Roseville City Council
April 15, 2026

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Furthermore, CONSULTANT shall require its subcontractors to agree to be bound to CONSULTANT and CITY in the same manner and to the same extent as CONSULTANT is bound to CITY under this Agreement. Additionally, CONSULTANT shall obligate its subcontractors to comply with these same provisions with respect to any tertiary subcontractor, regardless of tier. A copy of CITY’s indemnity and insurance provisions will be furnished to the subcontractor or tertiary subcontractor upon request.
f. Self-Insured Retentions. All self-insured retentions (“SIR”) must be

disclosed to Risk Management for approval and shall not reduce the limits of liability.

Policies containing any SIR provision shall provide or be endorsed to provide that the SIR may be satisfied by either the named insured or CITY. CITY reserves the right to obtain a full certified copy of any insurance policy and endorsements. The failure to exercise this right shall not constitute a waiver of such right.
g. Waiver of Subrogation. CONSULTANT hereby agrees to waive

subrogation which any insurer of CONSULTANT may acquire from CONSULTANT by virtue of the payment of any loss under a Workers Compensation, Commercial General Liability or Automobile Liability policy. All Workers Compensation, Commercial General Liability and Automobile Liability policies shall be endorsed with a waiver of subrogation in favor of CITY, its officers, agents, employees and volunteers for all worked performed by CONSULTANT, its employees, agents and subcontractors.
h. Liability/Remedies. Insurance coverage in the minimum amounts set forth

herein shall not be construed to relieve CONSULTANT of liability in excess of such coverage, nor shall it preclude CITY from taking such other actions as are available to it under any other provisions of this Agreement or law.

6. Records. CONSULTANT and its subcontractors shall maintain all files and

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records relating to the services performed hereunder during the term of this Agreement and for a period of not less than one (1) year after the date of termination or expiration. Provided, however, that in the event of litigation or settlement of claims arising from the performance of this Agreement, CONSULTANT and its subcontractors shall maintain all files and records until such litigation, appeals or claims are resolved. Duly authorized representatives of CITY shall have right of access during normal business hours and after reasonable notice to CONSULTANT’s and subcontractors’ files and records relating to the services performed hereunder and may review and copy the files and records at appropriate stages during performance of the services and during the one (1) year period following termination or expiration of this Agreement. CONSULTANT shall include this provision in its contracts with all subcontractors.

7. Time is of the Essence. Time is of the essence of this Agreement.

8. Prevailing Wages. When applicable, for purposes of this Agreement,

CONSULTANT and its subcontractors shall comply with all applicable prevailing wage laws, e.g., but not limited to, California Labor Code Sections 1770 et seq. In accordance with said Section 1775, CONSULTANT shall forfeit as a penalty to the City two hundred dollars ($200) for each calendar day or portion thereof for each worker paid less than the prevailing rates for such work or craft in which such worker is employed for any work done on-site under the Agreement by CONSULTANT or by any subcontractor in violation of the provisions of the Labor Code and in particular, Labor Code Sections 1770 to 1780, inclusive. In addition to said penalty and pursuant to said Section 1775, the difference between such stipulated prevailing wage rates and the amount paid to each worker for each calendar day or portion thereof for which each worker was paid less than the stipulated prevailing wage shall be paid to each worker by CONSULTANT or the applicable subcontractor.

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Pursuant to the provisions of California Labor Code Section 1773, the contracting department has identified the source, stated below, of the general prevailing rate of wages applicable to the site to be done, for straight time, overtime, and holiday work. The holiday wage rate listed shall be applicable to all holidays recognized in the collective bargaining agreement of the particular craft, classification or type of worker concerned. These wage rates may be obtained from the State Department of Industrial Relations and/or the following website address: http://www.dir.ca.gov/dlsr/DPreWageDetermination.htm.

Pursuant to Labor Code Section 1773.2, general prevailing wage rates set forth above, which forms a part of this Agreement, shall be posted by CONSULTANT at a prominent place at the work site. Prevailing wage rates to be posted at the work site will be furnished by the contracting department. The possibility of wage increases is one of the elements to be considered by CONSULTANT in determining its proposal and will not under any circumstances be considered as the basis of a claim against CITY or the Agreement.

9. Compliance with Laws. CONSULTANT shall comply with all federal, state and

local laws, ordinances and policies as may be applicable to the performance of services under this Agreement.

10. Ability to Perform. CONSULTANT agrees and represents that it has the time,

ability and professional expertise to perform the services required under this Agreement.

11. Public Contracts: Conflicts of Interest. CONSULTANT’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. CONSULTANT’s participation in the planning, discussions, or drawing of project plans

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or specifications shall be limited to conceptual, preliminary, or initial plans or specifications.

CONSULTANT 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 CONSULTANT pursuant to this Agreement.

12. Governing Agreement. In the event of any conflict between this Agreement and

its EXHIBITS, the provisions of this Agreement shall govern. In the event of any conflict between any of the EXHIBITS, the provisions of the first in order of attachment shall govern.

13. Assignment. CONSULTANT is employed to perform unique personal services.

CONSULTANT shall not assign this Agreement without the prior written consent of CITY.

CONSULTANT shall not employ or otherwise incur any obligation to pay other specialists or experts for services in connection with this Agreement, without prior written consent of CITY.

14. Independent Contractor. CONSULTANT, inclusive of its agents, officers,

employees, volunteers, independent contractors, and subcontractors, shall act as an independent contractor, and covenants and agrees that it will conduct itself consistent with such status, that it will neither hold itself out as, nor claim to be, an officer or employee of CITY by reason of this Agreement.

CONSULTANT and CITY agree that: (a) CONSULTANT is free from the control and direction of CITY in connection with the performance of the work; (b) CONSULTANT is providing services directly to CITY; (c) CONSULTANT has and will maintain at all relevant times a business license; (d) CONSULTANT maintains a business location that is separate from CITY; (e) CONSULTANT is customarily engaged in an independently established business of the same nature as that involved in the work performed hereunder; (f) CONSULTANT actually contracts with other businesses to provide the same or similar services and maintains a clientele

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without restrictions from CITY; (g) CONSULTANT advertises and holds itself out to the public as available to provide the same or similar services; (h) CONSULTANT provides its own tools, vehicles, and equipment to perform the services; (i) CONSULTANT has negotiated its own rates; (j) CONSULTANT set its own hours and location of work in accomplishing CITY’s on- call needs; and (k) CONSULTANT has the right to control the manner and means of accomplishing the result desired and exercises its own expert independent judgement.

15. Representations and Warranties. CONSULTANT warrants that it has not

employed or retained any company or person, other than a bona fide employee working for CONSULTANT, to solicit or secure this Agreement, and that it has not paid or agreed to pay any company or person, other than a bona fide employee, any fee, commission, percentage, brokerage fee, gift or any other consideration, contingent upon or resulting from the award or making of this Agreement. For breach or violation of this warranty, CITY shall have the right to terminate as void this Agreement, without liability, or, in its discretion, to deduct from the Agreement price or consideration, or otherwise recover, the full amount of such fee, commission, percentage, brokerage fee, gift or contingent fee.

16. Successors in Interest. This Agreement shall be binding upon the heirs,

successors, executors, administrators and assigns of the respective parties hereto.

