Agenda packet — Roseville City Council, May 21, 2025 (part 8 of 20)

or reasonably foreseeable indirect physical change in the environment or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378. The budget adjustment to re-direct funds meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

1. Ensure a safe and healthy community

2. Remain fiscally responsible in a changing world

3. Enhance economic vitality

4. Invest in well-planned infrastructure and growth

6. Deliver exceptional City services
Respectfully Submitted,
Tara Gee, Park Planning and Development Manager
Jill Geller, Parks Recreation and Libraries Director
ATTACHMENTS:

1. Ordinance 6934

2. Vicinity Map
REVIEWERS:

Tara Gee, Parks, Recreation, and Libraries Department - Park Development Created/Initiated - 4/22/2025 Tara Gee, Parks, Recreation, and Libraries Department - Park Development Approved - 4/22/2025 Jill Geller, Parks, Recreation, and Libraries - All Approved - 5/2/2025 Gretchen Hakala, City Attorney Department Approved - 5/2/2025 Katrina Six, City Clerk Department Approved - 5/2/2025
Ryan DeVore, City Clerk Department Approved - 5/5/2025
Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 5/8/2025 Michelle Sheidenberger, City Attorney Department Approved - 5/8/2025 Dominick Casey, City Manager Department - City Manager Approved - 5/12/2025 Katrina Six, City Clerk Department Final Approval - 5/12/2025

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ORDINANCE NO. 6934

ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE
AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25

BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY

EFFECTIVE AS AN APPROPRIATION MEASURE
THE CITY OF ROSEVILLE ORDAINS:

SECTION 1. The City of Roseville Annual Budget, Fiscal Year 2024-25, is hereby amended as listed on the attached budget adjustment for the Downtown Library Security and Space Plan project.

SECTION 2. This ordinance is hereby declared to be an appropriation measure, immediately effective pursuant to the provisions of Section 5.03 of the Charter.

SECTION 3. The City Clerk is hereby authorized and directed to post a true copy of the foregoing ordinance in each of three (3) conspicuous locations in the City and she shall immediately after such posting enter in the ordinance book, under the record of the ordinance, a certificate under her hand stating the time and place of such publication by posting.

PASSED AND ADOPTED by the Council of the City of Roseville, this day of , 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR
ATTEST:

City Clerk

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REQUEST FOR BUDGET ADJUSTMENT
Updated 11/22/2024
Please complete the cells highlighted in yellow.

REQUESTER NAME & TITLE: FISCAL YEAR:

PREPARER NAME & TITLE: ORDINANCE:

DEPARTMENT/DIVISION:

EXPENDITURES/EXPENSES/TRANSFERS OUT
ACCOUNT STRING BUDGET ($)
Fund Account Center Project Adjustment DESCRIPTION
4065 6587 84001 500384 (148,469) Decrease project budget - cancel Downtown Library Public Service Desk - Security Upgrades
4065 6810 10001 148,469 Transfer out from Facility Rehab Fund to PRL Capital Projects Fund
3130 6587 84001 500570 148,469 Establish project expenditure budget - Downtown Library Security and Space Plan
EXPENDITURES/EXPENSES/TRANSFERS OUT TOTAL 148,469

REVENUES/TRANSFERS IN
ACCOUNT STRING BUDGET ($)
Fund Account Center Project Adjustment DESCRIPTION
3130 4810 10001 148,469 Transfer in to PRL Capital Projects Fund from the Facility Rehab Fund
REVENUES/TRANSFERS IN TOTAL 148,469

NET ADJUSTMENT -

FUND BALANCE
ACCOUNT STRING BUDGET ($)
Fund Account Center Project Adjustment DESCRIPTION
3130 3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000

FUND BALANCE TOTAL -
Justification for Budget Adjustment:

The Parks, Recreation & Libraries Department (PRL) is requesting a budget adjustment to reduce the Downtown Library Public Service Desk - Security Upgrades project (500384) budget to zero to cancel the project and reappropriate the remaining funds ($148,469) to establish a new noncapital project, the Downtown Library Security and Space Plan (500570), in the PRL Capital Projects Fund (3130). This request includes a capital transfer from the Facility Rehabilitation Fund (4065) to the PRL Capital Projects Fund (3130) to move the remaining budget of the original project that will now be cancelled. The newly established project will provide funding for a design to update staff and public areas within the library and address security issues identified in the 2019 risk assessment study to ensure staff and patron safety.

Tara Gee, Park Planning & Development Manager 2024-25
Lisa Saunders, Management Analyst
Parks, Recreation & Libraries

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City Council
Communication
Meeting Date: 5/21/2025
Item #: VII.26
File #: 0324 & 0201-01
Item ID: 2025-157
Title: Fire Department Strike Team Reimbursements - Budget Adjustment Contact: Matthew Lauchner 916-774-5807 [email protected]

SUMMARY
Staff recommends approval of a budget adjustment to recognize $1,207,276 in additional overtime expenses, $7,893 in other reimbursable items/logistics, $1,762,939 in revenue related to the department's participation in reimbursable strike teams, and a $547,770 positive impact contribution to the General Fund with available resources for fleet usage and overhead.

RECOMMENDATION
Adopt an ordinance to approve a budget adjustment to recognize $1,207,276 in additional overtime expense, $7,893 in other reimbursable items/logistics, $1,762,939 in revenue related to the department's participation in reimbursable strike teams, and a $547,770 contribution to General Fund available resources for fleet usage and overhead.

BACKGROUND
The Roseville Fire Department participates in the California Fire Assistance Agreement (CFAA), California Task Force Seven of the National Urban Search and Rescue Response System, and the Operating Plan for Cooperating Agency Personnel on Cal Fire Incident Management Teams (IMT/ECC Support Teams (ECCST)). The department sends resources, upon emergency request, to assist in the management and control of large emergency incidents that occur throughout both our region and the country every year.

These agreements can also provide resources to Roseville Fire should the department require and request them. This fiscal year to date, Fire Department crews have assisted throughout northern and southern California, New Mexico, and the east coast of the United States. The contracts provide reimbursement for staff, vehicle use and overhead.

FISCAL IMPACT
After the incremental overtime and other expenses are reimbursed, there is a positive impact on the General Fund of $547,770 from the fleet usage and overhead.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) does not apply to activities that will not result in a direct or reasonably foreseeable indirect physical change in the environment, or is otherwise not considered a project as defined by CEQA Statute §21065 and CEQA State Guidelines §15060(c)(3) and §15378.

Approval of a budget adjustment for Fire Strike Team Reimbursements meets the above criteria and is not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

1. Ensure a safe and healthy community

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2. Remain fiscally responsible in a changing world
Respectfully Submitted,
Matthew Lauchner, Assistant Fire Chief
Ryan Harrigan, Fire Chief
ATTACHMENTS:

1. Ordinance 6935
REVIEWERS:

Katrina Rostam, Fire Department Created/Initiated - 4/24/2025 Deanna Schondelmayer, Fire Department Approved - 4/28/2025 Ryan Harrigan, City Clerk Department Approved - 5/1/2025 Gretchen Hakala, City Attorney Department Approved - 5/1/2025 Katrina Six, City Clerk Department Approved - 5/2/2025
Ryan DeVore, City Clerk Department Approved - 5/5/2025
Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 5/7/2025 Michelle Sheidenberger, City Attorney Department Approved - 5/8/2025 Dominick Casey, City Manager Department - City Manager Approved - 5/12/2025 Katrina Six, City Clerk Department Final Approval - 5/13/2025

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ORDINANCE NO. 6935

ORDINANCE OF THE COUNCIL OF THE CITY OF ROSEVILLE
AUTHORIZING CERTAIN AMENDMENTS TO THE FISCAL YEAR 2024-25

BUDGET AND DECLARING THIS ORDINANCE TO BE IMMEDIATELY

EFFECTIVE AS AN APPROPRIATION MEASURE
THE CITY OF ROSEVILLE ORDAINS:

SECTION 1. The City of Roseville Annual Budget, Fiscal Year 2024-25, is hereby amended as listed on the attached budget adjustment for Fire Department Strike Team reimbursements.

SECTION 2. This ordinance is hereby declared to be an appropriation measure, immediately effective pursuant to the provisions of Section 5.03 of the Charter.

PASSED AND ADOPTED by the Council of the City of Roseville, this day of , 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

MAYOR
ATTEST:

City Clerk

Page 1137 of 2438 ends

REQUEST FOR BUDGET ADJUSTMENT
Updated 11/22/2024
Please complete the cells highlighted in yellow.

REQUESTER NAME & TITLE: FISCAL YEAR:

PREPARER NAME & TITLE: ORDINANCE:

DEPARTMENT/DIVISION:

EXPENDITURES/EXPENSES/TRANSFERS OUT
ACCOUNT STRING BUDGET ($)
Fund Account Center Project Adjustment DESCRIPTION
1001 5010 48030 1,020,332 Strike Team Reimbursable Overtime 1001 5010 48040 58,107 Strike Team Reimbursable Overtime 1001 5010 48001 128,837 Strike Team Reimbursable Overtime 1001 5461 48030 7,893 Strike Team - Other Reimbursed Expenses EXPENDITURES/EXPENSES/TRANSFERS OUT TOTAL 1,215,169

REVENUES/TRANSFERS IN
ACCOUNT STRING BUDGET ($)
Fund Account Center Project Adjustment DESCRIPTION
1001 4790 48030 1,762,939 Strike Team Reimbursement Revenue REVENUES/TRANSFERS IN TOTAL 1,762,939
NET ADJUSTMENT (547,770)

FUND BALANCE
ACCOUNT STRING BUDGET ($)
Fund Account Center Project Adjustment DESCRIPTION
1001 3601 00000 000000 547,770 Increase General Fund Balance 3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
3601 00000 000000
FUND BALANCE TOTAL 547,770
Justification for Budget Adjustment:

During FY2024-25, Fire Department staff have been deployed on three urban search and rescue deployments, and several fire assignments through the California Fire Assistance Agreement and other state/federal aid contracts. This budget adjustment is to request (1) a revenue increase of $1,762,939 for reimbursements from our local, state, and federal partners for expenditures related to these deployments and (2) an expenditure increase of $1,215,169 for reimbursable costs ($1,207,277 of overtime labor and $7,893 for materials, services, and supplies) that were not already included in Fire's budget. These requests will net a $547,770 increase to the General Fund's balance (the same amount of the reimbursable expenditures that were already included in Fire's budget for straight time worked, apparatus usage, and administrative fees).

Katrina Rostam, Management Analyst II 2024-25
Katrina Rostam, Management Analyst II
Fire Department/Fire Operations

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City Council
Communication
Meeting Date: 5/21/2025
Item #: VII.27
File #: 0202
Item ID: 2025-164
Title: Audit Services - Agreement Amendment
Contact: Teri Quinlan 916-774-5316 [email protected]

SUMMARY
Staff recommends approval of a professional services agreement amendment with Lance, Soll & Lunghard, LLP, in the amount of $208,692 to provide audit services. Audit costs are partially paid for by the General Fund. The cost of the FY2025-26 audit services has been included in the proposed FY2025- 26 budget.

RECOMMENDATION
Staff recommends that the City Council adopt a resolution authorizing the City Manager to execute a second amendment to professional services agreement with Lance, Soll & Lunghard, LLP, to provide audit services.

BACKGROUND
As stated in Article VII, Section 7.19 of the Roseville City Charter, the City Council shall provide for an annual audit of the City by a firm of independent certified public accountants who are in no other way connected with the City government. The firm shall be retained subject to the restrictions and limitations prescribed by state law. A comprehensive audit shall be made covering each fiscal year to assure that the City's financial transactions, accounts and records are maintained in accordance with the requirements of the City charter, state and federal laws, and generally accepted accounting principles.

In March 2021, the City issued a request for proposals to conduct a competitive procurement process to engage a CPA firm for this purpose. After a thorough selection process, staff recommended, and the City Council approved on June 16, 2021, engaging Lance, Soll & Lunghard, LLP (LSL) to be the City's new audit firm. The LSL agreement was for a two-year term with two options to renew. The City renewed for a two-year term ending May 31, 2025. The proposed second amendment would extend the term of the Agreement one additional year to an end date of May 31, 2026. All provisions of the existing agreement remain unchanged and in force.

FISCAL IMPACT
The cost of the FY2025-26 audit services is not-to-exceed $208,692, a portion of which will be paid for by the General Fund. The cost of the FY2025-26 audit services has been included in the proposed FY2025- 26 budget.

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required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

2. Remain fiscally responsible in a changing world
Respectfully Submitted,
Teri Quinlan, Accounting Manager
Scott Pettingell, Finance Director
ATTACHMENTS:

1. Resolution 25-134

2. Agreement - Second Amendment
REVIEWERS:

Teri Quinlan, Finance Department Created/Initiated - 4/21/2025 Dennis Kauffman, City Clerk Department Approved - 4/30/2025 Scott Pettingell, Finance Department - Budget Approved - 5/2/2025 Gretchen Hakala, City Attorney Department Approved - 5/2/2025 Katrina Six, City Clerk Department Approved - 5/2/2025
Ryan DeVore, City Clerk Department Approved - 5/5/2025
Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 5/6/2025 Michelle Sheidenberger, City Attorney Department Approved - 5/6/2025 Dominick Casey, City Manager Department - City Manager Approved - 5/6/2025 Katrina Six, City Clerk Department Final Approval - 5/6/2025

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RESOLUTION NO. 25-134

APPROVING A SECOND AMENDMENT TO AGREEMENT FOR AUDIT SERVICES, BY

AND BETWEEN THE CITY OF ROSEVILLE AND LANCE, SOLL & LUNGHARD, LLP,

AND AUTHORIZING THE CITY MANAGER TO EXECUTE IT

ON BEHALF OF THE CITY OF ROSEVILLE
WHEREAS, a Second Amendment to Agreement for Audit Services, by and between the City of Roseville and Lance, Soll & Lunghard, LLP, has been reviewed by the City Council; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said second amendment is hereby approved and that the City Manager is authorized to execute it on behalf of the City of Roseville.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
______________________________
MAYOR
ATTEST:
________________________
City Clerk

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SECOND AMENDMENT TO

AGREEMENT FOR AUDIT SERVICES
THIS SECOND AMENDMENT TO AGREEMENT is made and entered into this ___ day of __________, 20__, by and between the City of Roseville, a municipal corporation (“CITY”), and Lance, Soll & Lunghard, LLP, a California limited liability partnership (“AUDITOR”); and
W I T N E S S E T H:

WHEREAS, CITY and AUDITOR previously entered into an Agreement dated June 16, 2021 and amended June 7, 2023 (“Agreement”) to provide auditing services (“Services”); and WHEREAS, CITY desires to extend the term of the agreement for an additional one (1) year term; and
WHEREAS, AUDITOR is willing and able to provide such additional services.

NOW, THEREFORE, the parties agree as follows:

1. Section 2, subsection (b) of the Agreement is amended by adding an additional paragraph to read as follows:
“CITY shall pay two hundred eight thousand, six hundred ninety-two dollars ($208,692) in consideration of certain services rendered and the additional services to the Second Amendment to Agreement. This brings the total not to exceed contract amount to eight hundred forty-three thousand, six hundred fourteen dollars ($843,614).”

2. Paragraph 10 of the Agreement is amended by adding an additional paragraph to read as follows:
“CITY is exercising its option to extend the term of the Agreement for an

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[B:\City Attorney\corres\Kelly\Contracts 2025\Second Amendment to Audit Services.docx:04/07/2025] additional one (1) year period commencing June 1, 2025 and ending on May 31, 2026”.

3. The Agreement is amended by adding an additional paragraph for compliance with AB334 to read as follows:
“27. Public Contracts: Conflicts of Interest. AUDITOR’s duties and services under this Agreement shall not include preparing or assisting CITY with any portion of the CITY’s preparation of a request for proposals, request for qualifications, or any other solicitation regarding a subsequent or additional contract with CITY. CITY shall at all times retain responsibility for public contracting, including with respect to any subsequent phase of this project. AUDITOR’s participation in the planning, discussions, or drawing of project plans or specifications shall be limited to conceptual, preliminary, or initial plans or specifications. AUDITOR shall cooperate with CITY to ensure that all bidders for a subsequent contract on any subsequent phase of this project have access to the same information, including all conceptual, preliminary, or initial plans or specifications prepared by AUDITOR pursuant to this Agreement.”

4. The Agreement is further amended by adding an additional paragraph regarding compliance with the Levine Act:
“28. The Levine Act Disclosure. The Levine Act (Govt. Code, Section 84308) requires a Party (and its agent(s), if any) to a Proceeding before the City of Roseville that involves any action or consideration related to their contract, license, permit, or other entitlement for use, to disclose any campaign contributions made to CITY elected or appointed officers totaling more than $250 within the twelve (12) months prior to the CITY decision and while a proceeding is pending, and includes certain prohibitions on

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[B:\City Attorney\corres\Kelly\Contracts 2025\Second Amendment to Audit Services.docx:04/07/2025] contribution activity thereafter. If applicable campaign contributions have been made by AUDITOR and/or its agent(s), AUDITOR is responsible for compliance, including for its disclosure obligations, if any, as further described at https://www.roseville.ca.us/government/departments/city_clerk/transparency/levine_act.”

5. All other provisions of the Agreement shall remain unchanged and in full force and effect.

IN WITNESS WHEREOF, the City of Roseville, a municipal corporation, has authorized the execution of this Second Amendment to Agreement in duplicate by its City Manager and attested to by its City Clerk under the authority of Resolution No. _________, adopted by the Council of the City of Roseville on the ___ day of ___________, 20__, and AUDITOR has caused this Second Amendment to Agreement to be executed.

CITY OF ROSEVILLE, a LANCE, SOLL & LUNGHARD, LLP, a
municipal corporation California limited liability partnership BY: _______________________________ BY: _______________________________ DOMINICK CASEY its: _______________________________
City Manager
and
ATTEST:

BY: _______________________________
its: _______________________________
BY: _______________________________

CARMEN AVALOS
City Clerk
(SIGNATURES CONTINUED ON NEXT PAGE]
Partner/COO Page 1144 of 2438
[B:\City Attorney\corres\Kelly\Contracts 2025\Second Amendment to Audit Services.docx:04/07/2025] APPROVED AS TO FORM:

BY: _______________________________

MICHELLE SHEIDENBERGER
City Attorney
APPROVED AS TO SUBSTANCE:

BY: _______________________________

SCOTT PETTINGELL
Finance Director

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City Council
Communication
Meeting Date: 5/21/2025
Item #: VII.28
File #: 0203-07
Item ID: 2025-168
Title: 60kV Overhead Conductors (RFQ 10-3412) - Purchase Order Contact: Sue Jessup 916-746-1107 [email protected]

SUMMARY
Staff recommends approval of a purchase order with Southwire Company, LLC as the lowest responsive and responsible bidder for purchasing 60kV overhead conductors in response to RFQ 10-3412. Funding is included in the Electric Fund budget. The total spending authority for the initial contract period and optional renewal years through FY2029-30 is a not-to-exceed amount of $2,000,000.

RECOMMENDATION
Staff recommends that the City Council adopt a resolution to approve a purchase order with Southwire Company, LLC, as the lowest responsive and responsible bidder for purchasing 60kV overhead conductors in response to Request for Quotations No. 10-3412.

The bid allowed for four optional renewal years at one-year intervals. Staff requests authorization to continue utilizing the remaining optional renewal years without further Council approval, provided that the applicable budget is approved by the City Council each year, until the contract expires, or until City staff determines that continuing with the same vendor is not in the City's best interest.

BACKGROUND
The Electric Department has a recurring requirement for 60kV overhead conductor. The conductors will be used to upgrade lines of Roseville Electric’s sub-transmission system to increase capacity and for maintenance purposes.

