, the City i ssued the Series 2012A Lease Revenue Refunding Bonds in the amount of $41,240. The bonds are secured by l ease payments on a portion of the City H all Complex and the Lincoln Police Patrol Center. The bonds were issued to refinance the 2003 Certificates of Participation.
Interest on the bonds is payable semi-annually o n May 1 a nd November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum d epending on maturity d ate. P rincipal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and ending November 1, 2033. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. $8,242 relates to
Governmental Activities. $ 6,168
Total lease revenue bonds $ 6,168
Remaining lease revenue bond debt service payments will be made from unrestricted revenues of the Parking Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 480 $ 256 $ 736
2025 465 236 701
2026 481 220 701
2027 502 199 701
2028 527 173 700
2029-2033 3,031 461 3,492
2034-2038 682 14 696
Total $ 6,168 $ 1,559 $ 7,727
The following are legally required debt service cash reserves. These amounts, at a minimum, are held by the City or fiscal agents at June 30, 2023:
61 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Governmental Long-Term Obligations:
Certificates of participation $ 7,504
Total $ 7,504
Enterprise Funds:
Electric 10,802
Total $ 10,802
The City has a number of debt issuances outstanding that are collateralized by the pledging of certain revenues. The amount and term of the remainder of these commitments are indicated in the debt service to maturity t ables presented in the accompanying notes. The purposes for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions in the accompanying notes. For the current year, debt service payments as a percentage of the pledged gross revenue (or net of certain expenses where so required by t he debt agreement) are indicated in the table below. The debt service coverage ratios also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment.
Description of
Pledge Revenue
Annual Amount of
Pledge Revenue
(net of expenses,
where required)
Annual Debt Service
Payments (all of
debt secured by
this revenue)
Coverage
Ratio
for FY
06/30/23
Electric revenues $ 93,040 * $ 46,400 2.01
Water revenues 36,362 * 18,848 1.93
Sewer revenues 35,752 25,236 1.42
*Excludes non-cash pension expense
There are also a number of limitations and restrictions contained in Assessment Bond indentures. The City b elieves they a re in compliance with all significant limitations and restrictions.
Direct Borrowings: Notes Payable - Business-Type
Activities:
Principal
Outstanding
Notes payable consists of several agreements with Harvest A OSR, LLC, Stockbridge NLP, LLC and related entities
(collectively H illwood) for their development of logistic centers located in the City o f San Bernardino. As part of these agreements, the Water Fund leases land to Hillwood and also purchased land from Hillwood with a subsequent lease-back to the entity. In addition, the agreements require Hillwood to relocate wells located on the properties as well as terminate an existing lease. In consideration of the cost of the land purchase, well relocations and lease termination, the Water Utility w ill make payments to Hillwood in the form of a credit with
Hillwood’s rental payments to the Water Utility f or the first 15 years of the leases. $ 15,100
Public Parking Fund and Civic Entertainment Fund loan for Fox Entertainment Plaza project secured with collateral of the Fox Theater, Fox Entertainment Plaza, and Parking Garage No. 7.
3.85%, payable in net annual installments of $1,747, beginning June 16, 2011 through December 16, 2031. In the event of default, the City would continue to remain liable for the payment of Rental Payments and damages for breach of the Lease. 12,560 62 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
In July 1 9, 2012, the City s ecured financing in the amount of $41,650 with BBVA Compass Bank for the renovation and
expansion of the Riverside Convention Center (Civic
Entertainment Fund) secured with collateral of the convention center facility. In March 2014, the financing arrangement with BBVA was increased to $44,650. The financing consists of an initial 21-month variable rate interest only p eriod during construction that has a swap transaction layered over the remaining 20-year amortization resulting in a “synthetic fixed” rate of 3.24% for 20 of the 22 years. F or information on the swap agreement see Note 6. A t the end of the construction period, principal and interest are due on the first of each month, with equal payments each year of approximately $2,850. In the event of default, the outstanding amount of the site lease payment drawn by the City and not repaid will bear interest at a default rate that will be charged until the default is cured. 27,410 Total notes payable $ 55,070
Remaining notes payable debt service payments will be made from unrestricted revenues of the Water Fund, Public Parking Fund, and Civic Entertainment Fund. Annual debt service requirements to maturity are as follows:
Water
Fiscal Year Principal Interest Total
2024 $ 1,499 $ 540 $ 2,039
2025 1,628 490 2,118
2026 1,765 414 2,179
2027 1,915 342 2,257
2028 2,076 260 2,336
2029-2033 6,217 290 6,507
Total $ 15,100 $ 2,336 $ 17,436
Non-Major Enterprise Funds
Fiscal Year Principal Interest Total
2024 $ 3,445 $ 1,322 $ 4,767
2025 3,568 1,200 4,768
2026 3,688 1,075 4,763
2027 3,811 945 4,756
2028 3,940 811 4,751
2029-2033 19,128 1,932 21,060
2034-2038 2,390 29 2,419
Total $ 39,970 $ 7,314 $ 47,284
Direct Borrowings: Contracts Payable
Principal
Outstanding
Water stock acquisition rights payable on demand to various water companies $ 933
Direct Borrowings: Financed Purchase
The City purchased various equipment through financing arrangements in the governmental and proprietary fund types. These activities are recorded for both governmental and business-type activities in the government-wide financial statements. The assets and related obligations in governmental funds are not recorded in the fund statements. For proprietary f unds, the assets and their related liabilities are reported directly i n the fund. Amortization applicable to proprietary a ssets acquired through financing arrangements is included with depreciation for financial statement presentation.
The assets acquired through financing arrangements are as follows:
Asset
Governmental
Activites
Business-Type
Activities
Buildings and improvements $ 2,353 $ -
Machinery and equipment 32,966 2,985
Subtotal 35,319 2,985
Less: Accumulated depreciation (10,418) (1,026)
Total $ 24,901 $ 1,959
63 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
The future minimum obligations as of June 30, 2023 were as follows:
Fiscal Year
Governmental
Activities
Business-Type
Activities
2024 $ 3,972 $ 375
2025 3,972 375
2026 2,876 375
2027 2,836 375
2028 1,990 56
Thereafter 4,953 -
Total minimum installments 20,599 1,556
Less: Amount representing interest
(rates ranging from 1.2% to 9%) (1,369) (80)
Total financed purchase $ 19,230 $ 1,476
Note 10. Compensated Absences
A liability i s recorded for unused vacation and similar compensatory l eave balances since the employees’ entitlement to these balances are attributable to services already rendered and it is probably that virtually all of these balances will be liquidated by e ither paid time-off or payments upon termination or retirement.
Below is a summary o f changes in compensated absences during the fiscal year:
Governmental Activities:
Beginning
Balance Additions Reductions
Ending
Balance
Due
Within
One Year
Compensated absences $ 29,994 $ 20,209 $ (18,778) $ 31,425 $ 19,673 Business-Type Activities:
Beginning
Balance Additions Reductions
Ending
Balance
Due
Within
One Year
Compensated absences $ 11,855 $ 9,655 $ (9,426) $ 12,084 $ 9,602 Note 11. Risk Management
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Property insurance coverage has a limit of $1,000,000, with a deductible of $100. Earthquake and flood insurance coverage has a limit of $25,000, with a deductible of 5% (subject to $100 minimum for earthquake and $100 for flood). Workers’ compensation insurance coverage has a limit of $25,000, with a self-insured retention of $3,000. The City h as four General Liability policies: a primary and and three excess General Liability policies. The primary General Liability policy coverage has a limit of $4,000 and the Excess General Liability policies provide an additional $21,000 of coverage, with a self- insured retention of $3,000. Both the primary a nd excess General liability policies cover general and auto liability claims including but not limited to Law Enforcement Liability a nd Public Officials Errors and Ommissions. There has been one claim settled in the last three fiscal years that exceed insurance coverage. Internal service funds have been established to account for and finance the uninsured risks of loss.
All funds of the City p articipate in the Risk Management program and make payments to the Internal Service Funds based on actuarial estimates of the amounts needed to fund prior and current year claims and incidents that have been incurred but not reported. Interfund premiums are accounted for as quasi- external transactions and are therefore recorded as revenues of the Internal Service Funds in the fund financial statements.
Changes in the self-insurance fund’s claims and judgments amounts are:
Governmental Activities:
Beginning
Balance Additions Reductions
Ending
Balance
Due
Within
One Year
Claims and judgments $ 78,790 $ 1,938 $ (27,616) $ 53,112 $ 12,834 Unpaid claims, June 30,2021 $ 76,603
Incurred claims (including IBNR's) 13,134
Claim payments and adjustments (10,947)
Unpaid claims, June 30,2022 78,790
Incurred claims (including IBNR's) 1,938
Claim payments and adjustments (27,616)
Unpaid claims, June 30,2023 $ 53,112
Note 12. Landfill Capping
State and Federal laws and regulations require the City to place a final cover on all active landfills when closed and to perform certain maintenance and monitoring functions at the landfill site for 30 years after closure. To comply with these laws and regulations, the City is funding the costs of closure and "final capping" of the Tequesquite landfill located in the City. This area, comprised of approximately 1 20 acres, operated as a "Class II Sanitary L andfill" until its 64 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
closure in 1985. During its operation, the landfill did not accept hazardous waste and no clean up and abatement or cease and desist orders have been issued to the City. The capacity used at June 30, 2023 was 100%. The remaining post closure period is currently 16 years.
The estimated costs as determined and updated by t he Public Works Department are associated with flood control upgrades, remediation of possible ground water contamination and control of methane gas. All potential costs have been recognized in the financial statements. However, there is the potential for these estimates to change due to inflation, deflation, technology, or change in laws or regulations. The City i s recovering such costs in rates charged to its customers. The portion of costs to be recovered through future rates is classified as a regulatory a sset and will be amortized over future periods.
Below is a summary of changes in landfill capping liability during the fiscal year:
Business-Type Activities:
Beginning
Balance Additions Reductions
Ending
Balance
Due
Within
One Year
Landfill capping $ 9,820 $ - $ (395) $ 9,425 $ 559
Note 13. Nuclear Decommissioning Liability
As of June 30, 2023, decommissioning liability b alance was $48,873 w ith a portion reflected as current liabilities payable from restricted assets. Due to adequate funding of the liability, the Electric Utility no longer provides additional funding to the trustee. However, since the decommissioning cost estimate is subject to a number of uncertainties including the cost of disposal of nuclear waste, site remediation costs, as well as a number of other assumptions and estimates, the Electric Utility will continue to set aside funds in the designated decommissioning reserve of $2,000 per year, as approved by t he Board of Public Utilities and City Council.
Below is a summary o f changes in decommissioning liability d uring the fiscal year:
Business-Type Activities:
Beginning
Balance Additions Reductions
Ending
Balance
Due
Within
One Year
Decommissioning liability $ 53,310 $ 907 $ (5,344) $ 48,873 $ 10,227 Note 14. Commitments and Contingencies
Intermountain Power Agency
The Electric Utility h as a power purchase contract with Intermountain Power Agency (IPA) for the delivery of electric power. The Electric Utility’s share of IPA power is equal to 7.6 percent, or approximately 137.1 MW, of the net generation output of IPA’s 1,800 MW central Utah coal-fueled generating station, known as Intermountain Power Project (IPP). The contract expires in 2027 and the debt fully matures in 2024.
The contract constitutes an obligation of the Electric Utility to make payments solely f rom operating revenues. The power purchase contract requires the Electric Utility to pay certain minimum charges that are based on debt service requirements and other fixed costs. Such payments are considered a cost of production.
On September 29, 2006, Senate Bill 1368 (SB 1368) was enacted into law. The bill requires electric service providers to limit financial investments in power plants to those that adhere to greenhouse gas performance standards as determined by the Public Utilities Commission. Pursuant to this legislation, the Electric Utility is prohibited from renewing its participation in IPP if it remains a coal fueled generating resource.
In order to facilitate the continued participation in the IPP, the IPA Board issued the Second Amendatory P ower Sales Contract, which amended the IPP Contract allowing the plant to replace the coal units with combined cycle natural gas units by July 1, 2025. On June 16, 2015, the City Council approved the IPP renewal agreements, including the Second Amendatory Power Sales Contract and the Renewal Power Sales Contract, and authorized participation in the IPP Repower Project for up to 5 percent in generation capacity o r 60 MW. The Second Amendatory Power Sales Contract became effective March 16, 2016.
On January 5 , 2017, the Electric Utility e xecuted the Renewal Power Sales Contract and the Electric Utility accepted an offer of 4.167 percent entitlement or 50 MW generation capacity in the IPP Repower Project based on the 1,200 MW d esigned capacity, which is within the maximum participation level approved by t he City C ouncil. The Electric Utility’s corresponding Southern Transmission System allocation is 5.278 percent or approximately 1 27 MW.
Further, under the Renewal Power Sales Contract, the Electric Utility h ad the right to exit from the Repower Project by no later than November 1, 2019, if it is determined that the Repower Project is not cost beneficial to its customers. 65 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
On September 11, 2018, the City Council approved “Alternative Repowering” of the IPP Repower Project, which reduced the design capacity of the future plant from 1,200 MW to 840 MW.
On May 7, 2019, the City Council authorized termination of the Renewal Power Sales Contract between the IPA and the Electric Utility effective November 1, 2019, and the Electric Utility’s exit from the IPP Repower Project upon the expiration date of the current Power Sales Contract on June 15, 2027, due to numerous uncertainties surrounding the IPP Repower Project.
The Electric Utility i s a member of the Southern California Public Power Authority ( SCPPA), a joint powers agency. SCPPA provides for the financing and construction of electric generating and transmission projects for participation by s ome or all of its members. To the extent the Electric Utility participates in take-or-pay p rojects developed by S CPPA, it has entered into Power Purchase or Transmission Service Agreements, entitling the Electric Utility t o the power output or transmission service, as applicable, and the Electric Utility w ill be obligated for its proportionate share of the project costs whether or not such generation output of transmission service is available.
The projects and the Electric Utility’s proportionate share of SCPPA’s obligations, including final maturities and contract expirations are as follows:
Project
Percent
Share Entitlement
Final
Maturity
Contract
Expiration
Palo Verde Nuclear Generating Station %5.40 12.3 MW 2017 2030 Southern Transmission System %10.20 244.0 MW 2027 2027
Mead-Phoenix Transmission %4.00 18.0 MW 2020 2030
Mead-Adelanto Transmission %13.50 118.0 MW 2020 2030
Terms of Take or Pay Commitments
As part of the take-or-pay commitments with IPA and SCPPA, the Electric Utility has agreed to pay its share of current and long-term obligations. Management intends to pay t hese obligations from operating revenues received during the year that payment is due. A long-term obligation has not been recorded on the accompanying financial statements for these commitments. Take-or-pay commitments terminate upon the later of contract expiration or final maturity of outstanding bonds for each project.
The outstanding debts associated with the take-or-pay o bligations have fixed interest rates, which range from 4.00 percent to 5.00 percent. The schedule below details the amount of principal and interest that is due and payable by the Electric Utility as part of the take-or-pay contract for each project in the fiscal year indicated.
IPA1 SCPPA Total
Debt Service
Payment Year
Ending June 30,
Intermountain
Power Project
Southern
Transmission
System
All
Projects
2024 $ 3,479 $ 7,125 $ 10,604
2025 2,997 3,261 6,258
2026 2,997 3,257 6,254
2027 4,810 3,253 8,063
2028 - 3,254 3,254
Total $ 14,283 $ 20,150 $ 34,433
1 The Electric Utility's contract with IPA expires in 2027. The Electric Utility will not be responsible for the proportionate share of the 2022 Series A & B Revenue bonds after the contract expires.
In addition to debt service, the Electric Utility’s entitlements require the payment of fuel costs, operating and maintenance, administrative and general and other miscellaneous costs associated with the generation and transmission facilities discussed above. These costs do not have a similar structured payment schedule as debt service and vary each year. The costs incurred for the years ended June 30, 2023 and 2022, are as follows:
Fiscal Year
Intermountain
Power Project*
Palo Verde
Nuclear
Generating
Station*
Southern
Transmission
System
Mead-Phoenix
Transmission
Mead-Adelanto
Transmission All Projects
2023 $ 20,344 $ 3,010 $ 3,839 $ 90 $ 461 $ 27,744
2022 19,522 2,930 4,400 57 415 27,324
* Excludes variable costs
These costs are included in production and purchased power or transmission expense on the Statements of Revenues, Expenses, and Changes in Net Position.
The Electric Utility h as become a Participating Transmission Owner with the California Independent System Operator (CAISO) and has turned over the operational control of its transmission entitlements including the Southern Transmission System, Mead-Phoenix and Mead-Adelanto Transmission Projects. In return, users of California’s high voltage transmission grid are charged for, and the Electric Utility r eceives reimbursement for, transmission revenue requirements, including the costs associated with these three transmission projects.
66 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Hoover Uprating Project
The Electric Utility’s initial entitlement in the Hoover project through SCPPA terminated on September 30, 2017. On August 23, 2016, the City C ouncil approved a 50-year Electric Service Contract (ESC) and an Amended and Restated Implementation Agreement (IA) with the Western Area Power Administration (Western), Bureau of Reclamation for 30 MW o f hydroelectric power. The contract with Western is effective as of October 1, 2017. The ESC extended the Electric Utility’s 30 MW entitlement in the Hoover project through 2067. The IA is a supplemental agreement to the ESC that establishes administrative, budgetary and project oversight by creating project committees and process for decision making plant operations.
Nuclear Insurance
The Price-Anderson Act (the Act) requires that all utilities with nuclear generating facilities purchase the maximum private primary n uclear liability insurance available ($450 million) and participate in the industry’s secondary financial protection plan. The secondary f inancial protection program is the industry’s retrospective assessment plan that uses deferred premium charges from every l icensed reactor owner if claims and/or costs resulting from a nuclear incident at any licensed reactor in the United States were to exceed the primary nuclear insurance at that plant’s site. Effective October 5, 2023, the Act limits liability from third-party claims to approximately $16.5 billion per incident.
Under the industry wide retrospective assessment program provided for under the Act, assessments are limited to $137.6 million per reactor for each nuclear incident occurring at any n uclear reactor in the United States, with payments under the program limited to $24.7 million per reactor, per year, per event to be indexed for inflation every f ive years. Based on the Electric Utility’s interest in Palo Verde, the Electric Utility would be responsible for a maximum assessment of $1.4 million, limited to payments of $0.2 million per incident, per year. If the public liability limit above is insufficient, federal regulations may impose further revenue-raising measures to pay c laims, including a possible additional assessment on all licensed reactor operators.
Renewable Portfolio Standards (RPS)
On April 12, 2011, the California Renewable Energy Resources Act (SBX1-2) was signed into law by t he Governor, which officially c reated the first set of tiered RPS targets of 20% by 2013, 25% by 2016 and 33% by 2020. SBX1-2 specified that publicly owned utilities must meet these defined targets via interim Compliance Period (CP) targets to achieve the end goal of 33% RPS by December 31, 2020 as follows: CP1 - an average of 20 percent of retail sales during the three year period from 2011-2013; CP2 – no less than 25 percent of retail sales by December 31, 2016; and CP3 – no less than 33 percent of retail sales by D ecember 31, 2020. The Riverside Public Utilities Board and City Council approved the RPS Enforcement Program required by S BX1-2 on November 18, 2011 and December 13, 2011, respectively, and further approved the Electric Utility’s RPS Procurement Plan (a.k.a. Procurement Policy) implementing the new RPS mandates on May 3 , 2013 and May 1 4, 2013, respectively. The Electric Utility m et the procurement requirements of SBX1-2 for CP1 (2011-2013) CP2 (2014-2016), and CP3 (2017-2020). The additional future mandates are expected to be met with resource procurement actions as outlined in the Electric Utility’s RPS Procurement Plan. For calendar year 2022, renewable resources provided 43 percent of retail sales requirements.
On October 7, 2015, the Governor signed into law Senate Bill 350 (SB 350) increasing the RPS mandate from 33 percent by 2 020 to 50 percent by December 31, 2030. In addition, SB 350 required that an updated RPS Procurement Policy be approved and adopted before January 1, 2019 and be incorporated into the Electric Utility’s Integrated Resource Plan. An updated 2018 Renewable Energy P rocurement Policy w as adopted by t he Board and City C ouncil on September 10, 2018 and October 9, 2018, respectively. The Electric Utility e xpects to be able to substantially m eet the increased RPS mandates imposed by S B 350 with the actions described in the updated procurement policy and the portfolio of renewable resources outlined below.
On September 10, 2018, the 100 Percent Clean Energy Act of 2018 (Senate Bill 100) was signed into law by the California Governor. This bill further increases the RPS goals of SBX1-2 and SB 350 while maintaining the 33 percent RPS target by D ecember 31, 2020, but modifying the RPS percentages to be 44 percent by December 31, 2024, 52 percent by December 31, 2027, 60 percent by December 31, 2030, with an end goal of 100 percent of total retail sales of electricity in California generated from eligible renewable energy resources and zero-carbon resources by December 31, 2045. It is expected that the California Energy Commission will have further guidance and enforcement procedures for publicly o wned utilities to meet these increased mandates. The Electric Utility will continue to monitor the outcome and impacts of any upcoming workshops and regulations in meeting the new requirements.