17. Copyright, Ownership and Use of Materials. All tangible material (“Material”)

created or delivered pursuant to this Agreement is considered a work made for hire under the Copyright Act. To the extent such Material does not qualify as a work made for hire, CONSULTANT hereby assigns to CITY all right, title, and interest, including but not limited to all copyrights, in all Material created by CONSULTANT in its performance under this Agreement. Material constitutes the scope of work outlined in Exhibit A and attached hereto, and all written and other tangible expressions, including but not limited to, drawings (including

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computer aided drawings), papers, documents, reports, surveys, renderings, exhibits, sketches, maps, models, prints, paintings or photographs, in any and all media or formats in which such materials have been created or are maintained. All Material furnished by CONSULTANT is, and shall remain, the property of CITY. This does not include any software, programs, methodologies or systems used in the creation of such work product, nor does it include any drafts, notes or internal communications prepared by CONSULTANT in the course of performing the Services that were not otherwise provided to CITY in either hardcopy or electronic form, all of which may be protected by CONSULTANT or others’ copyrights or other intellectual property.

CONSULTANT shall execute any documents necessary to effectuate such assignment.

In the event that CONSULTANT uses, employs, designates, or retains any person or entity who is not an employee of CONSULTANT, to perform any work required of it pursuant to this Agreement, CONSULTANT shall require said person or entity to execute an agreement containing the preceding paragraph.

18. Termination of Agreement. The City may terminate this Agreement without

cause by giving CONSULTANT thirty (30) days advance written notice from the City Manager.

CONSULTANT may terminate this Agreement without cause by giving CITY thirty (30) days advance written notice. In the event of termination through no fault of CONSULTANT, CITY shall compensate CONSULTANT for services performed as of the date of termination, upon the release to CITY of all Material hereunder, in any and all media or formats in which such materials have been created or are maintained. CITY retains the right to receive and use any Material, notwithstanding any termination or any dispute regarding the amount to be paid.

19. Attorney’s Fees; Venue; Governing Law. If either party commences any legal

action against the other party arising out of this Agreement or the performance hereof, the

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prevailing party in such action shall be entitled to recover its reasonable litigation expenses, including but not limited to, court costs, expert witness fees, discovery expenses, and attorney’s fees. Any action arising out of this Agreement shall be brought in Placer County, California, regardless of where else venue may lie. This Agreement shall be governed by and construed in accordance with the laws of the State of California.

20. Modification. This Agreement and each provision contained herein may be

waived, amended, supplemented or eliminated only by mutual written agreement of the parties.

21. Severability. If any of the provisions contained in this Agreement are for any

reason held invalid or unenforceable, such holding shall not affect the remaining provisions or the validity and enforceability of the Agreement as a whole.

22. Notices. Any notices to parties required by this Agreement shall be delivered

personally or mailed, U.S. first class postage prepaid, addressed as follows:

CITY OF ROSEVILLE CONSULTANT

Finance Department Hinderliter, De Llamas & Associates, dba Attn: Scott Pettingell HDL Companies
311 Vernon Street Attn: Andy Nickerson
Roseville, CA 95678 120 S. State College Blvd., Ste 200 Brea, CA 92821
Either party may amend its address for notice by giving notice to the other party in writing.

23. Integrated Agreement. This is an integrated agreement and contains all of the

terms, considerations, understanding and promises of the parties. It shall be read as a whole.

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IN WITNESS WHEREOF, the City of Roseville, a municipal corporation, has authorized the execution of this 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 CONSULTANT has caused this Agreement to be executed.

CITY OF ROSEVILLE, a HINDERLITER, DE LLAMAS &
municipal corporation ASSOCIATES DBA HDL COMPANIES,
a California corporation

BY: BY:

DOMINICK CASEY its:

City Manager

ATTEST:

BY: _______________________________
its: ________________________________

BY: _______________________________

CARMEN AVALOS
City Clerk

APPROVED AS TO FORM:

BY: _______________________________

MICHELLE SHEIDENBERGER
City Attorney

APPROVED AS TO SUBSTANCE:

BY: ________________________________

SCOTT PETTINGELL
Finance Director

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EXHIBIT “A”

1211802.2

Business License Tax and Fees Administration

SCOPE OF SERVICES
Consultant will provide the following Services relative to Client’s business license tax administration.

1. Operations Management Services

1.1. Establish and maintain database of Client businesses.

1.2. Receive and process applications, renewals and payments in a timely fashion.

1.3. Send renewal notices to active businesses within 30 days of the renewal period end date or at another interval specified by Client.

1.4. Provide businesses multiple options for submitting applications, renewals, payments, or support requests (including via website, em ail, mail, phone, and fax. Consu ltant license specialists will be available for live interactions Monday through Friday, 8:00am to 5:00pm Pacific).

1.5. Remit revenue to Client no less than monthly.

1.6. Provide Client staff access to website portal offering business registry inquiry, reporting, and electronic department approval capabilities.

2. Compliance Services: 1) Identify and register businesses which are subject to licensure or taxation, 2) collect known debt as pertains to business license or tax, and 3) identify under-reported tax liability.

2.1. Discovery Services

2.1.1. Develop a list of businesses subject to Client licensure or taxation.

2.1.2. Notify non-compliant businesses of their options to comply or dispute their non-compliant status.

Notification and support to businesses will be facilitated through the website, mail, email, phone and fax.

2.1.3. Review information and forms submitted by the business for completion and accuracy, inclusive of any additional required documentation (i.e. home occupation permit). All submissions are filed and stored electronically and made available to Client upon request.

2.1.4. Provide businesses with detailed invoicing and options to pay via website, mail, and phone.

2.1.5. Remit revenue to Client no less than monthly, along with all business applications and any additional documentation.

2.2. Collection Services

2.2.1. Identify businesses subject to Client licensure or taxation which have known debt to Client and have failed to pay within an appropriate time frame.

2.2.2. Notify businesses of their options to comply or dispute their non-compliant status.

2.2.3. Provide businesses with detailed invoicing and options to pay via website, mail and phone.

2.2.4. Remit revenue to Client no less than monthly.

2.3. Audit Services

2.3.1. Identify potential under-reporting and/or misclassified businesses.

2.3.2. Audit businesses mutually agreed to by Client and Consultant that are identified as potential under-reporting businesses.

2.3.3. Submit audit summaries to Client and discuss further actions.

2.3.4. Educate businesses on proper reporting practices.

2.3.5. Invoice and collect identified deficiencies.

3. Online Payment Processing – Consultant’s services include PCI compliant payment processing services which supports both credit card and eCheck transactions.

3.1. Client Responsibilities

3.1.1. As a condition to its receipt of the Service, Client shall execute a nd deliver any and all applications, agreements, certifications or ot her documents required by Consultant’s payment processor, Networks or other third parties whose consent or approval is necessary for the

1211802.2

processing of Transactions by Consultant’s paym ent processor. “Network” is an entity or association that operates, under a common service mark, a system which permits participants to authorize, route, and settle Transactions among themselves, including, for example, networks operated by VISA USA and Mastercard, Inc., NYCE Corporation, American Express, and Discover.

3.1.2. Client hereby grants Consultant the full right, power and authority to request, receive and review any Data or records reflected in a Transaction repor t. Client represents and warrants that it has the full right and authority to grant these rights.

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“EXHIBIT B”

FEES

1. Operations Management Services

1.1. Fees for performing operations management Services shall be $15.41 for each processed account, which is any account for which an application or renewal/return was processed, or active account which was sent a renewal notice.

1.1.1. Fees will be increased as of January 1st of each calendar year with reference to the 12-month percent change in the most recently published annual Consumer Price Index for All Urban Consumers (CPI-U), West Region, as reported by the U.S. Bureau of Labor St atistics (the “CPI Change”). Each annual increase in the Fees will be equal to the greater of two percent (2%) or the actual CPI Change and the lesser of ten percent (10%) or the actual CPI Change.

For example, if the actual CPI Change is 1.5%, then the annual increase will be 2%, if the actual CPI Change is 3.5%, then the annual increase will be 3.5%, and if the actual CPI Change is 12%, then the annual increase will be 10%.