A formal bid was issued with the following vendor responses:

Bidder Unit Price per Ft "Flamingo" Unit Price per Ft. "Finch" Southwire Company, LLC $2.07 $3.48
Graybar Electric $2.41 $4.16
Anixter, Inc. $2.50 $4.19
General Pacific $2.77 $4.60
Blue Angel International, LLC $3.99 $6.64

FISCAL IMPACT
The total spending authority for the initial contract period from May 21, 2025, to May 20, 2026, and optional renewal years through May 30, 2030, is a not-to-exceed amount of $2,000,000.

These materials are purchased on an as-needed basis; there are no guaranteed spend amounts. Funding

Page 1146 of 2438 ends

is included in the Electric Fund budget for FY2024-25. Future year funding will be included in proposed department budgets and contingent upon Council approval of budgets.

The purchase of 60kV overhead conductors does not include the potential for a significant environmental effect and therefore is not subject to CEQA.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

4. Invest in well-planned infrastructure and growth
Respectfully Submitted,
Sue Jessup, Buyer
Scott Pettingell, Finance Director
ATTACHMENTS:

1. Resolution 25-135
REVIEWERS:

Sue Jessup, Finance Department - Purchasing Created/Initiated - 4/22/2025 Shannon Wiest, Finance Department - Purchasing Approved - 5/1/2025 Scott Pettingell, Finance Department - Budget Approved - 5/2/2025 Gretchen Hakala, City Attorney Department Approved - 5/2/2025 Katrina Six, City Clerk Department Approved - 5/2/2025
Ryan DeVore, City Clerk Department Approved - 5/5/2025
Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 5/5/2025 Michelle Sheidenberger, City Attorney Department Approved - 5/6/2025 Dominick Casey, City Manager Department - City Manager Approved - 5/6/2025 Katrina Six, City Clerk Department Final Approval - 5/6/2025

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RESOLUTION NO. 25-135

APPROVING A PURCHASE ORDER
FOR 60kV OVERHEAD CONDUCTORS
WHEREAS, a purchase order for 60kV overhead conductors, by and between the City of Roseville and Southwire Company, LLC, have been reviewed by the City Council; and NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said purchase order is approved.

BE IT FURTHER RESOLVED, that the City Manager or his or her designee is authorized to execute four (4) additional one (1) year renewals without further City Council approval, provided that the applicable budget is approved by the City Council, or until staff determines that continuing with this consultant is not in the best interest of the City.

PASSED AND ADOPTED by the Council of the City of Roseville this ___ day of ______________, 2025, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:
_______________________________
MAYOR
ATTEST:
__________________________
City Clerk

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City Council
Communication
Meeting Date: 5/21/2025
Item #: VII.29
File #: 0202
Item ID: 2025-177
Title: Annual Audit Reports for the Fiscal Year Ended June 30, 2024 – Single Audit, Electric Fund, Other Post-Employment Benefit Trust Fund, and Roseville Natural Gas Financing Authority
Contact: Teri Quinlan 916-774-5316 [email protected]

SUMMARY
Staff recommends Council receive four informational financial reports for the fiscal year ended June 30, 2024, along with six required auditor communication letters. There is no impact to the City's General Fund.

RECOMMENDATION
Staff recommends that the City Council receive four informational financial reports, along with six required auditor communication letters, for the fiscal year ended June 30, 2024.

BACKGROUND
The following informational reports for the year ended, June 30, 2024 are included with this communication:
• City of Roseville Single Audit Report
• Electric Fund Financial Statements
• Electric Fund Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters
• Electric Fund Auditor Communication Letter
• Other Post-Employment Benefit Trust Financial Statements • Other Post-Employment Benefit Trust Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters
• Other Post-Employment Benefit Trust Auditor Communication Letter • Roseville Natural Gas Financing Authority Financial Statements and Auditors' Report on Internal Controls over Financial Reporting and on Compliance and Other Matters • Roseville Natural Gas Financing Authority Auditor Communication Letter The City Charter requires that the City Council engage an independent certified public accounting firm to conduct an annual financial audit of the City. Lance, Soll, and Lunghard, LLP (LSL), a certified public accounting firm, conducted the audits of the City’s financial statements for the fiscal year ended June 30, 2024. The City Council accepted the City’s Annual Comprehensive Financial Report, and other financial audit reports on April 2, 2025.

A Single Audit is required for any non-federal entity that expends $750,000 or more of federal awards during the non-federal entity’s fiscal year. The City's Single Audit Report includes the Schedule of Expenditures of Federal Awards, which reports that the City expended $32,151,753 during the fiscal year

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and had $10,142,032 of loans carried over from the prior year with continuing compliance requirements.

The Single Audit reports the resolution of the one prior year audit finding; includes the audit finding in the Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters presented to Council at the April 2, 2025, meeting regarding the City not having all necessary documentation and reconciliations completed prior to the commencement of the audit; and reports a finding for an invoice recorded in the incorrect period. Staff agree with the findings and, being fully staffed in the Accounting team this year, expect to complete documentation and reconciliations prior to the start of the fiscal year audit fieldwork, and have implemented new procedures to ensure invoices are recorded in the proper accounting period.

Separately issued financial statements are completed for the Electric Fund, OPEB Trust, and RNGFA, which detail activity in the current fiscal year and year-end balances.

Audit standards require the auditor's communication letters. These letters convey that no difficulties were encountered during the audit and there were no disagreements between the auditors and City staff. The letters also include information about significant estimates and footnote disclosures included in the financial statements.

The internal control report is also a required communication that describes the scope of the auditor's testing of internal controls and compliance and the results of that testing. The auditors did not identify any internal control deficiencies that they considered material weaknesses.

FISCAL IMPACT
There is no fiscal impact as a result of these informational reports.

No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

2. Remain fiscally responsible in a changing world
Respectfully Submitted,
Teri Quinlan, Accounting Manager
Scott Pettingell, Finance Director
ATTACHMENTS:

1. FY24 City of Roseville Single Audit Report

2. FY24 Electric Fund Financial Statements

3. FY24 Electric Fund Report on Internal Controls

4. FY24 Electric Fund Audit Communication Letter

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5. FY24 OPEB Trust Financial Statements

6. FY24 OPEB Trust Report on Internal Controls

7. FY24 OPEB Trust Audit Communication Letter

8. FY24 Roseville Natural Gas Financing Authority Financial Statements and Report on Internal Control

9. FY24 Roseville Natural Gas Financing Authority Audit Communication Letter REVIEWERS:

Teri Quinlan, Finance Department Created/Initiated - 4/27/2025 Dennis Kauffman, City Clerk Department Approved - 4/30/2025 Scott Pettingell, Finance Department - Budget Approved - 5/2/2025 Gretchen Hakala, City Attorney Department Approved - 5/6/2025 Katrina Six, City Clerk Department Approved - 5/6/2025
Ryan DeVore, City Clerk Department Approved - 5/6/2025
Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 5/6/2025 Michelle Sheidenberger, City Attorney Department Approved - 5/7/2025 Dominick Casey, City Manager Department - City Manager Approved - 5/8/2025 Katrina Six, City Clerk Department Final Approval - 5/8/2025

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CITY OF ROSEVILLE, CALIFORNIA
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2024
Assistance Amounts Passed
Listing Pass-Through Federal Through to
Federal Grantor/Pass-Through Grantor/Program Title Number Unique Entity ID Expenditures Subrecipients U.S. Department of Housing and Urban Development
Direct Programs
Housing Voucher Cluster
Section 8 Housing Choice Vouchers 14.871 N/A 9,940,131 $ - $ Mainstream Vouchers 14.879 N/A 546,600 -
Emergency Housing Voucher 14.EHV N/A 648,074 -
Total Housing Voucher Cluster* - 11,134,805
CDBG - Entitlement Grants Cluster
Community Development Block Grants/Entitlement Grants 14.218 N/A 525,785 - Community Development Block Grants/Entitlement Grants - Program Income 14.218 N/A 52,282 - Community Development Block Grants/Entitlement Grants - Beginning Loan Balance 14.218 N/A 2,413,825 Subtotal Assistance Listing Number 14.218 - 2,991,892
Total CDBG - Entitlement Grants Cluster - 2,991,892
Home Investment Partnership Program 14.239 L4JQPJ7N5NT4 146,844 - Home Investment Partnership Program - Beginning Loan Balance 14.239 L4JQPJ7N5NT4 7,728,207 - Subtotal Assistance Listing Number 14.239 - 7,875,051
Total Home Investment Partnership Program - 7,875,051
Total Department of Housing and Urban Development - 22,001,748 U.S. Department of Justice
Direct Programs
Edward Byrne Memorial Justice Assistance Grant 16.738 N/A 19,483 - Equitable Sharing Program 16.922 N/A 5,937 -
Total Department of Justice - 25,420
U.S. Department of Transportation
Direct Programs
Federal Transit Cluster
Federal Transit - Formula Grants (Urbanized Formula Program)* 20.507 N/A 229,658 - Federal Transit - Formula Grants (Urbanized Formula Program)* 20.507 N/A 161,433 - Federal Transit - Formula Grants (Urbanized Formula Program) - Program Income* 20.507 N/A 114,398 - Subtotal Assistance Listing Number 20.507 - 505,489
Bus and Bus Facilities Formula & Discretionary Programs (Bus Program)* 20.526 N/A 441,091 - Bus and Bus Facilities Formula & Discretionary Programs (Bus Program)* 20.526 N/A 833,621 - Subtotal Assistance Listing Number 20.526 - 1,274,712
Total Federal Transit Cluster - 1,780,201
Passed through the California Department of Transportation Highway Planning and Construction 20.205 D2C8ARJZKDJ7 5,203,766 - Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 N4YFFGL4CDX5 58,658 - Total Department of Transportation - 7,042,625
U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Funds* 21.027 RN15SP9CPJE6 5,548,557 - Total Department of Treasury - 5,548,557
U.S. Department of Health and Human Services
CCDF Cluster
Child Care and Development Block Grant* 93.575 HWECY7CDW9Y7 276,802 - Child Care Mandatory and Matching Funds of the Child Care and Development Fund* 93.596 HWECY7CDW9Y7 57,584 - Total CCDF Cluster - 334,386
Total Department of Health and Human Services - 334,386 U.S. Department of Homeland Security
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 UTM3S7LKYQZ4 388,703 - Hazard Mitigation Grant 97.039 UTM3S7LKYQZ4 107,184 -
Homeland Security Grant Program 97.067 L786NC553FC1 44,966 - Homeland Security Grant Program* 97.067 UEBEEPV69B58 55,747 - Subtotal Assistance Listing Number 97.067 - 100,713
UASI SF-Securing the Cities Grant 97.106 VM1HFWS7PDN5 11,579 - Total Department of Homeland Security - 608,179
U.S. Environmental Protection Agency
State Revolving Fund Loan* 66.458 TGFTZM2DN5Z2 6,686,597 - Total U.S. Environmental Protection Agency - 6,686,597
Institute of Museum and Library Services
Direct Programs
Museum for America 45.301 N/A 46,273 -
Total Institute of Museum and Library Services 46,273 - Total Expenditures of Federal Awards $ - 42,293,785 $
* Major Program
Note a: There were no federal awards expended in the form of noncash assistance and insurance in effect during the year.

Passed through the City of Sacramento
Passed through the County of Placer
Passed through Securing the Cities (STC) San Francisco Bay Area Passed through the California State Water Resource Control Board Passed through the California Department of Housing and Community Development Passed through the State of California
Passed through the California Department of Education
Passed through the California Governor's Office of Emergency Services The notes to the schedule of expenditures of federal awards are an integral part of this schedule. 6

Page 1160 of 2438 ends

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Finance
311 Vernon Street
Roseville, California 95678-2649
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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
FOR THE YEAR ENDED JUNE 30, 2024 AND 2023 FINANCIAL STATEMENTS

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Financial Statements
For the Years Ended June 30, 2024 and 2023

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Financial Statements
For the Years Ended June 30, 2024 and 2023
Table of Contents
Page
Independent Auditors’ Report ................................................................................................................................. 1 Management’s Discussion and Analysis ................................................................................................................ 4 Basic Financial Statements
Statements of Net Position ............................................................................................................................. 11 Statements of Revenues, Expenses and Changes in Fund Net Position ................................................... 12 Statements of Cash Flows ............................................................................................................................. 13 Notes to Financial Statements ....................................................................................................................... 15 Required Supplementary Information
Schedule of the Electric Fund’s Proportionate Share of the City’s Miscellaneous Plan Net Pension Liability ....................................................................................................................................... 49 Schedule of Pension Contributions ............................................................................................................. 51 Schedule of the Electric Fund’s Proportionate Share of the City’s Net OPEB Liability .............................. 53 Schedule of OPEB Contributions ................................................................................................................ 55

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LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the Electric Fund (the “Fund”) of the City of Roseville, California (the “City”), as of and for the years ended June 30, 2024 and 2023, and the related notes to the financial statements, as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Fund of the City, as of June 30, 2024 and 2023, and the changes in its financial position and cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Fund and do not purport to, and do not, present fairly the financial position of the City, as of June 30, 2024 and 2023, the changes in its financial position, or, where applicable, its cash flows for the years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinions are not modified with respect to this matter.

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error.

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To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

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

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, and required pension and other postemployment benefits schedules, as listed on the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. 2

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To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 11, 2025, on our consideration of the City’s internal control over the Fund’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over the Fund’s financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Fund’s financial reporting and compliance.

Irvine, California
March 18, 2025
3

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Electric Enterprise Fund
Management’s Discussion and Analysis
June 30, 2024 and 2023
Management of the Roseville Electric Enterprise Fund (Electric Fund), a fund of the City of Roseville (City) offers the following overview and analysis of the financial statements of the Electric Fund for the fiscal years ended June 30, 2024 and 2023. We encourage readers to utilize the information presented here in conjunction with the accompanying basic financial statements.

Overview of the Financial Statements
The Electric Fund’s financial statements are divided into two sections: 1) basic financial statements, and 2) required supplementary information.

The basic financial statements include the Statement of Net Position, Statement of Revenues, Expenses and Changes in Net Position, Statement of Cash Flows, and notes to the financial statements. Following the notes to the financial statements, the required supplementary information includes schedules related to pensions and other post-employment benefits.

Financial Highlights
2024 compared to 2023
The Electric Fund’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $555.6 million, an increase of $36.1 million or 6.9% over the prior fiscal year.

Total operating revenue was $213.0 million, an increase of $31.3 million or 17.2% compared to fiscal year 2023.Total operating expense was $186.9 million, up $18.9 million or 11.2%. Operating income for the year totaled $26.1 million, and the Electric Fund paid $8.1 million to the City as a payment in lieu of taxes or franchise fee. 2023 compared to 2022
The Electric Fund’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $519.5 million, an increase of $23.8 million or 4.8% over the prior fiscal year.

Total operating revenue was $181.8 million, an increase of $9.2 million or 5.3% compared to fiscal year 2022. Total operating expense was $168.1 million, an increase of $24.9 million or 17.4%. Operating income for the year total $13.7 million, and the Electric Fund paid $7.3 million to the City as a payment in lieu of taxes or franchise fee. 4

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Financial Analysis
The Statement of Net Position for the Electric Fund is as follows:
2024 compared to 2023
As of June 30, 2024, the Electric Fund’s total assets increased by $33.7 million, or 4.9%, compared to the prior fiscal year. This increase was primarily driven by higher cash and investments held in the City Treasury, mainly due to increased customer receipts from rate increases. Additional contributors to the increase included higher accounts receivable, prepaid expenses, inventories, and a rise in capital assets (net of depreciation) resulting from ongoing infrastructure improvements. However, the increase was partially offset by a decrease in lease receivables due to the maturity of a lease agreement. Deferred outflows of resources increased by $0.3 million, or 1.2%, primarily due to higher deferred amounts related to pensions and OPEB, partially offset by a decrease in the deferred charges on refunding.

As of June 30, 2024, total liabilities increased by $0.1 million, or 0.1%, compared to the prior fiscal year. This increase was mainly attributed to higher accounts payable, accrued payroll, net pension liability, and net OPEB liability. However, this increase was partially offset by a decrease in outstanding debt. Deferred inflows of resources decreased by $2.1 million, or 26.5%, primarily due to reductions in deferred inflows related to leases and OPEB. 5

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2023 compared to 2022
As of June 30, 2023, the Electric Fund’s total assets decreased by $55.4 million, or 7.4%, compared to the prior fiscal year. This decrease was primarily due to a reduction in cash and investments held in the City Treasury and restricted cash and investments with fiscal agents, which the utility strategically repaid variable rate debt and terminated an interest rate swap. Additionally, a decrease in lease receivables reflected the maturity of a lease agreement. However, these declines were partially offset by increases in accounts receivable and inventories.

Deferred outflows of resources increased by $5.0 million, or 22.0%, largely due to changes in pension assumptions, partially offset by reductions in deferred charges on refunding, accumulated decreases in the fair value of hedging derivatives, and deferred amounts related to OPEB.

As of June 30, 2023, total liabilities decreased by $55.5 million, or 22.3%, compared to the prior fiscal year. This reduction was primarily due to decreases in outstanding debt, deposit payables, and derivative liabilities at fair value. However, these decreases were partially offset by an increase in the net pension liability. Deferred inflows of resources decreased by $18.7 million, or 69.9%, mainly due to a decrease in deferred inflows related to pensions and OPEB.

The Statement of Revenues, Expenses, and Changes in Net Position for the Electric Fund is as follows:

FY2024 FY2023 FY2022
Operating Revenue
Sales Revenue $190,013.0 $176,889.9 $166,656.2
Wholesale sales 7,922.8 1,629.0 1,482.9 Other Operating Revenue 15,112.1 3,271.7 4,447.8 Total Operating Revenue 213,047.9 181,790.6 172,587.0 Operating Expenses
Production and Purchased Power 99,258.0 84,096.0 72,795.1 Transmission & Distribution 33,715.3 28,993.3 26,998.4 Customer Accounts, Administrative and General 27,147.6 29,691.8 19,235.3 Depreciation 26,786.7 25,272.4 24,099.8 Total Operating Expenses 186,907.6 168,053.5 143,128.5 Operating Income 26,140.3 13,737.1 29,458.4 NonͲoperating Revenues (Expenses)
Interest Expense (2,731.4) (7,292.5) (5,287.7) Subventions and Grants 149.0 127.8 514.4 Payment in Lieu of Taxes (8,075.8) (7,295.2) (6,439.0) Investments, Amortization & Loss from Sale of
Property 794.5 2,191.7 (10,534.2) Lease Revenue 1,785.9 3,549.1 2,992.8 Proceeds from Litigation Ͳ Ͳ 9,427.1 Total NonͲoperating Revenues (Expenses) (8,077.8) 708.0 (18,753.7) Income before Capital Contributions and 18,062.5 14,445.1 10,704.8 Contributions and Transfers
Capital Contributions 18,428.6 9,580.1 11,325.0 Transfers in/out from/to City (435.4) (258.4) (412.6) Total Contributions and Transfers 17,993.2 9,321.7 10,912.4 Change in Net Position 36,055.7 23,766.8 21,617.1 Net Position, Beginning 519,498.5 495,731.7 474,114.6 Net Position, Ending $555,554.2 $519,498.5 $495,731.7
Condensed Statement of Revenues, Expenses, and Changes in Net Position (in thousands)
6

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2024 compared to 2023
The Electric Fund’s operating revenue totaled $213.0 million, an increase of $31.3 million or 17.2%, compared to the prior fiscal year. This growth is primarily attributed to a $13.1 million or 7.4%, increase in sales revenue due to higher energy cost surcharges and rate increases. Out of the approximate $190.0 million total sales revenue, $97.1 million was attributed to commercial customers and $92.9 million to residential customers. The wholesale energy sales revenue amounted to $7.9 million, an increase of $6.3 million or 386.3%, largely due to a one-time energy sale to trading partners in the Pacific Northwest during a significant power shortage in mid-January.

Additionally, other operating revenues was $15.1 million, an increase of $11.8 million or 361.9%, primarily driven by proceeds from a non-recurring Greenhouse Gas (GHG) allowance sale.