67 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
In an effort to increase the share of renewables in the Electric Utility’s power portfolio, the Electric Utility entered into power purchase agreements (PPA) and power sales agreements (PSA) with various entities described below in general on a “take-and-pay” basis. The contracts in the following tables were executed as part of compliance with RPS mandates.
Long-term renewable PPAs and PSAs in operation:
Supplier Type
Maximum
Contract1
Contract
Expiration
Estimated
Annual
Cost for
2023
Wintec Wind 1.3 MW 02/19/2024 $ 150
WKN Wagner Wind 6.0 MW 12/22/2032 1,358
Terraform Power - AP North Lake Photovoltaic 20.0 MW 08/11/2040 4,942 Onward Energy - Columbia II Photovoltaic 11.1 MW 12/22/2034 2,314 GlidePath Power Solutions - GPS Cabazon Wind LLC Wind 39.0 MW 01/01/2025 4,299 Capital Dynamics - Kingbird Solar B, LLC Photovoltaic 14.0 MW 12/31/2036 2,867 AES - Summer Solar Photovoltaic 10.0 MW 12/31/2041 1,748 AES - Antelope Big Sky Ranch Photovoltaic 10.0 MW 12/31/2041 1,748 AES - Antelope DSR 1 Solar Photovoltaic 25.0 MW 12/19/2036 3,826 Arevon - Tequesquite Landfill Solar Photovoltaic 7.3 MW 12/31/2040 1,434 Roseburg Forest Products2 Biomass N/A MW 02/16/2026 179 CalEnergy - Salton Sea Portfolio Geothermal 86.0 MW 12/31/2039 56,038 Atlantica - Coso Geothermal Geothermal 10.0 MW 12/31/2041 6,050 Total3 239.7 MW $ 86,953
1 All contracts are contingent on energy d elivered from specific related generating facilities. The Electric Utility h as no commitment to pay a ny amounts except for energy delivered on a monthly basis from these facilities except for any economic curtailments directed by the Electric Utility. 2 This supply is only available to satisfy SB 859 requirements. 3 American Renewable Power - Loyalton was excluded due to the contract expiring April 2023 and no capacity received.
Long-term renewable PPAs with expected delivery:
Supplier Type
Maximum
Contract1 Expected
Delivery
Energy
Delivery
No Later
Than
Contract
Term
In Years
Atlantica - Coso Geothermal Geothermal 20.0 MW 01/01/2027 01/01/2027 15 Total 20.0 MW
1 All contracts are contingent on energy d elivered from specific related generating facilities. The Electric Utility h as no commitment to pay a ny amounts except for energy delivered on a monthly basis from these facilities except for any economic curtailments directed by the Electric Utility.
Cap-and-Trade Program
Assembly B ill (AB) 32, enacted in 2006, mandated that the California Air Resources Board (CARB) develop regulations for the reduction of greenhouse gas (GHG) emissions to the 1990 levels by t he year 2020. Subsequently, Senate Bill (SB 32), enacted in 2016, extended the requirements of AB 32 and codified that it was the State’s goal to reduce GHG emissions to 40% below 1990 levels by the year 2020. AB 398 was then enacted in 2017 clarifying that it was the State legislature’s intent to continue the Cap-and-Trade Program and regulations until 2030. In January 2 013, emission compliance obligations developed by CARB began under the Cap-and-Trade Program (Program). This Program requires electric utilities to have GHG allowances on an annual basis to offset GHG emissions associated with generating electricity. To ease the transition and mitigate the rate impacts to retail customers, CARB will allocate certain amounts of GHG allowances at no cost to electrical distribution utilities.
The Electric Utility’s free allocation of GHG allowances is expected to be sufficient to meet the Electric Utility’s direct GHG compliance obligations.
At times, the Electric Utility m ay h ave allocated allowances in excess of its compliance obligations that can be sold into the CARB quarterly a uctions. In fiscal year ended June 30, 2023, the Electric Utility r eceived $18,317, in proceeds related to the sale of the GHG allowances which are included on the Statements of Revenues, Expenses, and Changes in Net Position as other operating revenue. The Electric Utility h as established a restricted Regulatory Requirement reserve to comply w ith regulatory r estrictions and governing requirements related to the use of the GHG proceeds. The available funds are to be utilized for qualifying projects, consistent with the goals of AB 32 to benefit the retail ratepayers. The balance in the Regulatory Requirement reserve was $21,707 as of June 30, 2023.
The Electric Utility also purchases GHG allowances which can be used in future periods for GHG compliance regulations. The balance of purchased GHG allowances was $485 as of June 30, 2023 and is recorded as inventory in the Statement of Net Position.
Low Carbon Fuel Standard Program
Assembly B ill (AB) 32, enacted in 2006, mandated that the California Air Resources Board (CARB) develop regulations for the reduction of greenhouse gas (GHG) emissions to the 1990 levels by t he year 2020. Subsequently, Senate Bill (SB 32), enacted in 2016, extended the requirements of AB 32 and codified that it was the State’s goal to reduce GHG emissions to 40% below 68 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
1990 levels by the year 2020. Similar to the Cap-and-Trade Program, the Low Carbon Fuel Standard (LCFS) Program is a key c omponent of the market mechanisms authorized by t hese bills to achieve the State’s GHG emissions reduction goals. The LCFS regulation was initially approved by CARB in 2009.
The program then underwent some litigation in the State of California and the regulation was re-adopted in 2015 with modifications and went into effect in 2016. LCFS seeks to reduce the carbon intensity ( CI) of fuels used for transportation by establishing an annual CI target. Fuels that have a CI greater than the target have a compliance obligation and are required to turn in LCFS credits; fuels with a CI lower than the target may generate credits.
Electricity i s considered a fuel subject to the program when it is used as a transportation fuel in electric vehicles. However, because the CI of electricity is substantially lower than the annual CI targets under the program, electricity is a fuel that generates LCFS credits and participation in the Program is voluntary.
The City o pted into the LCFS program in March 2018 and began generating LCFS credits for the first quarter of 2018. These credits are associated with two sources – unmetered electricity u sed to charge residents’ electric vehicles at their homes (residential base credits) and from electric forklifts charging at private businesses (forklift credits). CARB calculates the credits that the Electric Utility receives, and the Electric Utility submits reports quarterly to receive the credits.
The LCFS regulation was amended in 2018 and required that electric utilities that have opted into the LCFS Program participate in and manage a statewide point-of-sale rebate program for new electric vehicles. This program is called the California Clean Fuel Reward Program (CFR) and the City j oined the program in May 2 020. To fund the program, electric utilities are required to contribute proceeds received from the sales of residential base credits beginning with the credits the Electric Utility r eceived in Q4 2019 (generated from electricity used for transportation in Q2 2019). Residential base credits the Electric Utility r eceived prior to that time are not subject to the contribution requirements. Additionally, a “start-up” contribution from proceeds is required to be submitted by January 31, 2021. After the initial deposit of funds in November 2020, deposits to the CFR program are required by March 31 annually.
In fiscal year ended June 30, 2023, the Electric Utility’s proceeds from the sale of LCFS credits were $683. These proceeds are included on the Statements of Revenues, Expenses and Changes in Net Position as other operating revenue.
The Electric Utility has established a restricted Regulatory Requirement reserve to comply with regulatory restrictions and governing requirements related to the use of the LCFS proceeds. The available funds are to be utilized for qualifying programs that support the Electric Utility's customers who are existing and future electric vehicle owners. Total expenses for qualifying programs as of June 30, 2023 was $194. The balance in the Regulatory Requirement reserve as of June 30, 2023 was $3,795.
Note 15. Other Post-Employment Benefits (OPEB)
Plan description - The City’s defined benefit OPEB plan, Retiree Health Plan, provides continuation of medical (including prescription drugs) and dental coverage benefits to retirees and surviving spouses in the form of an implied rate subsidy. The Retiree Health Benefits plan is a single employer defined benefit OPEB plan administered by t he City. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.
Benefits provided - Eligibility f or continuation of coverage requires retirement from the City and CalPERS with at least 5 years of City service. The retiree is responsible for 100% of the premium cost for coverage, which is based on the blended experience of both the active and retired employees. The City is not required by law or contractual agreement to provide funding other than the pay- as-you-go amount necessary to provide current benefit to eligible retirees and beneficiaries. Retiree and spousal coverage terminate when the retirees become covered under another employer health plan, or when the retiree reaches Medicare eligibility a ge, which is currently a ge 65. However, retiree benefit continues to the surviving spouse if the retiree elects the CalPERS survivor annuity.
Employees covered by b enefit terms – At June 30, 2022, the following employees were covered by the benefit terms:
Inactive plan members or beneficiaries currently receiving benefits 206 Inactive plan members entitled to but not yet receiving benefits - Active plan members 2,014
Total 2,220
Significant Actuarial Assumptions Used in Calculating the Total OPEB Liability The total OPEB liability w as determined by a n actuarial valuation using the following actuarial assumptions:
69 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Valuation Date: June 30, 2021
Measurement Date: June 30, 2022
Funding Policy: Pay-as-you-go for implicit rate subsidy Discount Rate: 3.54% per year net of expenses. This is based on the Bond Buyer 20 Bond Index
Inflation Rate: 2.5% per annum
Salary Inflation: 2.75% per annum
Salary Increases: Since benefits do not depend on salary (as they do for pensions), this assumption is only used to determine the accrual pattern of the Actuarial Present Value of
Projected Benefit Payments
Mortality: Based on the CalPERS 2017 Experience Study
Sensitivity analysis of total OPEB liability for healthcare cost trend rates.
The following presents the total net OPEB liability, calculating using the healthcare cost trend rate of 4.0%, as well as what the total OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-percentage- point lower (3.0%) or 1-percentage-point higher (5.0%) than the current rate:
Current Healthcare
1% Decrease Cost Trend Rate 1% Increase
3% 4% 5%
Total OPEB liability $ 39,878 $ 45,471 $ 51,830
Sensitivity analysis of total OPEB liability for discount rates The following presents the total OPEB liability, calculating using the discount rate of 3.54%, as well as what the total OPEB liability w ould be if it were calculated using a discount rate that is 1-percentage-point lower (2.54%) or 1- percentage-point higher (4.54%) than the current rate:
1% Decrease
(2.54%)
Current
Discount Rate
(3.54%)
1% Increase
(4.54%)
Total OPEB liability $ 49,839 $ 45,471 $ 42,384
Change in total OPEB liability
For fiscal year 2023, the City recognized total OPEB expense of $2,285. The liability f or the governmental activities is primarily l iquidated from the General Fund. The following table shows the change in the total OPEB liability for the year ended June 30, 2023:
2023
Beginning total OPEB liability $ 48,770
Service cost 3,184
Interest 1,070
Changes of assumptions (5,926)
Benefit of implied subsidy payments (1,627)
Net changes (3,299)
Ending total OPEB liability $ 45,471
Deferred outflows/inflows of resources
At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Contributions subsequent to the
measurement date $ 1,836 $ -
Differences between expected
and actual experience 163 3,410
Changes of assumptions 6,788 8,501
Total $ 8,787 $ 11,911
Amounts reported as deferred outflows/(inflows) of resources related to OPEB will be recognized in OPEB expense as follows:
Year Ending June 30,
Deferred
Outflows/(Inflows)
of Resources
2024 $ (134)
2025 (134)
2026 74
2027 113
2028 113
Thereafter (4,992)
Total $ (4,960)
70 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Note 16. City Employees Retirement Plan
(A) Plan Description - The City of Riverside contributes to the California Public Employees Retirement System (CalPERS), an agent multiple employer public employee defined benefit pension plan. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by s tate statute and City ordinance. A copy of CalPERS’ annual financial report may be obtained online at www.calpersca.gov.
(B) Funding Policy - The City has contributed at the actuarially determined rate provided by CalPERS’ actuaries. Participants are required to contribute various percentages for miscellaneous employees and for safety e mployees of their annual covered salary b ased on their Tier. The City h as a multiple tier retirement plan with benefits varying by p lan. The City p ays the employees’ contributions to CalPERS for both miscellaneous and safety employees hired on or before specific dates as follows:
Safety (Police):
1st T ier (RPOA, RPOA Supervisory & R PAA Management) - The retirement formula is 3% at age 50 for employees hired on or before February 1 6, 2012 (RPOA, RPAA Management) or June 8, 2012 (RPOA Supervisory). E ffective January 1 , 2018, employees were required to pay 1 .5% of their pensionable income, with the City contributing the other 7.5%. Only i n the event that annual wages increase in excess of 2%, will the following apply: Effective January 1, 2019, employees were required to pay a n additional portion of their pensionable income. This portion is a three-year increase of 1.5% (2019), 1.5% (2020) and 1.5% (2021). However, the 2021 increase did not take affect. In 2023, RPAA Management had an additional 1% increase and employees are contributing 5.5% pensionable income.
RPOA and RPOA Supervisory r emained at 4.5% contribution of pensionable income.
2nd T ier (RPOA, RPOA Supervisory & R PAA Management) - The retirement formula is 3% at age 50 for RPOA and RPAA Management employees hired on or after February 17, 2012 and RPOA Supervisory employees hired on or after June 8, 2012 pay t heir share (9%) of contributions.
3rd Tier (RPOA, RPOA Supervisory & RPAA) – The retirement formula is 2.7% at age 57 for new members hired on or after January 1, 2013 and the employee must pay t he normal cost to CalPERS which is currently a t 12.75%. Classic members (CalPERS members prior to 12/31/12) hired on or after January 1 , 2013 may be placed in a different tier.
Safety (Fire):
1st Tier - The retirement formula is 3% at age 50 for employees hired before June 11, 2011. E ffective January 1 , 2019, employees were required to pay a portion of their pensionable income. This portion is a three-year increase of 2.5% (2019), 2.5% (2020) and 3% (2021).
However, the 2021 increase was only 2 % with the remaining 1% increase in 2022; therefore, in 2022, employees are contributing 8% of their pensionable income.
2nd Tier - The retirement formula is 3% at age 55 and new employees hired on or after June 11, 2011 pay their share (9%) of contributions. 3rd Tier – The retirement formula is 2.7% at age 57 for new members hired on or after January 1, 2013. A new member, as defined by the Public Employees’ Pension Reform Act (PEPRA), hired on or after January 1 , 2013 pay 5 0% of the normal cost to CalPERS which is currently 12.75% of compensation.
Miscellaneous:
1st Tier –
The retirement formula is 2.7% at age 55 for employ ees hired on or before October 18, 2011. E ffective January 1 , 2018 for unrepresented employees (Sr. Management, Management,
Professional, Para-professional, Supervisory, Confidential, and Executive units, excluding the Chief of Police and the Fire Chief), the employees were required to pay 2 % of their pensionable income, with the City contributing the other 6%. Effective January 1, 2019, employees were required to pay an additional portion of their 71 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
pensionable income. This portion is a three-year increase of 2% (2019), 2% (2020) and 2% (2021). As of 2021, employees were contributing the entire 8% of their pensionable income. The retirement formula is 2.7% at age 55 for SEIU and SEIU Refuse employees hired before June 7, 2011. Currently, employees are required to pay 7 % of their pensionable income with the City contributing the other 1%. Effective January 1 , 2019, employees were required to pay a n additional portion of their pensionable income. This portion is a two-year increase of 1% (2019) and 1% (2020). A s of 2020, employees are contributing the entire 8% of their pensionable income.
The retirement formula is 2.7% at age 55 for IBEW a nd IBEW Supervisory e mployees hired on or before October 18, 2011.
Effective November 1, 2017 employees were required to pay 2% of their total pensionable income with the City p aying the remaining 6%. Effective each November 1 st, employees will be required to pay an additional portion of their pensionable income. This portion is a three-year increase of 2% (2018), 2% (2019) and 2% (2020). As of November 2020, employees are contributing the entire 8% of their pensionable income.
2nd Tier - The retirement formula is 2.7% at age 55, and:
Miscellaneous employees, IBEW, and IBEW Supervisory h ired on or after October 19, 2011 pay their share (8%) of contributions. SEIU and SEIU Refuse employees hired on or after June 7, 2011 pay their share (8%) of contributions.
3rd T ier – The retirement formula is 2% at age 62 for new members hired on or after January 1 , 2013 and the employee must pay t he normal cost to CalPERS which is currently at 7.75%. Classic members (CalPERS members prior to 12/31/12) hired on or after January 1 , 2013 may be placed in a different tier.
The contribution requirements of plan members and the City a re established and may be amended by CalPERS.
(C) 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 five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit Level III, or the Optional Settlement 2W Death Benefit.
The cost of living adjustments for each plan are applied as specified by t he Public Employees’ Retirement Law.
(D) Employees Covered - At June 30, 2022, the following employees were covered by the benefit terms of each Plan: Inactive employees or beneficiaries currently receiving benefits are 2,418 and 851 for the Miscellaneous and Safety Plans, respectively. Inactive employees entitled to but not yet receiving benefits are 1,475 a nd 205 f or Miscellaneous and Safety P lans, respectively. Active employees were 1,527 a nd 564 f or Miscellaneous and Safety P lans, respectively.
(E) Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by t he actuary a nd shall be effective on the July 1 f ollowing 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 d etermined rate and the contribution rate of employees.
(F) Net Pension Liability - The City’s net pension liability f or each Plan is measured as the total pension liability, less the pension plan’s fiduciary n et position. The net pension liability of each of the Plans is measured as of June 30, 2022, using an annual actuarial valuation as of June 30, 2021 rolled forward to June 30, 2022 u sing standard update procedures. The liability f or the governmental activities is primarily liquidated from the General Fund. 72 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
A summary o f principal assumptions and methods used to determine the net pension liability i s shown below. Actuarial Assumptions – The total pension liabilities in the June 30, 2022 actuarial valuations were determined using the following actuarial assumptions:
Miscellaneous Safety
Valuation Date June 30, 2021 June 30, 2021
Measurement Date June 30, 2022 June 30, 2022
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions
Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Salary Increase Varies by Entry Age and Service
Mortality Rate Table1 Derived using CALPERS' membership data for all funds Post Retirement Benefit
Increase
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter
1 T he mortality t able used was developed based on CalPERS-specific data.
The probabilities of mortality a re based on the 2021 CalPERS Experience Study f or the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study a nd Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website.
Long-term Expected Rate of Return - The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building- block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows:
Asset Class1
Assumed
Asset
Allocation Real Return1,2
Global Equity - Cap-weighted 30.00% 4.54%
Global Equity - Non-Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage (5.00)% (0.59)%
1 An expected inflation of 2.30% used for this period
2 Figures are based on the 2021 Asset Liability Management Study Discount Rate - The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily r equired rates, actuarially d etermined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
Changes in Assumptions – Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from
7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by t he long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study a nd Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and
7.50% for measurement date 2014.
73 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
(G) Changes in the Net Pension Liability
The changes in the Net Pension Liability for each Plan follows:
Miscellaneous Increase (Decrease)
Total
Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 $ 1,549,563 $ 1,638,246 $ (88,683) Changes recognized for the
measurement period:
Service cost 27,830 - 27,830
Interest on total pension liability 105,283 - 105,283
Changes of Assumptions 19,686 - 19,686
Differences between expected and actual
experience (17,684) - (17,684)
Contributions - employer - 27,329 (27,329)
Contributions - employees - 10,788 (10,788)
Net investment income - (122,366) 122,366
Benefit payments, including
refunds of employee
contributions (79,265) (79,265) -
Administrative expenses - (1,020) 1,020
Net changes 55,850 (164,534) 220,384
Balance at June 30,2022 $ 1,605,413 $ 1,473,712 $ 131,701 Safety Increase (Decrease)
Total
Pension
Liability
Plan
Fiduciary
Net Position
Net Pension
Liability/(Asset)
Balance at June 30, 2021 $ 1,250,329 $ 1,301,939 $ (51,610) Changes recognized for the
measurement period:
Service cost 25,734 - 25,734
Interest on total pension liability 87,761 - 87,761
Changes of Assumptions 43,994 - 43,994
Differences between expected and actual
experience (3,506) - (3,506)
Contributions - employer - 24,810 (24,810)
Contributions - employees - 10,557 (10,557)
Net investment income - (97,579) 97,579
Benefit payments, including
refunds of employee
contributions (63,558) (63,558) -
Administrative expenses - (812) 812
Net changes 90,425 (126,582) 217,007
Balance at June 30,2022 $ 1,340,754 $ 1,175,357 $ 165,397 Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability w ould be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate:
Miscellaneous
Discount Rate
-1% (5.90%)
Current
Discount Rate
(6.90%)
Discount Rate
+1% (7.90%)
Plan's net pension liability/(asset) $ 350,680 $ 131,701 $ (48,111) Safety
Discount Rate
-1% (5.90%)
Current
Discount Rate
(6.90%)
Discount Rate
+1% (7.90%)
Plan's net pension liability/(asset) $ 349,445 $ 165,397 $ 14,687 74 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary n et position is available in the separately i ssued CalPERS financial reports.