1.2. Fees related to travel and lodging expenses are billed at cost and apply to all meetings (including implementation, training, operations and support ). All such expenses only apply to out of scope travel and must therefore be pre-approved by Client.

1.3. Fees will be invoiced monthly to Client for Services performed during the prior month. Fees will be netted out of Client’s monthly revenue disbursement. Client will submit payment for any balance due to Consultant within 30 days of receiving the invoice.

2. Compliance Services

2.1. Fees for performing compliance Services apply to all monies received for the current tax/license period and any other prior period collected (including monies received for taxes, penalties, interest, and fees).

2.1.1. Fees for performing discovery Services shall be a contingency Fee of 35% of the revenues received as a result of the Services.

2.1.2. In the event that Client discovers a non-compliant business and reports the business to Consultant (including a calculation of all taxes/fees due), Consultant will categorize the business as a collection service effort and thus apply the lower collection S ervices contingency Fee rate.

2.1.3. Fees for performing collection Services shall be a contingency Fee of 25% of the revenues received as a result of the Services.

2.1.4. Fees for performing audit Services shall be a contingency Fee of 35% of the revenues received as a result of the Services.

2.2. Consultant recognizes Client’s authority to waive or reduce the tax/fee debt of a business. Should Client decide to do so for a business whose deficiency was identified by Consultant, Consultant shall be entitled to compensation in the amount of one half (1/2) of the Fees Consultant would have otherwise earned. Defici encies which are uncollectable due to insolvency or dissolution of the business, or for deficiencies which are otherwise incapable of collection (i.e. statute of limitation or other legal defense) shall not be considered a Client voluntary election to waive, and thus, Consultant would not be entitled to compensation related thereto under this provision.

2.3. The fee shall be paid notwithstanding any related Client assistance, work in parallel, and/or incurrence of attorneys’ fees or other costs or expenses in connection, with the relevant Services.

2.4. Fees related to travel and lodging expenses are billed at cost and applied to all meetings (including implementation, training, operations, and support ). Travel expenses only apply to out of scope travel and must therefore be pre-approved by Client.

2.5. Fees will be invoiced monthly to Client for Services performed during the prior month. Fees will be netted out of Client’s monthly revenue disbursement. Client will submit payment for any balance due to Consultant within 30 days of receiving the invoice.

3. Payment Processing – Consultant will configure payment processing services to utilize either a taxpayer funded model (convenience fee) or Client funded model, as directed by Client. Client may switch between these models upon written request to Consultant. Fees for each o f these payment processing models are detailed here.

3.1. Taxpayer funded model – Client authorizes Consultant to collect each convenience fee from the taxpayer at time of payment.

3.1.1. Credit and debit card processing – 2.9% of transaction amount, minimum of $2.00

3.1.2. ACH/eCheck processing - $2.50 per transaction

3.2. Client funded

3.2.1. Credit and debit card processing – 2.9% of transaction amount

3.2.2. ACH/eCheck processing - $0.75 per transaction

3.3. Returned payments/NSF fee – Each occurrence of a card chargeback, returned payment or insufficient funds will incur a fee of $25.00, to be applied to the taxpayers account.

3.4. Consultant reserves the right to review and adjust pricing related to payment processing services on an annual basis. Consultant will communicate any such adjustment to Client in writing, with 60 days advance notice. Items that will be considered in the review of fees may include, but are not limited to: regulatory changes, card association rate adjustments, card association category changes, bank/processor dues and asse ssments, average consumer payment amounts, card type utilization, and costs of service.

4. Other Services

4.1. Council meetings – At Client’s request Consultant will attend council meetings for a fee of $2,500.00.

4.2. Hourly rates – Consultant’s current hourly rates are as follows:

4.2.1. Principal - $325/hr

4.2.2. Programmer - $295/hr

4.2.3. Senior Analyst - $245/hr

4.2.4. Analyst - $195/hr

City Council
Communication
Meeting Date: 4/15/2026
Item #: VI.14
File #: 0210
Item ID: 2026-278

Title: Tax Revenue Consulting - Short-Term Rental Administrative Services - Professional Services Agreement Amendment
Contact: Jeannine Thrash 916-774-5473 [email protected]

SUMMARY
Staff recommends approval of a fourth amendment to the professional services agreement with Hinderliter, de Llamas & Associates, dba HdL Companies, to extend short-term rental administration services for an additional six months in order to complete a request for proposals competitive procurement process.

Sufficient funding is available in the Finance Department’s FY2025-26 General Fund budget to support this extension through the end of the fiscal year. The Finance Department will fund the remaining portion of the agreement within the proposed FY2026-27 General Fund budget.

RECOMMENDATION
Staff recommends that the City Council adopt a resolution to approve the Fourth Amendment to the Professional Services Agreement for Tax Revenue Consulting Services (Short-Term Rental Administration Services) with Hinderliter, de Llamas & Associates dba HdL Companies, and authorize the City Manager to execute it on behalf of the City of Roseville.

BACKGROUND
On April 21, 2021, the City Council approved a professional services agreement with Hinderliter, de Llamas and Associates, doing business as HdL Companies, to provide transient occupancy tax (TOT) administration, short-term rental administration, business tax administration, and related consulting services to the City. The original term of the agreement was two years and has been renewed three times for additional one-year periods. The City is now requesting a six-month extension of the final renewal period for short-term rental administration services in order to complete a request for proposals competitive procurement process.

Title 4, Chapter 4.25 of the Roseville Municipal Code prohibits any person from advertising, maintaining, or operating a short-term rental within the City without a permit. Property owners may apply for a short-term rental permit by submitting an application and paying the required fee. Property owners are also required to collect and remit TOT to the City in accordance with the Municipal Code.

FISCAL IMPACT
Sufficient funding is available in the Finance Department’s FY2025-26 General Fund budget to support this extension through the end of the fiscal year. The Finance Department will fund the remaining portion of the agreement within the proposed FY2026-27 General Fund budget.

ENVIRONMENTAL REVIEW
The California Environmental Quality Act (CEQA) only applies to projects which have the potential to cause a significant effect on the environment. Where it can be seen with certainty that there is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. (CEQA Guidelines §15061(b)(3)).

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

1. Ensure a safe and healthy community

6. Deliver exceptional City services

Respectfully Submitted,
Jeannine Thrash, Management Analyst

Scott Pettingell, Finance Director

ATTACHMENTS:

1. Resolution 26-094

2. HDL Short term rental PSA amendment

REVIEWERS:

Jeannine Thrash, Finance Department Created/Initiated - 3/30/2026 Jeannine Thrash, City Clerk Department Approved - 3/31/2026 Scott Pettingell, Finance Department Approved - 3/31/2026 Kelly Aye, City Attorney Department Approved - 4/1/2026 Katrina Six, City Clerk Department Approved - 4/2/2026
Ryan DeVore, City Manager Department - Assistant City Manager Approved - 4/6/2026 Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 4/6/2026 Michelle Sheidenberger, City Attorney Department Approved - 4/7/2026 Dominick Casey, City Clerk Department Approved - 4/7/2026 Katrina Six, City Clerk Department Final Approval - 4/7/2026

RESOLUTION NO. 26-094

APPROVING A FOURTH AMENDMENT TO PROFESSIONAL SERVICES AGREEMENT,

BY AND BETWEEN THE CITY OF ROSEVILLE AND HINDERLITER, DE LLAMAS &

ASSOCIATES DBA HDL COMPANIES, AND AUTHORIZING THE CITY MANAGER TO

EXECUTE IT ON BEHALF OF THE CITY OF ROSEVILLE

WHEREAS, a Fourth Amendment to Professional Services Agreement for Tax Revenue Consulting Services (Short-Term Rental Administration Services), by and between the City of Roseville and Hinderliter, de Llamas & Associates dba HdL Companies, has been reviewed by the City Council; and

NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Roseville that said fourth 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 ______________, 2026, by the following vote on roll call:

AYES COUNCILMEMBERS:

NOES COUNCILMEMBERS:

ABSENT COUNCILMEMBERS:

______________________________
MAYOR

ATTEST:

________________________
City Clerk

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FOURTH AMENDMENT TO

PROFESSIONAL SERVICES AGREEMENT
Tax Revenue Consulting Services
(Short-Term Rental Administration Services)

THIS FOURTH AMENDMENT TO AGREEMENT is made and entered into this ___ day of __________, 20__, by and between the City of Roseville, a municipal corporation (“CITY”), and Hinderliter, de Llamas & Associates dba HdL Companies, a California corporation (“CONSULTANT”); and
W I T N E S S E T H:

WHEREAS, CITY and CONSULTANT previously entered into a Professional Services Agreement dated April 21, 2021, and amended April 19, 2023, April 3, 2024, and May 21, 2025 (“Agreement”) regarding tax revenue consulting services (“Project”); and WHEREAS, CITY desires to extend the term of the Agreement for up to an additional six (6) months, on a month-to-month basis, for the continued provision of just the Short-Term Rental Administration Services component; and
WHEREAS, CONSULTANT is willing and able to provide such services as described.

NOW, THEREFORE, the parties agree as follows:

1. Section 2 of the Agreement is amended by adding an additional paragraph to read as follows:
“The CITY has requested and the CONSULTANT has agreed to extend the term of the Agreement for up to an additional six (6) month period from the date of execution hereof by all parties and ending on October 20, 2026, unless otherwise terminated earlier.” Docusign Envelope ID: 08030678-4ED0-4084-9946-39C294785E29

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2. 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 Fourth 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 CONSULTANT has caused this Fourth Amendment to Agreement to be executed.

CITY OF ROSEVILLE, a HINDERLITER, DE LLAMAS &
municipal corporation ASSOCIATES dba HDL COMPANIES, a California corporation

BY: _______________________________ BY: _______________________________ DOMINICK CASEY its: _______________________________ City Manager
and
ATTEST:

BY: _______________________________
its: _______________________________

BY: _______________________________

CARMEN AVALOS
City Clerk

APPROVED AS TO FORM:

BY: _______________________________

MICHELLE SHEIDENBERGER
City Attorney

APPROVED AS TO SUBSTANCE:

BY: _______________________________

SCOTT PETTINGELL
Finance Director
Docusign Envelope ID: 08030678-4ED0-4084-9946-39C294785E29 CFO
Vice President

City Council
Communication
Meeting Date: 4/15/2026
Item #: VI.15
File #: 0202
Item ID: 2026-252

Title: Annual Audit Reports
Contact: Teri Quinlan 916-774-5316 [email protected]

SUMMARY
Staff recommends the City Council receive four informational financial reports for the fiscal year ended June 30, 2025: Single Audit, Electric Enterprise Fund, Other Post-Employment Benefit Trust Fund, and Roseville Natural Gas Financing Authority, along with five required auditor communication letters; and one informational financial report for the fiscal year ended June 30, 2024, Transportation Development Act Funds, along with one management letter. There is no impact to the City’s General Fund.

RECOMMENDATION
Staff recommends the City Council receive four informational financial reports for the fiscal year ended June 30, 2025, along with five required auditor communication letters and one informational financial report for the fiscal year ended June 30, 2024, along with one management letter.

BACKGROUND
The following informational reports are included with this communication:

For the year ended June 30, 2025
• City of Roseville Single Audit Report
• Electric Enterprise Fund (Electric) Financial Statements • Electric Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters
• Electric Auditor Communication Letter
• Other Post-Employment Benefit (OPEB) Trust Financial Statements • OPEB Trust Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters
• OPEB Trust Auditor Communication Letter
• Roseville Natural Gas Financing Authority (RNGFA) Financial Statements and Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters • RNGFA Auditor Communication Letter

For the year ended June 30, 2024
• Transportation Development Act (TDA) Funds Audited Financial Statements and Auditors’ Report on Internal Controls over Financial Reporting and on Compliance and Other Matters • TDA Funds Management 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, 2025. The City Council accepted the City’s Annual Comprehensive Financial Report, along with other financial audit reports, on February 4, 2026.

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 Single Audit Report for the City includes the Schedule of Expenditures of Federal Awards, which reports that the City expended $45,364,532. The Single Audit report reflects resolution of the two prior year audit findings and no findings for the year ended June 30, 2025.

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

The auditor communication letters are required by audit standards. These letters convey there were no difficulties encountered performing the audit or 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 required communication that describes the scope of the auditors’ testing of internal controls and compliance and the results of that testing. The auditors did not identify any deficiencies in internal control that they considered to be material weaknesses.

Richardson and Company, an independent certified public accounting firm, conducted an annual audit of the June 30, 2024, TDA funds. The internal control report reflects two findings for untimely reporting resulting from staffing vacancies. Management agrees with the findings and has implemented new controls over financial reporting to meet deadlines. The management letter comments that the City should consider unspent Local Transportation Funds (LTF) as of June 30, 2024, prior to making additional LTF claims. In FY25, the City allocated a significant portion of the unspent funds to projects.

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

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. The financial reports meet the above criteria and are not subject to CEQA. No additional environmental review is required.

CITY COUNCIL STRATEGIC PLAN/OVERARCHING GOALS

1. Ensure a safe and healthy community

Respectfully Submitted,
Teri Quinlan, Accounting Manager

Scott Pettingell, Finance Director

ATTACHMENTS:

1. FY25 Roseville Single Audit Report

2. FY25 Electric Fund Financial Statements

3. FY25 Electric Fund Report on Internal Control

4. FY25 Electric Fund Auditor Communication Letter

5. FY25 OPEB Trust Financial Statements

6. FY25 OPEB Trust Report on Internal Control

7. FY25 OPEB Trust Auditor Communication Letter

8. FY25 RNGFA Financial Statements and Report on Internal Control

9. FY25 RNGFA Auditor Communication Letter

10. FY24 Transportation Development Act Funds Financial Statements and Report on Internal Control

11. FY24 Transportation Development Act Funds Management Letter

REVIEWERS:

Teri Quinlan, Finance Department Created/Initiated - 3/24/2026 Scott Pettingell, Finance Department Approved - 4/1/2026 Kelly Aye, City Attorney Department Approved - 4/1/2026 Katrina Six, City Clerk Department Approved - 4/2/2026
Ryan DeVore, City Manager Department - Assistant City Manager Approved - 4/6/2026 Dennis Kauffman, City Manager Department - Assistant City Manager Approved - 4/6/2026 Michelle Sheidenberger, City Attorney Department Approved - 4/6/2026 Dominick Casey, City Manager Department - City Manager Approved - 4/6/2026 Katrina Six, City Clerk Department Final Approval - 4/7/2026

CITY OF ROSEVILLE, CALIFORNIA
FOR THE YEAR ENDED JUNE 30, 2025 SINGLE AUDIT REPORT

CITY OF ROSEVILLE, CALIFORNIA

Single Audit Report

For the Year ended June 30, 2025

CITY OF ROSEVILLE, CALIFORNIA
Single Audit Report
For the Year Ended June 30, 2025
Table of Contents
Page

Number
Indepe
ndent 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 .............................................................................................. 1 Independent Auditors’ Report on Compliance for Each Major Program and on Internal Control Over Compliance and Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance ............................................................................................................ 3 Schedule of Expenditures of Federal Awards for the
For the Year Ended June 30, 2025 ......................................................................................................................... 6 Notes to the Schedule of Expenditures of Federal Awards ........................................................................................ 7 Schedule of Findings and Questioned Costs for the
For the Year Ended June 30, 2025 ......................................................................................................................... 8 Summary Schedule of Prior Year Findings and Questioned Costs for the For the Year Ended June 30, 2024 ....................................................................................................................... 10

LSLCPAS.COM

INDEPENDE
NT 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 Hon
orable 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 of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Roseville, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated December 16, 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.