Total operating expenses increased by $18.9 million,
or 11.2%, compared to the prior fiscal year, reaching
$186.9 million in FY2024. This increase was primarily
driven by higher power supply purchase costs and
increased distribution operations and maintenance
costs. Production and purchased power expenses,
the largest component, amounted to $99.3 million,
representing 53.1% of total operating expenses.

Distribution and transmission expenses followed at
$33.7 million, or 18.0% of total expenses.

Administrative and general expenses were
$18.6 million, accounting for 9.9% of the total.

Customer accounts and public benefits expenses
totaled $8.6 million, or 4.6% of total expenses.

Depreciation expenses increased by $1.5 million, or

6.0%, to $26.8 million, representing 14.3% of total
operating expenses and reflecting the addition of
capital assets from recent infrastructure investments.

Consistent with the City Charter, the Utility may pay an in-lieu franchise fee not exceeding 4% of expenses to the City General Fund as a Payment in Lieu of Taxes. For fiscal year 2024, this franchise fee transfer totaled $8.1 million, an increase of $0.8 million, or 10.7%, compared to the prior fiscal year.

Investment earnings, including the net change in the fair value of investments, totaled $7.3 million, reflecting a $4.7 million increase compared to the prior fiscal year. This increase was primarily driven by higher interest and dividend earnings, as well as rising fair market values in the pooled investment portfolio.

A loss on disposal of capital assets totaling $6.6 million was recognized in fiscal year 2024, representing an increase of $6.1 million, or 1,389.8%, compared to the prior fiscal year. The increase was primarily due to a one-time retirement of the legacy meter system, which was replaced by the Advanced Metering Infrastructure (AMI) System that became operational in May 2024.

Total capital contributions received were $18.4 million, an increase of $8.8 million, or 92.3%, largely driven by higher contributions in aid of construction and developer contributions.

Interest and related fiscal charges on debt service totaled $2.7 million, reflecting a decrease of $4.6 million compared to the prior fiscal year, primarily due to a reduction in outstanding debt.

The net transfers out of the Electric Fund to the City projects was $0.4 million.

Production
and
Purchased
Power
Distribution & 53%
Transmission
18%
Customer accounts,
Public Benefits
5%
Administrative and
General
10%
Depreciation
14%
Operating Expenses
7

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2023 compared to 2022
The Electric Fund’s operating revenue totaled $181.8 million in FY2023, an increase of $9.2 million, or 5.3%, compared to FY2022. This growth was primarily driven by a $10.2 million, or 6.1%, rise in sales revenue due to increases in the energy cost surcharge and rate increases, partially offset by a decrease in the hydroelectric surcharge. Of the $176.9 million in total sales revenue, $91.2 million was attributed to commercial customers and $85.7 million to residential customers. Wholesale energy sales revenue increased by $0.1 million, or 9.8%, to $1.6 million, reflecting additional wholesale power sold. However, other operating revenues declined by $1.2 million, or 26.4%, primarily due to reduced mutual aid recovery from other agencies and lower carbon allowance and credit proceeds.

Operating expenses totaled $168.1 million in
FY2023, an increase of $24.9 million, or 17.4%,
compared to the prior fiscal year. This increase was
primarily driven by higher power supply costs and
increased higher salary and pension benefits.

Production and purchased power expenses
accounted for $84.1 million, or 50.0% of total
operating costs. Distribution and transmission
expenses were $29.0 million, representing 17.3% of
expenses. Administrative and general expenses
totaled $19.3 million, or 11.5% of costs. Customer
accounts and public benefits expenses amounted to
$10.4 million, or 6.2% of total costs. Additionally,
depreciation expenses increased by $1.2 million, or

4.9%, to $25.3 million, representing 15.0% of total
operating expenses and reflecting the addition of
capital assets from recent infrastructure
investments.

Consistent with the City Charter, the Utility may pay an in-lieu franchise fee of up to 4% of expenses to the City General Fund as a Payment in Lieu of Taxes. For fiscal year 2023, this franchise fee transfer totaled $7.3 million, an increase of $0.9 million, or 13.3%, compared to the prior fiscal year.

Investment earnings, which include the net change in the fair value of investments, amounted to $2.2 million, reflecting a $12.7 million increase primarily driven by rising fair market values in the pooled investment portfolio.

Capital contributions totaled $9.6 million, a decline of $1.7 million, or 15.4%, largely due to reduced contributions from developers.

The net transfers out of the Electric Fund to the City projects was $0.3 million.

Capital Assets
2024 compared to 2023
As of June 30, 2024, the Electric Fund’s net utility plant and equipment, which includes investments in land, buildings, production and distribution facilities, as well as general items like equipment, furniture and right-to-use leased assets, totaled $502.3 million. This figure represents an increase of $11.6 million or 2.4% compared to prior fiscal year.

Production
and
Purchased
Power
50%
Distribution
&
Transmissio
n
17%
Customer
accounts, Public
Benefits
6%
Administrative and
General
12%
Depreciation
15%
Operating Expenses
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2023 compared to 2022
As of June 30, 2023, the Electric Fund’s net utility plant and equipment, which includes investments in land, buildings, production and distribution facilities, as well as general items like equipment, furniture and right-to-use leased assets, totaled $490.7 million. This figure represents a decrease of $0.1 million or 0.0% compared to prior fiscal year.

Debt Administration
2024 compared to 2023
Total long-term debt, net of unamortized premium of $3.1 million, was $85.3 million at the end of fiscal year 2024.

This represents a decrease of $4.5 million or 5.0% compared to the prior fiscal year. The current long-term debt due within a year was $4.3 million and non-current long-term debt was $77.9 million. The debt is backed by the revenue of the Utility.

The Utility maintains a debt service coverage ratio that exceeds the current provisions in the bond indenture document. This debt service coverage ratio is a measure of the adequacy of cash to pay debt service. The Utility must maintain debt coverage of 1.1 as required by the bond indenture, however the City has an internal policy for the Utility to maintain a debt coverage of 2.0. As of June 30, 2024, the Utility had debt coverage of 6.77.

Interest rates on outstanding debt range from 0.39% to 5.25%. 2023 compared to 2022
Total long-term debt, net of unamortized premium of $3.4 million, was $89.8 million at the end of fiscal year 2023.

This represents a notable decrease of $59.0 million or 39.7% compared to the previous fiscal year. This reduction is primarily attributed to the retirement of $51.1 million in variable rate 2012 Series Electric System Revenue Certificates of Participation (COP) in March 2023. The current long-term debt due within a year was $4.3 million, while non-current long-term debt was $82.2 million. The debt is backed by the revenue of the Utility.

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Interest rates on outstanding debt range from 0.39% to 5.25%.

Economic Condition, Outlook and Activity
The Electric Fund experienced a 2.18% growth in its residential and commercial customer base compared to the prior fiscal year. However, total retail electric energy sales decreased 1.27%, totaling 1.2 million megawatt-hours.

The decline was primary due to the largest industrial customer operating at reduced capacity due to facility rehabilitation beginning September 2023. The customer’s energy usage has gradually increased since January 2025 and is expected to return to normal production levels by the summer of 2025. Despite the slight decline in energy sales, total revenue increased by 7.4%, primarily driven by the implementation of the energy cost surcharge and rate increase.

During the fiscal year, the Electric Fund maintained strong credit ratings, with an “AA” rating by Fitch Ratings and a Stable, Standard & Poor’s Global Ratings was “AA” rating, and Moody’s Investors Service rating was “A1” with a Stable Outlook.

The revenue to expense outlook for the next several years forecasts revenues covering expenses. New development will continue to add residential and commercial customers to the service territory. To address the projected revenue shortfall, the utility plans to recommend a rate increase to ensure sufficient funding for operations and infrastructure. Several factors could impact future rate adjustments including the increasing volatility of natural gas and energy markets in California, compliance with state and federal renewable energy and environmental mandates, as well as rising adoption of distributed generation and energy efficiency programs throughout the service territory.

Requests for Information
This financial report is designed to provide a general overview of the Electric Fund’s finances. Questions concerning information provided in this report should be addressed to the Financial Administrator, Roseville Electric Utility, 116 South Grant Street, Roseville, California 95678.
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CITY OF ROSEVILLE ELECTRIC FUND
Statement of Net Position
June 30, 2024 and 2023
ASSETS
Current assets:

Cash and investments in city treasury 149,146,902 $ $ 134,784,933 Receivables (net of uncollectibles):

Accounts 29,497,685 24,731,479
Notes and loans 791,487 -
Leases 110,526 1,857,893
Inventories 23,055,490 21,616,376
Prepaid costs 4,452,290 2,885,787
Restricted:

Cash and investments with fiscal agents 10,792,185 10,261,381 Total current assets 217,846,565 196,137,849
Noncurrent:

Leases 632,051 742,579
Investment in NCPA reserves 6,675,685 6,120,238
Capital assets not being depreciated 15,869,692 26,090,740 Capital assets - net of accumulated depreciation/amortization 486,462,810 464,651,148 Total noncurrent assets 509,640,238 497,604,705
Total assets 693,742,554 727,486,803

DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding 4,089,910 4,435,192
Deferred pension related items 21,750,929 21,578,386
Deferred OPEB related items 1,930,000 1,439,000
Total deferred outflows of resources 27,452,578 27,770,839

LIABILITIES
Current liabilities:

Accounts payable 8,616,163 8,171,039
Accrued liabilities 2,629,203 2,459,123
Unearned revenues 3,751 -
Deposits payable 2,626,087 2,657,424
Subscriptions 318,000 323,775
Accrued compensated absences 2,555,042 3,614,801
Long-term debt - due in less than one year 4,320,000 4,250,000 Total current liabilities 21,068,246 21,476,162
Noncurrent liabilities:

Subscriptions 511,368 814,105
Accrued compensated absences 2,921,861 1,662,522
Long-term debt - due in more than one year 81,013,533 85,574,958 Pension liability 78,200,115 74,341,652
Net OPEB liability 10,071,000 9,778,000
Total noncurrent liabilities 172,717,877 172,171,237
Total liabilities 193,647,399 193,786,123

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB related items 5,206,000 5,509,000
Lease deferred inflows 711,327 2,540,223
Total deferred inflows of resources 8,049,223 5,917,327

NET POSITION
Net investment in capital assets 420,259,511 404,214,242 Restricted for debt service 9,507,484 10,134,406
Restricted for sustainable energy program (AB 32) 6,264,572 8,607,478 Unrestricted 119,522,625 96,542,384
Total net position $ 519,498,510 555,554,192 $
2024 2023
See Notes to Financial Statements.
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CITY OF ROSEVILLE ELECTRIC FUND
Statement of Revenues, Expenses and Changes in Net Position For the Years Ended June 30, 2024 and 2023

OPERATING REVENUES
Residential sales $ 92,880,261 $ 85,701,443
Commercial and industrial sales 97,105,051 91,155,270
Other sales 27,662 33,201
Wholesale sales 7,922,836 1,629,023
Other operating revenues 15,112,115 3,271,743
Total operating revenues 213,047,925 181,790,680

OPERATING EXPENSES
Production and purchased power 99,258,029 84,096,004
Transmission 9,407,591 8,747,705
Distribution 24,307,700 20,245,641
Customer accounts, service and informational 5,317,453 4,500,359 Public benefits and administrative and general 21,830,191 25,191,443 Depreciation/Amortization 26,786,709 25,272,365
Total operating expenses 186,907,673 168,053,517
Operating income (loss) 26,140,252 13,737,163

NONOPERATING REVENUES (EXPENSES)
Subvention and grants 149,011 127,820
Payment in lieu of taxes (franchise transfer) (8,075,815) (7,295,172) Increase in value of certain NCPA projects and reserves 555,447 83,110 Investment income 6,858,825 3,941,525
Interest expense and fiscal charges (2,731,435) (7,292,473) Amortization of gain (loss) on refunding (103,857) (1,395,602) Loss on disposal of capital assets (6,515,885) (437,368) Lease revenue 1,785,905 3,549,080
Proceeds from litigation - 9,427,101
Total nonoperating revenues (expenses) (8,077,804) 708,021 Income (loss) before capital contributions and transfers 18,062,448 14,445,184 Capital contributions - connection/impact fees 1,882,559 2,500,094 Capital contributions from developers and other agencies 8,710,776 5,014,316 Contributions in aid of construction 7,835,255 2,065,674 Transfers in - 177,080
Transfers out (435,356) (435,501)
Change in net position 23,766,847 36,055,682
Net position-beginning 519,498,510 495,731,663
Net position-ending $ 519,498,510 555,554,192 $
2024 2023
See Notes to Financial Statements.
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CITY OF ROSEVILLE ELECTRIC FUND
Statement of Cash Flows
For the Years Ended June 30, 2024 and 2023

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 194,595,821 $ 177,955,062
Payments to suppliers (115,090,435) (110,002,012)
Payments to employees (44,133,468) (41,014,311)
Receipts from counterparties 7,900,000 22,600,000
Receipts returned to counterparties (7,900,000) (41,400,000) Other receipts 14,175,905 2,434,384
Net cash provided by (used for)
operating activities 10,573,123 49,547,823

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Payment in lieu of taxes (franchise transfer) (8,075,815) (7,295,172) Proceeds from litigation - 9,427,101
Subvention and grants 179,090 39,554
Loans to developers (791,487) -
Transfers in - 177,080
Transfers out (435,356) (435,501)
Net cash provided by (used for)
noncapital financing activities (9,123,568) 1,913,062

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Capital contributions 7,835,255 2,065,674
Acquisition and construction of capital assets (36,221,312) (19,425,797) Principal paid on long term debt (4,250,000) (7,205,000) Principal paid on subscriptions (331,476) (217,391)
Interest paid on capital debt (2,787,867) (4,850,544)
Refunding principal payoff - (51,075,000)
Debt service related fees - (2,665,000)
Connection/impact fees 1,882,559 2,500,094
Proceeds from sales of assets 61,845 -
Net cash provided by (used for)
capital and related financing activities (33,810,996) (80,872,964)

CASH FLOWS FROM INVESTING ACTIVITIES
Lease payments received 1,825,112 3,627,946
Fair value adjustment 3,066,949 1,664,350
Interest on investments 3,387,453 2,244,775
Net cash provided by (used for)
investing activities 7,537,071 8,279,514
Net increase (decrease) in
cash and cash equivalents 14,892,773 (60,849,708)
Cash and cash equivalents-beginning 145,046,314 205,896,022 Cash and cash equivalents-ending 159,939,087 $ 145,046,314 $ 2024 2023
See Notes to Financial Statements.
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CITY OF ROSEVILLE ELECTRIC FUND
Statement of Cash Flows
For the Years Ended June 30, 2024 and 2023
2024 2023

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED FOR)

OPERATING ACTIVITIES
Operating income (loss) $ 26,140,252 $ 13,737,163
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:

Depreciation/Amortization 26,786,709 25,272,365
(Increase) decrease in receivables (4,427,075) (1,153,740) (Increase) decrease in inventories (1,439,114) (8,436,780) (Increase) decrease in prepaids (1,566,503) 705,686
Increase (decrease) in accounts payable 696,640 (973,263) Increase (decrease) in deposits payable (27,586) (19,047,493) Increase (decrease) in compensated absences 199,580 723,279 Increase (decrease) in net pension items 3,685,920 1,170,906 Increase (decrease) in net OPEB items (501,000) (1,425,000) Total adjustments 23,407,571 (3,164,040)
Net cash provided by (used for)
operating activities $ 10,573,123 49,547,823 $

SCHEDULE OF NON-CASH NONCAPITAL, CAPITAL,

AND INVESTING ACTIVITIES
Net amortization of premium and deferred loss (241,425) $ 742,753 $ Contribution of capital assets 8,710,776 5,014,316
Change in JPA reserves 83,110 555,447
Gain/(Loss) on disposition of capital assets (6,577,730) (437,368) Initiation of subscriptions 1,130,533 22,964
See Notes to Financial Statements.
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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. General
The Electric Fund (Fund) is an enterprise fund of the City of Roseville (City) that owns and operates the electric systems and provides these services to the businesses and residents of the City. The Electric Fund is under the policy control of the City Council. The accompanying financial statements only reflect the activity of the Electric Fund as it does not have any component units. The Electric Fund is an integral part of the City and its financial statements are included in the basic financial statements of the City. These financial statements do not purport to, and do not represent the financial position, changes in financial position, and where applicable, cash flows of the City.

B. Basis of Presentation
The Financial Statements of the Electric Fund are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board (GASB) is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

The accounting records of the Electric Fund are also substantially in conformity with the Uniform System of Accounts prescribed by the Federal Energy Regulatory Commission (FERC). The Electric Fund operating revenues, such as charges for services, result from exchange transactions associated with the principal activity of the fund.

Exchange transactions are those in which each party receives and gives up essentially equal values. Nonoperating revenues, such as subsidies and investment earnings, result from non-exchange transactions or ancillary activities.

C. Basis of Accounting
The Electric Fund is accounted for as an enterprise fund (proprietary fund type). A fund is an accounting entity with a self-balancing set of accounts established to record the financial position and results of operations of a specific governmental activity. The activities of enterprise funds closely resemble those of the private sector in which the purpose is to conserve and add to economic resources. Enterprise funds account for operations that provide services on a continuous basis and are substantially financed by revenues derived from user charges.

The financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

The Electric Fund may fund programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenses. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.

D. Cash and Investments
Cash and investments with original maturities of three months or less are treated as cash and cash equivalents for purpose of preparing the statements of cash flows. Also, the Electric Fund’s portion of the City’s overall cash and investment pool is treated as cash and equivalents since these amounts are in substance demand deposits. Further information related to the City’s cash and investment pool can be found in the City’s Annual Comprehensive Financial Report.
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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Joint Powers Authorities
The Electric Fund records its equity in the general operating reserve of the Northern California Power Agency (NCPA), and its net equity in those projects in which it participates, as discussed in Note 8. The Electric Fund’s share of individual project obligations has been netted against its share of the related project assets, as reported by NCPA, because the Electric Fund does not actively manage these projects and does not expect to become directly liable for any of the obligations of these projects. Amounts paid to the Transmission Agency of Northern California (TANC) are expensed currently because the Electric Fund’s estimated equity, if any, in TANC is not material. Amounts paid to the California Joint Powers Risk Management and the Local Agency Workers Compensation Excess Joint Powers Authority are charged currently to insurance expense, as discussed in Note 9.

F. Prepaids
Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in the financial statements.

G. Inventories
Certain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in the financial statements.

H. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense) until then. The deferred charge on refunding reported in the statement of net position results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The accumulated decrease in the fair value of hedging derivatives is equal to the fair value of the associated derivative instrument liability so long as the instrument is deemed effective. The deferred outflows related to pensions are described in Note 6. The deferred outflows related to other postemployment benefits (OPEB) are described in Note 7.

In addition to liabilities, the statement of net position reports a separate section for deferred inflows of resources.

This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets or fund balance that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The deferred inflows related to pensions are described in Note 6. The deferred inflows related to OPEB are described in Note 7.

I. Deposits from Customers
Deposits from Customers may be required by the Electric Fund from commercial and residential customers when they establish their account as specified in section 14.04.030 of the City of Roseville Municipal Code. Significant customer deposits may be held in the form of certificates of deposit in the Electric Fund’s name with the interest paid to the customer.
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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) J. Compensated Absences
Compensated Absences including accumulated unpaid vacation, sick pay and other employee benefits are accounted for as expenses in the year earned.

Changes in compensated absences payable consist of the following:

K. Revenue Recognition
Revenues are recognized based on cycle billings rendered to customers. All residential and commercial utility customers are billed once per month. There are twenty-three billing cycles per month which include all types of customers, based on their location within the City. Revenues for services provided but not billed at the end of a fiscal year are accrued.

Contributions of cash or assets to proprietary funds from state and federal agencies, developers and others are recorded as revenue when earned.

L. Classification of Revenues
Operating revenues consist mainly of electric sales. Operating revenues are used to finance the cost of operations, including the cost of delivering and providing services, maintenance and recurring capital replacement. All other revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.

M. Operating Expense
Operating expenses include expenses reflected by the City as related to rent payments, information technology and facility services, and other indirect cost transfers.