(H) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions.
For the year ended June 30, 2023, the City recognized pension expense/(credit) of $(4,303) to Miscellaneous and $12,821 to Safety for a total of $8,518. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous
Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Pension contributions subsequent to measurement
date, net $ 29,144 $ -
Changes of assumptions 13,534 -
Differences between expected and actual
experience 893 (12,158)
Net differences between projected and actual
earnings on plan investments 75,156 -
Total $ 118,727 $ (12,158)
Safety
Deferred
Outflows
of Resources
Deferred
Inflows
of Resources
Pension contributions subsequent to measurement
date, net $ 26,195 $ -
Changes of assumptions 33,763 -
Differences between expected and actual
experience 7,320 (2,691)
Net differences between projected and actual
earnings on plan investments 60,326 -
Total $ 127,604 $ (2,691)
The $55,339 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability i n the subsequent fiscal period rather than in the current fiscal period.
Amortization of Deferred Outflows and Deferred Inflows of Resources - Under GASB 68, gains and losses related to changes in total pension liability a nd fiduciary n et position are recognized in pension expense systematically o ver time.
The first amortized amounts are recognized in pension expense for the y ear the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between
projected and actual earnings
on pension plan investments 5 year straight-line amortization All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of all
members that are provided with benefits (active,
inactive, and retired) as of the beginning of the
measurement period
The remaining amounts reported as deferred outflows of resources and deferred (inflows) of resources related to pensions will be recognized as pension expense as follows:
Fiscal Year Miscellaneous Safety
2024 $ 13,763 $ 24,201
2025 11,797 20,530
2026 5,097 13,884
2027 46,768 40,103
Total 77,425 98,718
Events Subsequent to Actuarial Valuation Date - On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21.
Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of
0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability M anagement (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021.
On November 17, 2021, the board adopted a new strategic asset allocation.
The new asset allocation along with the new capital market assumptions, 75 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study a lso recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date.
Note 17. Other Long-Term Obligations
Changes in Long-Term Obligations
Below is a summary of changes in long-term obligations during the fiscal year for the former Redevelopment Agency, which is accounted for in the Successor Agency Trust Fund (a fiduciary fund):
Beginning
Balance Additions Reductions
Ending
Balance
Due Within
One Year
Lease revenue bonds $ 9,350 $ - $ (2,447) $ 6,903 $ 2,556 Tax allocation bonds 165,342 - (5,813) 159,529 10,280
Direct borrowings:
Notes payable 3,918 - - 3,918 38
$ 178,610 $ - $ (8,260) $ 170,350 $ 12,874
Lease Revenue Bonds - Successor Agency:
Principal
Outstanding
$26,255 State of California Department of General Services Project, 2003 Lease Revenue Refunding Bonds, Series A are secured by l ease payments made by t he State of Califronia Department of General Services for the California Tower office building; 2% to 5% due in annual installments from $545 to $2,230 through October 1, 2024. The bonds are subject to acceleration under the Trust Agreement upon the occurrence of an event of default and with the consent of the Insurer. There is no remedy of acceleration of the total Base Rental over the term of the Lease. $ 4,315
$4,810 State of California Department of General Services Project, 2003 Lease Revenue Refunding Bonds, Series B are secured by l ease payments made by t he State of California Department of General Services for the California Tower office building; $310 serial bonds 1.20% to 1.42% through October 1, 2004; $620 term bonds at 3.090% due October 1, 2008; $1,110 term bonds at 4.340% due October 1, 2014 and $2,770 term bonds at 5.480% due October 1, 2024. The bonds are subject to acceleration under the Trust Agreement upon the occurrence of an event of default and with the consent of the Insurer. There is no remedy of acceleration of the total Base Rental over the term of the Lease. 680
In 2019, the 2012A Lease Revenue Refunding bonds were
distributed between Governmental Activities, Business-Type Activities, and the Successor Agency t o properly r eflect their proportional share.
$41,240 Lease Revenue Refunding Bonds, Series 2012A. The bonds are secured by lease payments on a portion of the City Hall Complex and the Lincoln Police Patrol Center. The bonds were issued to refinance the 2003 Certificates of Participation.
Interest on the bonds is payable semi-annually o n May 1 a nd November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum d epending on maturity date. Principal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and
ending November 1, 2033. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. $2,415 relates to the Successor Agency. 1,808
Subtotal 6,803
Add: Unamortized bond premium 100
Total lease revenue bonds $ 6,903
Remaining debt service will be paid by the Successor Agency Trust from future property t ax revenues. Annual debt service requirements to maturity a re as follows:
76 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Fiscal Year Principal Interest Total
2024 $ 2,556 $ 267 $ 2,823
2025 2,717 135 2,852
2026 141 64 205
2027 147 58 205
2028 154 51 205
2029-2033 888 135 1,023
2034-2038 200 4 204
Premium 100 - 100
Total $ 6,903 $ 714 $ 7,617
Tax Allocation Bonds - Successor Agency:
Principal
Outstanding
$62,980 Subordinate Tax Allocation Refunding Bonds (2014 Series A and B). The bonds were issued to refund certain obligations of the former Redevelopment Agency of the City of Riverside. Interest is due semi-annually o n March 1 and September 1, commencing March 1, 2015. Principal is due in annual installments from $160 to $4,745 through September 1, 2034. The rate of interest varies from 0.6% to 5% per annum. $ 28,410 $114,815 2018 Tax Allocation Refunding Bonds (Series A and B). The bonds were issued to refund the 2007 Riverside Public Financing Authority R edevelopment Agency T ax Allocation Bonds (Series A, B, C and D). Principal is payable in annual installments from $140 to $9,180 through September 1, 2037.
The rate of interest varies from 3.125% to 5% per annum. The refunding transaction resulted in a total net present value savings of $20,000. 114,675
Subtotal 143,085
Add: Unamortized bond premium 16,444
Total tax allocation bonds $ 159,529
The Successor Agency T ax Allocation Bonds are secured by t ax revenues deposited in the Redevelopment Property T ax Trust Fund for the Agency established and held by the County of Riverside Auditor-Controller pursuant to Section 34813(a)(2) of the Dissolution Act. Upon event of default, the principal due on the Bonds is subject to acceleration.
Remaining debt service will be paid by the Successor Agency Trust Fund from future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 10,280 $ 6,450 $ 16,730
2025 10,690 5,928 16,618
2026 10,795 5,392 16,187
2027 11,135 4,844 15,979
2028 10,230 4,317 14,547
2029-2033 47,365 14,112 61,477
2034-2038 42,590 4,054 46,644
Premium 16,444 - 16,444
Total $ 159,529 $ 45,097 $ 204,626
Notes Payable – Successor Agency:
Principal
Outstanding
These notes payable have been issued to promote development and expansion within the City’s redevelopment areas.
Pepsi Cola Bottling Company of Los Angeles, 10.5%, payable in net annual installments of $341, subject to recording of completion. Interest accrues on the outstanding note balance upon issuance of the Certificate of Completion. Principal and interest on the note are payable solely from Project Property Tax Increment. Payments start upon the time sufficient increment is generated in one year to pay the annual principal and interest on the note. Upon 25 years from the first anniversary d ate of the certificate of completion, all unpaid principal together with any accrued interest will be forgiven. $ 2,987
Smith’s Food & Drug Centers Inc., 6% payable in variable installments, subject to payment of annual Community Facilities District assessment. The note is secured under a developer agreement. 931
Total notes payable $ 3,918
77 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Remaining debt service will be paid by the Successor Agency Trust Fund from future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total
2024 $ 38 $ 304 $ 342
2025 42 300 342
2026 46 295 341
2027 51 291 342
2028 57 285 342
2029-2033 385 1,323 1,708
2034-2038 636 1,074 1,710
2039-2043 1,048 661 1,709
2044-2048 1,615 1,025 2,640
Total $ 3,918 $ 5,558 $ 9,476
Assessment Districts and Community Facilities Districts Bonds (Not obligations of the City):
As of June 30, 2023, the City h as several series of Assessment District and Community Facility District Bonds outstanding in the amount of $38,980. Bonds were issued for improvements in certain districts and are long-term obligations of the property owners. The City's only limited commitment on these obligations is that the City Treasurer act as an agent for the property owners in collecting the assessments, forwarding the collections to bondholders and initiating foreclosure proceedings, if applicable. Since the debt does not constitute an obligation of the City, it is not reflected as a long-term obligation of the City and is not reflected in the government-wide financial statements.
Note 18. Interfund Assets, Liabilities and Transfers
Due From/To Other Funds: These balances resulted from expenditures being incurred prior to receipt of the related revenue source.
The following table shows amounts receivable/payable between funds within the City at June 30, 2023:
Receivable Funds Payable Funds Amount
General Fund Non-Major Governmental Funds $ 1,021
Internal Service Funds 645
Total $ 1,666
Advances To/From Other Funds: These balances consist of advances used to fund capital projects in advance of related financing/assessments and for other long-term borrowing purposes.
The following table shows amounts advanced from funds within the City to other funds within the City at June 30, 2023:
Receivable Funds Payable Funds Amount
Sewer General Debt Service Fund $ 1,131
In addition, the following advances to the former Redevelopment Agency a re accounted for in the Private-Purpose Trust Fund of the Successor Agency:
Receivable Funds Amount
Electric $ 2,003
Transfers In/Out: T ransfers are primarily u sed to (1) move revenues to the fund that statute or budget requires to expend them, and (2) move receipts restricted to debt service from the funds collecting the receipts to the debt service fund as debt service payments become due.
The following table shows amounts transferred to/from funds within the City for the year ended June 30, 2023:
78 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Transfers in Funds Transfers Out Funds Amount
General Fund General Debt Service Fund $ 584
Non-Major Governmental Funds 16,149
Electric Fund 42,326
Water Fund 8,170
67,229
Capital Outlay Fund General Fund 37,900
Non-Major Enterprise Funds 215
38,115
General Debt Service
Fund General Fund 43,171
Capital Outlay Fund 2,999
Non-Major Governmental Funds 1,958
48,128
Non-Major Governmental
Funds General Fund 1,635
Capital Outlay Fund 149
1,784
Non-Major Enterprise
Funds General Fund 17,575
Non-Major Governmental Funds 7,500
25,075
Total $ 180,331
Note 19. Deficit Net Position
Deficit net position exists in the non-major enterprise fund, Transportation $(1,429). The deficit is primarily due to the net pension and OPEB liabilities.
Deficit net position exists in the Self-Insurance Internal Service Fund $(24,729).
This City adopted a Self-Insurance Reserve Policy that addresses the on-going deficit in fund balance. In the past, the City began funding a portion of the deficit in the internal service fund via self-insurance rate increases phased in over several years. However, the increases continue to be offset by unusually large losses incurred during the year combined with an adjustment for the increase in the amount estimated for claims and judgments. Management believes that there are sufficient funds on hand to cover current payment obligations and plans to continue to control costs and increase rates, as needed.
Deficit net position exists in the Successor Agency Private-Purpose Trust Fund $(124,004). The deficit in the Successor Agency T rust Fund will be reduced over the years as the related debt is paid-off with funds received from the Redevelopment Property Tax Trust Fund (RPTTF), which is administered by the County Auditor-Controller.
Note 20. Contruction Commitments
As of June 30, 2023, the Electric Utility had commitments (encumbrances) of approximately $25,674 w ith respect to ongoing capital projects, of which $16,623 is expected to be funded by bonds, $7,676 to be funded by unrestricted cash reserves, and $1,375 to be funded by restricted cash reserves.
Note 21. Forward Purchase/Sale Agreements
In order to meet seasonal energy needs and summer peaking requirements, the Electric Utility contracts on a monthly and/or quarterly basis for the purchase or sale of natural gas, electricity a nd/or capacity p roducts on a one to four year forward horizon. As of June 30, 2023, the Electric Utility has net natural gas and electricity c ommitments for fiscal year 2024 a nd thereafter, of approximately $112,355, with a market value of $112,807.
Note 22. Economic Contingency
A portion of fund balance has been committed within the General Fund and Measure Z fund for future economic contingencies. The amount that has been set aside for the General Fund is $65,500 which equals to approximately 20% of the 2023-2024 G eneral Fund adopted expenditure budget plus appropriation adjustments. For the General Fund Measure Z Fund, $5,000 h as been set aside.
Note 23. Litigation
The City i s a defendant in various lawsuits arising in the normal course of business. Present lawsuits and other claims against the City a re incidental to the ordinary c ourse of operations and are largely c overed by t he City’s self- insurance program. In the opinion of management and the City Attorney, such claims and litigation will not have a materially adverse effect upon the financial position or results of operation of the City.
79 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Note 24. Tax Abatements
In November 2012, the City entered into a tax sharing agreement with a local business to incentivize an expansion of their facility. Assistance is provided in the form of a rebate of sales and property taxes over fifteen years in an amount not to exceed $4,500. The agreement expires on the earlier of: 1) total cumulative tax rebate of $4,500; or 2) fifteen years in fiscal 2027-28.
Incremental Sales Tax Revenue can be generated from sales, over the fiscal 2011-12 base period, reported to the State Board of Equalization at the business site and from third party v endor transactions occurring using the business site as the point of sale. I ncremental Property T ax Revenue is generated from the increase in County a ssessed valuation over the 2012-13 base period values, for the parcels designated in the agreement. For parcels acquired after 2012-13 in the project area, the acquisition price will become its base year valuation. The initial 2012-13 base year assessed valuation is $114,293 and has been adjusted to $125,043 for the parcels acquired in 2014-
15. The business is due 100% of the incremental Property tax revenue due to the City f rom the project area tax rate. It is calculated as 11% of the value determined from taking 1% of the difference of current net assessed valuation over the adjusted base valuation. The cumulative rebate payment as of June 30, 2023 is $1,664.
Note 25. Subsequent Events
Parada II Litigation
On September 12, 2018, a petition for writ of mandate entitled Parada v. City of Riverside (“Parada II”) was filed against the City seeking to invalidate, rescind and void, under Proposition 26, the Electric System’s rates approved by C ity Council on May 22, 2018, which took effect on January 1, 2019, by challenging the portion of the electric rates that are attributable to the General Fund. The petition did not seek any monetary relief from the General Fund. The trial court divided the case into two stages for hearings: a liability phase and a damages phase. On April 17, 2020, the Court in the liability phase of Parada II litigation entered a tentative ruling finding the City’s electric rates attributable to the General Fund transfer violate Article XIII C of the California Constitution. The formal hearing on the matter took place on June 5, 2020, but the Court asked for further briefing on the issue of whether or not the plaintiffs failed to exhaust their administrative remedies. On October 9, 2020, the Court confirmed its tentative ruling and entered an order denying the City’s request for interlocutory remand. The court had set a hearing for February 2 4, 2021, to set a briefing schedule for determining appropriate remedies /damages in the case. The City expected the second phase of the trial relating to plaintiffs’ available remedies to occur in the second quarter of 2021.
The ruling by t he Court in Parada II was anticipated to likely h ave a material adverse impact on the City’s General Fund. The General Fund receives approximately $ 40 million annually ( up to the maximum amount of 11.5% of Electric Fund revenues) from the Electric Fund. Based on the Court’s order in the liability phase of the trial, approximately $19-32 million of the General Fund transfer is potentially attributable to rate payer revenue that was not approved by t he voters. However, that amount will be determined during the damages phase of the trial. Additionally, the City might have been required to refund rate payers for the portions of the rates that were determined to violate Article XIII C of the California Constitution from the date the writ of mandate was filed.
However, the trial court did not issue any ruling as to what the amount of any damages would be.
Based on the Court’s order in the liability phase of the trial, the City estimated that the amount of a refund would be $19 to $32 million per year, beginning January 1, 2019, until date of settlement or issuance of a final, non-appealable judgment by the trial court after anticipated appeals are resolved. This amount could vary d epending upon whether or not the City d ecides to repeal and replace the challenged rates pending appeal.
On May 1 7, 2021, the City a nd the Paradas entered into a conditional settlement agreement. This settlement was conditioned on: (1) the Riverside City Council’s placement of a ballot measure on City ballots in November 2021 to approve the City’s General Fund Transfer practices as a general tax (“Ballot Measure”); and (2) voter approval of the Ballot Measure. The Riverside City Council placed the Ballot Measure on the ballot for the November 2, 2021 election. The Parties stayed the Parada lawsuit until certification of the results of the Ballot Measure. If voters approved the Ballot Measure, the City would refund to customers of its electric utility an amount equal to $24 million less the amount awarded to Plaintiffs’ counsel in fees, paid over a five year period beginning no later than February 1, 2022. If voters did not approve the Ballot Measure, this litigation would then resume.
On or about September 16, 2021, a petition for writ of mandate entitled Riversiders Against Increased Taxes v. City of Riverside, et al. (“RAIT lawsuit”) was filed against the City challenging the Ballot Measure on the grounds that the Ballot Measure cannot be adopted at the November 2021 election because that election is a “special” election and under Proposition 218, a ballot measure 80 CITY OF RIVERSIDE
NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
to impose a general tax can only be submitted to voters at a general election.
On November 9, 2021, the court set a trial date for the RAIT lawsuit for January 7, 2022 and ordered a stay o f the certification of the Ballot Measure Election results pending the January 7th hearing but did not otherwise delay or cancel the election for the Ballot Measure.
The election was held on November 2, 2021, and the Measure C was approved by voters, with 54.52 percent voting in favor.
On April 26, 2022 the RAIT lawsuit trial court determined that the November 2021 election was a “special election” rather than a “general election” and therefore did not comply w ith Proposition 218. The RAIT lawsuit trial court further ruled that it lacked power to enjoin the certification of election results or to otherwise invalidate the election. Both sides have since appealed that ruling.
The case has been fully b riefed and the parties are awaiting a date for oral argument.
On May 1 2, 2022, the City a nd the Paradas amended the May 1 7, 2021 Settlement Agreement, with the following additional terms: (a) City a greed to start making refunds to ratepayers by October 1, 2022; (b) if the City prevailed in the appeal of the trial court’s decision in the RAIT lawsuit, no additional refund would be due to the ratepayers; (c) if the City did not prevail in the appeal of the trial court’s decision in the RAIT lawsuit, an additional refund would be implemented in the amount of $705,882 per month, from November, 2021 up to when the City either (i) sets new electric rates; (ii) voters approve a valid ballot measure for the GFT or (iii) the City otherwise stops collecting the electric GFT.
The Parada lawsuit was dismissed on May 13, 2022.
The City C ouncil adopted a resolution certifying the results of the Measure C election on July 1 9, 2022. The plaintiffs from the RAIT lawsuit sought to intervene in the Parada lawsuit and set aside this dismissal. On August 3, 2022, the Parada trial court refused to set aside the dismissal. The City h as now begun to implement the settlement agreement.
Simpson v. City of Riverside
On December 19, 2019, a class action lawsuit entitled Simpson v. City of Riverside w as filed against the City a lleging that the City i s overcharging customers for water utility service in violation of Article XIIID, Section 6 of the California Constitution, on the grounds that the City i s transferring 11.5% of water utility revenues to the City’s general fund. The transfer, also known as the “General Fund Transfer”, was approved by voters on June 4, 2013, as a general tax. The plaintiff is seeking refunds for all customers for monies collected in violation and also that the court set aside the voter’s 2013 approval of the General Fund Transfer. The trial was bifurcated into two phases, liability a nd damages.
The Court issued its ruling on the liability phase on August 17, 2023, finding that the City’s water rates violated Article XIID, Section 6 of the California Constitution because they w ere set in an amount sufficient to recover the General Fund Transfer. A trial date of April 3, 2024 has been set for the second phase of the trial regarding damages.
Rate Plan Increases
On September 19, 2023, the City Council approved new 5-year rate plans for the Electric, Water, and Refuse Funds. The rate increases will enhance the financial stability o f each of the enterprise funds, supporting increases in operational costs as well as investment in capital infrastructure. In conjunction with the adoption of the water rate plan, the City Council directed that all future Water General Fund Transfer collections be placed in a reserve account pending the outcome of pending litigation (refer to Simpson v. City of Riverside).
Staff will consider the impact of the approximate $8.5 million annual loss of revenue in the General Fund during the development of the next biennial budget.
Replacement of London Interbank Offered Rate (LIBOR)
As of July 1, 2023, LIBOR is no longer an appropriate benchmark interest rate for a derivative instrument that hedges the interest risk for taxable debt for purposes of GASB Statement 53.
Note 26. Prior Period Adjustment
The Custodial Fund beginning net position has been restated to reflect the cash and investment balances in the fund as due to bond holders. Upon termination of the custodial relationship, the cash and investment balances will be released to bondholders.