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 and therefore, material weaknesses or significant deficiencies may exist that were not identified. 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 the 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.

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.

To the Hon
orable 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
March 17, 2026
2

INDEPENDENT AUDITORS’ REPORT ON COMPLIANCE FOR EACH MAJOR PROGRAM

AND ON INTERNAL CONTROL OVER COMPLIANCE AND REPORT ON SCHEDULE OF EXPENDITURES OF

FEDERAL AWARDS REQUIRED BY THE UNIFORM GUIDANCE
To the Honorable Members of the City Council
City of Roseville, California
Report on Compliance for Each Major Federal Program
Opinion on Each Major Federal Program
We have audited the City of Roseville, California (hereafter, the City)’s compliance with the types of compliance requirements identified as subject to audit in the OMB Compliance Supplement that could have a direct and material effect on each of the City’s major federal programs for the year ended June 30, 2025. The City’s major federal programs are identified in the summary of auditors’ results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, with the types of compliance requirements referred to abo
ve that could have a direct and material effect on each of its major federal programs for the year ended June 30, 2025.

Basis for Opinion on Each Major Federal Program
We conducted our audit of compliance in accordance with auditing standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States; and the audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance). Our responsibilities under those standards and the Uniform Guidance are further described in the Auditors’ Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with 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 opinion on compliance for each major federal program. Our audit does not provide a legal determination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance
Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control over compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

LSLCPAS.COM

To the Hon
orable Members of the City Council
City of Roseville, Californi
a
Auditors’ Responsibilities for the Audit of Compliance
Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. 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, Government Auditing Standards , and the Uniform Guidance will always detect material noncompliance when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compliance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with generally accepted auditing standards, Government Auditing Standards, and the Uniform Guidance, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit.
•
Identify and assess the risks of material noncompliance, 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 City’s compliance with the compliance requirements referred to above and performing such other procedures as we considered necessary in the circumstances. • Obtain an understanding of the City’s internal control over compliance relevant to the audit in order to design audit pro
cedures that are appropriate in the circumstances and to test and repo rt on internal control over compli
ance in accordance with the Uniform Guidance, but not for the purpose of expressing an opinion on the effectiven
ess of the City’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit and any significant deficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance
A deficiency in internal con
trol over compliance exists when the design or operation of a control over compliance does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, noncompliance with a type of compliance requirement of a federal program on a timely basis.

A material weakness in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our con
sideration of internal control over compliance was for the limited purpose described in the Auditor’s Responsibilities for the Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these limitations, during our audit we did not identify any deficiencies in internal control over compliance that we consider to be material weaknesses, as defined above. However, material weaknesses or significant deficiencies in internal control over compliance may exist that were not identified. 4

To the Hon
orable Members of the City Council
City of Roseville, Californi
a
Our audit was not designed for the purpose of expressing an opinion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance.

Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance We have audited the financial statements of the governmental activities, the business-type activities, the aggregate discretely presented component units, each major fund, and the aggregate remaining fund information of the City, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements. We issued our report thereon dated December 16, 2025, which contained unmodified opinions on those financial statements. Our audit was performed for the purpose of forming opinions on the financial statements that collectively comprise the basic financial statements. The accompanying schedule of expenditures of federal awards is presented for purposes of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

Irvine, California
March 17, 2026 (Except for the Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance, which is dated December 16, 2025)
5

CITY OF ROSEVILLE, CALIFORNIA
Schedule of Expenditures of Federal Awards
For the Fiscal Year Ended June 30, 2025
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 12,238,787 $ -$ HCV Family Self-Sufficiency Program 14.896 N/A 80,611 - Mainstream Vouchers 14.879 N/A 643,535 -
Emergency Housing Voucher 14.EHV N/A 628,492 - Total Housing Voucher Cluster* 13,591,425 -
CDBG - Entitlement Grants Cluster*
Community Development Block Grants/Entitlement Grants 14.218 N/A 1,027,029 - Community Development Block Grants/Entitlement Grants - Program Income 14.218 N/A 15,982 - Community Development Block Grants/Entitlement Grants - Beginning Loan Balance 14.218 N/A 2,861,885 - Subtotal Assistance Listing Number 14.218 3,904,896 - Total CDBG - Entitlement Grants Cluster* 3,904,896 - Home Investment Partnership Program 14.239 L4JQPJ7N5NT4 1,560,895 - Home Investment Partnership Program - Beginning Loan Balance 14.239 L4JQPJ7N5NT4 7,671,604 - Subtotal Assistance Listing Number 14.239 9,232,499 - Total Home Investment Partnership Program 9,232,499 - Total Department of Housing and Urban Development 26,728,820 - U.S. Department of Justice
Direct Programs
Law Enforcement Agency De-Escalation Grant 16.710 N/A 150,000 - Edward Byrne Memorial Justice Assistance Grant 16.738 N/A 21,080 - Equitable Sharing Program 16.922 N/A 48,169 -
Total Department of Justice 219,249 -
U.S. Department of Transportation
Direct Programs
Federal Transit Cluster
Federal Transit - Formula Grants (Urbanized Formula Program) 20.507 N/A 474,015 - Federal Transit - Formula Grants (Urbanized Formula Program) 20.507 N/A 1,985,257 - Federal Transit - Formula Grants (Urbanized Formula Program) - Program Income 20.507 N/A 141,221 - Subtotal Assistance Listing Number 20.507 2,600,493 - Bus and Bus Facilities Formula & Discretionary Programs (Bus Program) 20.526 N/A 855,800 - Bus and Bus Facilities Formula & Discretionary Programs (Bus Program) 20.526 N/A 49,199 - Bus and Bus Facilities Formula & Discretionary Programs (Bus Program) 20.526 N/A 156,822 - Bus and Bus Facilities Formula & Discretionary Programs (Bus Program) 20.526 N/A 53,100 - Bus and Bus Facilities Formula & Discretionary Programs (Bus Program) 20.526 N/A 64,959 - Subtotal Assistance Listing Number 20.526 1,179,880 - Total Federal Transit Cluster 3,780,373 -
Passed through the California Department of Transportation Highway Planning and Construction* 20.205 D2C8ARJZKDJ7 5,061,763 - Minimum Penalties for Repeat Offenders for Driving While Intoxicated 20.608 N4YFFGL4CDX5 63,112 - Total Department of Transportation 8,905,248 - U.S. Department of Treasury
Coronavirus State and Local Fiscal Recovery Funds* 21.027 RN15SP9CPJE6 8,282,738 - Total Department of Treasury 8,282,738 -
U.

S. Department of Health and Human Services
CCDF Cluster
Child Care and Development Block Grant* 93.575 HWECY7CDW9Y7 193,368 - Child Care Mandatory and Matching Funds of the Child Care and Development Fund* 93.596 HWECY7CDW9Y7 17,817 - Total CCDF Cluster 211,185 -
Total Department of Health and Human Services 211,185 - U.

S. Department of Homeland Security
Disaster Grants - Public Assistance (Presidentially Declared Disasters) 97.036 UTM3S7LKYQZ4 792,663 - Homeland Security Grant Program 97.067 L786NC553FC1 212,609 - UASI SF-Securing the Cities Grant 97.106 VM1HFWS7PDN5 12,020 - Total Department of Homeland Security 1,017,292 - Total Expenditures of Federal Awards 45,364,532$ - $ * 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 County of Placer
Passed through Securing the Cities (STC) San Francisco Bay Area 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

CITY OF ROSEVILLE, CALIFORNIA
Notes to the Schedule of Expenditures of Federal Awards For the Year Ended June 30, 2025
NOTE 1:

BASIS OF PRESENTATION
The accompanying schedule of expenditures of federal awards (the “Schedule”) includes the federal award activity of the City of Roseville, California (City) under programs of the federal government for the year ended June 30, 2025.