N. Allocation and Capitalization of Operating Overhead Expenses and General and Administrative Costs The allocation of operating overhead expenses and general and administrative costs to capital projects, as well as FERC distribution and maintenance operating expenses, was based on a comprehensive analysis and study prepared by the City’s staff. This analysis and allocation process is conducted annually in conformance with the generally accepted electric utility accounting practices within the Uniform System of Accounts (USOA) prescribed by FERC and utility accounting guides published by the American Public Power Association (APPA) regarding job costing and utility accounting.

The process of allocating and capitalizing operating overhead expenses and general and administrative costs was implemented to allow the Electric Fund Financial Statements to reflect a chart of accounts consistent with industry standards, provide more accurate operation and maintenance costs, and track the total actual costs of electric capital assets.
2024 2023
Beginning balance $ 5,277,323 $ 4,554,044
Additions 1,590,850 3,197,406
Payments (1,391,270) (2,474,127)
Ending balance $ 5,476,903 $ 5,277,323
Current portion $ 2,555,042 $ 3,614,801
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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

P. Fair Value Measurements
The Electric Fund categorizes the fair value measurements of its investments based on the hierarchy established by GAAP. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs.

Q. Pensions
For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pension, and pension expense, information about the fiduciary net position of the City’s California Public Employees Retirement System (CalPERS) plan and additions to/deductions from the plan’s fiduciary net position have been determined on the same basis as they are reported by CalPERS. 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.

R. Post-Employment Benefits Other Than Pensions (OPEB)
For purposes of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, information about the fiduciary net position of the City’s OPEB Plan (Plan) and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the Plan. 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, except for money market investments and participating interest-earning investment contracts that have a maturity at the time of purchase of one year or less, which are reported at cost.

S. Capital Asset Policies
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available.

Contributed capital assets are valued at their estimated acquisition value on the date contributed.

Capital assets with limited useful lives are depreciated/amortized over their estimated useful lives. The purpose of depreciation/amortization is to spread the cost of capital assets equitably among all users over the life of these assets. The amount charged to depreciation/amortization expense each year represents that year’s pro rata share of the cost of capital assets.
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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Depreciation/amortization is provided using the straight-line method which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year until the asset is fully depreciated/amortized. The Electric Fund has assigned the useful lives and capitalization thresholds listed below to capital assets:

Major outlays for capital assets and improvements are capitalized as projects are constructed.

T. New Accounting Pronouncements
New Pronouncements
Effective in Current Fiscal Year
GASB Statement No. 100 – In June 2022, the GASB issued Statement No. 100, Accounting Changes and Error Corrections. The objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. The Statement is effective for reporting periods beginning after June 15, 2023. There is no effect on the Electric Fund’s financial statements.

Effective in Future Fiscal Years
GASB Statement No. 101 – In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The Statement is effective for reporting periods beginning after June 15, 2023. The City has not determined the effect on the Electric Fund’s financial statements.

GASB Statement No. 102 – In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The Statement is effective for reporting periods beginning after June 15, 2024. The City has not determined the effect on the Electric Fund’s financial statements.

Useful Lives
Capitalization
Thresholds
Buildings 40 years 20,000 $
Improvements 20-75 years no threshold
Equipment 6-20 years 5,000
Plants and Substations 40 years 5,000
Distribution System 15-60 years no threshold
Electric Generation 15-30 years 5,000
Traffic Signals 20 years no threshold
Landscaping 12 years 20,000
Leases Varies by contract 75,000
SBITA Varies by contract 75,000
19

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) GASB Statement No. 103 – In April 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues. The Statement is effective for reporting periods beginning after June 15, 2025. The City has not determined the effect on the Electric Fund’s financial statements.

GASB Statement No. 104 – In September 2024, the GASB issued Statement No. 104, Disclosure of Certain Capital Assets. The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets. The Statement is effective for reporting periods beginning after June 15, 2025. The City has not determined the effect on the Electric Fund’s financial statements.

U. Net Position
Net position is the excess of all the Electric Fund’s assets and deferred outflows of resources over all its liabilities and deferred inflows of resources. Net position is classified into the captions below:

Net Investment in Capital Assets describes the portion of net position which is represented by the current net book value of the Electric Fund’s capital assets less accumulated depreciation and less the outstanding balance of any debt issued to finance these assets.

Restricted describes the portion of net position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws enabling legislation, or other restrictions which the Electric Fund cannot unilaterally alter.

Unrestricted describes the portion of net position which is not restricted to use.

It is the City’s policy to apply restricted resources first when an expense is incurred for purposes for which both restricted and unrestricted net position is available.
20

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 2: CAPITAL ASSETS
Capital asset activity for the year ended June 30, 2024, is as follows:

Balance at
June 30, 2023 Additions Retirements Transfers
Balance at
June 30, 2024
Capital assets, not being depreciated
Land 5,467,335 $ - $ - $ - $ 5,467,335 $
Construction in progress 20,623,405 30,450,005 - (40,671,053) 10,402,357 Total capital assets not being depreciated 26,090,740 30,450,005 - (40,671,053) 15,869,692 Capital assets, being depreciated
Buildings 28,679,133 - - - 28,679,133
Improvements 1,878,973 - - - 1,878,973
Vehicles and equipment 25,694,756 381,965 (932,762) 12,840,531 37,984,490 Landscaping 1,231,560 - - - 1,231,560
Traffic signals 75,166,416 1,939,814 (711,238) 1,208,443 77,603,435 Plant and substations 93,517,964 - (59,000) 4,157,099 97,616,063 Distribution 392,600,624 11,824,849 (11,977,614) 21,314,771 413,762,630 Generation 218,132,941 335,455 - 1,150,209 219,618,605
Subscriptions 1,347,924 22,964 - - 1,370,888
Total capital assets being depreciated 838,250,291 14,505,047 (13,680,614) 40,671,053 879,745,777 Less accumulated depreciation for
Buildings (8,220,648) (716,978) - - (8,937,626)
Improvements (1,314,573) (73,540) - - (1,388,113)
Vehicles and equipment (18,091,392) (3,360,514) 744,643 - (20,707,263) Landscaping (579,565) (56,797) - - (636,362)
Traffic signals (51,370,832) (2,554,638) 322,544 (53,602,926) - Plant and substations (38,882,703) (2,377,889) 21,487 (41,239,105) - Distribution (135,635,394) (9,035,422) 6,014,211 (138,656,605) - Generation (119,209,999) (8,301,348) - (127,511,347) -
Subscriptions (294,037) (309,583) - - (603,620)
Total accumulated depreciation (373,599,143) (26,786,709) 7,102,885 (393,282,967) - Net capital assets being depreciated 464,651,148 (12,281,662) (6,577,729) 40,671,053 486,462,810 Capital assets, net $ 490,741,888 $ 18,168,343 $ (6,577,729) $ 502,332,502 - $ 21

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 2: CAPITAL ASSETS (CONTINUED)
Capital asset activity for the year ended June 30, 2023, is as follows:

Depreciation and amortization on capital assets and intangibles included in the statement of revenues, expenses and changes in net position for the years ended June 30, 2024 and 2023 was $26,786,709 and $25,272,365 respectively.

During the fiscal year, the City updated its system to standardize the number of years of depreciation by asset class and updated accumulated depreciation to reflect the standardized years of certain assets.

NOTE 3: CASH AND INVESTMENTS
The City pools cash from all sources and all funds, except certain specific investments within funds and cash with fiscal agents, so that it can be invested at the maximum yield, consistent with safety and liquidity, while individual funds can make expenditures at any time.

The City and its fiscal agents invest in individual investments and in investment pools. Individual investments are evidenced by specific securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system. Individual investments are generally made by the City’s fiscal agents as required under its debt issues. In order to maximize security, the City employs the Trust Department of a bank as the custodian of all City managed investments, regardless of their form.

Balance at
June 30, 2022 Additions Retirements Transfers
Balance at
June 30, 2023
Capital assets, not being depreciated
Land 5,173,011 $ 294,324 $ - $ - $ 5,467,335 $
Construction in progress 14,150,660 16,818,351 - (10,345,606) 20,623,405 Total capital assets not being depreciated 19,323,671 17,112,675 - (10,345,606) 26,090,740 Capital assets, being depreciated
Buildings 28,679,133 - - - 28,679,133
Improvements 1,788,833 - - 90,140 1,878,973
Vehicles and equipment 23,568,195 192,499 (206,776) 2,140,838 25,694,756 Landscaping 599,975 - - 631,585 1,231,560
Traffic signals 74,853,320 - (1,091,218) 1,404,314 75,166,416 Plant and substations 93,676,970 - (159,006) - 93,517,964 Distribution 381,056,064 7,134,937 (521,406) 4,931,029 392,600,624 Generation 216,985,241 - - 1,147,700 218,132,941
Subscriptions - 1,347,924 - - 1,347,924
Total capital assets being depreciated 821,207,731 8,675,360 (1,978,406) 10,345,606 838,250,291 Less accumulated depreciation for
Buildings (7,503,670) (716,978) - - (8,220,648)
Improvements (1,237,694) (76,879) - - (1,314,573)
Vehicles and equipment (15,499,851) (2,662,747) 71,206 - (18,091,392) Landscaping (553,470) (26,095) - - (579,565)
Traffic signals (49,659,936) (2,505,434) 794,538 (51,370,832) - Plant and substations (36,714,075) (2,307,357) 138,729 (38,882,703) - Distribution (127,613,427) (8,437,542) 415,575 (135,635,394) - Generation (110,964,703) (8,245,296) - (119,209,999) -
Subscriptions (294,037) - - - (294,037)
Total accumulated depreciation (349,746,826) (25,272,365) 1,420,048 (373,599,143) - Net capital assets being depreciated 471,460,905 (16,597,005) (558,358) 10,345,606 464,651,148 Capital assets, net $ 490,784,576 $ 515,670 $ (558,358) $ 490,741,888 - $ 22

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
In order to mitigate its credit exposure to energy market risk and protect its financial position, the City requested its trading counterparties to post collateral. The collateral was held by the City in a specific account. If its trading counterparties defaulted on their contract obligations, the City could seize the collateral. Otherwise, the City would ultimately be obligated to return the entire amount back to those companies.

The City’s investments of the Electric Fund are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year. The City’s investment pool is not registered with the Security and Exchange Commission and is not rated.

A. Classification
Cash and investments of the Electric Fund are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or other agreements.

Cash and investments with original maturities of three months or less are treated as cash and equivalents for purpose of preparing the statement of cash flows. Also, the Electric Fund’s portion of the City’s overall cash and investment pool is treated as cash and equivalents since these amounts are in substance demand deposits.

Cash and investments as of June 30, consist of the following:
2024 2023
Cash and investments in City Treasury $ 149,146,902 $ 134,784,933 Restricted cash and investments with fiscal agent 10,792,185 10,261,381 Total cash and investments $ 159,939,087 $ 145,046,314
2024 2023
Cash on hand $ 3,450 $ 4,312
City of Roseville pooled cash and investments 149,143,452 134,780,621 Investments 10,792,185 10,261,381
Total cash and investments $ 159,939,087 $ 145,046,314
23

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
B. Investments Authorized by the California Government Code and the City’s Investment Policy The City’s Investment Policy and the California Government Code allow the City to invest in the following, provided the credit ratings of the issuers are acceptable to the City; and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code or the City’s Investment Policy where it is more restrictive:

C. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if the City fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with City resolutions, bond indentures, or State statutes.

Maximum Maturity
Minimum Credit
Quality
Maximum
Percentage
Allowed
Maximum
Investment in
One Issuer
U.S. Treasury Obligations (a) 5 Years None None None
U.S. Agency Securities (a) 5 Years None None None
Forward Delivery Agreements N/A A None None
Local Agency Bonds 5 Years None None None
Repurchase Agreements 1 Years None None None
Bankers' Acceptances 180 Days None 40% 30%
Commercial Paper 270 Days A-1 25% 10% (b)
Medium-Term Notes (Corporate Notes) 5 Years A 30% None
Collateralized Time Deposits 5 Years None 30% None
Negotiable Certificates of Deposit 5 Years A 30% None
Local Agency Investment Fund N/A None None LAIF Limit
Insured Saving Accounts N/A None None None
Money Market Mutual Funds N/A None 20% 10%
Shares in a California Common Law Trust N/A None None None Interest Rate Swaps (c) N/A None None None
Supranationals 5 Years AA 30% None
Mortgage Pass-Through Securities 5 Years AA 20% None
Authorized Investment Type
(a) In specified fund accounts where liquidity is not the primary investment objective, the maximum maturity can be up to ten years with granted express authority by the City Council. Such investments cannot be made less than three months following the approval of extended investment terms. All longer-term investments must be federal Treasury or Agency securities. (b) Eligible Commercial Paper may not represent more than 10 percent of the outstanding paper of an issuing corporation. (c) Interest rate swaps may only be used in conjunction with enterprise fund debt or investments. 24

Page 1192 of 2438 ends

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
The table below identifies the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements:

D. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment.

Normally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City also manages its interest rate risk by holding most investments to maturity.

Information about the sensitivity of the fair values of the investments to market interest rate fluctuations is provided by the following table that shows the distribution of the investments by maturity or earliest call date, as of June 30, 2024:

Maximum
Maturity
Minimum Credit
Quality
N/A None
U.S. Agencies Securities N/A None
N/A - 30 days None to A-1
30 days None to A-1
N/A - 270 days None to A-1
N/A None to Aam-G
Pre-refunded Municipal Obligations N/A AAA
Repurchase Agreements N/A - 30 days None to A
Investment Agreements N/A A+ to AA
California Asset Management Pool (CAMP) N/A None
Local Agency Investment Fund (LAIF) N/A None
Guaranteed Investment Contract N/A None
Bankers' Acceptance
Money Market Funds
Authorized Investment Type
U.S. Treasury Obligations
Certificates of Deposit
Time Deposits
12 Months
or Less
More than
60 Months Total
City of Roseville Investment Pool 149,146,902 $ - $ 149,146,902 $ Money Market Mutual Funds 8,637,998 - 8,637,998
Guaranteed Investment Contract (GIC) - 2,150,737 2,150,737 Total investments 157,784,900 $ 2,150,737 $ 159,935,637 $ Remaining Maturity (in Months)
June 30, 2024
12 Months
or Less
More than
60 Months Total
City of Roseville Investment Pool $ 134,784,605 $ 134,784,605 - $ Money Market Mutual Funds 8,106,660 8,106,660 -
Guaranteed Investment Contract (GIC) 2,150,737 - 2,150,737 Total investments $ 142,891,265 $ 2,150,737 $ 145,042,002 Remaining Maturity (in Months)
June 30, 2023
25

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
E. Credit Risk
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 June 30, 2024 and 2023 for each investment type as provided by Standard and Poor’s investment rating system:

F. Fair Value Measurements
The Electric Fund categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is used on the valuation inputs used to measure the fair value of the asset. Level 1 inputs are quotes prices in active markets for identical assets; Level 2 inputs are significant other observable input; Level 3 inputs are significant unobservable inputs.

In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The City’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

Total
Not Rated
City of Roseville Investment Pool 149,146,902 $
Money Market Mutual Funds 8,637,998
Guaranteed Investment Contract (GIC) 2,150,737
Total Investments 159,935,637 $
June 30, 2024
Total
Not Rated
City of Roseville Investment Pool 134,784,605 $
Money Market Mutual Funds 8,106,660
Guaranteed Investment Contract (GIC) 2,150,737
Total Investments 145,042,002 $
June 30, 2023
26

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
The Electric Fund has the following recurring fair value measurements as of June 30, 2024 and 2023:

Investment at Fair Value
Balance at
June 30, 2024
Significant
Other
Observable
Inputs (Level 2)
Money Market Mutual Funds 8,637,998 $ 8,637,998 $
Investments not subject to the Fair Value Heirarchy
City of Roseville Investment Pool 149,146,902
Investments Measured at Amortized Cost
Guaranteed Investment Contract (GIC) 2,150,737
Total Investments 159,935,637 $
Investment at Fair Value
Balance at
June 30, 2023
Significant
Other
Observable
Inputs (Level 2)
Money Market Mutual Funds 8,106,660 $ 8,106,660 $
Investments not subject to the Fair Value Heirarchy
City of Roseville Investment Pool 134,784,605
Investments Measured at Amortized Cost
Guaranteed Investment Contract (GIC) 2,150,737
Total Investments 145,042,002 $
27

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 4: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS A. Lessor Leases
For the year ended June 30, 2024, the financial statements include the adoption of GASB Statement No. 87, Leases.

The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For additional information, refer to the disclosures below.

Lease Receivable for the year ended June 30, 2024, and June 30, 2023 are as follows:

Deferred Inflows of Resources for the year ended June 30, 2024, and June 30, 2023 are as follows:
2024 Balance as of Balance as of
July 1, 2023 Additions Reductions June 30, 2024
Lease Receivable
Buildings $ 851,902 $ - $ 109,325 $ 742,577
Land 1,748,570 1,748,570 - -
Total Lease Receivable $ 2,600,472 $ 1,857,895 - $ $ 742,577 2023 Balance as of Balance as of
July 1, 2022 Additions Reductions June 30, 2023
Lease Receivable
Buildings $ 960,035 $ - $ 108,133 $ 851,902
Land 5,240,000 3,491,430 - 1,748,570
Total Lease Receivable $ 6,200,035 $ 3,599,563 - $ $ 2,600,472 2024 Balance as of Balance as of
July 1, 2023 Additions Reductions June 30, 2024
Deferred Inflow of Resources:

Buildings $ 829,881 $ - $ 118,554 $ 711,327
Land 1,710,342 1,710,342 - -
Total Deferred Inflows of Resources $ 2,540,223 $ 1,828,896 - $ $ 711,327 2023 Balance as of Balance as of
July 1, 2022 Additions Reductions June 30, 2023
Deferred Inflow of Resources:

Buildings $ 948,436 $ - $ 118,555 $ 829,881
Land 5,131,026 3,420,684 - 1,710,342
Total Deferred Inflows of Resources $ 6,079,462 $ 3,539,239 - $ $ 2,540,223 28

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 4: LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED)
B. Subscription-Based Information Technology Arrangements (SBITAs) The Fund is a subscriber for a noncancellable subscription of information technology services. The Fund recognizes a subscription liability and an intangible right-to-use subscription asset (subscription asset) in the financial statements. The Fund recognized subscription liabilities with an initial, individual value of $75,000 or more.

At the commencement of a subscription, the Fund initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, plus certain initial direct costs. Subsequently, the subscription asset is amortized on a straight-line basis over its useful life. Key estimates and judgments related to subscriptions include how the Fund determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) lease term, and (3) subscription payments.
x The Fund uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by the vendor is not provided, the Fund generally uses its estimated incremental borrowing rate as the discount rate for subscriptions.
x The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the Fund is reasonably certain to exercise.

The Fund monitors changes in circumstances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

NOTE 5: LONG-TERM DEBT
A. Composition and Changes
The Electric Fund generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt. The Electric Fund’s debt issues and transactions are summarized below and discussed in detail thereafter.