June 30, 2022
as Previously
Reported
Changes in
Accounting
Principle
June 30, 2022
as Restated
Custodial Fund $ 13,834 $ (9,837) $ 3,997
81 Required Supplementary Information
Consists of the following:
Schedule of Changes in Net Pension Liability and Related Ratios Schedule of Pension Plan Contributions
Schedule of Changes in Total OPEB Liability and Related Ratios 82 CITY OF RIVERSIDE
MISCELLANEOUS PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022
Total Pension Liability
Service cost $ 23,320 $ 22,228 $ 22,189 $ 24,766 $ 25,117 $ 25,017 $ 25,919 $ 26,168 $ 27,830 Interest on total pension liability 84,965 87,436 90,913 92,725 92,595 96,836 101,080 105,017 105,283 Changes in assumptions - (23,548) (8,417) (26,068) (19,805) - - - 19,686 Differences between expected and actual
experience - (21,782) - 79,037 (37,885) 6,927 6,220 873 (17,684) Benefit payments, including refunds of
employee contributions (50,770) (53,853) (57,702) (60,108) (63,483) (67,073) (71,266) (74,608) (79,265) Net change in total pension liability 57,515 10,481 46,983 110,352 (3,461) 61,707 61,953 57,450 55,850 Total pension liability - beginning 1,146,583 1,204,098 1,214,579 1,261,562 1,371,914 1,368,453 1,430,160 1,492,113 1,549,563 Total pension liability - ending (a) $ 1,204,098 $ 1,214,579 $ 1,261,562 $ 1,371,914 $ 1,368,453 $ 1,430,160 $ 1,492,113 $ 1,549,563 $ 1,605,413 Plan Fiduciary Net Position
Net Plan to Plan Resource Movement - - - - - - - (1) -
Contributions - employer $ 27,583 $ 25,996 $ 29,426 $ 30,477 $ 29,920 $ 34,627 $ 239,156 $ 26,274 $ 27,329 Contributions - employees 2,294 4,380 5,187 6,115 9,749 10,286 10,957 10,358 10,788 Net investment income 145,843 21,671 4,958 104,771 86,307 71,046 56,837 305,548 (122,366) Benefit payments, including refunds of
employee contributions (50,770) (53,853) (57,702) (60,108) (63,483) (67,073) (71,266) (74,608) (79,265) Administrative and other
income/(expenses) - (1,056) (594) (1,290) (4,664) (776) (1,604) (1,371) (1,020) Net change in fiduciary net position 124,950 (2,862) (18,725) 79,965 57,829 48,110 234,080 266,200 (164,534) Plan fiduciary net position - beginning 848,699 973,649 970,787 952,062 1,032,027 1,089,856 1,137,966 1,372,046 1,638,246 Plan fiduciary net position - ending (b) $ 973,649 $ 970,787 $ 952,062 $ 1,032,027 $ 1,089,856 $ 1,137,966 $ 1,372,046 $ 1,638,246 $ 1,473,712 Plan net pension liability/(assets) -
ending (a) - (b) $ 230,449 $ 243,792 $ 309,500 $ 339,887 $ 278,597 $ 292,194 $ 120,067 $ (88,683) $ 131,701 Plan fiduciary net position as a
percentage of the total pension liability %80.86 %79.93 %75.47 %75.23 %79.64 %79.57 %91.95 %105.72 %91.80 Covered-employee payroll $ 109,990 $ 110,891 $ 118,512 $ 117,637 $ 121,957 $ 128,881 $ 131,492 $ 131,216 $ 130,060 Plan net pension liability/(asset) as a
percentage of covered-employee
payroll %209.52 %219.85 %261.15 %288.93 %228.44 %226.72 %91.31 %(67.59) %101.26 (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
(2) Net of administrative expenses.
Notes to Schedule:
Benefit Changes: There was no changes in benefits.
Changes of Assumptions:
In fiscal year 2021-22, the discount rate was changed from 7.15 percent to 6.90 percent.
In fiscal year 2021-22, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions November 2021. 83 CITY OF RIVERSIDE
SAFETY PLAN
SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022
Total Pension Liability
Service cost $ 18,818 $ 18,187 $ 18,144 $ 21,373 $ 20,390 $ 21,454 $ 22,391 $ 23,160 $ 25,734 Interest on total pension liability 62,249 64,815 67,513 70,337 73,104 76,922 80,940 84,654 87,761 Changes in assumptions - (6,835) (4,373) (18) 868 - - - 43,994 Differences between expected and actual
experience - (16,117) - 59,768 (4,644) 10,897 11,896 6,361 (3,506) Benefit payments, including refunds of
employee contributions (38,981) (42,076) (44,609) (47,009) (50,477) (52,564) (56,537) (59,739) (63,558) Net change in total pension liability 42,086 17,974 36,675 104,451 39,241 56,709 58,690 54,436 90,425 Total pension liability - beginning 840,067 882,153 900,127 936,802 1,041,253 1,080,494 1,137,203 1,195,893 1,250,329 Total pension liability - ending (a) $ 882,153 $ 900,127 $ 936,802 $ 1,041,253 $ 1,080,494 $ 1,137,203 $ 1,195,893 $ 1,250,329 $ 1,340,754 Plan Fiduciary Net Position
Net Plan to Plan Resource Movement - - - - - - - 1 -
Contributions - employer $ 23,156 $ 23,384 $ 26,483 $ 26,775 $ 25,451 $ 29,254 $ 263,061 $ 22,931 $ 24,810 Contributions - employees 365 924 1,837 2,449 6,402 7,679 9,454 10,492 10,557 Net investment income 107,032 15,632 3,478 76,844 62,933 51,750 41,765 242,945 (97,579) Benefit payments, including refunds of
employee contributions (38,981) (42,076) (44,609) (47,009) (50,478) (52,564) (56,537) (59,739) (63,558) Administrative and other
income/(expenses) - (816) (428) (1,145) (3,403) (567) (1,170) (1,085) (812) Net change in fiduciary net position 91,572 (2,952) (13,239) 57,914 40,905 35,552 256,573 215,545 (126,582) Plan fiduciary net position - beginning 620,069 711,641 708,689 695,450 753,364 794,269 829,821 1,086,394 1,301,939 Plan fiduciary net position - ending (b) $ 711,641 $ 708,689 $ 695,450 $ 753,364 $ 794,269 $ 829,821 $ 1,086,394 $ 1,301,939 $ 1,175,357 Plan net pension liability/(assets) -
ending (a) - (b) $ 170,512 $ 191,438 $ 241,352 $ 287,889 $ 286,225 $ 307,382 $ 109,499 $ (51,610) $ 165,397 Plan fiduciary net position as a
percentage of the total pension liability %80.67 %78.73 %74.24 %72.35 %73.51 %72.97 %90.84 %104.13 %87.66 Covered-employee payroll $ 63,734 $ 63,612 $ 68,707 $ 66,226 $ 68,251 $ 73,237 $ 76,955 $ 78,813 $ 77,338 Plan net pension liability/(asset) as a
percentage of covered-employee
payroll %267.54 %300.95 %351.28 %434.71 %419.37 %419.71 %142.29 %(65.48) %213.86 (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
(2) Net of administrative expenses.
Notes to Schedule:
Benefit Changes: There was no changes in benefits.
Changes of Assumptions:
In fiscal year 2021-22, the discount rate was changed from 7.15 percent to 6.90 percent.
In fiscal year 2021-22, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions November 2021. 84 CITY OF RIVERSIDE
SCHEDULE OF PENSION PLAN CONTRIBUTIONS
AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Miscellaneous Plan
Actuarially determined contribution $ 20,505 $ 21,063 $ 24,885 $ 26,955 $ 29,948 $ 34,486 $ 38,889 $ 26,274 $ 27,330 $ 29,144 Contribution in relation to the actuarially
determined contribution (27,584) (25,997) (29,426) (30,477) (29,948) (34,486) (239,220) (26,274) (27,330) (29,144) Contribution deficiency/(excess) $ (7,079) $ (4,934) $ (4,541) $ (3,522) $ - $ - $ (200,331) $ - $ - $ - Covered-employee payroll $ 109,990 $ 110,891 $ 118,512 $ 117,637 $ 121,957 $ 128,881 $ 131,492 $ 131,216 $ 130,060 $ 142,170 Contributions as a percentage of covered-
employee payroll %25.08 %23.44 %24.83 %25.91 %24.56 %26.76 %181.93 %20.02 %21.01 %20.50 Safety Plan
Actuarially determined contribution $ 17,341 $ 18,452 $ 21,886 $ 23,076 $ 25,289 $ 29,047 $ 32,785 $ 22,925 $ 24,773 $ 26,195 Contribution in relation to the actuarially
determined contribution (23,156) (23,384) (26,483) (26,775) (25,289) (29,047) (263,016) (22,925) (24,773) (26,195) Contribution deficiency/(excess) $ (5,815) $ (4,932) $ (4,597) $ (3,699) $ - $ - $ (230,231) $ - $ - $ - Covered-employee payroll $ 63,734 $ 63,612 $ 68,707 $ 66,226 $ 68,251 $ 73,237 $ 76,955 $ 78,813 $ 77,338 $ 77,810 Contributions as a percentage of covered-
employee payroll %36.33 %36.76 %38.54 %40.43 %37.05 %39.66 %341.78 %29.09 %32.03 %33.67 (1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation.
Notes to Schedule:
Actuarial valuation date: June 30, 2020
Actuarial cost method: Entry Age Normal
Amortization method/period: June 30, 2020 CalPERS Funding Valuation Report Asset valuation method: Fair value of assets
Discount rate: 7.0%
Overall payroll growth: 2.75%
Inflation: 2.5%
Retirement age: 2017 CalPERS experience study
Mortality: 2017 CalPERS Experience Study, with ongoing improvement using 90 percent of Scale MP-2016 85 CITY OF RIVERSIDE
SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands)
Reporting period June 30, 2018 2019 2020 2021 2022 2023 Measurement period June 30, 2017 2018 2019 2020 2021 2022 Total OPEB liability
Service cost $ 2,554 $ 2,403 $ 2,435 $ 2,569 $ 2,646 $ 3,184 Interest on the total OPEB liability 1,090 1,301 1,392 1,810 1,394 1,070 Differences between expected and actual experience - - 292 (2,300) (2,267) - Changes in assumptions (1,668) (306) 9,550 2,225 (3,086) (5,926) Benefit payments (1,732) (1,846) (2,003) (2,032) (2,193) (1,627) Net change in total OPEB liability 244 1,552 11,666 2,272 (3,506) (3,299) Total OPEB liability - beginning 36,542 36,786 38,338 50,004 52,276 48,770 Total OPEB liability - ending $ 36,786 $ 38,338 $ 50,004 $ 52,276 $ 48,770 $ 45,471 Covered-employee payroll $ 170,858 $ 170,858 $ 185,967 $ 191,546 $ 197,292 $ 203,211 Total OPEB liability as a percentage of covered-employee payroll %21.53 %22.44 %26.89 %27.29 %24.72 %22.38
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
Notes to Schedule:
Changes in assumptions: For the measurement period ending June 30, 2022, the discount rate was changed from 2.16 percent to 3.54 percent.
There are no asset accumulated in a trust that meets the criteria of GASB codification P22.101 or P52.101 to pay related benefits for the OPEB plan. 86 Non-Major Governmental Funds
Special Revenue Funds
Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.
Urban Areas Security Initiative (UASI) Fund - To account for UASI grants received from the U.S. Department of Homeland Security.
Grants and Restricted Programs Fund - To account for federal, state, and local grants along with other restricted program revenue.
Gas Tax Fund - To account for the construction and maintenance of the road network system of the City. Financing is provided by the City's share of state gasoline taxes which state law requires to be used to maintain streets.
Air Quality Improvements Fund - To account for qualified air pollution reduction programs funded by the South Coast Air Quality Management District.
Housing & Community Development Fund - To account for federal grants received from the Department of Housing and Urban Development (HUD). The grants are used for the development of a viable urban community b y providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons with low and moderate incomes.
National Pollution Discharge Elimination System (NPDES) Storm Drain Fund - T o account for storm drain maintenance and inspection required for California storm water permits. Activities are funded by a special assessment district of Riverside County, California.
Special Districts Fund - T o account for Loving Homes, Village at Canyon Crest, Sycamore Highlands, Riverwalk, Riverwalk Parks Projects, and Street Lighting districts.
Housing Fund - To account for the housing activities for persons with low or moderate income.
Capital Projects Funds
Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
Special Capital Improvement Fund - T o account for the acquisition, construction and installation of capital improvements and a Community F acilities District within the City.
Storm Drain Fund - To account for the acquisition, construction and installation of storm drains in the City.
Transportation Fund - T o account for the construction and installation of street and highway improvements in accordance with Articles 3 and 8 of the Transportation Development Act of 1971 of the State of California.
Permanent Fund
Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs.
Library Special Fund - To account for the monies held in trust for the benefit of the Riverside City Public Library System. 87 CITY OF RIVERSIDE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Special Revenue Funds
Urban Areas
Security
Initiative
Grants and
Restricted
Programs Gas Tax
Air Quality
Improvements
Housing &
Community
Development
NPDES
Strom Drain
Special
Districts Housing Total
Assets:
Cash and investments $ - $ 46,425 $ 32,278 $ 1,859 $ 10,842 $ 348 $ 821 $ 9,218 $ 101,791 Cash and investments with fiscal agent - - - - - - - - - Receivables, net of allowance for uncollectible
Interest - 147 114 6 48 - 3 31 349
Property taxes - - - - - - 90 - 90
Accounts - 84 - - 20 - - 13 117
Intergovernmental 1,201 6,113 1,509 105 7,533 269 - - 16,730 Notes - - - - 16,143 - - 30,559 46,702
Prepaid items - 71 - - 23 - - - 94
Land and improvements held for resale - - - - 443 - - 1,983 2,426 Total assets $ 1,201 $ 52,840 $ 33,901 $ 1,970 $ 35,052 $ 617 $ 914 $ 41,804 $ 168,299 Liabilities, Deferred Inflows of Resources, and
Fund Balances:
Liabilities:
Accounts payable $ 241 $ 2,047 $ 1,303 $ - $ 2,601 $ 10 $ 7 $ 8 $ 6,217 Accrued payroll - 6 - - 11 7 - 16 40
Retainage payable - 26 466 - 122 1 - 1 616
Intergovernmental 4 - - - - - 1 - 5
Unearned revenue - 46,030 - - 15,678 - - - 61,708
Due to other funds 956 - - - - - - - 956
Total liabilities 1,201 48,109 1,769 - 18,412 18 8 25 69,542 Deferred Inflows of Resources:
Unavailable revenue - 1,525 - - 16,586 - - 30,558 48,669 Total deferred inflows of resources - 1,525 - - 16,586 - - 30,558 48,669 Fund Balances:
Nonspendable:
Inventories, prepaids, notes, and deposits - 71 - - 23 - - - 94 Permanent fund principal - - - - - - - - -
Restricted:
Housing and redevelopment - - - - 31 - - 11,221 11,252
Transportation and public works - 3,135 32,132 1,970 - 599 906 - 38,742 Other purposes - - - - - - - - -
Total fund balances - 3,206 32,132 1,970 54 599 906 11,221 50,088 Total liabilities, deferred inflows of
resources, and fund balances $ 1,201 $ 52,840 $ 33,901 $ 1,970 $ 35,052 $ 617 $ 914 $ 41,804 $ 168,299 88 CITY OF RIVERSIDE
COMBINING BALANCE SHEET
NON-MAJOR GOVERNMENTAL FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Capital Projects Funds
Permanent
Fund
Special Capital
Improvement Storm Drain Transportation Total Library Special Total
Non-Major
Governmental
Funds
Assets:
Cash and investments $ 7,624 $ - $ - $ 7,624 $ 1,642 $ 111,057 Cash and investments with fiscal agent 330 - - 330 - 330 Receivables, net of allowance for uncollectible
Interest 26 - - 26 - 375
Property taxes - - - - - 90
Accounts - - - - - 117
Intergovernmental - 946 - 946 - 17,676
Notes - - - - - 46,702
Prepaid items - - - - - 94
Land and improvements held for resale - - - - - 2,426
Total assets $ 7,980 $ 946 $ - $ 8,926 $ 1,642 $ 178,867 Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable $ 73 $ - $ - $ 73 $ - $ 6,290
Accrued payroll - - - - - 40
Retainage payable 5 - - 5 - 621
Intergovernmental - - - - - 5
Unearned revenue - - - - - 61,708
Due to other funds - 65 - 65 - 1,021
Total liabilities 78 65 - 143 - 69,685
Deferred Inflows of Resources:
Unavailable revenue - - - - - 48,669
Total deferred inflows of resources - - - - - 48,669
Fund Balances:
Nonspendable:
Inventories, prepaids, notes, and deposits - - - - - 94 Permanent fund principal - - - - 1,642 1,642
Restricted:
Housing and redevelopment - - - - - 11,252
Transportation and public works - - - - - 38,742
Other purposes 7,902 881 - 8,783 - 8,783
Total fund balances 7,902 881 - 8,783 1,642 60,513
Total liabilities, deferred inflows of resources, and fund balances $ 7,980 $ 946 $ - $ 8,926 $ 1,642 $ 178,867 89 CITY OF RIVERSIDE
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Special Revenue Funds
Urban Areas
Security
Initiative
Grants and
Restricted
Programs Gas Tax
Air Quality
Improvements
Housing &
Community
Development
NPDES
Strom Drain
Special
Districts Housing Total
Revenues:
Licenses and permits $ - $ - $ - $ - $ - $ - $ - $ - $ - Intergovernmental 2,008 37,453 15,043 421 20,372 - - - 75,297 Charges for services - 1,554 - 31 - - - - 1,585
Special assessments - - - - - 1,796 4,203 - 5,999
Rental and investment income - 1,225 347 20 289 6 14 302 2,203 Miscellaneous - 894 - - 500 - - (227) 1,167
Total revenues 2,008 41,126 15,390 472 21,161 1,802 4,217 75 86,251 Expenditures:
Current:
General government - 6,759 - 48 2,644 - - 1,060 10,511
Public safety 2,008 4,822 - - - - 4,909 - 11,739
Highways and streets - 487 - - - - 563 - 1,050
Culture and recreation - 3,059 - - - - 15 - 3,074
Capital outlay - 822 12,952 242 17,209 1,804 - - 33,029 Debt service:
Principal - 12 - - 25 - - 56 93
Interest and fiscal charges - - - - 14 - - 30 44
Total expenditures 2,008 15,961 12,952 290 19,892 1,804 5,487 1,146 59,540 Excess/(deficiency) of revenues over/(under)
expenditures - 25,165 2,438 182 1,269 (2) (1,270) (1,071) 26,711 Other Financing Sources/(Uses):
Transfers in - 200 149 - - - 1,435 - 1,784
Transfers out - (23,857) (215) - - - - - (24,072)
Proceeds from sale of capital assets - 7 - - - - - - 7
Issuance of debt related to leases and subscriptions - 12 - - - - - - 12 Total other financing sources/(uses) - (23,638) (66) - - - 1,435 - (22,269) Net change in fund balances - 1,527 2,372 182 1,269 (2) 165 (1,071) 4,442 Fund Balances:
Beginning of year - 1,679 29,760 1,788 (1,215) 601 741 12,292 45,646 End of year $ - $ 3,206 $ 32,132 $ 1,970 $ 54 $ 599 $ 906 $ 11,221 $ 50,088 90 CITY OF RIVERSIDE
COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
NON-MAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Capital Projects Funds
Permanent
Fund
Special Capital
Improvement Storm Drain Transportation Total Library Special Total
Non-Major
Governmental
Funds
Revenues:
Licenses and permits $ 3,175 $ 273 $ - $ 3,448 $ - $ 3,448 Intergovernmental - 2,535 - 2,535 - 77,832
Charges for services - - - - - 1,585
Special assessments - - - - - 5,999