The information in this Schedule is presented in accordance with the requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Pr inciples, and Audit requirements for Federal Awards (Uniform Guidance). Because the Schedule presents only a selected portion of the operations of the City, it is not intended to and does not present the financial position, changes in net position, or cash flows of the City.

NOTE 2: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
Expenditures reported in the Schedule are reported on the modified accrual basis of accounting for the governmental funds and the accrual basis of accounting for the proprietary funds, except for subrecipient expenditures, which are recorded on the cash basis. Such expenditures are recognized following the cost principles contained in the Uniform Guidance, wherein certain types of expenditures are not allowable or are limited as to reimbursement.

Negative amounts shown on the Schedule represent adjustments or credits made in the normal course of business to amounts reported as expenditures in the Schedule.

NOTE 3: INDIRECT COST RATE
The City has not elected to use the de minimis indirect cost rate.

NOTE 4: LOAN PROGRAMS WITH CONTINUING COMPLIANCE REQUIREMENTS The loans listed below are administered directly by the City, and balances and transactions relating to these programs are included in the City’s basic financial statements. Loans made du ring the fiscal year, if an y, are included in the federal expenditures presented in the Schedule of Expenditures of Federal Awards. The balance of loans outstanding at June 30, 2025, consists of:

Assistance
Listing
Number Program Name
Outstanding
Balance at
June 30, 2025

14.218 CDBG - Entitlement Grants Cluster 3,433,735$

14.239 HOME Investment Partnership Program 8,981,971
Total Loans Outstanding 12,415,706$
7

CITY OF ROSEVILLE, CALIFORNIA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025

SECTION I -

SUMMARY OF AUDITORS' RESULTS
Financial Statements
Ty
pe of auditors' report issued: Unmodified Opinion
Internal control over financial reporting:
• Material weaknesses identified?
yes X no
•
Significant deficiencies identified?
yes X none reported
Nonc
ompliance material to financial
statements noted? yes X no
Feder
al Awards
Int
ernal control over major programs:
• Material weaknesses identified? yes X no •
Significant deficiencies identified? yes X none reported T
ype of auditors' report issued on compliance for major programs: Unmodified Opinion Any audit findings disclosed that are required to be
reported in accordance with Title 2 U.S. Code of
Federal Regulations (CFR) Part 200,
Uniform Administrative Requirements, Cost Principles,
and Audit Requirements for Federal Awards
(Uniform Guidance)? yes X no
Ide
ntification of major programs:

Assistance Listing Number(s) Name of Federal Program or Cluster 1 4.871/14.879/14.896/14.EHV Housing Voucher Cluster

14.218 Community Development Block Grants/Entitlement Grants

20.205 Highway Planning and Construction
Dollar threshold used to distinguish
between type A and type B program $1,360,936
Auditee qualified as low-risk auditee? yes X no 8

CITY OF ROSEVILLE, CALIFORNIA
Schedule of Findings and Questioned Costs
For the Year Ended June 30, 2025

SECTION II - FINANCIAL STATEMENT FINDINGS

No matters were reported.

SECTION III - FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

No matters were reported.

9

Finance
311 Vernon Street
Roseville, California 95678-2649
CI

TY OF ROSEVILLE, CALIFORNIA
Summary Schedule of Prior Year Findings and Questioned Costs For the Year Ended June 30, 2024
Referen
ce Number: 2024-001
Status of Finding: This finding is considered resolved.

Reference Number: 2024-002
Status of Finding: This finding is considered resolved. 10

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
FOR THE YEAR ENDED JUNE 30, 2025 AND 2024 FINANCIAL STATEMENTS

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND

Financial Statements

For the Years Ended June 30, 2025 and 2024

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND

Financial Statements

For the Years Ended June 30, 2025 and 2024

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 ....................................................................................................................................... 48 Schedule of Pension Contributions ............................................................................................................. 50 Schedule of the Electric Fund’s Proportionate Share of the City’s Net OPEB Liability .............................. 52 Schedule of OPEB Contributions ................................................................................................................ 54

LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT

To the Honorable Members of the City Council
Electric Department
City of Roseville, California

Report on the Audit of the Financial Statements

Opinion

We have audited the accompanying financial statements of the Electric Fund (hereafter, the Fund) an enterprise fund of the City of Roseville, California (hereafter, the City) as of and for the years ended June 30, 2025 and June 30, 2024, and the related notes to the financial statement s, which collectively comprise the Fund’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 financial position of the Fund as of June 30, 2025 and 2024, and the changes in fi nancial 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 Opinion

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 Auditors’ Responsibilities for the Audit of the Financial State ments section of our report. We are required to be independent of the City and to meet our other ethical responsib ilities, 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

Change in Accounting Principle

As described in Note 1 to the financial statements, in 2025, th e Fund adopted new accounting guidance, GASB Statement No. 101, Compensated Absences. Our opinion is not modified with respect to this matter.

Fund Reporting

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, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accou nting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

To the Honorable Members of the City Council
Electric Department
City of Roseville, California

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.

Auditors’ 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 is sue an auditors’ 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 a uditing standards and Government Auditing Standards will always detect a material m isstatement 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 au diting standards and Government Auditing Standards, we:

• Exercise professional judgment and maintain professional skept icism throughout the audit.

• 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.

• Obtain an understanding of internal control relevant to the au dit 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.

• Evaluate the appropriateness of accounting policies used and t he 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 post-employment benefits schedules as listed on the table of contents be presented to supplement the basic financial statements. Such information is the resp onsibility 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 rep orting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary inf ormation in accordance with au diting standards generally accepted in the United States of America, which consisted of inquiries of manag ement 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

To the Honorable 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 January 29, 2026, 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 intern al control over financial reporting and compliance and the results of that testing, and not to provide an opinion on t he 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.

Sacramento, California
January 29, 2026
3

Electric Enterprise Fund
Management’s Discussion and Analysis
June 30, 2025 and 2024

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, 2025 and 2024. We encourage readers to utilize the in formation 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

2025 compared to 2024

The Electric Fund’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $672.0 million, an increase of $115.8 million or 20.8% over the prior fiscal year.

Total operating revenue was $232.6 million, an increase of $19.6 million or 9.2% compared to fiscal year 2024.Total operating expense was $207.0 million, up $20.1 million or 10.7%. Operating income for the year totaled $25.6 million, and the Electric Fund paid $8.6 million to the City as a payment in lieu of taxes or franchise fee.

2024 compared to 2023

The Electric Fund’s assets and deferred outflows of resources exceeded its liabilities and deferred inflows of resources by $556.2 million, an increase of $36.7 million or 7.1% 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.