Amount of
SBITA Capital Accumulated
Assets Amortization
$ (603,620) 1,370,888 $
Subscription Type
Software as a service
Principal Interest
2025 $ 318,000 $ 13,536
2026 279,252 8,200
2027 232,116 3,806
Total $ 829,368 $ 25,542
For the Year Ending June 30,
Subscription Liability
29

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 5: LONG-TERM DEBT (CONTINUED)
Long-term debt activity for the year ended June 30, 2024, is as follow:

Long-term debt activity for the year ended June 30, 2023, is as follow:

Original Issue
Amount
Balance at
June 30, 2023 Additions Retirements
Balance at
June 30, 2024 Current Portion
Certificates of Participation:
$ 5,000 39,940,000 $ - $ - $ 5,000 $ - $
- (728,254) - - - -
Total certificates of participation 39,211,746 5,000 - - 5,000 - Revenue Bonds:
53,270,000 56,210,000 - (3,605,000) 49,665,000 1,170,000 3,379,958 5,069,937 - (241,425) 3,138,533 -
33,170,000 34,770,000 - (645,000) 32,525,000 3,150,000
Total revenue bonds 96,049,937 89,819,958 - (4,491,425) 85,328,533 4,320,000 Total certificates of participation & revenue debt 135,261,683 89,824,958 - (4,491,425) 85,333,533 4,320,000 Subscriptions - 1,137,880 22,963 (331,475) 829,368 318,000 Total 225,261,683 $ 90,962,838 $ 22,963 $ (4,822,900) $ 86,162,901 $ 4,638,000 $

0.39-2.08%, due 2/1/34
2017A Electric System Reveue Refunding

3.00-5.00%, due 2/1/37
Add: bond premium
2020 Electric System Reveue Refunding
2004 Electric System Reveue, 3.00-5.25%,
due 2/1/34
Less: deferred bond discount
Original Issue
Amount
Balance at
June 30, 2022 Additions Retirements
Balance at
June 30, 2023 Current Portion
Direct Placement Debt
Certificates of Participation:
$ 54,000,000 90,000,000 $ - $ (54,000,000) $ - $ - $
Direct placement debt total 90,000,000 54,000,000 - (54,000,000) - - Certificates of Participation:
5,000 39,940,000 - - 5,000 -
- (728,254) - - - -
Total certificates of participation 39,211,746 5,000 - - 5,000 - Revenue Bonds:
875,000 48,780,000 - (875,000) - -
501,326 5,899,513 - (501,326) - -
56,035,000 56,210,000 - (2,765,000) 53,270,000 3,605,000 3,621,385 5,069,937 - (241,427) 3,379,958 -
33,810,000 34,770,000 - (640,000) 33,170,000 645,000
Total revenue bonds 150,729,450 94,842,711 - (5,022,753) 89,819,958 4,250,000 Total certificates of participation & revenue debt 189,941,196 94,847,711 - (5,022,753) 89,824,958 4,250,000 Subscriptions - - 1,347,924 (210,044) 1,137,880 323,775 Total $ 279,941,196 $ 148,847,711 $ 1,347,924 $ (59,232,797) $ 90,962,838 $ 4,573,775

3.00-5.00%, due 2/1/37
Add: bond premium
2020 Electric System Reveue Refunding

0.39-2.08%, due 2/1/34

2.00-5.00%, due 2/1/29
Add: bond premium
2017A Electric System Reveue Refunding
2013 Electric System Reveue Refunding
2012 Electric System Revenue variable rate,
due 2/1/35
2004 Electric System Reveue, 3.00-5.25%,
due 2/1/34
Less: deferred bond discount
30

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 5: LONG-TERM DEBT (CONTINUED)
B. Direct Placement
2012 Electric System Revenue Refunding Certificates of Participation On November 7, 2012 the City entered into a direct placement agreement with U.S. Bank for the purchase of the 2012 bonds. The COP’s were issued to refund and retire the outstanding balance of the 2008A Electric System Revenue COPs. As of June 30, 2024, the balance was fully paid.

The COPs are secured by a pledge of the net revenue of the Electric Department. The revenue may not be used for any other purpose while any of the bonds remain outstanding.

The continuing covenant agreement for the bonds includes a provision that in an event of default, the repayment of the outstanding principal plus any accrued interest becomes immediately due. The City is responsible for cost increases caused by the adoption of a law or rule applicable to the bonds, changes in the taxes or tax basis of the Purchaser or Credit Protection Provider.

The terms of this agreement were renewed on April 20, 2016, and will expire on November 1, 2019. The City originally entered into a 27-year interest rate swap agreement for the entire amount of the 2008A COPs, and the interest rate swap agreement remains outstanding after the refunding, but notional amount of the swap is based on the notional amount of the 2008A COPs. The combination of the variable rate COPs and a floating rate swap creates synthetic fixed-rate debt for the City. The synthetic fixed rate for the COPs was 3.919 percent for the year ended June 30, 2023. The COPs were subject to mandatory prepayment annually beginning February 1, 2023 through 2035.

On November 1, 2019, the 2012 Electric COPs were paid down by $36,000,000 leaving a balance of $54,000,000.

In addition, the Bank of America Merrill Lynch swap was terminated as of this date. As a result, the City paid $7,176,500 to terminate the interest rate swap agreement. The US Bank direct placement was renewed with new interest rate terms of 80% of one-month LIBOR plus 60 basis points with direct placement expiring May 1, 2023.

On April 3, 2023, the remaining balance of the 2012 Electric COPs, amounting to $51,075,000, was fully paid off.

Concurrently, the associated interest rate swap with Morgan Stanley Capital Services was terminated as of this date. The City paid $2,665,000 to terminate the interest rate swap agreement.

C. Certificates of Participation
2004 Electric System Revenue Certificates of Participation On July 1, 2004, the City issued $39,940,000 of Certificates of Participation (COPs) to finance capital improvements to the City’s Electric System. The COPs are repayable from net revenue of the Electric Utility System. The COPs bear interest at 3.00 percent to 5.25 percent and are due semi-annually on February 1 and August 1 of each year beginning February 1, 2005. Principal payments are due annually on February 1 through February 2034. The COPs were partially refunded by the 2013 Electric System Revenue Refunding Bonds as discussed in Note 5D below. In August 2014, the 2004 Electric System Revenue COP was partially refunded by the 2014 Electric System Revenue Refunding Bonds, leaving a par amount of $5,000.
31

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 5: LONG-TERM DEBT (CONTINUED)
D. Revenue Bonds
2013 Electric System Revenue Refunding Bonds
On November 14, 2013, the Roseville Finance Authority issued the Electric System Revenue Refunding Bonds, Series 2013, in the principal amount of $48,780,000 to refund a portion of each of the 2004 Electric System Revenue and 2005 Electric System Revenue, Series A, COPs. The Bonds bear interest at 2.00 percent to 5.00 percent, and are due semi-annually on February 1 and August 1 of each year. The Bonds are repayable by a pledge of net revenue from the Electric System. Principal payments are due annually on February 1 through 2029. In September 2020, the City issued the 2020 Taxable Electric System Revenue Refunding Bonds, which refunded a portion of the 2013 bonds, which are further described below. As of June 30, 2023, the balance was fully paid. 2017A Electric System Revenue Refunding Bonds
On February 8, 2017, the City issued Revenue Bonds in the original principal amount of $56,210,000. The Bonds were issued to refund a portion of the 2009 Electric System Revenue Refunding Certificates of Participation and the 2010 Electric System Revenue Refunding Bonds. The Revenue Bonds bear interest at 3.00 percent to 5.00 percent and are due semi-annually on February 1 and August 1 of each year. Principal payments are due annually on February 1 starting in 2022 and running through 2037. The balance outstanding as of June 30, 2024 is $49,665,000. 2020 Electric System Revenue Refunding Bonds
On September 2020, the City issued Taxable Revenue Bonds in the original principal amount of $34,770,000. The Bonds were issued to refund a portion of the 2013 and 2014 Electric System Revenue Refunding Bonds. The Revenue Bonds bear interest at 0.389 percent to 2.081 percent and are due semi-annually on February 1 and August 1 of each year. Principal payments are due annually on February 1 through 2034. The balance outstanding as of June 30, 2024 is $32,525,000.

E. Electric System Pledged Revenues
As of June 30, 2024, the total principal and interest remaining to be paid on the 2004 Electric System Revenue COPs, the 2017A Electric System Revenue Refunding bonds and the 2020 Electric System Revenue Refunding Bonds was $106,484,066. As disclosed in the official statements, all net revenues of the Electric System are expected to provide coverage over debt service of 110 percent over the lives of the Bonds. For fiscal year 2024, net revenues amounted to $47,342,500 which represents coverage of 678 percent over the $6,981,435 in debt service.

F. Original Issue Discounts and Premiums, Deferred Amounts on Refunding For proprietary fund types, 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. Any difference between proprietary refunded debt and the debt issued to refund it is amortized over the remaining life of either the refunded debt or the refunding debt, whichever is shorter. 32

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 5: LONG-TERM DEBT (CONTINUED)
G. Debt Service Requirements
Annual debt service requirements are shown for all long-term debt:

NOTE 6: PENSION PLAN
A. Plan Description
Substantially all Electric Fund employees are eligible to participate in the City’s Miscellaneous Plan, an agent multiple-employer defined benefit pension plan administered by the California Public Employees Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers.

Benefit provisions under the Plan are established by State statute and may be amended by City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

B. Benefits Provided
CalPERS provides retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law.

The Plan’s provisions and benefits in effect at June 30, 2024 and 2023, are summarized as follows:

Principal Interest
2025 4,320,000 $ 2,586,266 $
2026 4,400,000 2,499,576
2027 4,450,000 2,403,441
2028 4,565,000 2,296,148
2029 4,645,000 2,179,528
2030-2034 23,645,000 9,079,663
2035-2039 36,170,000 3,244,444
Total 82,195,000 $ 24,289,066 $
For the Year Ending June 30,
Hire date Prior to January 1, 2013 After January 1, 2013 Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50-55 52-67
Monthly benefits, as a % of annual salary 2.0-2.7% 1.0-2.5% Required employee contribution rates 8.00% 7.00%
Required employer contribution rates* 11.04% 15.26%
Miscellaneous
*There was an additional contribution amount related to the payment of the Unfunded Actuarial Liability (UAL). This amount is allocated by the City to the City's various funds. 33

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 6: PENSION PLAN (CONTINUED)
C. Contributions
Section 20814(c) of the California Public Employees’ Retirement law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in rate. Funding contributions for the Plan is 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 Electric Fund is required to contribute the difference between the actuarially determined rate and the contribution rates of employees.

The Electric Fund’s proportionate share of the City’s contributions to the Miscellaneous Plan was 8,644,684 and 8,057,403 for the year ended June 30, 2024 and 2023, respectively.

D. Pension Liability, Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions As of June 30, 2024 and 2023, the Electric Fund reported a net pension liability of $78,200,115 and $74,341,652 respectively for its proportionate share of the City’s Miscellaneous Plan’s net pension liability.

The net pension liability of the Plan was measured as of June 30, 2023, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022. The Electric Fund’s proportion of the City’s Miscellaneous Pension Plan’s net pension liability was based on the Electric Fund’s fiscal year 2022 contributions to the City’s miscellaneous pension plan relative to the total contributions of the City has a whole. The Electric Fund’s proportionate share of the City’s miscellaneous pension plan net pension liability, measured as of June 30, 2023 and June 30, 2022, for June 30, 2024 and 2023 was 23.95 percent and 24.07 percent respectively.

For the year ended June 30, 2024 and 2023, the Electric Fund recognized pension expense of $12,329,356 and $9,228,309 respectively. At June 30, 2024 and 2023, the Electric Fund reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
Employer contributions subsequent to measurement date 8,644,684 $ - $ Differences between expected and actual experience 3,387,703 - Changes in assumptions 3,534,699 -
Net differences between projected and actual earnings on pension plan investments 6,183,843 -
Total 21,750,929 $ - $
2024
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Employer contributions subsequent to measurement date 8,057,403 $ - $ Differences between expected and actual experience 1,631,894 - Changes in assumptions 5,328,836 -
Net differences between projected and actual earnings on pension plan investments 6,560,253 -
Total $ 21,578,386 $ -
2023
34

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 6: PENSION PLAN (CONTINUED)
The amount of $8,644,684 reported at June 30, 2024 in the enterprise fund as deferred outflows of resources related to pensions, resulting from the Electric Fund’s contributions to the City’s plan subsequent to the measurement date, will be recognized as a reduction of the net pension liability in the year ended June 30, 2025. Other amounts reported as deferred outflows and inflows of resources related to pensions will be recognized as a reduction to pension expense as follows:

E. Actuarial Assumptions
The Electric Fund’s proportion of the City’s Miscellaneous Plan total pension liability in the June 30, 2024 and 2023, actuarial valuation was determined using the following actuarial assumptions.

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2022 valuation were based on the results of an actuarial experience study for the period of 1997 to 2015. Further details of the Experience Study can be found on the CalPERS website.

The long-term expected rate of return on pension plan investments was determined using a building block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense an inflation) are developed for each major asset class.

For the Year Ending June 30,
Net Deferred
Outflows/(Inflows)
of Resources
2025 4,246,732 $
2026 3,536,734
2027 5,155,660
2028 167,119
Total $ 13,106,245
Valuation Date June 30, 2022 June 30, 2021
Measurement Date June 30, 2023 June 30, 2022
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.90% 6.90%
Inflation 2.80% 2.80%
Payroll Growth 2.80% 2.80%
Projected Salary Increase 3.3-14.2% (1) 3.3-14.2% (1)
Investment Rate of Return 7.00% (2) 7.00% (2)
Mortality
(1) Depending on age, service and type of employment
(2) Net of pension plan investment and administrative expenses, includes inflation Miscellaneous
Entry-Age Normal Cost Method; Level % of pay
Derived using CalPERS membership data
35

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 6: PENSION PLAN (CONTINUED)
In determining the long-term expected rate of return on pension plan investments, CalPERS took into account both short and long-term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equivalent to the single equivalent rate calculated above and rounded down to the nearest one quarter of one percent.

The table below reflects long-term expected real rate of return by asset class. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

Assumed
Asset
Allocation Real Return (1, 2)
Global Equity - Cap-weighted 30% 4.54%
Global Equity - Non-Cap-weighted 12% 3.84%
Private Equity 13% 7.28%
Treasury 5% 0.27%
Mortgage-back Securities 5% 0.50%
Investment Grade Corporates 10% 1.60%
High Yield 5% 2.27%
Merging Market Debt 5% 2.48%
Private Debt 5% 3.57%
Real Assets 15% 3.21%
Leverage -5% -0.59%
Total 100%
(1) An expected inflation of 2.3% used for this period
(2) Figures are based on the 2022 Asset Liability Management study Asset Class(1)
2024
Assumed
Asset
Allocation
Real Return
Years 1-10(2)
Real Return
Years 11+(3)
Global Equity 50% 4.80% 5.98%
Fixed Income 28% 1.00% 2.62%
Inflation Assets 0% 0.77% 1.81%
Private Equity 8% 6.30% 7.23%
Real Assets 13% 3.75% 4.93%
Liquidity 1% 0.00% -0.92%
Total 100%
(2) An expected inflation of 2.0% used for this period
(3) An expected inflation of 2.92% used for this period 2023
Asset Class(1)
(1) In the Basic Financial Statement, Fixed Income is included in Global 36

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 6: PENSION PLAN (CONTINUED)
F. Discount Rate
The discount rate used to measure the total pension liability was 6.90 percent for the Plan as of the measurement date of June 30, 2023 and 2022. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at the current contribution rate and that the City’s contributions will be made at rates equal to the difference between actuarially determined contributions rates and the employee rate. Based on those assumptions, each pension plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on pension plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

G. Sensitivity of the Electric Fund’s proportionate share of the City’s Miscellaneous Plan Net Pension Liability to Changes in the Discount Rate
The following presents the net pension liability of the Electric Fund for the Plan, calculated using the discount rate for the Plan, as well as what the Electric Fund’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

H. Pension Plan Fiduciary Net Position
Detailed information the City’s collective net pension liability is available in the City’s separately issued Annual Comprehensive Financial Report. The City’s financial statements may be obtained by contacting the City of Roseville’s Finance Department. That report may be obtained on the internet at www.roseville.ca.us.

NOTE 7: POSTEMPLOYMENT BENEFITS
Plan Description - The City provides medical benefits to substantially all retirees under the City of Roseville Retiree Healthcare Plan, a sole employer defined benefit healthcare plan administered by the Trust Investment Review Committee. The City is responsible for establishing and amending the funding policy of the Plan. The plan financial statements can be obtained by contacting the City of Roseville Finance Department at 311 Vernon Street, Roseville, California 95678. For financial reporting purposes, the Electric Fund reports a proportionate share of the City’s net OPEB liability. Accordingly, the disclosures and required supplementary information (RSI) have been reported for the Electric Fund as a cost-sharing participant.

Benefits Provided – The Plan provides medical, dental, and vision insurance benefits to eligible retirees and their dependents. Benefits are provided through a third-party insurer, and the full cost of the benefits is covered by the Plan. Benefit provisions are established and may be amended by City labor agreements, which are approved by the City Council.
2024 2023
1% Decrease 5.90% 5.90%
Net Pension Liability 107,734,441 $ $ 71,961,663
Current Discount Rate 6.90% 6.90%
Net Pension Liability $ 78,200,115 $ 74,341,652
1% Increase 7.90% 7.90%
Net Pension Liability $ 53,853,671 $ 35,784,240
37

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 7: POSTEMPLOYMENT BENEFITS (CONTINUED)
Contributions – Contribution requirements of the Electric Fund are established and may be amended by the City Council. The Council established rates based on an actuarially determined rate. For the year ended June 30, 2024 and 2023, the Electric Fund contributed $1,715,212 and $1,306,373 respectively.

OPEB Liability, OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB.

As of June 30, 2024 and 2023, the Electric Fund reported a net OPEB liability of $10,071,000 and $9,778,000 respectively for its proportionate share of the City’s net OPEB liability.

The net OPEB liability of the Plan was measured as of June 30, 2024, and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation as of June 30, 2023. The Electric Fund’s proportion of the Plan’s net OPEB liability was based on the Electric Fund’s fiscal year 2024 contributions to the Plan relative to the total contributions of the City as a whole. The Electric Fund’s proportionate share of the Plan’s net OPEB liability, measured as of June 30, 2024 and 2023, was 13.08 percent 12.43 percent respectively.

For the year ended June 30, 2024 and 2023, the Electric Fund recognized OPEB expense (income) of $10,595 and ($64,627) respectively. At June 30, 2024 and 2023, the Electric Fund 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
Changes in assumptions 479,847 $ 2,333,801 $
Differences between expected and actual experience 1,450,153 2,517,570 Net differences between projected and actual earnings on plan investments - 354,629
Total $ 1,930,000 $ 5,206,000
2024
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Changes in assumptions 758,198 $ 1,981,335 $
Differences between expected and actual experience - 3,527,665 Net differences between projected and actual earnings on plan investments 680,802 -
Total $ 1,439,000 $ 5,509,000
2023
38

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 7: POSTEMPLOYMENT BENEFITS (CONTINUED)
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as an reduction to pension expense for the year ending June 30, 2025 are as follows:

The Electric Fund’s proportion of the City’s total OPEB liability in the June 30, 2023 actuarial valuation was determined using the following actuarial assumptions:

The underlying mortality assumptions and all other actuarial assumptions used in the June 30, 2023, valuation were based on the results of an actuarial experience study for the period of 1997 to 2011. Further details of the Experience Study can be found on the CalPERS website.

In measurement year ended June 30, 2024 and 2023, the discount rate was 6.25 percent and 5.75 percent respectively.

The table below reflects long-term expected real rate of return by asset class for the year ended June 30, 2024 The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

For the Year Ending June 30,
Net Deferred
Outflows/(Inflows)
of Resources
2025 $ (998,521)
2026 (437,194)
2027 (982,456)
2028 (712,633)
2029 (353,399)
Therafter 208,203
Total $ (3,276,000)
Valuation Date June 30, 2023 June 30, 2021
Measurement Date June 30, 2024 June 30, 2023
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.25% 5.75%
Inflation 2.50% 2.50%
Payroll Growth 2.75% 2.75%
Projected Salary Increase 2.75% 2.75%
Investment Rate of Return 6.25% 5.75%
Healthcare cost trend rate
Mortality
Miscellaneous
Entry-Age Normal Cost Method; Level % of pay
Mortality projected fully generational with Scale
MP-2021
Non-Medicare: 7.90% for 2026, decreasing to an
ultimate rate of 3.45% in 2076.

Medicare: 6.28% for 2026, decreasing to an
ultimate rate of 3.45% in 2076.
39

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 7: POSTEMPLOYMENT BENEFITS (CONTINUED)
The table below reflects long-term expected real rate of return by asset class for the year ended June 30, 2023. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geometric rates of return are net of administrative expenses.