Rental and investment income 75 185 - 260 26 2,489
Miscellaneous - - - - 279 1,446
Total revenues 3,250 2,993 - 6,243 305 92,799
Expenditures:
Current:
General government 49 - - 49 - 10,560
Public safety - - - - - 11,739
Highways and streets - - - - - 1,050
Culture and recreation - - - - 158 3,232
Capital outlay 510 2,502 - 3,012 - 36,041
Debt service:
Principal - - - - - 93
Interest and fiscal charges - - - - - 44
Total expenditures 559 2,502 - 3,061 158 62,759
Excess/(deficiency) of revenues over/(under) expenditures 2,691 491 - 3,182 147 30,040 Other Financing Sources/(Uses):
Transfers in - - - - - 1,784
Transfers out (1,750) - - (1,750) - (25,822)
Proceeds from sale of capital assets - - - - - 7
Issuance of debt related to leases and subscriptions - - - - - 12 Total other financing sources/(uses) (1,750) - - (1,750) - (24,019) Net change in fund balances 941 491 - 1,432 147 6,021
Fund Balances:
Beginning of year 6,961 390 - 7,351 1,495 54,492
End of year $ 7,902 $ 881 $ - $ 8,783 $ 1,642 $ 60,513
91 CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Urban Areas Security Initiative Grants and Restricted Programs Gas Tax Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Revenues:
Intergovernmental $ 11,697 $ 2,008 $ (9,689) $ 144,307 $ 37,453 $ (106,854) $ 16,804 $ 15,043 $ (1,761) Charges for services - - - 1,516 1,554 38 - - -
Rental and investment income - - - - 1,225 1,225 150 347 197 Miscellaneous - - - 1,166 894 (272) - - -
Total revenues 11,697 2,008 (9,689) 146,989 41,126 (105,863) 16,954 15,390 (1,564) Expenditures:
Current:
General government - - - 39,404 6,759 32,645 - - -
Public safety 11,697 2,008 9,689 12,662 4,822 7,840 - - - Highways and streets - - - 1,208 487 721 - - -
Culture and recreation - - - 38,547 3,059 35,488 - - -
Capital outlay - - - 33,060 822 32,238 43,091 12,952 30,139 Principal - - - - 12 (12) - - -
Total expenditures 11,697 2,008 9,689 124,881 15,961 108,920 43,091 12,952 30,139 Excess/(deficiency) of revenues
over/(under) expenditures - - - 22,108 25,165 3,057 (26,137) 2,438 28,575 Other Financing Sources/(Uses):
Transfers in - - - - 200 200 - 149 149
Transfers out - - - (24,581) (23,857) 724 - (215) (215) Proceeds from sale of capital assets - - - - 7 7 - - -
Issuance of debt related to leases and
subscriptions - - - - 12 12 - - -
Total other financing
sources/(uses) - - - (24,581) (23,638) 943 - (66) (66)
Net change in fund balance - - - (2,473) 1,527 4,000 (26,137) 2,372 28,509 Fund Balances:
Beginning of year - - - 1,679 1,679 - 29,760 29,760 -
End of year $ - $ - $ - $ (794) $ 3,206 $ 4,000 $ 3,623 $ 32,132 $ 28,509 92 CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Air Quality Improvements Housing & Community Development NPDES Strom Drain Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Revenues:
Intergovernmental $ 424 $ 421 $ (3) $ 45,485 $ 20,372 $ (25,113) $ 397 $ - $ (397) Charges for services 75 31 (44) - - - - - -
Special assessments - - - - - - 1,887 1,796 (91)
Rental and investment income - 20 20 250 289 39 - 6 6
Miscellaneous - - - 1,481 500 (981) - - -
Total revenues: 499 472 (27) 47,216 21,161 (26,055) 2,284 1,802 (482) Expenditures:
Current:
General government 475 48 427 3,064 2,644 420 - - -
Capital outlay 242 242 - 60,219 17,209 43,010 2,879 1,804 1,075 Debt service:
Principal - - - 25 25 - - - -
Interest and fiscal charges - - - 14 14 - - - -
Total expenditures 717 290 427 63,322 19,892 43,430 2,879 1,804 1,075 Excess/(deficiency) of revenues
over/(under) expenditures (218) 182 400 (16,106) 1,269 17,375 (595) (2) 593 Other Financing Sources/(Uses):
Transfers in - - - - - - - - -
Transfers out - - - - - - - - -
Total other financing
sources/(uses) - - - - - - - - -
Net change in fund balances (218) 182 400 (16,106) 1,269 17,375 (595) (2) 593 Fund Balances:
Beginning of year 1,788 1,788 - (1,215) (1,215) - 601 601 - End of year $ 1,570 $ 1,970 $ 400 $ (17,321) $ 54 $ 17,375 $ 6 $ 599 $ 593 93 CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
NON-MAJOR SPECIAL REVENUE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Special Districts Housing
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Revenues
Special assessments $ 4,118 $ 4,203 $ 85 $ - $ - $ -
Rental and investment income - 14 14 - 302 302
Miscellaneous - - - - (227) (227)
Total revenues 4,118 4,217 99 - 75 75
Expenditures:
Current:
General government - - - 2,872 1,060 1,812
Public safety 4,744 4,909 (165) - - -
Highways and streets 748 563 185 - - -
Culture and recreation 353 15 338 - - -
Debt service:
Principal - - - 56 56 -
Interest and fiscal charges - - - 30 30 -
Total expenditures 5,845 5,487 358 2,958 1,146 1,812
Excess/(deficiency) of revenues over/(under) expenditures (1,727) (1,270) 457 (2,958) (1,071) 1,887 Other Financing Sources/(Uses):
Transfers in 1,399 1,435 36 - - -
Total other financing sources/(uses) 1,399 1,435 36 - - - Net change in fund balances (328) 165 493 (2,958) (1,071) 1,887 Fund Balances:
Beginning of year 741 741 - 12,292 12,292 -
End of year $ 413 $ 906 $ 493 $ 9,334 $ 11,221 $ 1,887
94 CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Capital Outlay Fund Special Capital Improvement Storm Drain Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Final
Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Revenues:
Licenses and permits $ - $ - $ - $ 2,585 $ 3,175 $ 590 $ 179 $ 273 $ 94 Intergovernmental 53,153 14,853 (38,300) - - - 26,481 2,535 (23,946) Special assessments 680 542 (138) - - - - - -
Rental and investment income 180 668 488 30 75 45 13 185 172 Miscellaneous - 249 249 - - - - - -
Total revenues 54,013 16,312 (37,701) 2,615 3,250 635 26,673 2,993 (23,680) Expenditures:
Current:
General government - - - 47 49 (2) - - -
Capital outlay 185,267 20,982 164,285 1,221 510 711 26,926 2,502 24,424 Debt service:
Interest and fiscal charges 2 - 2 - - - - - -
Total expenditures 185,269 20,982 164,287 1,268 559 709 26,926 2,502 24,424 Excess/(deficiency) of revenues
over/(under) expenditures (131,256) (4,670) 126,586 1,347 2,691 1,344 (253) 491 744 Other Financing Sources/(Uses):
Transfers in 37,900 38,115 215 - - - - - -
Transfers out (2,999) (3,148) (149) (1,750) (1,750) - - - - Issuance of long-term debt 57,700 - (57,700) - - - - - - Total other financing
sources/(uses) 92,601 34,967 (57,634) (1,750) (1,750) - - - - Net change in fund balance (38,655) 30,297 68,952 (403) 941 1,344 (253) 491 744 Fund Balances:
Beginning of year 52,504 52,504 - 6,961 6,961 - 390 390 - End of year $ 13,849 $ 82,801 $ 68,952 $ 6,558 $ 7,902 $ 1,344 $ 137 $ 881 $ 744 95 CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL
CAPITAL PROJECT FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Transportation
Final Budget
Actual
Amounts
Variance to
Final Budget
Positive
(Negative)
Revenues:
Intergovernmental $ 163 $ - $ (163)
Total revenues 163 - (163)
Expenditures:
Capital outlay 163 - 163
Total expenditures 163 - 163
Other Financing Sources/(Uses):
Transfers in - - -
Fund Balances:
Beginning of year - - -
End of year $ - $ - $ -
96 Non-Major Enterprise Funds
Enterprise Funds are used to account for the operations that are financed and operated in a manner similar to private business enterprises. The City's intent is to demonstrate that the cost of services provided to the general public on a continuing basis is financed or recovered through user charges; or the City has decided that the periodic determination of net income is appropriate for accountability purposes.
Airport - To account for the operations of the City's airport.
Refuse - To account for the operations of the City's solid waste and sanitation program which provides for the collection and disposal of solid waste on a user charge basis to residents and businesses.
Transportation - To account for the operations of the City's Senior Citizens' and Handicapped Transportation System in accordance with Article 4 of the Transportation Development Act of 1971 (SB325) of the State of California. Federal Transit Administration Funds are also accounted for in this fund.
Public Parking - To account for the operations and construction of the City's public parking facilities.
Civic Entertainment - To account for the operations of the Riverside Fox Theater, Riverside Municipal Auditorium, The Box and Showcase, the Riverside Convention Center, and the Cheech.
97 CITY OF RIVERSIDE
COMBINING STATEMENT OF NET POSITION
NON-MAJOR ENTERPRISE FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds
Airport Refuse Transportation Public Parking
Civic
Entertainment
Total
Non-Major
Enterprise
Funds
Assets:
Current assets:
Cash and investments $ 1,717 $ 12,981 $ 4,633 $ 5,458 $ 2,333 $ 27,122 Receivables, net of allowance for uncollectible
Interest 10 57 17 23 16 123
Utility billed - 2,176 - - - 2,176
Utility unbilled - 1,102 - - - 1,102
Accounts 290 384 25 270 377 1,346
Property taxes 1 - - - - 1
Intergovernmental 108 - 100 9 3,135 3,352
Leases receivable 237 - - 237 - 474
Inventory - - - - 89 89
Prepaid items - 8 - - 75 83
Deposits - - - - 300 300
Restricted assets:
Cash and cash equivalents - 2,500 - - - 2,500
Total current assets 2,363 19,208 4,775 5,997 6,325 38,668 Noncurrent assets:
Leases receivable 2,293 - - 2,102 - 4,395
Regulatory assets - 9,024 - - - 9,024
Derivative instruments - - - - 1,088 1,088
Capital assets, net of accumulated depreciation 20,490 4,083 1,945 27,869 89,073 143,460 Lease and subscription assets, net of amortization 5 9 4 164 - 182 Total noncurrent assets 22,788 13,116 1,949 30,135 90,161 158,149 Total assets 25,151 32,324 6,724 36,132 96,486 196,817
Deferred Outflows of Resources:
Changes in derivative values - - - - 844 844
Deferred charge on refunding - - - - 579 579
Pension related items 382 2,593 1,523 686 - 5,184
OPEB related items 23 192 131 22 - 368
Total deferred outflows of resources 405 2,785 1,654 708 1,423 6,975 (Continued)
98 CITY OF RIVERSIDE
COMBINING STATEMENT OF NET POSITION
NON-MAJOR ENTERPRISE FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds
Airport Refuse Transportation Public Parking
Civic
Entertainment
Total
Non-Major
Enterprise
Funds
Liabilities:
Current liabilities:
Accounts payable 150 1,773 4,095 613 1,225 7,856
Accrued payroll 13 123 51 19 - 206
Retainage payable 1 - - 62 100 163
Unearned revenue 41 - 646 - 32 719
Deposits - - - - 682 682
Accrued interest - - - 45 - 45
Long-term obligations 61 453 177 1,243 4,163 6,097
Compensated absences 75 372 175 33 - 655
Landfill capping - 559 - - - 559
OPEB liability 6 57 29 12 - 104
Lease liability 1 1 2 75 - 79
SBITA liability 1 5 - - - 6
Total current liabilities 349 3,343 5,175 2,102 6,202 17,171 Noncurrent liabilities:
Long-term obligations 623 4,177 1,966 12,614 53,759 73,139 Compensated absences 2 13 5 1 - 21
Landfill capping - 8,866 - - - 8,866
Regulatory liability - - - - 42 42
Derivative instruments - - - - 1,465 1,465
Net pension liability 424 2,876 1,690 761 - 5,751
OPEB liability 146 1,281 660 269 - 2,356
Lease liability 2 2 3 92 - 99
SBITA liability - 1 - - - 1
Total noncurrent liabilities 1,197 17,216 4,324 13,737 55,266 91,740 Total liabilities 1,546 20,559 9,499 15,839 61,468 108,911 Deferred Inflows of Resources:
Change in derivative values - - - - 1,064 1,064
Pension related items 39 266 156 70 - 531
OPEB related items 30 271 152 61 - 514
Lease related items 2,622 - - 2,432 - 5,054
Total deferred inflows of resources 2,691 537 308 2,563 1,064 7,163 Net Position:
Net investment in capital assets 20,491 3,592 1,944 15,067 31,731 72,825 Landfill capping - 2,500 - - - 2,500
Unrestricted/(deficit) 828 7,921 (3,373) 3,371 3,646 12,393 Total net position $ 21,319 $ 14,013 $ (1,429) $ 18,438 $ 35,377 $ 87,718 99 CITY OF RIVERSIDE
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION
NON-MAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds
Airport Refuse Transportation Public Parking
Civic
Entertainment
Total
Non-Major
Enterprise
Funds
Operating Revenues:
Charges for services $ 1,872 $ 31,477 $ 258 $ 6,084 $ 18,158 $ 57,849 Total operating revenues 1,872 31,477 258 6,084 18,158 57,849 Operating Expenses:
Personnel services 751 6,138 2,858 602 - 10,349
Contractual services 237 7,444 67 2,340 7,622 17,710
Maintenance and operation 370 11,129 533 536 214 12,782 General 205 4,391 705 274 14,484 20,059
Materials and supplies 16 1,931 217 7 - 2,171
Claims/Insurance 43 160 73 101 334 711
Depreciation 737 862 281 972 3,032 5,884
Amortization 3 570 2 75 - 650
Total operating expenses 2,362 32,625 4,736 4,907 25,686 70,316 Operating income/(loss) (490) (1,148) (4,478) 1,177 (7,528) (12,467) Nonoperating Revenues/(Expenses):
Grant subsidies 12 - 4,150 - 212 4,374
Interest revenue 61 84 19 47 6 217
Interest expense and fiscal charges (23) (152) (72) (586) (2,012) (2,845) Other (15) 407 (1) (94) 2 299
Gain/(loss) on disposal of capital assets - 14 - - - 14 Total nonoperating revenues/(expenses): 35 353 4,096 (633) (1,792) 2,059 Income/(loss) before contributions and transfers (455) (795) (382) 544 (9,320) (10,408) Capital contributions 194 - 99 - 1,187 1,480
Transfers in - 11,000 - 3,500 10,575 25,075
Change in net position (261) 10,205 (283) 4,044 2,442 16,147 Net Position
Beginning of year 21,580 3,808 (1,146) 14,394 32,935 71,571 End of year $ 21,319 $ 14,013 $ (1,429) $ 18,438 $ 35,377 $ 87,718 100
CITY OF RIVERSIDE
COMBINING STATEMENT OF CASH FLOWS
NON-MAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds
Airport Refuse Transportation Public Parking
Civic
Entertainment
Total
Non-Major
Enterprise
Funds
Cash Flows from Operating Activities:
Cash received from customers and users $ 1,660 $ 32,618 $ 234 $ 6,300 $ 18,244 $ 59,056 Cash paid to suppliers for goods or services (809) (26,148) (1,573) (3,240) (22,858) (54,628) Cash paid to employees for services (764) (6,157) (2,847) (619) - (10,387) Net cash provided/(used) by operating activities 87 313 (4,186) 2,441 (4,614) (5,959) Cash Flows from Non-Capital Financing Activities:
Transfers in - 11,000 - 3,500 10,575 25,075
Debt service payment on pension obligation bonds (52) (291) (148) (76) - (567) Other non-operating receipts 42 408 (1) (40) 2 411
Grant subsidies 12 - 5,676 - 212 5,900
Net cash provided/(used) by non-capital financing activities 2 11,117 5,527 3,384 10,789 30,819 Cash Flows from Capital and Related Financing Activities:
Purchase of capital assets (209) (1,340) (20) (617) (1,120) (3,306) Proceeds from sales of capital assets - 14 - - - 14
Principal paid on long-term obligations - (103) - (1,105) (4,020) (5,228) Interest paid on long-term obligations (23) (152) (72) (591) (2,065) (2,903) Contributions 194 - 99 - 1,187 1,480
Lease and subscription payments (3) (6) (2) (77) - (88) Net cash provided/(used) by capital and related financing activities (41) (1,587) 5 (2,390) (6,018) (10,031) Cash Flows from Investing Activities:
Interest from investments 59 41 8 29 (4) 133
Net cash provided/(used) by investing activities 59 41 8 29 (4) 133 Net increase/(decrease) in cash and cash equivalents 107 9,884 1,354 3,464 153 14,962 Cash and cash equivalents at beginning of year 1,610 5,597 3,279 1,994 2,180 14,660 Cash and cash equivalents at end of year $ 1,717 $ 15,481 $ 4,633 $ 5,458 $ 2,333 $ 29,622 101
CITY OF RIVERSIDE
COMBINING STATEMENT OF CASH FLOWS
NON-MAJOR ENTERPRISE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Business-Type Activities - Enterprise Funds
Airport Refuse Transportation Public Parking
Civic
Entertainment
Total
Non-Major
Enterprise
Funds
Reconciliation of Operating Income to Net Cash Provided/(Used) by Operating Activities:
Operating income/(loss) $ (490) $ (1,148) $ (4,478) $ 1,177 $ (7,528) $ (12,467) Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities:
Depreciation 737 862 281 972 3,032 5,884
Amortization 3 570 2 75 - 650
(Increase)/decrease in utility billed receivable - 1,282 - - - 1,282 (Increase)/decrease in utility unbilled receivable - (49) - - - (49) (Increase)/decrease in accounts receivable (119) (92) (24) 197 1,510 1,472 (Increase)/decrease in property tax receivable 20 - - - - 20 (Increase)/decrease in intergovernmental receivable (107) - - 18 - (89) (Increase)/decrease in inventory - - - - (10) (10)
(Increase)/decrease in prepaid items - (5) - - (40) (45) (Increase)/decrease in deposits - - - - 6 6
Increase/(decrease) in accounts payable 78 (687) 24 (42) 217 (410) Increase/(decrease) in accrued payroll 1 39 16 (3) - 53 Increase/(decrease) in retainage payable (18) - - 62 (378) (334) Increase/(decrease) in unearned revenue (4) - - - (1,457) (1,461) Increase/(decrease) in deposits payable - - - - 34 34
Increase/(decrease) in compensated absences (1) 29 39 3 - 70 Increase/(decrease) in landfill capping liability - (396) - - - (396) Changes in net pension liability/(asset) and related deferred inflows/(outflows) of resources (19) (145) (73) (32) - (269)
Changes in OPEB liability and related deferred inflows/(outflows) of resources 6 53 27 14 - 100 Total adjustments 577 1,461 292 1,264 2,914 6,508
Net cash provided/(used) by operating activities $ 87 $ 313 $ (4,186) $ 2,441 $ (4,614) $ (5,959) 102
Internal Service Funds
Internal Service Funds are used to account for the financing of goods and services provided by one City department to other City departments on a cost- reimbursement basis.
Self-Insurance Trust - To account for the operations of the City's self-insured workers' compensation, unemployment, and liability programs.
Central Stores - To account for the operations of the City's centralized supplies inventory, including receiving and delivery s ervices provided to City departments.