4

Financial Analysis

The Statement of Net Position for the Electric Fund is as follows:

Condensed Statement of Net Position
(In thousands)
FY2025 FY2024 FY2023
Assets
Current Assets $258,923.4 $217,846.6 $196,137.8
Capital Assets 586,335.3 502,332.5 490,741.9 Non-current Assets 7,707.8 7,307.7 6,862.8 Total Assets 852,966.5 727,486.8 693,742.5 Deferred Outflows 22,870.1 27,770.8 27,452.6 Liabilities
Current Liabilities 35,003.0 21,068.2 21,476.2 Non-Current Long-term Debt 76,372.1 81,013.5 85,575.0 Long-term Liabilities 87,141.3 91,080.8 86,596.2 Total Liabilities 198,516.4 193,162.5 193,647.4 Deferred Inflows 5,368.8 5,917.3 8,049.2 Net Position
Net Investment in Capital Assets 508,796.5 420,259.5 404,214.2 Restricted:

Benefit of Rate Payers 6,362.2 6,264.6 8,607.5 Debt Service 9,695.0 9,507.5 10,134.4 Unrestricted 147,097.7 120,146.2 96,542.4 Total Net Position $671,951.4 $556,177.8 $519,498.5

2025 compared to 2024
As of June 30, 2025, total assets of the Electric Fund increased by $125.5 million, or 17.2%, compared to the prior fiscal year. This increase was primarily attributable to higher cash and investments held in the City Treasury, reflecting increased customer r eceipts from rate adjustments, a s well as a one-time capital contribution of two combustion turbine generators valued at $71.6 million from the California Department of Water Resources.

Additional increases were recorded in accounts receivable, prepaid expenses, inventories, and net capital assets, reflecting the utility’s ongoing infrastructure improvements. D eferred outflows of resources decreased by $4.9 million, or 17.6%, primarily due to reductions in pension-related deferred amounts.

Total liabilities increased by $5.4 million, or 2.8%, as of June 30, 2025. The increase was largely the result of higher accounts payable, accrued payroll, and deposits payable. These increases were partially offset by lower outstanding debt, as well as declines in the net pension liability and net OPEB liability. Deferred inflows of resources decreased by $0.5 million, or 9.3%, primarily due to lower deferred inflows related to leases and OPEB. 2024 compared to 2023
As of Jun 30, 2024, total assets of the Electric Fund increased by $33.7 million, or 4.9%, compared to the prior fiscal year. The increase was primarily driven by higher cash and investments held in the City Treasury, resulting from increased customer receipts following rate adjustments. Ad ditional increases were recorded in accounts receivable, prepaid expenses, inventories, and capital assets (net of depreciation) as the utility continued to invest in infrastructure improvements. These increases were partially offset by a decline in lease receivables due to the maturity of a lease agreement. Deferred outflows of resources increased by $0.3 million, or 1.2%, mainly due to higher deferred amounts related to pensions and OPEB, partially offset by a decrease in deferred charges on refunding.
5

Total liabilities decr eased by $0.5 million, or 0.3%, as of Jun e 30, 2024. The decrease was primarily due to reductions in outstanding debt and compensated absences. These decreases were partially offset by higher accounts payable, accrued payro ll, net pension liability, and n et OPEB liability. Deferre d inflows of resources decreased by $2.1 million, or 26.5%, largely due to reductions in deferred inflows related to leases and OPEB.

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

Condensed Statement of Revenues, Expenses, and Changes in Net Position (in thousands)
FY2025 FY2024 FY2023
Operating Revenue
Sales Revenue $215,190.9 $190,013.0 $176,889.9
Wholesale sales 3,579.8 7,922.8 1,629.0 Other Operating Revenue 13,839.0 15,112.1 3,271.7 Total Operating Revenue 232,609.7 213,047.9 181,790.6 Operating Expenses
Production and Purchased Power 115,103.9 99,258.0 84,096.0 Transmission & Distribution 35,352.5 33,715.3 28,993.3 Customer Accounts, Administrative and General 26,880.1 27,147.6 29,691.8 Depreciation 29,649.7 26,786.7 25,272.4 Total Operating Expenses 206,986.2 186,907.6 168,053.5 Operating Income 25,623.5 26,140.3 13,737.1 Non-operating Revenues (Expenses)
Interest Expense (2,567.5) (2,731.4) (7,292.5) Subventions and Grants 74.2 149.0 127.8 Payment in Lieu of Taxes (8,640.6) (8,075.8) (7,295.2) Investment income 10,326.8 7,310.4 2,629.1 Gain (loss) on disposal of capital assets (512.8) (6,515.9) (437.4) Lease Revenue 293.4 1,785.9 3,549.1 Proceeds from Litigation - - 9,427.1
Total Non-operating Revenues (Expenses) (1,026.5) (8,077.8) 708.0 Income before Capital Contributions and Transfers 24,597.0 18,062.5 14,445.1 Contributions and Transfers
Capital Contributions 91,634.0 18,428.6 9,580.1 Transfers in/out from/to City (457.4) (435.4) (258.4) Total Contributions and Transfers 91,176.6 17,993.2 9,321.7 Change in Net Position 115,773.6 36,055.7 23,766.8 Net Position, Beginning 556,177.8 519,498.5 495,731.7 Restatement - 623.6 -
Net Position, Ending $671,951.4 $556,177.8 $519,498.5
6

2025 compared to 2024

The Electric Fund’s operating revenues totaled $232.6 million f or the fiscal year, an increase of $19.6 million, or

9.2%, compared to the prior year. This increase was primarily a ttributable to higher electric utility sales revenue resulting from approved rate increases. Electric utility sales revenue increased by $25.2 million, or 13.3%, from the prior fiscal year. Of the approximately $215.2 million in total electric sales revenue, $107.0 million was attributable to commercial customers and $108.2 million to residential custo mers. Wholesale energy sales revenue totaled $3.6 million, a decrease of $4. 3 million, or 54.8%, compared to the prior year. The decrease was primarily due to the absence of a one-time wholesale energy sale to trading part ners in the Pacific Northwest that occurred during a significant regional power shortage in mid-January 2024 and d id not recur in the current fiscal year. Other operating revenues totaled $13.8 million, a net decrease of $1. 3 million, or 8.4%, compared to the prior year. The decrease was primarily attributable to the absence of $12.5 mil lion in non-recurring Greenhouse Gas (GHG) allowance sale proceeds recognized in the prior fiscal year, pa rtially offset by insurance claim reimbursements received in the current fiscal year related to one-time, non-routine major plant repair.

Total operating expenses increased by $20.1
million, or 10.7%, compared to the prior fiscal year,
reaching $207.0 million in FY2025. This increase
was primarily driven by higher power plant
maintenance costs, largely attributable to $12.6
million in one-time, non-r outine major plant repair
costs, which were subsequently recovered through
insurance claims. Increased distribution operations
and maintenance costs, along with higher
depreciation expense, also contributed to the
overall increase in operating expenses. Production
and purchased power expenses, the largest
component of operating costs, totaled $115.1
million and represented 55.6% of total operating
expenses. Distribution and transmission expenses
were $35.4 million, or 17.1% of total expenses.

Administrative and general expenses totaled $18.0
million, accounting for 8.7% of total operating
expenses. Customer accounts and public benefits
expenses were $8.9 million, or 4.3% of total
expenses. Depreciation expense increased by $2.9 million, or 10.7%, to $29.6 million, representing 14.3% of total operating expenses. The increase r eflects the addition of capit al assets placed into service as part of ongoing infrastructure investment and one-time capital contribution from the California Department of Water Resources.

Consistent with the City Charter, the Utility may pay an in-lie u franchise fee not exceeding 4% of expenses to the City General Fund as a Payment in Lieu of Taxes. For fiscal yea r 2025, this franchise fee transfer totaled $8.6 million, an increase of $0.6 million, or 7.0%, compared to the prior fiscal year.

Investment earnings, including the net change in the fair value of investments, totaled $1 0.3 million for the fiscal year, an increase of $3.0 million compared to the prior year. T his increase was primarily attributable to higher fair values within the City’s pooled investment portfolio.

A loss on disposal of capital assets of $0.5 million was recogn ized in fiscal year 2025, a decrease of $6.0 million, or 92.1%, compared to the prior fiscal year. This significant decrease was primarily attributable to the absence of a one-time retirement of the legacy meter system that occurred in the prior year, which was replaced by the Advanced Metering Infrastructure (AMI) system that became operational in May 2024.