A. Discount Rate
The discount rate used to measure the total OPEB liability was 6.25 percent and 5.75 percent as of measurement date of June 30, 2024 and 2023, respectively. The projection of cash flows used to determine the discount rate assumed that contributions will be made at rates equal to the actuarially determined rate. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current active and inactive employees. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.

B. Sensitivity of the Electric Fund’s proportionate share of the Plan’s net OPEB Liability to changes in the discount rate
The following presents the Electric Fund’s proportionate share of the net OPEB liability, calculated using the discount rate for the Plan, as well as what the Electric Fund’s proportionate share of the net OPEB liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Assumed
Asset
Allocation Real Return
Equities 52% 4.56%
Private Equity 5% 7.09%
Fixed Income 33% 0.78%
Private Debt 5% 4.38%
Real Assets 5% 4.03%
Total 100%
Assumed long-term rate of inflation 2.50%
Expected long-term net rate of return, rounded 6.25%
2024
Asset Class
Assumed
Asset
Allocation Real Return
Equities 60% 4.65%
Fixed Income 40% 0.78%
Total 100%
Assumed long-term rate of inflation 2.50%
Expected long-term net rate of return, rounded 5.75%
Asset Class
2023
1% decrease Current 1% increase

5.25% 6.25% 7.25%
Net OPEB Liability $ 13,590,479 $ 10,071,000 $ 6,326,276 2024
40

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 7: POSTEMPLOYMENT BENEFITS (CONTINUED)
C. Sensitivity of the Electric Fund’s proportionate share of the Plan’s net OPEB Liability to changes in the healthcare cost trend rate
The following presents the Electric Fund’s proportionate share of the net OPEB liability, as well as what the Electric Fund’s proportionate share of the net OPEB liability would be if it were calculated using a healthcare cost trend rates that are 1-percentage point lower or 1-percentage point higher than the current healthcare cost trend rate:

OPEB Plan Fiduciary Net Position – Detailed information about the City’s collective net OPEB liability is available in the City’s separately issued Annual Comprehensive Financial Report. The City’s Annual Comprehensive Financial Report may be obtained at www.roseville.ca.us.
1% decrease Current 1% increase

4.75% 5.75% 6.75%
Net OPEB Liability $ 13,633,457 $ 9,778,000 $ 6,652,820 2023
1% decrease 1% decrease 1% decrease
(5.5% (6.5% (7.5%
decreasing to decreasing to decreasing to

2.75%) 3.75%) 4.75%)
Net OPEB Liability $ 6,823,560 $ 10,071,000 $ 12,378,061 2024
1% decrease 1% decrease 1% decrease
(5.5% (6.5% (7.5%
decreasing to decreasing to decreasing to

2.75%) 3.75%) 4.75%)
Net OPEB Liability $ 6,719,255 $ 9,778,000 $ 13,116,802 2023
41

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 8: NORTHERN CALIFORNIA POWER AGENCY (NCPA)
A. General
The City participates in joint ventures through Joint Powers Authorities (JPAs) established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, these JPAs exercise full powers and authorities within the scope of the related Joint Powers Agreement, including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Obligations and liabilities of the JPAs are not those of the City.

Each JPA is governed by a board consisting of representatives from each member agency. Each board controls the operations of its respective JPA, including selection of management and approval of operating budgets, independent of any influence by member agencies beyond their representation on the Board.

The City is a member of NCPA, a joint powers agency which operates under a joint powers agreement among fifteen public agencies. The purpose of NCPA is to use the combined strength of its members to purchase, generate, sell and interchange electric energy and capacity through the acquisition and use of electrical generation and transmission facilities, and to optimize the use of those facilities and the member’s position in the industry. Each agency member has agreed to fund a pro rata share of certain assessments by NCPA and certain members have entered into take-or-pay power supply contracts with NCPA. While NCPA is governed by its members, none of its obligations are those of its members unless expressly assumed by them.

The City receives no income from NCPA, and does not participate in all of its projects. Further, NCPA does not measure or determine the City’s equity in NCPA as a whole. NCPA reports only the City’s share of its General Operating Reserve, comprised of cash and investments, and the City’s share of those Projects in which the City is a participant. These amounts are reflected in the financial statements as Investment in NCPA Reserve.

In the fiscal year ending June 30, 2024, the City had expenses totaling $7,425,716 from resource contracts and the sale of energy generated by NCPA. In contrast, for the fiscal year ending June 30, 2023, the City generated net revenues totaling $7,470,295 from resource contracts and the sale of energy produced by NCPA.

The City’s interest in certain NCPA Projects and Reserve, as computed by NCPA using unaudited information, is set forth below.

The General Operating Reserve (GOR) is an additional operating reserve for non-budgeted items that are contingent or non-specific. Deposits to the GOR include items such as the City’s portion of funds which resulted from the settlement with third parties of issues with financial consequences and reconciliations of prior years’ budgets for programs. It is recognized that all the funds credited to the City are linked to the collection of revenue from the City’s ratepayers, or to the settlement of disputes relating to electric power supply and that the money was collected from the City’s ratepayers to pay power bills. Additionally, the NCPA Commission identified and approved the funding of specific reserves for working capital, accumulated employees post - retirement medical benefits, and billed property taxes for the geothermal project. The Commission also identified a number of contingent liabilities that may or may not be realized, the cost of which in most cases is difficult to estimate at this time. One such contingent liability is the steam field depletion which will require funding to cover debt service and operational costs in excess of the expected value of the electric power. The General Operating Reserve is intended to minimize the number and amount of June 30, 2024 June 30, 2023
General Operation Reserve (included advances) $ 5,008,942 $ 4,461,627 Associated Member Services (including advances) 100,313 92,212 Undivided equity interest, at cost, in certain NCPA Power Projects:

Geothermal Projects 762,998 762,969
Calavera Hydroelectric Project 490,690 490,689
Combustion Turbine Project No. 2 312,742 312,741
Total $ 6,675,685 $ 6,120,238
42

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 8: NORTHERN CALIFORNIA POWER AGENCY (NCPA) (CONTINUED) individual reserves needed for each project, protect NCPA’s financial condition and maintain its credit worthiness.

These funds are available on demand, but the City maintains funds with NCPA as a reserve against these contingencies identified by NCPA.

Members of NCPA may participate in an individual project of NCPA without obligation for any other project. Member assessments collected for one project may not be used to finance other projects of NCPA without the member’s permission.

B. Projects

1. Geothermal Projects
NCPA’s Geothermal Project has experienced a greater than originally anticipated decline in steam production from geothermal wells on its leasehold property. NCPA will continue to monitor the wells while pursuing alternatives for improving and extending reservoir performance, including supplemental water reinjection, plant equipment modifications, and changes in operating methodology. NCPA, along with other steam field operators, has observed a substantial increase in steam production in the vicinity of reinjection wells and is attempting to increase water reinjection at strategic locations. NCPA, together with other steam developers and the Lake County Sanitation District, has completed the construction of a wastewater pipeline project that greatly increased the amount of water available for reinjection.

Based on an internal assessment of the melded costs of power from the Geothermal Project and all other resources available to the members, NCPA believes its members will continue to be able to operate their electric utilities on a competitive basis, when compared to local investor-owned utility rates, while meeting all electric system obligations including those to NCPA. In March 2009, NCPA issued $35,610,000 Geothermal Project Number 3 Revenue Bonds (2009 Series A). The proceeds were used to finance and operate the two NCPA 110 MW geothermal steam powered generating plants, Plant Number 1 and Plant Number 2. In 2012, NCPA issued $12,910,000 Geothermal Project Number 3 Revenue Bonds to facilitate turbine upgrades (2012 Series A) for Plant Number 1. In 2016, NCPA refinanced a portion of the outstanding Geothermal Project Number 3 Revenue Bonds by the issuance of the $17,530,00 Fixed Rate Geothermal Project Number 3 Revenue Bonds (2016 Refunding Series A). The City is obligated to pay its contractual share of 7.883 percent of the operating costs and debt service until it is fully satisfied, regardless of resulting cost or availability of energy. At June 30, 2024, the book value of this Project’s plant, equipment and other assets was $140,753,000 while its long-term debt totaled $3,425,000 and other liabilities totaled $127,654,794. The City’s share of the Project’s long-term debt amounted to $269,993 at that date. At June 30, 2023, the book value of this Project’s plant, equipment and other assets was $131,814,266 while its longterm debt totaled $6,785,000 and other liabilities totaled $115,356,060. The City’s share of the Project’s long-term debt amounted to $534,862 at that date.

Page 1211 of 2438 ends

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 8: NORTHERN CALIFORNIA POWER AGENCY (NCPA) (CONTINUED)

2. Calaveras Hydroelectric Project
In July 1981, NCPA agreed with Calaveras County Water District to purchase the output of the North Fork Stanislaus River Hydroelectric Development Project and to finance its construction. Debt service payments to NCPA began in February 1990 when the project was declared substantially complete and power was delivered to the participants.

Under its power purchase agreement with NCPA, the City is obligated to pay 12 percent of this Project’s debt service and operating costs. In March 2018, NCPA refunded a portion of the outstanding Revenue Bonds with the $70,215,000 2018 Hydroelectric Project Number One Revenue Bonds. The City’s share of the 2018 bonds is

4.586 percent. In April 2019, NCPA refunded a portion of the outstanding Revenue Bonds with the $39,250,000 2019 Hydroelectric Project Number One Revenue Bonds. In April 2022, NCPA refunded a portion of the outstanding Revenue Bonds with the $132,310,000 2022 Hydroelectric Project Number One Revenue Bonds. As of June 30, 2024, the balance of the 2019 Hydroelectric Project Number One Revenue Bonds was fully paid. At June 30, 2024, the book value of this Project’s plant, equipment and other assets was $222,953,000, while its long-term debt totaled $174,117,786, and other liabilities totaled $44,746,139. The City’s share of the Project’s long-term debt amounted to $19,838,010 at that date. At June 30, 2023, the book value of this Project’s plant, equipment and other assets was $250,743,387, while its long-term debt totaled $203,500,748, and other liabilities totaled $43,153,564. The City’s share of the Project’s long-term debt amounted to $21,502,287 at that date.

3. Combustion Turbine Project No. 2 (Steam Injected Gas Turbine Project) The City is a participant in a 49.8 megawatt Steam Injected Gas Turbine project which was built under turnkey contract near the City of Lodi and declared substantially complete on April 23, 1996. In October 1992, NCPA issued $152,320,000 of Multiple Capital Facilities Revenue Bonds to finance this project. In January 2010, NCPA refinanced the outstanding Capital Facilities Revenue Bonds by the issuance of the $55,120,000 Capital Facilities Revenue Bonds Series A (2010 Refunding Series A). In December 2019, NCPA refinanced the outstanding Capital Facilities Revenue Bonds by the issuance of the $20,450,000 Capital Facilities Revenue Bonds Series A (2019 Refunding Series A).Under the NCPA power purchase agreement, the City is obligated to pay 36.50 percent of the debt service and operating costs for the Lodi unit.

The City’s participation in procurement of natural gas for fuel for existing and new combustion turbine units was approved in 1993. Although there is currently no additional debt financing, the City and NCPA have committed to long-term payments for gas transmission pipeline capacity, and entered a purchase contract for natural gas. The City is obligated to pay 17.9218 percent of the natural gas purchase contract.

At June 30, 2024, the book value of this Project’s plant, equipment and other assets was $11,656,000, while its long-term debt totaled $4,977,567 and other liabilities totaled $5,821,605. The City’s share of the Project’s longterm debt amounted to $1,816,812 at that date. At June 30, 2023, the book value of this Project’s plant, equipment and other assets was $14,075,998, while its long-term debt totaled $9,909,721 and other liabilities totaled $3,317,441. The City’s share of the Project’s long-term debt amounted to $3,614,131 at that date.

C. NCPA Financial Information
NCPA’s financial statements can be obtained from NCPA, 651 Commerce Drive, Roseville, California 95678.

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 9: RISK MANAGEMENT
The Electric Fund, as a Fund of the City, is included in the City’s risk management program. The City manages risk of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters by participating in the public entity risk pools described below and by retaining certain risks.

Public entity risk pools are formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member agencies. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by member agencies beyond their representation on that board. Obligations and liabilities of these risk pools are not the City’s responsibility.

The contributions made to the risk pools below equal the ratio of the respective member payrolls to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.

A. Risk Coverage
General Liability, Property and Boiler and Machinery
The City is a member of the California Joint Powers Risk Management Authority (CJPRMA) which covers general liability claims, property, and boiler and machinery losses. Once the City’s self-insured retention (SIR) is met, CJPRMA becomes responsible for payment of all claims up to the limit. Financial statements for the risk pool and more information may be obtained from CJPRMA, 3201 Doolan Road, Suite 285, Livermore, California 94551.

General Liability Coverage
The City has a self-insured retention (SIR) of $1,000,000 per claim up to a $40,000,000 limit.

Property Coverage
CJPRMA has purchased commercial insurance against property damage, boiler machinery claims. The City has a SIR of $250,000 per claim up to a $400,000,000 limit.

Roseville Energy Park Property Coverage
The City purchased commercial property insurance specifically to cover the Roseville Energy Park. The City has a SIR of $250,000 per claim up to a $200,000,000 limit.

Fiduciary Coverage
The City purchased fiduciary insurance specifically to cover the OPEB Trust. The SIR is $25,000 per claim up to a $3,000,000 limit.

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CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 9: RISK MANAGEMENT (CONTINUED)
Workers’ Compensation
The City is also a member of the Local Agency Workers’ Compensation Excess Joint Powers Authority (LAWCX), which covers workers’ compensation claims up to $5,000,000 and has excess coverage through CSAC-EIA up to the statutory limit. The City has a SIR of $500,000 per claim.

Financial statements for the risk pool and more information may be obtained from LAWCX, 1750 Creekside Oaks Drive, Suite 200, Sacramento, California 95833.

Claims have not exceeded coverage at any time in the last three years.

NOTE 10: CONTINGENT LIABILITIES
A. NCPA, Transmission Agency of Northern California and Western Area Power Administration Under the terms of its NCPA joint venture agreement, the City is contingently liable for a portion of the bonded indebtedness issued by these agencies under take-or-pay or similar agreements, as discussed in Note 8. The City’s estimated share of such debt outstanding at June 30, 2024 and 2023, was $21,924,815 and $25,651,279, respectively. Under certain circumstances, the City may also be responsible for a portion of the costs of operating these entities. Under certain circumstances, such as default or bankruptcy of other participants, the City may also be liable to pay a portion of the debt of these joint ventures on behalf of the other participants.

The City is a member of the Transmission Agency of Northern California (TANC), a joint powers agency. The City is entitled to 2.1119 percent of TANC’s share of transfer capability in the California-Oregon Transmission Project (approximately 29.35MW). The City is responsible for a share of debt service on debt issued by TANC under a take-or-pay agreement, approximately $350,000 annually through 2039. The City’s estimated share of debt outstanding at June 30, 2024 and 2023 was $3,641,409 and $3,776,850 respectively.

In addition, the City has a long-term obligation to the United States Department of Energy, Western Area Power Administration, for 4.85333 percent of the output of the Central Valley Project, California. This contract, also known as the Western Base Resource, obligates the City to make payments on a “take-or-pay” basis through December 31, 2024. The City expects to pay approximately $3.25 million annually for the term of this contract. The City receives approximately 155,000 MWh of energy per year under average hydro and storage conditions.

B. Federal and State Grant Programs
The City participates in Federal and State grant programs. These programs have been audited by the City’s independent accountants in accordance with the provisions of the federal Single Audit Act as amended and applicable State requirements. No cost disallowances were proposed as a result of these audits; however, these programs are still subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

C. Litigation
The City is subject to litigation arising in the normal course of business. In the opinion of the City Attorney there is no pending litigation, other than disclosed above, which is likely to have a material adverse effect on the financial position of the City.

Page 1214 of 2438 ends

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2024 and 2023
NOTE 10: CONTINGENT LIABILITIES (CONTINUED)
D. Other Commitments
The Electric Fund had the following outstanding significant commitments at June 30, 2024 and 2023:

NOTE 11: SUBSEQUENT EVENTS
On November 1, 2024, the Electric Fund took title to two General Electric TM2500 combustion turbine generators (the “Units”) from the California Department of Water Resources (CDWR). These Units, which were installed by CDWR at the Roseville Energy Park in 2021 to enhance grid reliability, were part of the State of California’s response to projected energy supply challenges amid climate-driven emergencies. The net book value of these units and associated equipment was approximately $71.6 million as of the transfer date. With immediate ownership, the Electric Fund anticipates leveraging the capacity and energy from the Units to benefit its customers, including reducing reliance on other generation sources during high-demand months. 2024 2023
Amount Amount
Projects (in millions) (in millions)
Purchase Contracts:

Roseville Energy park long-term service agreement $ 26.4 $ 29.0 Net power purchase contracts 4.8 6.8
Natural gas forward obligation 38.7 49.3
Renewable power purchase obligations 7.6 15.1
Advanced metering infrastructure - 4.0
SWAP Contracts:

Forward Contract, Power (1) 4.3 (2.8)
Forward Contract, Natural Gas (1) 5.3 1.4
(1) The City enters into contracts to hedge its exposure to power and natural gas price fluctuations and to procure energy supplies. These forward contracts for both power and natural gas are intended to stabilize future costs and reduce the impact of market volatility. The net fair value of these contracts represents the difference between the contract price and the prevailing market price as of the reporting date. Net fair values are estimated by comparing contract prices to forward market prices quoted by third party market participants or provided in relevant industry publications. A negative net fair value indicates a favorable market condition.

Conversely, a positive net fair value represents an unfavorable market condition. 47

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REQUIRED SUPPLEMENTARY INFORMATION
48

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CITY OF ROSEVILLE ELECTRIC FUND
Schedule of Pension Contributions
City's Miscellaneous Plan Net Pension Liability
As of June 30, for the Last Ten Fiscal Years
2015 2016 2017 2018
Measurement date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Proportion of the City's miscellaneous plan 21.27% 21.27% 15.10% 24.20% net pension liability
Proportionate share of the City's miscellaneous plan 35,340,103 $ 37,644,806 $ 45,137,479 $ 55,319,523 $ net pension liability
Covered payroll $ 15,098,184 14,222,485 $ 16,397,168 $ 19,055,633 $ Proportionate share of the net pension liability as a
percentage of covered payroll 248.48% 249.33% 275.28% 290.31% Miscellaneous plan fiduciary net position as a
percentage of the total pension liability 67.62% 66.97% 63.89% 63.85% 49

Page 1217 of 2438 ends

2019 2020 2021 2022 2023 2024
6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023

24.80% 25.60% 25.93% 24.58% 24.07% 23.95%
$ 63,291,847 58,193,004 $ 68,619,020 $ 47,478,679 $ 74,341,652 $ 78,200,115 $ $ 20,288,169 19,169,023 $ 20,586,805 $ 22,270,720 $ 21,355,722 $ 22,445,040 $ 303.58% 311.96% 333.32% 213.19% 348.11% 348.41%

65.21% 65.09% 64.55% 75.39% 63.82% 63.92%
50

Page 1218 of 2438 ends

CITY OF ROSEVILLE ELECTRIC FUND
Schedule of Pension Contributions
As of June 30, for the Last Ten Fiscal Years
2015 2016 2017 2018
Valuation Date June 30, 2013 June 30, 2014 June 30, 2015 June 30, 2016 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Actuarial Determined Contribution $ 3,884,489 3,375,790 $ 4,699,119 $ $ 4,463,913 (3,884,489) (3,375,790) (4,699,119) (4,463,913)
$ - $ - $ - $ -
Covered payroll $ 16,397,168 15,098,184 $ 19,055,633 $ $ 19,169,023 Contributions as a percentage of covered payroll 22.36% 23.69% 24.66% 23.29% Notes to Schedule:

Valuation date
Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality
Entry age normal cost method
Level percentage of pay, a summary of the current policy is provided in the table below:

Contribution in relation to the Actuarially Determined Contribution All other actuarial assumptions used in the June 30, 2019 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report may be accessed on the CalPERS website at www.calpers.ca.gov under Forms and Publications.