Central Garage - To account for the maintenance and repair of all city-owned vehicles and motorized equipment, except for Police vehicles. 103
CITY OF RIVERSIDE
COMBINING STATEMENT OF NET POSITION
INTERNAL SERVICE FUNDS
JUNE 30, 2023
(amounts expressed in thousands)
Governmental Activities - Internal Service Funds
Self Insurance
Trust Central Stores Central Garage
Total Internal
Service Funds
Assets:
Current assets:
Cash and investments $ 29,386 $ - $ 10,786 $ 40,172
Receivables, net of allowance for uncollectible
Interest 102 - 38 140
Accounts 70 - 55 125
Intergovernmental 57 - 229 286
Inventory - 8,592 476 9,068
Prepaid items - - 2 2
Total current assets 29,615 8,592 11,586 49,793
Noncurrent assets:
Capital assets, net of accumulated depreciation - 83 7,960 8,043 Lease and subscription assets, net of amortization 13 1 8 22 Total noncurrent assets 13 84 7,968 8,065
Total assets 29,628 8,676 19,554 57,858
Deferred Outflows of Resources:
Pension related items 576 408 1,900 2,884
OPEB related items 46 27 115 188
Total deferred outflows of resources 622 435 2,015 3,072 Liabilities:
Current liabilities:
Accounts payable 277 626 330 1,233
Accrued payroll 17 14 65 96
Due to other funds - 645 - 645
Long-term obligations 46 49 360 455
Compensated absences 47 88 204 339
Claims and judgments 12,834 - - 12,834
OPEB liability 7 8 33 48
Lease liability 4 - 1 5
SBITA liability - 1 3 4
Total current liabilities 13,232 1,431 996 15,659
Noncurrent liabilities:
Long-term obligations 526 528 3,209 4,263
Compensated absences 17 33 76 126
Claims and judgments 40,278 - - 40,278
Net pension liability 639 453 2,107 3,199
OPEB liability 167 172 756 1,095
Lease liability 7 - 3 10
SBITA liability - - 1 1
Total noncurrent liabilities 41,634 1,186 6,152 48,972
Total liabilities 54,866 2,617 7,148 64,631
Deferred Inflows of Resources:
Pension related items 59 42 195 296
OPEB related items 54 44 138 236
Total deferred inflows of resources 113 86 333 532
Net Position:
Net investment in capital assets 2 83 7,960 8,045
Unrestricted/(deficit) (24,731) 6,325 6,128 (12,278)
Total net position $ (24,729) $ 6,408 $ 14,088 $ (4,233) 104
CITY OF RIVERSIDE
COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Governmental Activities - Internal Service Funds
Self Insurance
Trust Central Stores Central Garage
Total Internal
Service Funds
Operating Revenues:
Charges for services $ 21,005 $ 1,580 $ 8,979 $ 31,564
Total operating revenues 21,005 1,580 8,979 31,564
Operating Expenses:
Personnel services 1,049 870 3,457 5,376
Contractual services 662 6 217 885
Maintenance and operation 5 40 3,396 3,441
General 6,095 128 1,407 7,630
Materials and supplies 2 11 171 184
Claims/Insurance 4,043 10 145 4,198
Depreciation - 11 925 936
Amortization 4 1 5 10
Total operating expenses 11,860 1,077 9,723 22,660
Operating income (loss) 9,145 503 (744) 8,904
Nonoperating Revenues/(Expenses):
Interest revenue 578 - 185 763
Interest expense and fiscal charges (19) (19) (115) (153) Other 145 - 1 146
Gain/(loss) on disposal of capital assets - - 51 51
Total nonoperating revenues/(expenses) 704 (19) 122 807 Income/(loss) before contributions and operating
transfers 9,849 484 (622) 9,711
Capital contributions - - 239 239
Change in net position 9,849 484 (383) 9,950
Beginning of year (34,578) 5,924 14,471 (14,183)
End of year $ (24,729) $ 6,408 $ 14,088 $ (4,233)
105
CITY OF RIVERSIDE
COMBINING STATEMENT OF CASH FLOWS
INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Governmental Activities - Internal Service Funds
Self Insurance
Trust Central Stores Central Garage
Total Internal
Service Funds
Cash Flows from Operating Activities:
Cash received from interfund services provided $ 21,095 $ 1,580 $ 9,027 $ 31,702 Cash paid to suppliers for goods and services (36,499) (1,230) (5,454) (43,183) Cash paid to employees for services (1,052) (892) (3,497) (5,441) Net cash provided/(used) by operating activities (16,456) (542) 76 (16,922) Cash Flows from Non-Capital Financing Activities:
Payments from other funds - 606 - 606
Debt service payment on pension obligation bonds (38) (41) (211) (290) Other non-operating receipts 145 - 1 146
Net cash provided/(used) by non-capital financing
activities 107 565 (210) 462
Cash Flows from Capital and Related Financing Activities:
Purchase of capital assets - (2) (1,187) (1,189)
Proceeds from sales of capital assets - - 51 51
Interest paid on long-term obligations (19) (19) (116) (154) Lease and subscription payments (4) (2) (10) (16)
Net cash provided/(used) by capital and related
financing activities (23) (23) (1,262) (1,308)
Cash Flows from Investing Activities:
Interest from investments 567 - 171 738
Net cash provided/(used) by capital and related
financing activities 567 - 171 738
Net increase/(decrease) in cash and cash equivalents (15,805) - (1,225) (17,030) Cash and cash equivalents at beginning of year 45,191 - 12,011 57,202 Cash and cash equivalents at end of year $ 29,386 $ - $ 10,786 $ 40,172 Reconciliation of Operating Income to Net Cash
Provided/(Used) by Operating Activities:
Operating income/(loss) $ 9,145 $ 503 $ (744) $ 8,904
Adjustments to Reconcile Operating Income/(Loss) Net Cash Provided/(Used) by Operating Activities:
Depreciation - 11 925 936
Amortization 4 1 5 10
(Increase)/decrease in accounts receivable (41) - 41 -
(Increase)/decrease in intergovernmental receivable 128 - 1 129 (Increase)/decrease in inventory - (885) 14 (871)
Increase/(decrease) in accounts payable (15) (150) (122) (287) Increase/(decrease) in accrued payroll 5 (1) 15 19
Increase/(decrease) in retainage payable - - (6) (6)
Increase/(decrease) in compensated absences 15 (17) 10 8 Increase/(decrease) in claims and judgments (25,678) - - (25,678) Changes in net pension liability/(asset) and related deferred inflows/(outflows) of resources (28) (13) (89) (130)
Changes in OPEB liability and related deferred inflows/(outflows) of resources 9 9 26 44
Total adjustments (25,601) (1,045) 820 (25,826)
Net cash provided/(used) by operating activities $ (16,456) $ (542) $ 76 $ (16,922) 106
Combining General Fund and Capital Outlay Fund Schedules with Measure Z Fund Activity
107
CITY OF RIVERSIDE
BALANCE SHEET
COMBINING GENERAL FUND SCHEDULE
JUNE 30, 2023
(amounts expressed in thousands)
General Fund Measure Z Fund
Total General
Fund
Assets:
Cash and investments $ 141,168 $ 55,022 $ 196,190
Cash and investments with fiscal agent 32,695 11,272 43,967 Receivables, net of allowance for uncollectible
Interest 469 225 694
Property taxes 1,988 - 1,988
Sales taxes 16,052 14,866 30,918
Utility billed 2,320 - 2,320
Utility unbilled 945 - 945
Accounts 12,686 7 12,693
Intergovernmental 4,615 - 4,615
Notes 10 - 10
Leases receivable 9,213 - 9,213
Prepaid items 1,644 286 1,930
Due from other funds 1,666 - 1,666
Land and improvements held for resale 175 - 175
Total assets $ 225,646 $ 81,678 $ 307,324
Liabilities, Deferred Inflows of Resources, and Fund Balances :
Liabilities:
Accounts payable $ 8,054 $ 6,196 $ 14,250
Accrued payroll 14,813 427 15,240
Retainage payable 4 2 6
Intergovernmental 139 - 139
Deposits 11,805 - 11,805
Total liabilities 34,815 6,625 41,440
Deferred Inflows of Resources:
Unavailable revenue 3,346 - 3,346
Lease related items 9,161 - 9,161
Total deferred inflows of resources 12,507 - 12,507
Fund Balances:
Nonspendable:
Inventories, prepaids, and deposits 1,654 286 1,940
Land and improvements held for resale 175 - 175
Restricted:
Unfunded accrued liability 32,695 - 32,695
Committed:
Economic contingency 65,500 5,000 70,500
Other purposes 40,801 - 40,801
Assigned:
General government 3,978 619 4,597
Public safety 956 4,958 5,914
Highways and streets 702 4,183 4,885
Culture and recreation 1,412 15 1,427
Continuing projects 5,751 12,992 18,743
Unassigned 24,700 47,000 71,700
Total fund balances 178,324 75,053 253,377
Total liabilities, deferred inflows of resources, and fund balances $ 225,646 $ 81,678 $ 307,324
108
CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
COMBINING GENERAL FUND SCHEDULE
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
General Fund Measure Z Fund
Total General
Fund
Revenues:
Taxes $ 226,504 $ 84,016 $ 310,520
Licenses and permits 12,446 - 12,446
Intergovernmental 2,720 - 2,720
Charges for services 16,393 - 16,393
Fines and forfeitures 1,131 - 1,131
Special assessments 305 - 305
Rental and investment income 5,737 (1,105) 4,632
Miscellaneous 4,335 10 4,345
Total revenues 269,571 82,921 352,492
Expenditures:
Current:
General government 13,155 3,548 16,703
Public safety 183,189 24,631 207,820
Highways and streets 19,681 1,593 21,274
Culture and recreation 35,808 451 36,259
Capital outlay 4,237 12,578 16,815
Debt service:
Principal 1,948 155 2,103
Interest and fiscal charges 206 22 228
Total expenditures 258,224 42,978 301,202
Excess/(deficiency) of revenues over/(under)
expenditures 11,347 39,943 51,290
Other Financing Sources/(Uses):
Transfers in 67,229 - 67,229
Transfers out (63,875) (36,406) (100,281)
Transfers in/(out) to General Fund * 18,266 (18,266) -
Proceeds from sale of capital assets 4,228 - 4,228
Issuance of debt related to leases and subscriptions 3,356 337 3,693 Total other financing sources/(uses) 29,204 (54,335) (25,131) Net change in fund balance 40,551 (14,392) 26,159
Fund Balances:
Beginning of year 137,773 89,445 227,218
End of year $ 178,324 $ 75,053 $ 253,377
* Per accounting standards, transfers within the same fund are not reflected in the Statement of Revenues, Expenditures, and Changes in Fund Balances; however, they are reflected in this schedule for transparency purposes.
109
CITY OF RIVERSIDE
BALANCE SHEET
COMBINING CAPITAL OUTLAY FUND SCHEDULE
JUNE 30, 2023
(amounts expressed in thousands)
Capital Outlay
Fund
Measure Z
Capital Outlay
Fund
Total Capital
Outlay Fund
Assets:
Cash and investments $ 51,456 $ 29,288 $ 80,744
Receivables, net of allowance for uncollectible
Interest 184 88 272
Accounts 451 4 455
Intergovernmental 3,941 - 3,941
Total assets $ 56,032 $ 29,380 $ 85,412
Liabilities, Deferred Inflows of Resources, and Fund
Balances:
Liabilities:
Accounts payable $ 363 $ 1,750 $ 2,113
Retainage payable 34 45 79
Unearned revenue 265 - 265
Total liabilities 662 1,795 2,457
Deferred Inflows of Resources:
Unavailable revenue 154 - 154
Total deferred inflows of resources 154 - 154
Fund Balances:
Restricted:
Transportation and public works 55,216 27,585 82,801
Total fund balances 55,216 27,585 82,801
Total liabilities, deferred inflows of resources, and fund balances $ 56,032 $ 29,380 $ 85,412
110
CITY OF RIVERSIDE
SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES
COMBINING CAPITAL OUTLAY FUND SCHEDULE
FOR THE YEAR ENDED JUNE 30, 2023
(amounts expressed in thousands)
Capital Outlay
Fund
Measure Z
Capital Outlay
Fund
Total Capital
Outlay Fund
Revenues:
Intergovernmental $ 14,853 $ - $ 14,853
Special assessments 542 - 542
Rental and investment income 314 354 668
Miscellaneous 249 - 249
Total revenues 15,958 354 16,312
Expenditures:
Capital outlay 5,987 14,995 20,982
Total expenditures 5,987 14,995 20,982
Excess/(deficiency) of revenues over/(under) expenditures 9,971 (14,641) (4,670) Other Financing Sources/(Uses):
Transfers in 11,940 26,175 38,115
Transfers out (3,148) - (3,148)
Total other financing sources/(uses) 8,792 26,175 34,967 Net change in fund balances 18,763 11,534 30,297
Fund Balances:
Beginning of year 36,453 16,051 52,504
End of year $ 55,216 $ 27,585 $ 82,801
111
Statistical Section
(Unaudited)
This part of the City's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
Contents Page
Financial Trends 113
These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.
Revenue Capacity 118
These schedules contain trend information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.
Debt Capacity 128
These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information 134
These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.
Operating Information 137
These schedules contain information about the City's operations and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.
Source: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year. 112
CITY OF RIVERSIDE
TABLE 1
NET POSITION BY COMPONENT
LAST TEN FISCAL YEAR
(accrual basis of accounting) (in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Governmental Activities
Net investment in capital assets $ 1,106,384 $ 1,126,220 $ 1,123,910 $ 1,102,409 $ 1,093,896 $ 1,102,837 $ 1,081,991 $ 1,170,232 $ 1,176,215 $ 1,198,815 Restricted - Expendable 96,587 105,847 106,488 104,853 112,183 126,551 153,806 164,809 203,038 237,159 Restricted - Nonexpendable - - - - - - - - - 1,642
Unrestricted (2,049) (406,388) (389,278) (362,146) (364,500) (356,340) (369,222) (366,713) (284,713) (242,886) Total governmental activities net position $ 1,200,922 $ 825,679 $ 841,120 $ 845,116 $ 841,579 $ 873,048 $ 866,575 $ 968,328 $ 1,094,540 $ 1,194,730 Business-Type Activities
Net investment in capital assets $ 616,844 $ 626,166 $ 654,870 $ 702,844 $ 800,227 $ 867,206 $ 751,865 $ 756,116 $ 774,469 $ 790,844 Restricted - Expendable 68,507 75,660 85,526 93,570 80,717 67,057 75,170 78,885 85,666 96,638 Unrestricted 359,698 209,469 235,144 245,116 199,143 155,468 272,776 263,837 284,977 283,132 Total business-type activities net position $ 1,045,049 $ 911,295 $ 975,540 $ 1,041,530 $ 1,080,087 $ 1,089,731 $ 1,099,811 $ 1,098,838 $ 1,145,112 $ 1,170,614 Primary Government
Net investment in capital assets $ 1,723,228 $ 1,752,386 $ 1,778,780 $ 1,805,253 $ 1,894,123 $ 1,970,043 $ 1,833,856 $ 1,926,348 $ 1,950,684 $ 1,989,659 Restricted - Expendable 165,094 181,507 192,014 198,423 192,900 193,608 228,976 243,694 288,704 333,797 Restricted - Nonexpendable - - - - - - - - - 1,642
Unrestricted 357,649 (196,919) (154,134) (117,030) (165,357) (200,872) (96,446) (102,876) 264 40,246 Total primary government net position $ 2,245,971 $ 1,736,974 $ 1,816,660 $ 1,886,646 $ 1,921,666 $ 1,962,779 $ 1,966,386 $ 2,067,166 $ 2,239,652 $ 2,365,344 113
CITY OF RIVERSIDE
TABLE 2
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(accrual basis of accounting) (in thousands) Page 1 of 2 Fiscal Year
20141 2015 2016 2017 2018 2019 2020 2021 2022 2023
Expenses
Governmental Activities:
General government $ 39,331 $ 26,587 $ 24,483 $ 44,510 $ 45,360 $ 51,139 $ 63,651 $ 97,927 $ 66,937 $ 34,258 Public safety 149,555 154,123 161,284 160,665 216,772 201,942 222,061 219,136 169,742 239,744 Highways and streets 36,564 36,563 38,836 38,585 42,544 43,770 46,983 42,034 41,125 50,588 Cultural and recreation 42,252 45,594 47,762 49,406 38,362 31,200 37,400 37,693 38,885 50,863 Interest on long-term debt and fiscal charges 17,741 17,025 16,387 16,028 12,414 10,045 13,181 19,083 19,806 18,598 Total governmental activities 285,443 279,892 288,752 309,194 355,452 338,096 383,276 415,873 336,495 394,051 Business-Type Activities:
Electric 304,416 309,874 307,925 317,335 333,061 347,804 350,667 366,165 349,004 401,427 Water 60,030 62,792 57,769 62,189 68,281 70,912 73,742 71,738 69,303 76,475 Sewer 40,385 35,593 39,978 38,305 54,136 70,137 62,961 61,029 59,060 67,195 Airport 1,662 1,809 1,799 1,998 2,179 1,972 2,304 2,326 1,944 2,385 Refuse 20,831 20,007 21,652 21,953 22,082 24,205 26,549 28,428 28,449 32,777 Transportation 4,067 4,385 4,113 4,221 4,782 4,493 4,607 4,623 3,758 4,808 Public Parking 4,610 5,604 5,141 5,448 6,186 5,151 4,628 4,684 4,566 5,493 Civic Entertainment - - - - 19,995 24,151 21,584 11,885 21,804 27,698 Total business-type activities 436,001 440,064 438,377 451,449 510,702 548,825 547,042 550,878 537,888 618,258 Total primary government expenses $ 721,444 $ 719,956 $ 727,129 $ 760,643 $ 866,154 $ 886,921 $ 930,318 $ 966,751 $ 874,383 $ 1,012,309 Program Revenues
Governmental Activities:
Charges for services:
General government $ 13,775 $ 17,600 $ 24,944 $ 27,441 $ 24,605 $ 29,281 $ 25,698 $ 11,485 $ 13,721 $ 14,046 Public safety 7,444 7,256 3,243 1,167 1,880 2,443 2,138 7,649 14,491 14,963 Highways and streets 17,487 13,868 5,709 5,930 5,554 6,036 5,174 11,278 6,090 7,288 Cultural and recreation 7,406 16,319 12,458 22,802 6,078 7,465 5,050 3,694 6,770 6,790 Operating grants and contributions 14,341 12,869 16,321 19,374 22,548 23,966 21,779 64,405 50,378 59,368 Capital grants and contributions 48,433 43,904 31,216 7,617 18,039 27,450 19,945 28,284 38,508 34,305 Total governmental activities 108,886 111,816 93,891 84,331 78,704 96,641 79,784 126,795 129,958 136,760 Business-Type Activities:
Charges for services:
Electric - 347,621 354,530 366,066 364,516 363,570 368,969 376,101 397,947 419,392 Water 68,691 66,051 57,250 62,627 66,828 65,177 70,167 80,252 80,535 78,703 Sewer 46,162 50,336 52,664 59,735 65,081 64,282 64,114 66,323 71,557 72,140 Airport 1,100 1,260 1,549 1,578 1,562 1,618 1,743 1,709 1,728 1,872 Refuse 20,677 21,360 21,806 22,567 23,085 23,004 25,109 26,468 29,768 31,477 Transportation 413 385 377 359 441 444 309 65 168 258
Public Parking 4,382 4,609 4,918 5,009 6,258 4,604 4,301 2,968 4,888 6,084 Civic Entertainment - - - - 16,393 16,977 12,233 1,381 11,883 18,158 Operating grants and contributions 2,524 3,869 2,322 3,751 3,374 3,093 3,473 3,976 5,866 4,374 Capital grants and contributions 11,486 8,027 18,868 24,151 26,957 10,607 13,979 12,273 20,527 15,483 Total business-type activities 155,435 503,518 514,284 545,843 574,495 553,376 564,397 571,516 624,867 647,941 Total primary government program revenues $ 264,321 $ 615,334 $ 608,175 $ 630,174 $ 653,199 $ 650,017 $ 644,181 $ 698,311 $ 754,825 $ 784,701 114
CITY OF RIVERSIDE
TABLE 2
CHANGES IN NET POSITION
LAST TEN FISCAL YEARS
(accrual basis of accounting) (in thousands) Page 2 of 2 Fiscal Year
20141 2015 2016 2017 2018 2019 2020 2021 2022 2023
Net Revenues/(Expenses)
Governmental Activities $ (176,557) $ (168,076) $ (194,861) $ (224,863) $ (276,748) $ (241,455) $ (303,492) $ (289,078) $ (206,537) $ (257,291) Business-Type Activities (280,566) 63,454 75,907 94,394 63,793 4,551 17,355 20,638 86,979 29,683 Total primary government net
revenues/(expenses) $ (457,123) $ (104,622) $ (118,954) $ (130,469) $ (212,955) $ (236,904) $ (286,137) $ (268,440) $ (119,558) $ (227,608) General Revenues and Other Changes in Net
Position
Governmental Activities:
Taxes:
Sales taxes $ 55,096 $ 59,437 $ 60,976 $ 75,883 $ 120,338 $ 130,645 $ 128,653 $ 150,321 $ 173,933 $ 177,722 Property taxes 51,323 54,864 55,545 59,526 63,515 69,478 72,609 71,986 79,790 84,751 Utility users' taxes 28,092 28,076 27,828 27,958 27,498 28,009 29,044 30,577 32,464 34,963 Franchise taxes 5,046 5,543 5,730 4,814 4,972 5,256 5,443 5,527 5,955 6,422 Transient occupancy taxes 4,189 5,280 6,093 6,622 6,793 7,163 5,959 5,801 8,764 8,587 Intergovernmental, unrestricted 263 3,153 477 145 172 156 656 499 661 467 Rental and investment income 2,759 3,233 729 6,145 5,187 7,500 10,185 4,969 (7,613) 8,817 Miscellaneous 5,425 12,395 11,708 2,050 4,278 - 9,146 5,988 3,876 10,331 Transfers 43,100 42,681 41,216 45,716 41,459 37,115 35,324 34,879 34,915 25,421 Total governmental activities 195,293 214,662 210,302 228,859 274,212 285,322 297,019 310,547 332,745 357,481 Business-Type Activities:
Investment income 8,005 5,319 6,888 2,650 3,939 19,488 19,838 681 (13,324) 11,191 Miscellaneous 7,081 7,652 22,666 14,662 12,901 10,322 8,211 11,986 12,639 10,049 Extraordinary items - - - - - - - - (5,748) -
Transfers (43,100) (42,681) (41,216) (45,716) (41,459) (37,115) (35,324) (34,278) (34,915) (25,421) Total business-type activities (28,014) (29,710) (11,662) (28,404) (24,619) (7,305) (7,275) (21,611) (41,348) (4,181) Total primary government 167,279 184,952 198,640 200,455 249,593 278,017 289,744 288,936 291,397 353,300 Change in Net Position
Governmental Activities $ 18,736 $ 46,586 $ 15,441 $ 3,996 $ (2,536) $ 43,867 $ (6,473) $ 21,469 $ 126,208 $ 100,190 Business-Type Activities (308,580) 33,744 64,245 65,990 39,174 (2,754) 10,080 (973) 45,631 25,502 Total primary government $ (289,844) $ 80,330 $ 79,686 $ 69,986 $ 36,638 $ 41,113 $ 3,607 $ 20,496 $ 171,839 $ 125,692 1 The decrease in total business-type activities net position is primarily due to the power plant closure. 115
CITY OF RIVERSIDE
TABLE 3
FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(modified accrual basis of accounting) (in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
General Fund
Nonspendable $ 24,419 $ 23,642 $ 23,094 $ 26,168 $ 1,947 $ 949 $ 1,446 $ 1,870 $ 2,087 $ 2,115 Restricted 2,204 2,985 3,067 2,651 2,991 3,411 10,699 10,697 30,715 32,695 Committed - - - - 53,800 65,916 59,280 62,400 82,801 111,301 Assigned 14,505 13,965 9,922 14,968 23,242 26,984 21,260 24,890 41,707 35,566 Unassigned 37,732 39,059 29,495 39,283 7,644 23,907 41,184 59,790 69,908 71,700 Total general fund $ 78,860 $ 79,651 $ 65,578 $ 83,070 $ 89,624 $ 121,167 $ 133,869 $ 159,647 $ 227,218 $ 253,377 All Other Governmental Funds
Nonspendable $ 1,460 $ 1,625 $ 1,619 $ 1,601 $ 4,855 $ 1,560 $ 1,510 $ 1,477 $ 1,495 $ 1,736 Restricted for:
Housing and redevelopment 26,223 25,523 24,746 24,098 18,827 16,668 16,611 18,553 12,292 11,252 Debt service 26,177 26,203 26,221 6,455 11,509 6,825 11,210 11,292 11,679 14,059 Transportation and public works 54,876 36,347 36,876 34,178 43,499 91,379 84,413 78,884 87,073 121,543 Other purposes 321 2,326 3,628 4,145 3,451 5,505 5,984 6,275 7,351 8,783 Unassigned - - - (24) - - (27) - (1,215) -
Total all other governmental funds $ 109,057 $ 92,024 $ 93,090 $ 70,453 $ 82,141 $ 121,937 $ 119,701 $ 116,481 $ 118,675 $ 157,373 Notes:
Certain reclassifications have been made to prior year balances to conform with current year's presentation. 116
CITY OF RIVERSIDE
TABLE 4
CHANGES IN FUND BALANCES - GOVERNMENTAL FUNDS
LAST TEN FISCAL YEARS
(modified accrual basis of accounting) (in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Revenues:
Taxes $ 143,748 $ 153,200 $ 156,172 $ 174,803 $ 223,116 $ 240,416 $ 241,708 $ 267,714 $ 300,906 $ 312,445 Licenses and permits 9,244 11,168 11,611 14,455 12,442 14,317 13,023 12,778 14,850 15,894 Intergovernmental 59,348 49,892 51,896 31,440 42,454 44,950 42,296 87,226 88,000 95,405 Charges for services 15,734 24,737 26,443 31,384 17,438 16,927 15,968 14,578 16,938 17,978 Fines and forfeitures 7,283 3,957 1,941 1,976 3,717 2,078 1,887 2,100 2,096 1,131 Special assessments 6,272 6,757 7,039 7,578 7,113 7,973 6,950 7,674 7,188 8,084 Rental and investment income 4,315 5,112 4,370 4,718 3,446 6,548 8,441 4,437 (6,533) 8,054 Miscellaneous 6,957 6,939 12,578 7,252 8,716 5,370 7,845 5,962 3,703 6,040 Total revenues $ 252,901 $ 261,762 $ 272,050 $ 273,606 $ 318,442 $ 338,579 $ 338,118 $ 402,469 $ 427,148 $ 465,031 Expenditures:
General government $ 13,558 $ 17,799 $ 19,900 $ 20,650 $ 21,135 $ 18,880 $ 107,779 $ 30,887 $ 24,332 $ 27,263 Public safety 151,721 157,660 164,800 163,712 190,916 198,363 434,208 200,733 205,968 219,559 Highways and streets 16,944 16,594 17,416 17,504 19,207 20,927 22,254 16,897 18,805 22,324 Culture and recreation 34,275 37,527 39,583 40,643 29,382 30,528 28,825 28,391 33,065 39,491 Capital outlay 72,365 60,060 53,208 31,000 33,504 41,585 55,178 69,248 71,534 73,838 Debt service:
Principal 45,500 49,101 51,987 72,700 21,904 37,867 23,761 24,475 28,126 31,984 Interest and fiscal charges 16,787 17,048 16,451 16,115 12,746 10,493 10,773 20,372 20,134 19,076 Bond issuance cost 843 172 180 29 24 854 1,185 - - -
Total expenditures $ 351,993 $ 355,961 $ 363,525 $ 362,353 $ 328,818 $ 359,497 $ 683,963 $ 391,003 $ 401,964 $ 433,535 Excess/(deficiency) of revenue
over/(under) expenditures $ (99,092) $ (94,199) $ (91,475) $ (88,747) $ (10,376) $ (20,918) $ (345,845) $ 11,466 $ 25,184 $ 31,496 Other Financing Sources/(Uses):
Transfers in $ 58,469 $ 61,510 $ 61,384 $ 94,521 $ 102,774 $ 94,771 $ 95,932 $ 112,907 $ 116,891 $ 155,256 Transfers out (15,369) (18,829) (20,168) (48,805) (66,021) (58,688) (60,608) (102,028) (85,380) (129,835) Issuance of long-term debt 87,037 30,940 31,145 31,578 14,500 49,485 320,131 - 11,292 - Proceeds from sale of capital assets 931 (114) 261 4,199 461 149 856 213 59 4,235 Issuance of debt related to leases and
subscriptions - - - - - - - - 1,714 3,705
Capital lease financing 6,625 4,450 5,846 2,109 - - - - - Bond premium/(discounts) - - - - - 6,540 - - - -
Total other financing sources/(uses) 137,693 77,957 78,468 83,602 51,714 92,257 356,311 11,092 44,576 33,361 Net changes in fund balances $ 38,601 $ (16,242) $ (13,007) $ (5,145) $ 41,338 $ 71,339 $ 10,466 $ 22,558 $ 69,760 $ 64,857 Debt services as a percentage of non-capital
expenditures %21.803 %22.360 %21.714 %26.625 %11.999 %15.143 %5.428 %13.383 %13.535 %13.956 (1)
(1) Includes one-time payment of $318,944 to CalPERS to paydown the Unfunded Pension Liability for Miscellaneous and Safety personnel. 117
CITY OF RIVERSIDE
TABLE 5
BUSINESS-TYPE ACTIVITIES - ELECTRICITY REVENUES BY SOURCE
LAST TEN FISCAL YEARS
(accrual basis of accounting) (in thousands)
Fiscal
Year
Residential
Sales
Commercial
Sales 1
Industrial
Sales 1
Wholesale
Sales
Other
Sales
Transmission
Revenue
Other
Operating
Revenue
Total
Revenues
2014 $ 111,880 $ 67,063 $ 111,260 $ 115 $ 5,600 $ 32,630 $ 15,489 $ 344,037 2015 114,112 68,572 112,283 60 5,654 30,587 16,353 347,621 2016 116,997 69,759 113,756 3 4,737 32,924 16,354 354,530 2017 117,662 71,456 115,432 9 4,782 35,497 21,779 366,617 2018 115,630 73,971 112,264 2 4,792 37,484 8,860 353,003 2019 116,303 72,511 111,445 344 4,824 35,730 22,413 363,570 2020 121,162 71,570 113,132 - 4,849 34,817 23,438 368,968 2021 133,460 71,510 112,572 27 4,864 32,316 21,351 376,100 2022 134,403 75,899 122,684 89 4,891 32,245 27,736 397,947 2023 140,538 77,191 124,600 2,043 5,162 35,233 34,625 419,392 1 Changes in fiscal years 2018, 2019, 2020 and 2021 reflect reclassification of certain Industrial and Commercial accounts related to contract accounts. Prior to fiscal year 2018, accounts were reflected under Industrial Sales. 118
CITY OF RIVERSIDE
TABLE 6
GOVERNMENTAL ACTIVITIES - TAX REVENUE BY SOURCE
LAST TEN FISCAL YEARS
(accural basis of accounting) (in thousands)
Fiscal Year
Sales
Tax1
Property
Tax2
Utility
Users'
Tax
Franchise
Tax
Transient
Occupancy
Tax
Total
Taxes
2014 $ 55,096 $ 51,323 $ 28,092 $ 5,046 $ 4,189 $ 143,746 2015 59,437 54,864 28,076 5,543 5,280 153,200
2016 60,976 55,545 27,828 5,730 6,093 156,172
2017 75,883 59,526 27,958 4,814 6,622 174,803
2018 120,338 63,515 27,498 4,972 6,793 223,116
2019 130,645 69,343 28,009 5,256 7,163 240,416
2020 128,653 72,609 29,044 5,443 5,959 241,708
2021 150,321 71,986 30,577 5,527 5,801 264,212
2022 173,933 79,790 32,464 5,955 8,764 300,906
2023 177,722 84,751 34,963 6,422 8,587 312,445
1 Increase in sales tax in fiscal year 2017 is due to Measure Z which was passed by the voters November 2016 and became effective April 1, 2017.
Measure Z is a one percent transaction and use tax.
2 Decrease in property taxes in fiscal year 2013 relates to the dissolution of the Redevelopment Agency. Upon the dissolution of the Redevelopment Agency o n February 1 , 2012, property t axes received by t he Successor Agency a re reported in a private-purpose trust fund and therefore are excluded from the activities of the primary government. 119
CITY OF RIVERSIDE
TABLE 7
TAXABLE SALES BY CATEGORY
LAST TEN CALENDAR YEARS (in thousands)
2013 2014 2015 2016 2017 2018 2019 2020 2021 2022
Apparel stores $ 178,349 $ 188,670 $ 203,001 $ 214,852 $ 210,158 $ 212,036 $ 210,439 $ 147,176 $ 249,034 $ 232,964 General merchandise 463,355 475,147 477,903 478,538 465,490 470,386 465,234 426,500 617,257 460,364 Food stores 193,368 209,022 217,902 168,854 169,922 184,278 185,859 202,647 208,060 225,764 Eating and drinking places 447,841 483,901 533,317 582,262 609,705 639,995 677,763 587,403 788,765 875,980 Building materials 454,468 514,993 567,790 636,415 666,907 738,178 761,881 813,584 1,010,364 1,265,631 Auto dealers and supplies 1,280,633 1,461,217 1,548,385 1,608,231 1,588,854 1,621,311 1,672,475 1,728,498 2,084,828 2,111,240 Service stations 418,110 413,128 370,257 338,762 360,830 432,991 434,162 327,119 527,973 644,484 Other retail stores 550,157 595,305 633,089 692,375 677,850 666,659 636,043 609,428 764,854 743,571 All other outlets 1,154,492 1,312,607 1,461,982 1,474,160 1,481,019 1,700,733 1,701,236 1,995,760 2,099,827 2,545,362 Total $ 5,140,773 $ 5,653,990 $ 6,013,626 $ 6,194,449 $ 6,230,735 $ 6,666,567 $ 6,745,092 $ 6,838,115 $ 8,350,962 $ 9,105,360 Notes:
Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue.
Source: State of California Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, and HdL Companies. 120
CITY OF RIVERSIDE
TABLE 8
ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS (in thousands)
Fiscal
Year
Ended
June 30 Secured Unsecured
Less:
Exemptions
Taxable
Assessed
Value
Total
Direct
Rate1
2014 $ 23,045,134 $ 1,201,634 $ (7,394,982) $ 16,851,786 0.125 2015 24,482,621 1,329,391 (7,945,000) 17,867,012 0.124
2016 25,710,122 1,225,375 (8,432,984) 18,502,513 0.124
2017 26,927,989 1,311,356 (9,029,817) 19,209,528 0.124
2018 28,373,517 1,354,934 (9,791,810) 19,936,641 0.124
2019 30,196,815 1,420,597 (10,818,883) 20,798,529 0.124 2020 31,856,912 1,466,408 (10,946,897) 22,376,423 0.124 20212 33,717,485 1,482,535 (11,915,468) 23,284,552 0.123 2022 35,353,418 1,736,131 (12,881,213) 24,208,336 0.123 2023 38,044,185 1,874,928 (14,108,558) 25,810,555 0.123 Notes:
In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Assessed valuations are based on 100 percent of estimated actual value. 1 Total Direct Rate is the weighted average of all individual direct rates. Beginning in 2013/14, the Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas.
2 Total Taxable Assessed Value for FY2020 was recorded as an estimate and has been restated to the actual amount per information from the Riverside County Auditor-Controller.
Source: Riverside County Auditor-Controller
121
CITY OF RIVERSIDE
TABLE 9
DIRECT AND OVERLAPPING PROPERTY TAX RATES
(RATE PER $100 OF ASSESSED VALUATION)
LAST TEN FISCAL YEARS
2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 2022/23 Basic Levy1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Unified School Districts Debt Service 2 0.390 0.377 0.487 0.495 0.517 0.521 0.535 0.529 0.535 0.519 City of Riverside Debt Service 0.007 0.006 0.006 0.006 0.006 0.006 0.005 0.005 0.005 0.005 Metropolitan Water District Original Area 0.004 0.004 0.004 0.004 0.004 0.004 0.004 0.004 0.004 0.004 Riverside City Community College Debt Service 0.018 0.018 0.017 0.016 0.016 0.015 0.015 0.015 0.015 0.015 Total direct & overlapping3 tax rates 1.419 1.405 1.514 1.521 1.543 1.546 1.559 1.553 1.559 1.543 City's share of 1% levy per prop 134 0.113 0.113 0.113 0.113 0.113 0.113 0.113 0.113 0.113 0.113 Voter approved City debt rate 0.007 0.006 0.006 0.006 0.006 0.006 0.005 0.005 0.005 0.005 Total direct rate5 0.125 0.124 0.124 0.124 0.124 0.124 0.124 0.123 0.123 0.122 Notes:
Amounts presented in this table have been restated for prior years to reflect the most current information available. 1 In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds. 2 Includes: Alvord Unified School District, Corona Norco Unified School District, Jurupa Unified School District, Moreno Valley Unified School District, and Riverside Unified School District. 3 Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all property owners. 4 City's share of 1% levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. The ERAF portion of the City's levy has been subtracted where known.
5 Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical information and excludes revenues derived from aircraft. Beginning in 2013/14, the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognize enforceable obligations assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue.
Source: Riverside County Assessor 2013/14 - 2022/23 Tax Rate Table. 122
CITY OF RIVERSIDE
TABLE 10
PRINCIPAL PROPERTY TAXPAYERS
CURRENT YEAR AND NINE YEARS AGO (in thousands)
2023 2014
Property Owner
Taxable
Assessed
Valuation Rank
Percentage of
Total Taxable
Assessed
Value
Taxable
Assessed
Valuation Rank
Percentage of
Total Taxable
Assessed
Value
Riverside Healthcare System $ 317,875 1 %0.83 $ 110,757 3 %0.48 Tyler Mall LP 235,091 2 %0.61 194,241 1 %0.84
Nordstrom Inc 201,115 3 %0.53 -
CPT Riverside Plaza LLC 170,663 4 %0.45 - %0.00
Rohr Inc 150,551 5 %0.39 108,703 4 %0.47
La Sierra University 141,373 6 %0.37 136,505 2 %0.59
TA Lance Drive LLC 135,715 7 %0.35 -
Corona Pointe Resort LLC 129,700 8 %0.34 -
490 Columbia 127,533 9 %0.33 %0.00
Smiths Food and Drug Centers Inc 108,392 10 %0.28 -
Cole ID Riverside California - 93,330 5 %0.40
State Street Bank and Trust Co of CA - 91,636 6 %0.40
Vestar Riverside Plaza LLC - 84,860 7 %0.37
Advanced Group 13 107 - 77,450 8 %0.34
7450 Northrop Drive Apartments - 73,297 9 %0.32
Canyon Springs Marketplace Corporation - 70,030 10 %0.30 Totals $ 1,718,008 %4.49 $ 1,040,809 %4.50
Notes:
The amounts shown above include assessed value data for both the City and the Successor Agency.
Source: Riverside County Assessor 2022/2023 and 2013/14 Combined Tax Rolls and the SBE Non Unitary Tax Roll. 123
CITY OF RIVERSIDE
TABLE 11
PROPERTY TAXES LEVIES AND COLLECTIONS
LAST TEN FISCAL YEARS (in thousands)
Fiscal Year Ended
Taxes
Levied for
Collected Within the
Fiscal Year of the Levy
Collections
in
Subsequent Total Collections to Date
June 30 Fiscal Year Amount Percentage of Levy Years Amount Percentage of Levy 2014 $ 45,138 $ 44,684 98.99% $ 454 $ 45,138 100.00%
2015 48,846 48,427 99.14% 419 48,846 100.00%
2016 50,023 49,585 99.12% - 50,023 100.00%
2017 53,655 53,252 99.25% - 53,655 100.00%
2018 57,567 57,173 99.32% - 57,567 100.00%
2019 63,003 62,557 99.29% - 63,003 100.00%
2020 66,295 65,729 99.15% - 66,295 100.00%
2021 68,363 67,968 99.42% - 68,363 100.00%
2022 71,892 71,573 99.56% - 71,892 100.00%
2023 78,685 78,228 99.42% - 78,228 99.42%
Notes:
The table reflects amounts related to the City. In addition, it includes amounts related to the Redevelopment Agency through dissolution (01/31/12). The amounts collected by the Redevelopment Agency include monies that were passed-though to other agencies. Current tax levies are the original charge as provided by the County of Riverside. Current tax collections do not include supplemental taxes, aircraft taxes or other property taxes.
The City adopted the Teeter plan available with the County of Riverside effective Fiscal year 2014. Under the Teeter plan, the County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy.
Source: Riverside County Auditor-Controller and City Finance Department 124
CITY OF RIVERSIDE
TABLE 12
ELECTRICITY SOLD BY TYPE OF CUSTOMER
LAST TEN FISCAL YEARS (in millions of kilowatt-hours)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Type of Customer:
Residential 700 711 726 730 727 722 722 783 759 786
Commercial1 421 428 438 448 476 460 442 430 443 440
Industrial1 997 995 982 996 970 947 931 890 923 920
Wholesale sales2 4 2 - 1 - - 1 - 2 14
Other 30 31 23 23 22 21 18 18 19 15
Total 2,152 2,167 2,169 2,198 2,195 2,150 2,114 2,121 2,146 2,175 Total direct rate
Monthly base rate * 18.06 18.06 18.06 18.06 18.06 19.41 20.63 21.84 23.20 24.55 * Includes a Reliability Charge
1 Changes in fiscal years 2018, 2019, 2020 and 2021 reflect reclassification of certain Industrial and Commercial accounts related to contract accounts. Prior to fiscal year 2018, accounts were reflected in the Industrial customer class.
2 For fiscal years 2016, 2018, 2019, and 2021 wholesale MWH was less than 1 MWH.
Source: Riverside Public Utilities, Finance Services
125
CITY OF RIVERSIDE
TABLE 13
ELECTRICITY RATES
LAST TEN FISCAL YEARS (average rate in dollars per kilowatt-hour) Fiscal
Year Ended
June 30 Residential Commercial1 Industrial1 Other
2014 0.15995 0.15936 0.11156 0.18513
2015 0.16050 0.16022 0.11282 0.18291
2016 0.16119 * 0.15915 * 0.11577 * 0.20908 *
2017 0.16116 * 0.15958 * 0.11586 * 0.21287 *
2018 0.15910 * 0.15547 * 0.11570 * 0.21288 *
2019 0.16111 * 0.15768 * 0.11761 * 0.23448 *
2020 0.16774 * 0.16202 * 0.12149 * 0.26480 *
2021 0.17032 * 0.16636 * 0.12643 * 0.26659 *
2022 0.17707 * 0.17126 * 0.13295 * 0.26454 *
2023 0.17878 * 0.17528 * 0.13537 * 0.35779 *
1 Changes in fiscal years 2018, 2019, 2020 and 2021 reflect reclassification of certain Industrial and Commercial accounts related to contract accounts. Prior to fiscal year 2018, accounts were reflected in the Industrial customer class. * Rate calculations were taken from the Sales Stats not the financial statements.
Does not include Public Benefits charge.