The mortality table used was developed based on CalPERS’ specific data. The table includes 15 years of mortality improvements using 90 percent of Society of Actuaries' Scale 2016. For more details on this table, please refer to the 2017 experience study report. **Historical information is required only for measurement periods for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.

2.75%

7.00%, net of pension plan investment expenses, including inflation.

Varies by Entry Age and Service
Market Value

2.50%
Contribution Deficiency (Excess)
June 30, 2022
51

Page 1219 of 2438 ends

2019 2020 2021 2022 2023 2024
June 30, 2017 June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Miscellaneous Miscellaneous $ 5,112,952 $ 5,888,148 $ 7,058,610 $ 7,457,891 $ 8,057,403 $ 8,644,684 (5,112,952) (5,888,148) (7,058,610) (7,457,891) (8,057,403) (8,644,684) $ - $ - $ - $ - $ - $ -
$ 20,288,169 $ 20,586,805 $ 22,270,720 $ 21,355,722 $ 22,445,040 $ 23,606,035

25.20% 28.60% 31.69% 34.92% 35.90% 36.62%
52

Page 1220 of 2438 ends

CITY OF ROSEVILLE ELECTRIC FUND
Schedule of the Electric Fund's
Proportionate Share of the City’s Net OPEB Liability
Last Ten Years**
2018 2019 2020
Measurement Date June 30, 2018 June 30, 2019 June 30, 2020 Proportion of the City's miscellaneous plan 11.11% 13.43% 12.18% net OPEB liability
Proportionate share of City's miscellaneous plans $ 15,897,000 $ 18,900,000 $ 14,134,000 net OPEB liability
Covered payroll $ 13,336,246 $ 17,651,501 $ 20,586,805
Proportionate share of net OPEB liability as a 119.20% 107.07% 68.66% percentage of covered payroll
Miscellaneous plan fiduciary net position as a 37.07% 41.04% 48.58% percentage of the total OPEB liability
** 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. 53

Page 1221 of 2438 ends

2021 2022 2023 2024
June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024

11.72% 12.45% 12.43% 13.08%
$ 10,427,000 11,681,000 $ 9,778,000 $ 10,071,000 $
$ 21,355,722 22,270,720 $ 22,445,040 $ 23,606,877 $

52.45% 48.83% 43.56% 42.66%

58.95% 60.73% 64.17% 68.43%
54

Page 1222 of 2438 ends

CITY OF ROSEVILLE ELECTRIC FUND
Schedule of OPEB Contributions
Last Ten Years**
2018 2019 2020
Valuation Date June 30, 2017 June 30, 2017 June 30, 2019 $ 2,079,000 2,016,000 $ 2,224,000 $
(2,016,000) (2,079,000) (2,224,000)
$ - - $ - $
$ 17,651,501 13,336,246 $ 20,586,805 $

15.12% 11.78% 10.80%
Notes to Schedule:

Methods and assumptions used to determine contributions:

Most Recent Valuation Date June 30, 2023
Actuarial Cost Method
Amortization Method
Asset Valuation Method
Inflation
Salary Increase
Discount rate
Mortality
Contribution Deficiency (Excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll Actuarially Determined Contribution
Level percent of pay
Contribution in Relation to the Actuarially Determined Contributions ** 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.

Entry Age Normal, level percent of payroll
Investment gains and losses spread over 5 year rolling period Derived using CalPERS membership data

5.75%

2.50%
Aggregate of 2.75%
55

Page 1223 of 2438 ends

2021 2022 2023 2024
June 30, 2019 June 30, 2021 June 30, 2021 June 30, 2023 $ 1,936,000 2,286,000 $ 1,602,000 $ 1,375,231 $
(2,286,000) (1,936,000) (1,602,000) (1,375,231)
$ - $ - $ - $ -
$ 21,355,722 22,270,720 $ 22,445,040 $ 23,606,877 $

10.26% 9.07% 7.14% 5.83%
56

Page 1224 of 2438 ends

LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements Electric Fund (the “Fund”) of the City of Roseville, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Fund’s basic financial statements, and have issued our report thereon dated March 18, 2025.

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

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

Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether Fund’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.

However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards.

Page 1225 of 2438 ends

To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
March 18, 2025

Page 1226 of 2438 ends

LSLCPAS.COM
March 18, 2025
To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
We have audited the financial statements of the Electric Fund (the “Fund”) of the Roseville, California, (the “City”) for the year ended June 30, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated March 18, 2025.

Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by Fund are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2023-2024. We noted no transactions entered into by the Fund during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the Fund’s financial statements were:

Management’s estimates of the pension and other postemployment benefits are based on actuarial valuations. We evaluated the methods, assumptions, and data used to develop the pension and other postemployment benefits in determining that it is reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management.

Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.

Page 1227 of 2438 ends

To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated March 18, 2025.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the Fund’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the Fund’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to management’s discussion and analysis and the required pension and other postemployment benefits schedules, which are required supplementary information (“RSI”) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

Future GASB Pronouncements
The following Government Accounting Standards Board (GASB) pronouncements will be effective for the following fiscal years’ audits and should be reviewed for proper implementation by management:

Fiscal Year 2024-2025
GASB Statement No. 101, Compensated Absences.

GASB Statement No. 102, Certain Risk Disclosures.

Fiscal Year 2025-2026
GASB Statement No. 103, Financial Reporting Model Improvements.

GASB Statement No. 104, Disclosure of Certain Capital Assets.

Page 1228 of 2438 ends

To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California
Future Projects
Comprehensive Project, Revenue and Expense Recognition.

Major Project, Going Concern Uncertainties and Severe Financial Stress.

Major Project, Infrastructure Assets.

Practice Issue, Classification of Nonfinancial Assets.

Practice Issue, Risks and Uncertainties Disclosures.

Practice Issue, Subsequent Events.

Restriction on Use
This information is intended solely for the information and use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

LSL, LLP

Page 1229 of 2438 ends

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CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Statement of Fiduciary Net Position
June 30, 2024
Assets:

Investments:

Money market funds $ 1,064,093
Equity funds 88,514,417
Fixed income security funds 56,644,410
Real estate investment partnership 12,195,365
Cash equivalents 626,724
Receivables:

Accounts 220,364
Total Assets 159,265,373
Liabilities:

Accounts payable 5,705
Total Liabilities 5,705
Net Position:

Net Position restricted for postemployment benefits other than pensions 159,259,668 Total Net Position $ 159,259,668
See Notes to Financial Statements.
4

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CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Statement of Changes in Fiduciary Net Position
For the Fiscal Year Ended June 30, 2024
Additions:

Employer contributions $ 10,315,668
Investment income 17,394,918
Miscellaneous 47,045
Total Additions 27,757,631
Deductions:

Retiree health plan benefit payments 9,348,549
Contract services 25,317
Total Deductions 9,373,866
Net increase in fiduciary net position 18,383,765
Net position restricted for postemployement benefits other than pensions Beginning of the Year 140,875,903
End of the Year $ 159,259,668
See Notes to Financial Statements.
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5(48,5('6833/(0(17$5<,1)250$7,21
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CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Schedule of Changes in the City’s Net OPEB Liability and Related Ratios Last Ten Years**
2017 2018 2019
Measurement Date June 30, 2018 June 30, 2018 June 30, 2019 Total OPEB Liability
Service cost $ 6 6,814,000 $ 6,021,000 ,665,000 $
Interest on the total OPEB liability 14,435,000 15,256,000 14,291,000 Differences between expected and actual experiences (29,958,000) - - Changes in assumptions 11,123,000 - -
Benefit payments, including refunds of employee contributions (8 ( ,475,000) (8,550,000) 8,449,000) Net change in total OPEB liability 12,774,000 (5 11,762,000 ,363,000) Total OPEB liability - beginning 219,497,000 232,271,000 226,908,000 Total OPEB liability - ending (a) 232,271,000 238,670,000 226,908,000 Plan Fiduciary Net Position
Contributions - employer 12,129,300 14,213,477 15,342,178 Miscellaneous revenue - - 69,429
Net investment income 6,832,238 5,902,312 7,122,750
Benefit payments ( (6,886,960) 8,449,000) (8,550,000)
Administrative expenses (183,025) (210,775) (144,591)
Net change in plan fiduciary net position 11,891,553 11,456,014 13,839,766 Plan fiduciary net position - beginning 60,772,073 72,663,626 84,119,640 Plan fiduciary net position - ending (b) 72,663,626 84,119,640 97,959,406 Net OPEB Liability/(Assets) - ending (a) - (b) $ 159,607,374 $ 142,788,360 $ 140,710,594 Plan fiduciary net position as a percentage of the total OPEB liability 31.28% 37.07% 41.04% Covered-employee payroll $ 101,578,000 $ 106,770,729 $ 108,508,739 Net OPEB liability as a percentage of covered-employee payroll 157.13% 133.73% 129.68% Notes to Schedule:
** Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2017 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.

Changes in assumptions: None
Changes of benefit terms: None
13

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2020 2021 2022 2023 2024
June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 $ 5 5,701,000 $ 5 ,414,588 $ 5 ,759,625 $ 5 ,143,281 $ ,284,721 14,961,000 14,588,405 14,125,117 12 12,237,069 ,595,833 - (17,999,000) (21,544,252) - 12 ,744,845
7 (5,591,000) (17,673,776) ,744,727 - (5 ,911,337)
( (9,988,000) (10,649,042) 10,333,464) ( ( 11,021,257) 11,543,549) (12,916,000) (29,519,040) 16,950,968 6,359,093 13,170,513 225,754,000 238,670,000 242,704,968 213,185,928 219,545,021 242,704,968 225,754,000 213,185,928 219,545,021 232,715,534 16,425,867 15,400,470 15,353,152 12 11,961,366 ,510,667 - - - - -
5,318,871 (18,288,504) 28,457,424 17 10,511,924 ,394,919 ( (9,988,000) (10,649,042) 10,333,464) ( ( 11,021,257) 11,543,549) (81,197) (34,934) (75,790) (40,389) (59)
11,721,804 (13,612,866) 33,395,915 18 11,411,644 ,361,978 97,959,406 143,077,125 109,681,210 129,464,259 140,875,903 143,077,125 109,681,210 129,464,259 140,875,903 159,237,881 $ 116,072,790 $ 99,627,843 $ 83,721,669 $ 7 78,669,118 $ 3,477,653

48.58% 58.95% 60.73% 64.17% 68.43%
$ 107,995,767 $ 115,547,480 $ 128,628,850 $ 142,721,264 $ 154,106,009 107.48% 86.22% 65.09% 55.12% 47.68%
14

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CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Schedule of Employer Contributions
Last Ten Years**
2017 2018 2019 2020
Valuation Date June 30, 2015 June 30, 2017 June 30, 2017 June 30, 2019 $ 15,132,000 16,740,000 $ 15,342,000 $ 13,739,000 $
(14, (12,129,300) (15,226,000) 213,000) (16,485,000)
$ 4,610,700 $ 116,000 919,000 $ (2,746,000) $
$ 106,770,729 101,578,000 $ 108,508,739 $ 107,995,767 $

11.94% 13.31% 14.03% 15.26%
Notes to Schedule:

Methods and assumptions used to determine contributions:

Most Recent Valuation Date June 30, 2023
Actuarial Cost Method Entry Age Normal, level percent of payroll Amortization Method Level percent of pay
Asset Valuation Method Investment gains and losses spread over 5 year rolling period Inflation 3.00% 2.75% 2.75% 2.75%
Salary Increase 3.25% CPI plus
merit increases

3.00% CPI plus
merit increases

3.00% CPI plus
merit increases
Investment rate of return 6.50% 6.25% 6.25% 6.25%
Tiers
CalPERS Hire
Age
Estimated
Retirement Age
Retirement age Misc. 32.9 57.9
Police 25.7 54.0
Fire 26.7 55.6
Misc. 36.6 60.9
Police 27.1 56.8
Fire 27.0 57.6
Mortality CalPERS 1997-2015 Mortality Tables with Scale MP-2021 Contribution Deficiency (Excess)
Covered-employee payroll
Contributions as a percentage of covered-employee payroll Actuarially Determined Contribution
Contribution in Relation to the Actuarially Determined Contributions ** Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2017 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available. 15

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2021 2022 2023 2024
June 30, 2019 June 30, 2021 June 30, 2021 June 30, 2023 $ 10,687,000 14,026,000 $ 10,591,000 $ 10,514,000 $
(15,400,470) (15,353,152) (11,961,366) (12,510,667)
$ ( (1,327,152) $ (1, 4,713,470) $ (1, 370,366) $ 996,667) $ 128,628,850 115,547,480 $ 142,721,264 $ 154,106,009 $

13.29% 11.97% 8.38% 8.12%

2.75% 2.50% 2.50% 2.50%

3.00% CPI plus
merit increases

2.75% CPI plus
merit increases

6.00% 5.75% 5.75% 5.75%
16

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CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Schedule of Investment Returns
Last Ten Years**
2017 2018 2019 2020

2.05% 8.07% 6.93% 5.75%
Notes to Schedule:

Fiscal year 2017 was the first year of implementation, therfore only eight years are shown.

Annual money weighted rate of return, net investment expense 17

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2021 2022 2023 2024

25.81% -12.28% 7.94% 12.08%
18

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LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Mayor and Members of the City Council
City of Roseville, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements Other Post-Employment Benefit Trust (OPEB Trust) of the City of Roseville, California (the “City”), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the OPEB Trust’s basic financial statements, and have issued our report thereon dated April 23, 2025.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether OPEB Trust’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.

Page 1251 of 2438 ends

To the Honorable Mayor and Members of the City Council
City of Roseville, California
Purpose of This Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose.

Irvine, California
April 23, 2025

Page 1252 of 2438 ends

LSLCPAS.COM
April 23, 2025
To the Honorable Mayor and Members of the City Council
City of Roseville, California
We have audited the financial statements of the Roseville Other Post-Employment Benefit Trust Fund (OPEB Trust) for the year ended June 30, 2024. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated April 18, 2024.

Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the OPEB Trust are described in Note 1 to the financial statements. No new accounting policies were adopted and the application of existing policies was not changed during 2023-2024. We noted no transactions entered into by the OPEB Trust during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimate affecting the OPEB Trust’s financial statements was:

Management’s estimates of the other postemployment benefits are based on an actuarial valuation.

We evaluated the methods, assumptions, and data used to develop the other postemployment benefits in determining that it is reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

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To the Honorable Mayor and Members of the City Council
City of Roseville, California
Management Representations
We have requested certain representations from management that are included in the management representation letter dated April 23, 2025.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the OPEB Trust’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the OPEB Trust’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters
We applied certain limited procedures to the other postemployment benefits schedules, which are required supplementary information (“RSI”) that supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

Fiscal Year 2024-2025
GASB Statement No. 101, Compensated Absences.

GASB Statement No. 102, Certain Risk Disclosures.

Fiscal Year 2025-2026
GASB Statement No. 103, Financial Reporting Model Improvements.

GASB Statement No. 104, Disclosure of Certain Capital Assets.

Future Projects
Comprehensive Project, Revenue and Expense Recognition.

Major Project, Going Concern Uncertainties and Severe Financial Stress.

Major Project, Infrastructure Assets.

Practice Issue, Classification of Nonfinancial Assets.

Page 1254 of 2438 ends

To the Honorable Mayor and Members of the City Council
City of Roseville, California
Practice Issue, Risks and Uncertainties Disclosures.

Practice Issue, Subsequent Events.

Restriction on Use
This information is intended solely for the information and use of the City Council, specific to the OPEB Trust and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

Very truly yours,

Page 1255 of 2438 ends

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
(A COMPONENT UNIT OF THE CITY OF ROSEVILLE, CALIFORNIA) FOR THE YEAR ENDED JUNE 30, 2024 BASIC FINANCIAL STATEMENTS

Page 1256 of 2438 ends

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
(A COMPONENT UNIT OF THE CITY OF ROSEVILLE, CALIFORNIA) Basic Financial Statements
For the Year Ended June 30, 2024

Page 1257 of 2438 ends

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
(A COMPONENT UNIT OF THE CITY OF ROSEVILLE, CALIFORNIA) Basic Financial Statements
For the Year Ended June 30, 2024
Table of Contents
Page
Independent Auditors’ Report ........................................................................................................................................ 1 Basic Financial Statements
Statement of Net Position ........................................................................................................................................... 4 Statement of Revenues, Expenses and Changes in Net Position ............................................................................ 5 Statement of Cash Flows ........................................................................................................................................... 6 Notes to Financial Statements ....................................................................................................................................... 7 Independent Auditors’ Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ............................................................................... 15

Page 1258 of 2438 ends

LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Board of Directors
Roseville Natural Gas Financing Authority
Roseville, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the Roseville Natural Gas Financing Authority (the “Authority”), a component unit of the City of Roseville, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the Authority, as of June 30, 2024, and the changes in financial position, and cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.

Emphasis of Matter
As discussed in Note 1, the financial statements present only the Roseville Natural Gas Financing Authority fund, an enterprise fund of the City, and do not purport to, and do not present fairly the financial position of the City, as of June 30, 2024, the change in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Page 1259 of 2438 ends

To the Board of Directors
Roseville Natural Gas Financing Authority
Roseville, California
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
x Exercise professional judgment and maintain professional skepticism throughout the audit. x Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Authority’s internal control. Accordingly, no such opinion is expressed. x Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.

Required Supplementary Information
Management has omitted the management’s discussion and analysis that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial statements. Such missing information, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information. 2

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To the Board of Directors
Roseville Natural Gas Financing Authority
Roseville, California
Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated April 23, 2025, on our consideration of the City’s internal control over the Authority’s financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over the Authority’s financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over the Authority’s financial reporting and compliance.

Irvine, California
April 23, 2025
3

Page 1261 of 2438 ends

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Statement of Net Position
June 30, 2024
Assets:

Current:

Restricted investments with fiscal agents $ 7,242,970
Total Current Assets 7,242,970
Noncurrent:

Prepaid purchased gas 61,251,875
Derivative instruments - fair value 27,384,851
Total Noncurrent Assets 88,636,726
Total Assets 95,879,696
Liabilities:

Current:

Accounts payable 15,068
Accrued interest payable 1,119,281
Deposits payable 2,381,755
Due to City funds 447,403
Revenue bonds - current 13,865,000
Total Current Liabilities 17,828,507
Noncurrent:

Revenue bonds 48,037,731
Total Noncurrent Liabilities 48,037,731
Total Liabilities 65,866,238
Deferred Inflows of Resources:

Accumulated increase in fair value of hedging derivatives 27,384,851 Total Deferred Inflows of Resources 27,384,851
Net Position:

Restricted for debt service 7,242,970
Unrestricted (4,614,363)
Total Net Position $ 2,628,607
See Notes to Financial Statements.
4

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Statement of Revenues, Expenses
and Changes in Net Position
Year Ended June 30, 2024
Operating Revenues:

Gas supply revenue $ 16,565,863
Total Operating Revenues 16,565,863
Operating Expenses:

Natural gas purchases 17,436,112
Administration 7,377
Total Operating Expenses 17,443,489
Operating Income (loss) (877,626)
Nonoperating Revenues (Expenses):

Interest revenue (loss) 3,862,415
Interest, fiscal charges (expense), and amortization (3,398,583) Total Nonoperating
Revenues (Expenses) 463,832
Changes in Net Position (413,794)
Total Net Position - Beginning 3,042,401
Total Net Position - Ending $ 2,628,607
See Notes to Financial Statements.
5

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Statement of Cash Flows
Year Ended June 30, 2024
Cash Flows from Operating Activities:

Cash received from customers $ 17,005,863
Cash paid to suppliers (2,790,675)
Cash paid to employees for salaries and benefits (246,657) Net Cash Provided by Operating Activities 13,968,531
Cash Flows from Non-Capital
Financing Activities:

Transfers from City for short-term borrowings 258,273
Net Cash Used by
Non-Capital Financing Activities 258,273
Cash Flows from Capital
and Related Financing Activities:

Principal paid on long term debt (13,155,000)
Interest paid on long term debt (4,134,493)
Net Cash Provided (Used) by
Capital and Related Financing Activities (17,289,493)
Cash Flows from Investing Activities:

Interest received 3,862,415
Net Cash Provided by
Investing Activities 3,862,415
Net Increase (Decrease) in Cash
and Cash Equivalents 799,726
Cash and Cash Equivalents at Beginning of Year 6,443,244 Cash and Cash Equivalents at End of Year $ 7,242,970
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:

Operating Income (loss) $ (877,626)
Adjustments to Reconcile Operating Loss
Net Cash Provided by Operating Activities:
(Increase) decrease in prepaid expense 14,645,945
Increase (decrease) in accounts payable 6,869
Increase (decrease) in accrued liabilities (246,657)
Increase (decrease) in deposits payable 440,000
Total Adjustments 14,846,157
Net Cash Provided by
Operating Activities $ 13,968,531
Non-Cash Investing and Financing Activities:

Change in the fair value of derivatives $ 33,312,145
Amortization of bond premium (735,910)
See Notes to Financial Statements.
6

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Organization and Purpose
The Roseville Natural Gas Financing Authority (Authority) is a Joint Exercise Powers Agency created on December 6, 2006, for the purpose of acquiring, financing and supplying natural gas to the City of Roseville (City).

The members of the Authority are the City and the Successor Agency of the former City of Roseville Redevelopment Agency (Successor Agency), a fiduciary fund of the City. The City is governed by a five member City Council. City Council serves as the governing body of the Authority and officers of the Authority are employees of the City. The Authority is a blended component unit of the City as it has substantively the same governing body and a financial burden/benefit relationship exists between the City and the authority.

The Authority is an integral part of the City and, accordingly, the accompanying financial statements are included as a component unit of the basic financial statements of the City. The accounting records of the Authority are maintained by the City.

These financial statements present only the activities of the Authority and are not intended to present the financial position of the City, or the results of its operations. The financial statements of the Authority are included as an enterprise fund in the City’s financial statements.

B. Measurement Focus and Basis of Accounting
The Authority's basic financial statements are prepared in conformity with accounting principles generally accepted in the United States of America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

The Authority reports its activities in an enterprise fund for financial statement purposes. Enterprise funds are used to account for operations that are financed and operated in a manner similar to private business enterprises, where the intent of the governing body is the costs and expenses, including depreciation, of providing goods or services to the general public to recover through user charges.

The accrual basis of accounting is used whereby all assets, deferred outflows/inflows of resources and liabilities of the enterprise are recorded on its Statement of Net Position, and all revenues are recognized when earned and all expenses, including depreciation, are recognized when incurred.

The Authority distinguishes operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with the Authority’s operations. The principal operating revenue of the Authority is gas supply revenue. The principal operating expense of the Authority is natural gas purchases. Non-operating revenues and expenses consist of those revenues and expenses that are related to financing and investing activities and result from non-exchange transactions or ancillary activities. The principal non-operating revenue is interest revenue, and the principal non-operating expense is interest and fiscal charges related to the Authority’s outstanding long-term liabilities.

When both restricted and unrestricted resources are available for use, it is the Authority’s policy to use restricted resources first.

C. Cash and Cash Equivalents
Cash and investments with original maturities of three months or less are treated as cash and equivalents for the purpose of preparing the statement of cash flows. The Authority’s portion of the City’s overall cash and investment pool is treated as cash and equivalents since this amount is in substance a demand deposit. 7

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) D. Deferred Inflows of Resources
In addition to liabilities, the statement of net position will sometimes report a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The Authority only has one item that qualifies for reporting in this category.

It is the accumulated increase in the fair value of hedging derivatives. An accumulated increase in the fair value of hedging derivatives is equal to the fair value of the associated derivative instrument so long as the instrument is deemed an effective hedge.

E. Net Position
Net Position is the excess of all the Authority's assets over all its liabilities and deferred inflows of resources.

Restricted for debt service represents the portion of net position held in reserve in the event other resources of the Authority are not adequate to make required debt services payments.

Unrestricted describes the portion of net position which is not legally or contractually restricted as to use.

F. Fair Value Measurement
The Authority categorizes the fair value measurements of its investments based on the hierarchy established by generally accepted accounting principles. The fair value hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The Authority’s forward purchase agreement with Wells Fargo Bank is measured using Level 3 inputs, which requires verification from an outside party to validate the valuation.

G. Use of Estimates
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

H. New Accounting Standards Implemented
The following Government Accounting Standards Board (GASB) pronouncement was effective for the fiscal year ended June 30, 2024:

1. GASB Statement No. 100, Accounting Changes and Error Corrections The requirements of this Statement will improve the clarity of the accounting and financial reporting requirements for accounting changes and error corrections, which will result in greater consistency in application in practice. In turn, more understandable, reliable, relevant, consistent, and comparable information will be provided to financial statement users for making decisions or assessing accountability. In addition, the display and note disclosure requirements will result in more consistent, decision useful, understandable, and comprehensive information for users about accounting changes and error corrections. 8

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 2: CASH AND INVESTMENTS
Cash and Investment Composition
The Authority is a participant in the City-wide cash and investment pool (City Pool). The City Pool is an investment pool, is not rated and is not registered with the Securities Exchange Commission (SEC). The Assistant City Manager/Chief Financial Officer conducts City Pool oversight. Investments in the City Pool at June 30, 2023, are stated at fair value. The City Pool values participant shares on an amortized cost basis during the year and adjusts to fair value at year-end. The fair value adjustment at June 30, 2024 decreased the Authority’s investment income by $1,373.

As of June 30, 2024, the Trustee was holding cash and investments totaling $7,242,970 pursuant to the terms of the Gas Revenue Bonds, Series 2007 Indenture. These cash and investments consisted of $3,020,212 invested mainly in First American Treasury Obligation Fund and California Arbitrage Management Monday Market Fund and $4,222,758 invested in a forward purchase agreement with Wells Fargo Bank.

The Authority is a Participant in CAMP. CAMP is an investment pool offered by the California Asset Management Trust (Trust). The Trust is a joint powers authority created by the Declaration of Trust and established under the provisions of the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the "Act") for the purpose of exercising the common power of its Participants to invest certain proceeds of debt issues and surplus funds. The Pool's investments are limited to investments permitted by subdivisions (a) to (n), inclusive, of Section 53601 of the California Government Code.

The Authority reports its investments in CAMP at fair value which is the same as the value of the pool share. At June 30, 2024, the fair value approximated the Authority's cost, and these investments had an average maturity of 26 days.

Money market mutual funds are available for withdrawal on demand and at June 30, 2024, had an average maturity of 7 days.

A. Investments Authorized by Debt Agreement
The Authority must maintain required amounts of cash and investments with a trustee under the terms of the Gas Revenue Bonds, Series 2007 Indenture. These funds are unexpended bond proceeds or are pledged as reserves to be used if the Authority fails to meet its obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with the Authority's ordinance, bond indentures or State statute. The table below identifies the investment types that are authorized for investments held by fiscal agents.

Maximum
Maturity
Minimum
Credit Quality
U.S. Treasury Obligations 5 Years None
U.S. Agency Securities 5 Years None
Forward Delivery Agreements N/A A
Local Agency Bonds 5 Years None
Repurchase Agreements N/A - 30 days None to A
Bankers' Acceptances 180 Days None
Commercial Paper 180-270 Days A-1 to AA
Medium-Term Notes 5 Years A
Collateralized Time Deposits N/A - 30 days None to A-1
Negotiable Certificates of Deposit N/A - 30 days None to A-1 Local Agency Investment Fund (LAIF) N/A None
Insured Saving Accounts N/A None
Money Market Mutual Funds N/A None
Shares in a California Common Law Trust N/A None
Interest Rate Swaps N/A None
Supranationals N/A None
Mortgage Pass-Through Securities N/A None
CAMP N/A None
Authorized Investment Type
9

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 2: CASH AND INVESTMENTS (CONTINUED)
B. Fair Value Measurement
In instances where inputs used to measure fair value fall into different levels in the above fair value hierarchy, fair value measurements in their entirety are categorized based on the lowest level input that is significant to the valuation. The Authority’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

For the forward purchase agreement, fair value is estimated by comparing contract prices to forward market prices quoted by third party market participants or provided in relevant industry publications. Deposits and withdrawals from CAMP investment pool are made on the basis of $1 and not fair value.

The following table summarizes the investments of the Authority for which fair values are determined on a recurring basis as of June 30, 2024:

NOTE 3: GAS SUPPLY ACQUISITION AND RESALE
The City operates certain electrical generating plants which provide power for sale to the public and need reliable, economic supplies of natural gas to generate the necessary electricity. In pursuit of that objective the City and Successor Agency formed the Authority for the purpose of acquiring, financing and supplying natural gas to the City. Summarized below are agreements entered into by the Authority to achieve its purpose.

A. Prepaid Purchased Gas Agreement
Pursuant to an Agreement for the Purchase and Sale of Natural Gas dated January 24, 2007, the Authority used a portion of the proceeds of its $209,350,000 of Gas Revenue Bonds, Series 2007 (the Bonds) to prepay Merrill Lynch Commodities, Inc. (Gas Supplier) for a twenty year supply of natural gas. Commencing January 1, 2008, and continuing through December 31, 2027, the Gas Supplier is obligated to deliver daily contract quantities of natural gas on a firm basis to the designated delivery point. Daily contract quantities vary from month to month but not from year to year. This commitment totals 2,352,000 MMBtus (millions of British thermal units) per year or 47,040,000 MMBtus for the twenty year contract period. The Authority has recorded a Prepaid Natural Gas asset which is amortized as daily contract quantities are delivered.

The agreement provides for payments to be made by the Gas Supplier if it fails to deliver the daily contract quantities and may be terminated by the Authority in the event of non-performance by the Gas Supplier. The Agreement will automatically terminate if there is a termination of the Commodity Swap (See Note 3D) which is not due to default by the Authority or if there is an event of default under the swap agreement entered into by the Gas Supplier and a third party. Upon early termination, whether due to the above or due to any other optional termination event as defined in the agreement, the Gas Supplier is required to make a termination payment to the Authority that is expected to be sufficient, together with other available funds, to redeem the Bonds. The Gas Supplier's commitments under this agreement are guaranteed by its parent company, Merrill Lynch & Co. Inc., under a guarantee agreement with the Authority. As of June 30, 2024, prepaid gas under this agreement amounted to $61,251,875.

Fair Value
Quoted Prices In
Active Markets
for Identical
Assets (Level 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Forward Purchase Agreement $ 4,222,758 $ - $ - $ 4,222,758 Money Market Mutual Funds 3,020,212 3,020,212 - -
7,242,970 $ 3,020,212 $ - $ 4,222,758
Total Investments $ 7,242,970
Investments at Fair Value
10

Page 1268 of 2438 ends

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 3: GAS SUPPLY ACQUISITION AND RESALE (CONTINUED)
B. Funding Agreement
Under certain conditions specified in a Funding and Assignment Agreement dated January 24, 2007 between the Authority and Gas Supplier, the Gas Supplier has agreed to advance funds to the Trustee to pay debt service when due or to redeem bonds in the event of early termination. Advances are required under covered swap deficiencies and covered termination deficiencies and optional advances may also be made. Advances are repayable by the responsible party causing the deficiency requiring an advance under this agreement. This agreement is coterminous with the Bonds. The Gas Supplier's commitment under this agreement is guaranteed by its parent company, Merrill Lynch & Co. Inc., under a guarantee agreement with the Authority. There were no advances outstanding as of June 30, 2024.

C. Supply Agreement
Pursuant to a Natural Gas Supply Agreement dated February 1, 2007, the Authority has agreed to sell to the City a twenty year supply of natural gas. This Supply Agreement is coterminous with and provides for the delivery of natural gas in quantities which are matched to the Prepaid Gas Agreement, discussed above. For each MMBtu delivered (sold) to the City, the Authority will receive a variable revenue stream based on a first of the month index for the delivery location.

The Agreement terminates upon termination of the Prepaid Gas Agreement or upon the City's failure to make any required payment within two business days of the due date.

D. Commodity Swap Agreement
In order to have its gas price exposure consistent with prevailing market rates, the Authority entered into a natural gas Commodity Swap Agreement with JPMorgan Chase Bank (Counterparty). For the term of deliveries under the Prepaid Gas Agreement and the Supply Agreement, the Authority will pay an index price per MMBtu to the Counterparty, and the Counterparty will pay a fixed price to the Authority. The index price paid by the Authority is expected to approximate the price paid by the City under the Supply Agreement.

The monthly quantity and term of the Commodity Swap Agreement are matched to those of the Supply Agreement.

Details of the commodity swap agreement are discussed in Note 5.

NOTE 4: LONG-TERM DEBT
A. Current Year Transactions and Balances
On January 24, 2007, the Authority issued $209,350,000 of Gas Revenue Bonds, Series 2007, to finance a lump sum prepayment to a Gas Supplier (See Note 3A) in order to acquire a supply of natural gas to be delivered over a period of twenty years. The gas purchased by the Authority will be sold to the City pursuant to a Natural Gas Supply Agreement (See Note 3C) to produce revenues to be used for debt service on the Bonds.

Principal payments are due annually commencing on February 15, 2009 through 2028 and interest is payable semiannually on February 15 and August 15, commencing August 15, 2007. The current year transactions and balances related to the Bonds were as follows:

Original Issue
Amount
Balance at
June 30, 2023 Retirements
Balance at
June 30, 2024 Current Portion
Revenue Bonds

4.00%-5.00%, due 2/15/28 $ 72,850,000 209,350,000 $ 13,155,000 $ 59,695,000 $ 13,865,000 $ Add: bond premium 15,454,116 2,943,641 735,910 2,207,731 - Total revenue bonds $ 224,804,116 $ 75,793,641 $ 13,890,910 $ 61,902,731 $ 13,865,000 2007 Gas Revenue Bonds
11

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 4: LONG-TERM DEBT (CONTINUED)
All revenues of the Authority are pledged for the repayment of the Bonds. The Authority's rights, title and interest in the Agreements are pledged as security for the Bonds. Annual debt service requirements for the Bonds are shown below:

B. Original Issue Premiums
Bond premiums are deferred and amortized over the life of the bonds using the straight-line method. Bonds payable are reported net of the applicable bond premium.

NOTE 5: DERIVATIVE INSTRUMENTS
A. Summary of Notional Amounts and Fair Values
The Authority enters into contracts to hedge its price exposures to natural gas, and to procure energy supplies.

These contracts are evaluated pursuant to GASB Statement No. 53, Accounting and Financial Reporting for Derivative Instruments, to determine whether they meet the definition of derivative instruments, and, if so, whether they effectively hedge the expected cash flows associated with interest rate and energy exposures.

The Authority applies hedge accounting for derivatives that are deemed effective hedges. Under hedge accounting, the increase (decrease) in the fair value of a hedge is reported as a deferred cash flow hedge on the statement of net position. For the reporting period, all of the Authority's derivatives meet the effectiveness tests.

For energy derivatives, fair values are estimated using Level 3 inputs, by comparing contract prices to forward market prices quoted by third party market participants or provided in relevant industry publications.

The following is a summary of the fair values and notional amounts of derivative instruments outstanding as of June 30, 2024:

Principal Interest Total
$ 13,865,000 $ 2,984,750 $ 16,849,750
14,530,000 2,291,500 16,821,500
15,265,000 1,565,000 16,830,000
16,035,000 801,750 16,836,750
$ 59,695,000 $ 7,643,000 $ 67,338,000
Reconciliation of long-term debt
Add: bond premium 2,207,731
Net long-term debt $ 61,902,731
Year Ending June 30,
2025
2026
2027
2028
Notional
Classification Amount Classification Amount
Effective Cash Flow Hedges
Pay fixed SWAP, Natural Gas Deferred Outflow 1,198,497 $ Derivative 5,445,741 $ 34,513,500 mmBTU Receive fixed SWAP, Natural Gas Deferred Outflow 32,113,648 Derivative 21,939,110 75,000-372,000 $ monthly mmBTU 27,384,851
2024 Change in Fair Value Fair Value, June 30, 2024
12

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 5: DERIVATIVE INSTRUMENTS (CONTINUED)
B. Objective and Terms of Hedging Derivative Instruments The objectives and terms of the Authority's hedging derivative instruments that were outstanding at June 30, 2024, are summarized in the next table. The table is aggregated by the credit ratings of the Authority's counterparties. For counterparties having multiple ratings, the rating indicating the greatest degree of risk is used.

Objectives and terms of the Authority's hedging derivative instruments that were outstanding at June 30, 2024 are summarized in the table below:

C. Risks of Derivative Instruments
Credit risk – Credit risk is the risk of loss due to a counterparty defaulting on its obligations. The Authority seeks to minimize credit risk by transacting with creditworthy counterparties. Interest rate swap counterparties are evaluated at the time of transaction execution. The procedure prohibits the Authority from executing energy hedge transactions with counterparties rated lower than BBB by Standard & Poor's or Fitch rating services, or Baa2 by Moody's. Subsequent to entering into transactions, the credit ratings of one or more counterparties may deteriorate. If so, the Authority's credit risk management policies increase the amount of collateral that the counterparty must post with the Authority when the counterparty owes the Authority, thereby reducing credit risk associated with the decline in the counterparty's credit worthiness.

Termination risk – Termination risk is the risk that a derivative will terminate prior to its scheduled maturity due to a contractual event. Contractual events include bankruptcy, illegality, default, and mergers in which the successor entity does not meet credit criteria. One aspect of termination risk is that the Authority would lose the hedging benefit of a derivative that becomes subject to a termination event. Another aspect of termination risk is that, if at the time of termination, the mark-to-market value of the derivative was a liability to the Authority, the Authority could be required to pay that amount to the counterparty. Termination risk is associated with all of the Authority's derivatives up to the fair value amounts.

NOTE 6: COMMITMENTS AND CONTINGENT LIABILITIES
The Authority is subject to litigation arising in the normal course of business. In the opinion of the Authority's attorney there is no pending litigation which is likely to have a material adverse effect on the financial position of the Authority.

NOTE 7: FUTURE ACCOUNTING PRONOUNCEMENTS
GASB Statement No. 101 – In June 2022, the GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. The Statement is effective for reporting periods beginning after December 15, 2023. The Authority has not determined the effect of this Statement.

GASB Statement No. 102 – In December 2023, the GASB issued Statement No. 102, Certain Risk Disclosures.

The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. The Statement is effective for reporting periods beginning after June 15, 2024. The City has not determined the effect on the Electric Fund’s financial statements.

Notional Amount
Effective
Date
Maturity
Date Terms Counterparty
Counterparty
Rating
Commodity Swaps, Gas:

Prepayment 20-year
supply of Natural Gas 20,426,500 mmBtu 1/1/2008 12/31/2027 Merrill Lynch A+ Hedge on Cash Flows on
prepayment of 20-year
supply of Natural Gas 1/24/2007 1/24/2028 A+
Type and Objective
Pay index minus

0.68; Receive NGI
Pay NGI PG&E
citygate price;
Receive $7.7224 per
mmBtu
From 75,000 to
372,000 mmBtu
per month
JP Morgan
Chase Bank,
NA
13

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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2024
NOTE 7: FUTURE ACCOUNTING PRONOUNCEMENTS (CONTINUED)
GASB Statement No. 103 – In April 2024, the GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues. The Statement is effective for reporting periods beginning after June 15, 2025. The City has not determined the effect on the Electric Fund’s financial statements.

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LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON

COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS
To the Board of Directors
Roseville Natural Gas Financing Authority
Roseville, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the financial statements of the Roseville Natural Gas Financing Authority (Authority), a component unit of the City of Roseville, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements, and have issued our report thereon dated April 23, 2025.

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

Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether City’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements.

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Roseville City CouncilMay 21, 2025

Roseville City Council
May 21, 2025