Source: Riverside Public Utilities, Finance Services
126
CITY OF RIVERSIDE
TABLE 14
TOP 10 ELECTRICITY CUSTOMERS
CURRENT YEAR AND NINE YEARS AGO
2023 2014
Electricity Customer
Electricity
Charges Rank
Percent of
Total Electric
Revenues
Electricity
Charges Rank
Percent of
Total Electric
Revenues
Local University $ 13,261,512 1 %3.82 $ 10,947,884 1 %3.70 Local Government 8,255,373 2 %2.38 8,335,217 2 %2.82
Local Government 7,315,285 3 %2.11 - %0.00
Local School District 5,118,539 4 %1.47 4,189,035 4 %1.42 Corporation 4,538,154 5 %1.31 - %0.00
Corporation 3,800,280 6 %1.09 3,315,738 6 %1.12
Corporation 3,639,576 7 %1.05 - %0.00
Hospital 3,388,624 8 %0.98 2,453,555 8 %0.83
Corporation 3,137,781 9 %0.90 - %0.00
Local University 3,085,263 10 %0.89 - %0.00
Local Government - %0.00 7,386,521 3 %2.50
Corporation - %0.00 3,677,670 5 %1.24
Corporation - %0.00 2,775,346 7 %0.94
Corporation - %0.00 2,120,900 9 %0.72
Corporation - %0.00 2,113,037 10 %0.71
Total $ 55,540,386 %15.98 $ 47,314,904 %16.00
Retail sales per financial statements * $ 347,490,345 $ 295,803,687 Source: Riverside Public Utilities, Finance Services
* Financial Report - Riverside Public Utilities
127
CITY OF RIVERSIDE
TABLE 15
RATIOS OF OUTSTANDING DEBT BY TYPE
LAST TEN FISCAL YEARS (in thousands)
Governmental Activities
Fiscal Year
General
Obligation
Bonds
Lease
Revenue
Bonds
Pension
Obligation
Bonds2
Certificates
of
Participation
Financed
Purchase
Notes/Loans
Payable
Lease
Liability
SBITA
Liability
2014 $ 14,460 $ 42,344 $ 115,775 $ 191,446 $ 13,168 $ 47,611 $ - $ - 2015 13,546 40,891 108,725 187,212 14,966 45,574 - -
2016 12,567 39,398 101,000 181,429 12,006 43,482 - -
2017 11,513 37,854 92,592 156,516 17,193 41,325 - -
2018 10,388 36,246 60,883 150,800 25,647 1,746 - -
2019 9,179 80,416 50,486 99,178 21,422 1,329 - -
2020 7,874 75,964 364,633 94,802 18,207 899 - -
2021 6,478 72,471 352,824 90,215 14,922 457 - -
2022 4,987 68,855 338,264 85,477 22,294 - 1,060 -
2023 3,411 65,093 321,413 80,584 19,230 - 563 1,930
Business-Type Activities
Fiscal Year
Revenue
Bonds
Notes/Loans
Payable
Financed
Purchase
Certificates
of
Participation2
Lease
Revenue
Bonds3
Lease
Revenue
Bonds4
Lease
Liability
SBITA
Liability
Total
Primary
Government
Debt
Per
Capita1
Debt
Per
Capita1
2014 $ 1,094,290 $ 36,030 $ 2,266 $ - $ - $ - $ - $ - $ 1,557,390 22.00% 4.00 2015 1,239,634 37,225 1,720 - - - - - 1,689,493 24.00% 5.00 2016 1,208,851 37,793 4,694 - - - - - 1,641,220 23.00% 5.00 2017 1,180,345 35,255 6,209 - - - - - 1,578,802 22.00% 4.00 2018 1,139,864 78,583 6,821 18,324 - - - - 1,529,302 20.00% 4.00 2019 1,241,743 73,673 5,192 14,775 29,692 7,867 - - 1,634,952 21.00% 4.00 2020 1,212,914 69,519 3,633 119,625 28,483 7,473 - - 2,004,026 24.00% 6.00 2021 1,176,605 64,678 2,354 116,227 27,213 7,059 - - 1,931,503 22.00% 5.00 2022 1,139,100 59,948 2,176 110,718 25,912 6,625 787 - 1,866,203 20.00% 5.00 2023 1,163,676 55,070 1,476 103,705 24,582 6,168 563 86 1,847,550 20.40% 5.89 1 These ratios are calculated using personal income and population data for the prior calendar year. 2 In 2018, the 2005 and 2017 Taxable Pension Obligation Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency. 3 In 2019, the 2008 Certificates of Participation were distributed between Governmental Activities and Business-Type Activities. 4 In 2019, the 2012 Lease Revenue Refunding Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency.
Source: City of Riverside Notes to Financial Statements and Statistical Table 20. 128
CITY OF RIVERSIDE
TABLE 16
RATIOS OF GENERAL BONDED DEBT OUTSTANDING
LAST TEN FISCAL YEARS (in thousands, except per capita amount) Fiscal Year
General
Obligation
Bonds
Pension
Bonds
Certificates
of
Participation
Total Obligated
Debt
Outstanding
Less: Amounts
Available in Debt
Service Fund
Net Obligated
Debt Outstanding
Percent of
Assessed
Value1
Per
Capita2
2014 $ 14,460 $ 115,775 $ 191,446 $ 321,681 $ (27,996) $ 293,685 %1.74 935 2015 13,546 108,725 187,212 309,483 (9,295) 300,188 %1.68 955 2016 12,567 101,000 181,429 294,996 (27,997) 266,999 %1.44 822 2017 11,513 92,592 156,516 260,621 (8,339) 252,282 %1.31 772 2018 10,388 60,883 150,800 222,071 (13,546) 208,525 %1.05 640 2019 9,179 50,486 99,178 158,843 (9,051) 149,792 %0.72 457 2020 7,874 364,633 94,802 467,309 (11,210) 456,099 %2.04 1,390 2021 6,478 352,824 90,215 449,517 (11,292) 438,225 %1.88 1,351 2022 4,987 338,264 85,477 428,728 (11,679) 417,049 %1.72 1,312 2023 3,411 321,413 80,584 405,408 (14,059) 391,349 %1.52 1,248 Notes:
General bonded debt is debt payable with governmental fund and enterprise fund resources. 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California. 2 These ratios are calculated using population data for the prior calendar year.
Source: City of Riverside Notes to Financial Statements, Statistical Table 8, Statistical Table 15, and Reserve Cash Reconciliation maintained by City Finance Department. 129
CITY OF RIVERSIDE
TABLE 17
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
JUNE 30, 2023 Page 1 of 2
2022-23 Assessed Valuation: $ 38,008,158,400
Less Dissolved Redevelopment Agency Incremental Valuation: 12,197,603,242 Adjusted Assessed Valuation: $ 25,810,555,158
Total Debt % Applicable
City's Share
of Debt1
Overlapping debt repaid with property taxes
Metropolitan Water District $ 19,215,000 %1.053 $ 202,334 Riverside County Flood Control, Zone 4 5,380,000 1.703 91,621 Riverside City Community College District 291,274,397 27.526 80,176,191 Alvord Unified School District 267,702,056 72.800 194,887,097 Riverside Unified School District 382,460,000 84.132 321,771,247 Corona-Norco Unified School District 484,011,917 0.001 4,840 Jurupa Unified School District 146,547,972 0.002 2,931
Moreno Valley Unified School District 290,606,643 9.597 27,889,520 Alvord Unified School District Community Facilities District No.2006-1 5,940,000 73.302 4,354,139 Riverside Unified School District Community Facilities Districts 67,600,000 88.837-100 67,506,789 City of Riverside Community Facilities Districts 24,585,000 100.000 24,585,000 City of Riverside 1915 Act Bonds 14,395,000 100.000 14,395,000 Total overlapping debt repaid with property taxes $ 735,866,709 (Continued)
130
CITY OF RIVERSIDE
TABLE 17
DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT
AS OF JUNE 30 2023 Page 2 of 2
Other overlapping debt2
Riverside County General Fund Obligations $ 686,776,829 %10.570 $ 72,592,311 Riverside County Pension Obligations 748,540,000 10.570 79,120,678 Riverside City Community College District Certificates of Participation 24,550,000 27.526 6,757,633 Corona-Norco Unified School District General Fund Obligations 19,421,607 0.001 194 Jurupa Unified School District Certificates of Participation 47,341,612 0.002 947 Moreno Valley Unified School District Certificates of Participation 4,895,000 9.597 469,773 Riverside Unified School District General Fund Obligations 11,052,000 84.132 9,298,269 Western Municipal Water District General Fund Obligations 4,075,058 32.407 1,320,604 Total other overlapping debt 169,560,409
Overlapping tax increment debt 171,664,176
Total overlapping debt 1,077,091,294
City direct debt 492,224,000 (3)
Combined total direct and overlapping debt $ 1,569,315,294 (1) Debt balances are as of June 30, 2023.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, non-bonded capital lease obligations. (3) Excludes debt related to Business-Type Activities.
Ratios to 2022-23 Assessed Valuation:
Total debt repaid with property taxes…………………….……..... %1.94 City direct debt $492,224,000 .......……...…………..………...…. %1.30 Combined total direct and overlapping debt……………............. %4.13 Ratios to dissolved redevelopment incremental valuation $(12,197,603,242):
Total overlapping tax increment debt…………………………….. %1.41 Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government.
Source: California Municipal Statistics, Inc., Riverside County Auditor-Controller, City Finance Department, and Statistical Table 8. 131
CITY OF RIVERSIDE
TABLE 18
LEGAL DEBT MARGIN INFORMATION
LAST TEN FISCAL YEARS (in thousands)
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Assessed valuation $ 16,851,786 $ 17,867,012 $ 18,502,513 $ 19,209,528 $ 19,936,641 $ 20,798,529 $ 22,376,423 $ 23,284,552 $ 24,208,336 $ 25,810,555 Conversion percentage %25 %25 %25 %25 %25 %25 %25 %25 %25 %25 Adjusted assessed valuation 4,212,947 4,466,753 4,625,628 4,802,382 4,984,160 5,199,632 5,594,106 5,821,138 6,052,084 6,452,639 Debt limit percentage %15 %15 %15 %15 %15 %15 %15 %15 %15 %15 Debt limit 631,942 670,013 693,844 720,357 747,624 779,945 839,116 873,171 907,813 967,896 Total net debt applicable to limit 14,460 13,546 12,567 11,513 10,388 9,179 7,874 6,478 4,987 3,411 Legal debt margin $ 617,482 $ 656,467 $ 681,277 $ 708,844 $ 737,236 $ 770,766 $ 831,242 $ 866,693 $ 902,826 $ 964,485 Total net debt applicable to the limit
as a percentage of debt limit %2.3 %2.0 %1.8 %1.6 %1.4 %1.2 %0.9 %0.7 %0.5 %0.4 The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the State.
Source: City of Riverside, Statistical Table 8, Statistical Table 15, and Notes to Financial Statements. 132
CITY OF RIVERSIDE
TABLE 19
PLEDGED-REVENUE COVERAGE
BUSINESS-TYPE ACTIVITY DEBT
LAST TEN FISCAL YEARS (in thousands)
Electric Revenue Bonds Water Revenue Bonds
Fiscal Pledged
Less:
Operating
Net
Available Debt Service Pledged
Less:
Operating
Net
Available Debt Service
Year Revenue1 Expenses1 Revenue Principle Interest Coverage Revenue1 Expenses1 Revenue Principal Interest Coverage 2014 $ 347,541 $ 241,136 $ 106,405 $ 21,632 $ 27,575 2.16 $ 71,317 $ 37,698 $ 33,619 $ 4,574 $ 8,536 2.56 2015 348,244 250,578 * 97,666 15,485 26,532 2.32 66,010 36,725 * 29,285 5,258 8,342 2.15 2016 371,029 249,607 * 121,422 16,460 25,780 2.87 60,047 35,608 * 24,439 5,533 8,063 1.80 2017 368,956 251,998 * 116,958 14,032 25,553 2.95 65,689 37,956 * 27,733 5,486 8,124 2.04 2018 368,116 257,785 * 110,331 15,675 25,045 2.71 71,054 40,737 * 30,317 6,098 8,049 2.14 2019 374,510 279,394 * 95,116 16,449 26,017 2.24 69,965 44,547 * 25,418 6,362 8,780 1.68 2020 378,391 277,064 * 101,327 11,641 26,992 2.62 74,343 45,825 * 28,518 6,139 9,671 1.80 2021 373,663 284,293 * 89,370 17,364 27,559 1.99 83,510 45,896 * 37,614 7,007 9,685 2.25 2022 391,860 298,221 * 93,639 19,339 26,689 2.03 85,163 47,177 * 37,986 7,715 9,353 2.23 2023 425,941 332,901 * 93,040 20,985 25,415 2.01 85,058 48,696 * 36,362 8,278 10,570 1.93 Sewer Revenue Bonds
Fiscal Pledged
Less:
Operating
Net
Available Debt Service
Year Revenue1 Expenses1 Revenue Principal Interest Coverage 2014 52,098 28,930 23,168 7,753 10,781 1.25
2015 51,288 27,598 23,690 8,056 10,958 1.25
2016 68,412 31,864 36,548 8,405 20,786 1.25
2017 78,337 29,921 48,416 9,010 19,621 1.69
2018 68,735 31,513 37,222 9,184 19,136 1.31
2019 71,787 34,084 37,703 14,766 14,455 1.29
2020 70,365 33,704 36,661 8,634 18,434 1.35
2021 66,421 31,431 34,990 9,599 17,032 1.31
2022 69,422 29,640 39,782 9,966 16,575 1.50
2023 73,923 38,171 35,752 9,770 15,466 1.42
Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements The City of Riverside does not have any pledged revenue related to Govermental Activities. 1 Amounts have been calculated in accordance with the provisions set forth in the debt covenants. Total operating expenses exclusive of depreciation. Pledged revenue includes applicable cash set aside in a rate stabilization account in accordance with applicable bond covenants. * Excludes non-cash pension expense.
133
CITY OF RIVERSIDE
TABLE 20
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Calendar
Year Population1
Personal
Income2
(in thousands)
Per
Capita
Personal
Income2
Unemployment
Rate3
2013 314,034 6,909,376 22,002 8.4
2014 314,221 6,857,559 21,824 7.9
2015 324,696 6,953,323 21,415 6.4
2016 326,792 7,139,080 21,846 5.8
2017 325,860 7,349,024 22,553 5.1
2018 328,101 7,674,374 23,390 3.8
2019 328,155 8,102,150 24,690 3.6
2020 324,302 8,496,064 26,198 9.0
2021 317,847 8,891,501 27,974 6.7
2022 313,676 9,058,788 28,879 3.8
Sources:
1 California State Department of Finance.
2 Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries. Demographic Estimates for 2010 and later are per the U.S. Cenus Bureau most recent American Community Survey. 3 State of California Employment Development Department. 134
CITY OF RIVERSIDE
TABLE 21
PRINCIPAL EMPLOYERS
CURRENT YEAR AND NINE YEARS AGO
2023 2014
Employer Employees Rank
Percentage
of Total City
Employment Employees Rank
Percentage
of Total City
Employment
County of Riverside 24,399 1 17.7% 11,187 1 7.6%
University of California, Riverside 8,831 2 6.4% 7,218 2 4.9% March Air Force Reserve 9,750 3 7.1%
Kaiser Permanente 7,610 4 5.5% 3,156 4 2.1%
Riverside Unified School District 4,505 5 3.3% 3,461 3 2.4% City of Riverside 2,457 6 1.8% 2,476 5 1.7%
Riverside Community Hospital 2,993 7 2.2% 1,880 6 1.3%
Riverside Community College District 1,900 8 1.4% 1,061 10 0.7% Alvord Unified School District 1,824 9 1.3% 1,445 8 1.0% California Baptist University 1,355 10 1.0%
Riverside County Office of Eduation 1,765 7 1.2%
Parkview Community Hospital 1,350 9 0.9%
Total 65,624 47.7% 34,999 23.8%
Source: City of Riverside, Economic Development Department 135
CITY OF RIVERSIDE
TABLE 22
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
2014 20151 2016 2017 2018 2019 2020 2021 2022 2023
Function
General government 356.25 361.25 394.24 417.55 430.05 453.80 458.30 460.30 462.05 485.05 Public safety (sworn and non-sworn personnel)
Police 551.75 553.75 554.75 512.00 543.00 557.00 571.00 585.00 604.00 626.00 Fire 255.00 255.00 251.00 239.00 242.00 245.00 248.00 251.00 250.00 252.00 Highways and streets 333.48 308.00 308.00 272.00 273.00 271.00 271.00 270.00 271.00 273.00 Sanitation 59.00 57.00 59.00 59.00 59.00 59.00 59.00 62.00 62.00 62.00 Culture and recreation 269.98 274.45 286.75 276.23 276.98 276.07 284.07 283.60 287.86 284.60 Airport 6.00 6.00 6.00 7.00 7.00 7.00 7.00 7.00 7.00 7.00 Water 182.15 181.15 181.15 174.15 158.65 158.65 158.65 164.50 164.50 164.00 Electric 462.50 464.50 466.50 471.75 489.25 475.25 475.25 466.25 468.50 473.00 Total 2,476.11 2,461.10 2,507.39 2,428.68 2,478.93 2,502.77 2,532.27 2,549.65 2,576.91 2,626.65 1 In fiscal year 2013/14, the City Council deleted a number of long-term unfunded positions.
Source: City of Riverside, Finance Department, FY 2022/23 Budget Master Personnel Detail 136
CITY OF RIVERSIDE
TABLE 23
OPERATING INDICATORS BY FUNCTION
LAST TEN FISCAL YEARS
Function/Program 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Police:
Arrests 9,321 10,310 9,242 8,358 8,423 8,295 7,738 8,089 7,667 8,095 Fire:
Number of calls answered 30,668 32,943 35,905 36,150 38,501 37,739 37,999 31,918 38,801 45,073 Inspections 12,476 8,770 6,636 6,482 6,519 5,584 7,987 7,175 9,244 6,662 Public Works:
Street resurfacing (miles) 35.38 38.75 39.01 27.09 17.37 16.50 18.80 7.30 17.35 14.60 Parks and Recreation:
Number of recreation classes 45,707 43,007 53,907 53,308 54,025 54,069 34,366 525 8561 28,8882 Number of facility rentals 46,432 44,363 47,772 48,097 46,904 66,846 45,741 324 3741 1,391 Water:
Number of accounts 64,829 65,102 65,094 65,428 65,640 65,803 66,031 66,198 66,372 66,441 Annual consumption (ccf) 28,887,304 26,007,490 22,529,463 25,340,729 27,514,374 25,827,721 25,526,021 28,625,382 26,845,583 23,667,466 Electric:
Number of accounts 108,358 108,388 108,776 109,274 109,619 110,480 111,161 111,711 112,328 112,751 Annual consumption (millions of
kwh) 2,152 2,167 2,170 2,197 2,195 2,150 2,115 2,122 2,145 2,175 Sewer:
New connections 17,274 17,553 17,669 17,654 17,551 17,540 17,593 17,602 17,588 17,575 Average daily sewage treatment
(millions of gallons) 28.49 27.15 26.35 27.19 26.16 26.86 25.22 25.30 26.01 26.98 1 Reduction is due to the affects of the COVID-19 pandemic. 2 Increase due to return to full operations.
Source: City of Riverside, various departments
137
CITY OF RIVERSIDE
TABLE 24
CAPITAL ASSET STATISTICS BY FUNCTION
LAST TEN FISCAL YEARS
Fiscal Year
2014 2015 2016 2017 2018 2019 2020 2021 2022 2023
Function:
Public Safety:
Police:
Stations 3 3 3 3 3 3 3 3 4 4
Substations 4 4 4 4 5 4 5 4 1 1
Helicopters 4 3 3 3 3 2 2 2 2 2
Airplane 0 0 0 0 0 1 1 1 1 1
Fire:
Stations 14 14 14 14 14 14 14 14 14 14
Active apparatus 28 28 31 33 32 33 55 32 32 38
Reserve apparatus 11 11 8 9 9 9 13 9 10 13
Training facilities 1 1 1 1 1 1 1 1 1 1
Highways and streets:
Streets (miles) 868.89 871.19 872.16 872.22 872.01 872.24 872.10 872.35 891.28 893.28 Streetlights 29,949 29,968 299,986 30,427 30,467 30,479 30,445 30,489 30,489 30,745 Signalized intersections 365 367 386 381 382 384 392 397 408 408 Culture and Recreation:
Parks acreage 2,891.0 2,911.8 2,926.8 2,983.0 2,983.0 2,988.0 2,988.0 2,988.0 2,988.0 3,010.5 Community centers 11 11 11 11 11 11 11 11 12 14
Playgrounds 43 44 44 46 46 46 46 46 43 43
Swimming pools 7 7 7 7 7 7 7 7 7 7
Softball and baseball
diamonds 44 44 44 44 44 44 44 44 44 44
Library branches 8 8 8 8 8 8 8 8 8 8
Museum exhibit-fixed 3 3 4 5 5 - 1 1 1 0 1 - 1
Museum exhibit-special 4 4 5 6 6 1 1 4 1 3 1 1 5
Water:
Fire hydrants 7,726 7,754 7,758 7,908 7,952 8,173 8,192 9,304 8,012 8,023 Sewer:
Sanitary sewers (miles) 829 829 820 829 827 820 820 820 853 853 Electric:
Miles of overhead distribution
system 513.0 513.0 513.0 513.0 513.0 514.0 514.0 513.0 513.0 513.0 Miles of underground system 810.0 814.0 815.0 817.0 826.0 831.0 834.0 838.0 838.0 842.0 1 The decrease in total numbers of Museum's exhibits is due to the closure of the Riverside Metropolitan Museum for expansion and renovation.
Source: City of Riverside, various departments
138
3900 Main Street
Riverside, CA 92522
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