Operating Expenses
Production
and
Purchased
Power
56%Distribution &
Transmission
17%
Customer accounts,
Public Benefits
4%
Administrative and
General
9%
Depreciation
14%
Operating Expenses
7

Total capital contributions received were $91.6 million, an inc rease of $73.2 million, or 397.2%, largely driven by one-time capital contribution v alued at $71.6 million of two c ombustion turbine generators from the California Department of Water Resources.

Interest and related fiscal charges on debt service totaled $2. 6 million, reflecting a decrease of $0.2 million, or

6.0% compared to the prior fiscal year, due to a reduction in outstanding debt.

The net transfers out of the Electric Fund to the City projects was $0.5 million.

2024 compared to 2023

The Electric Fund’s operating revenue totaled $213.0 million, a n 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
o f 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 in crease 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 su pply 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 e xpenses 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 inc reased 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-lie u franchise fee not exceeding 4% of expenses to the City General Fund as a Payment in Lieu of Taxes. For fiscal yea r 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 i ncrease was primarily driven by higher interest earnings, as well as rising fair values in the pooled investment portfolio.

A loss on disposal of capital assets totaling $6.5 million was recognized in fiscal year 2024, representing an increase of $6.1 million, or 1,389.7%, com pared 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.

Production
and
Purchased
Power
53%Distribution &
Transmission
18%
Customer
accounts, Public
Benefits
5%
Administrative and
General
10%
Depreciation
14%
Operating Expenses
8

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.

Capital Assets
2025 compared to 2024
As of June 30, 2025, the Electric Fund’s net utility plant and equipment, which includes investments in land, buildings, production and distribution facilities, as well as g eneral items like equipment, furniture and right-to-use leased assets, totaled $586.3 million. This figure represents an increase of $84.0 million or 16.7% compared to prior fiscal year.
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 g eneral 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.

Capital Assets
(In thousands)
FY2025 FY2024 FY2023
Land $5,493.5 $5,467.3 $5,467.3
Buildings & Improvements 35,840.0 31,789.7 31,789.7 Equipment & Vehicles 40,386.6 37,984.5 25,694.8 Traffic Signals 80,431.9 77,603.4 75,166.4 Plant and Substations 97,524.9 97,616.1 93,518.0 Distribution 432,183.2 413,762.6 392,600.6 Generation 291,217.4 219,618.6 218,132.9 Construction in Progress 23,993.1 10,402.4 20,623.4 Subscriptions 1,147.7 1,370.9 1,347.9 Less: Accumulated Depreciation (421,883.0) (393,283.0) (373,599.1) Capital Assets, Net $586,335.3 $502,332.5 $490,741.9
Debt Adm
inistration
2025 compared to 2024
Total long-term debt, net of unamortized premium of $2.9 million, was $80.8 million at the end of fiscal year 2025.

This represents a decrease of $4.6 million or 5.3% compared to the prior fiscal year. The current long-term debt due within a year was $4.4 million and non-current long-term debt was $73.5 million. The debt is backed by the revenue of the Utility.

The Utility maintains a debt service coverage ratio that exceed s 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, 2025, the Utility had debt coverage of 8.64. 9

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 exceed s 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.

Long-Term Debt
(In thousands)
FY2025 FY2024 FY2023
Certificates of Participation $5.0 $5.0 $5.0
Revenue Bonds 80,767.1 85,328.5 89,820.0 Total Long-Term Debt 80,772.1 85,333.5 89,825.0 Current Portion of Long-Term Debt 4,400.0 4,320.0 4,250.0

Economic Condition, Outlook and Activity

The Electric Fund experienced a 3.0% growth in its residential and commercial customer base compared to the prior fiscal year. Total retail electric energy sales increased 2.1% to 1.2 million megawatt-hours, driven primarily by an 8.4% increase in residential usage, despite a 2.7% decline i n commercial sales due to the largest industrial customer operating at reduced c apacity for facility rehabilitat ion beginning in September 2023. Energy usage by this customer has gradually increased since January 2025 and is expected to return to normal production levels by summer 2026. Combined customer growth and higher energy sales contributed to a 13.2% increase in total electric sales revenue, primarily driven by rate adjustments and higher consumption.

During the fiscal year, the Electric Fund maintained strong cre dit ratings. On August 18, 2025, Moody’s upgraded the Fund’s rating to “Aa3” from “A1” with a stable outlook. Fitch Ratings and Standard & Poor’s Global Ratings both affirmed an “AA” rating with stable outlooks.

Looking ahead, revenues are expected to cover expenses over the next several years, supported by continued growth in residential and commercial customers within the servi ce territory. To address projected revenue needs, the utility plans to recommend a rate increase to ensure sufficient funding for operations and infrastructure. Future rate adjustments may be influenced by factors such as the volatility of natural gas and energy markets in California, compliance with state and federal renewable energy mandates, as well as the increasing 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 ENTERPRISE FUND
Statement of Net Position
June 30, 2025 and 2024
ASSETS
Current assets:

Cash and investments in city treasury 166,266,864$ 149,146,902$ Receivables (net of uncollectibles):

Accounts 43,132,969 29,497,685
Notes and loans 976,908 791,487
Leases 123,658 110,526
Inventories 28,262,186 23,055,490
Prepaid costs 8,859,260 4,452,290
Restricted:

Cash and investments with fiscal agents 11,301,542 10,792,185 Total current assets 258,923,387 217,846,565
Noncurrent:

Leases 508,395 632,051
Investment in NCPA reserves 7,199,392 6,675,685
Capital assets not being depreciated 29,486,573 15,869,692 Capital assets - net of accumulated depreciation/amortization 556,848,741 486,462,810 Total noncurrent assets 594,043,101 509,640,238
Total assets 852,966,488 727,486,803

DEFERRED OUTFLOWS OF RESOURCES
Deferred charge on refunding 3,744,628 4,089,910 Deferred pension related items 17,494,422 21,750,929 Deferred OPEB related items 1,631,000 1,930,000
Total deferred outflows of resources 22,870,050 27,770,839

LIABILITIES
Current liabilities:

Accounts payable 21,967,112 8,616,163
Accrued liabilities 2,754,012 2,629,203
Unearned revenues 10,955 3,751
Deposits payable 2,891,101 2,626,087
Subscriptions 271,130 318,000
Accrued compensated absences 2,708,687 2,555,042 Long-term debt - due in less than one year 4,400,000 4,320,000 Total current liabilities 35,002,997 21,068,246
Noncurrent liabilities:

Subscriptions 240,239 511,368
Accrued compensated absences 2,426,489 2,298,231 Long-term debt - due in more than one year 76,372,108 81,013,533 Net pension liability 75,098,554 78,200,115
Net OPEB liability 9,376,000 10,071,000
Total noncurrent liabilities 163,513,390 172,094,247 Total liabilities 198,516,387 193,162,493

DEFERRED INFLOWS OF RESOURCES
Deferred OPEB related items 4,776,000 5,206,000
Lease deferred inflows 592,773 711,327
Total deferred inflows of resources 5,368,773 5,917,327

NET POSITION
Net investment in capital assets 508,796,465 420,259,511 Restricted for debt service 9,694,961 9,507,484
Restricted for sustainable energy program (AB 32) 6,362,234 6,264,572 Unrestricted 147,097,718 120,146,255
Total net position 671,951,378$ 556,177,822$
2024 2025
See Notes to Financial Statements.
11

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Statement of Revenues, Expenses and Changes in Net Position For the Years Ended June 30, 2025 and 2024

OPERATING REVENUES
Residential sales 108,192,664$ 92,880,261$
Commercial and industrial sales 106,970,291 97,105,051 Other sales 27,958 27,662
Wholesale sales 3,579,795 7,922,836
Other operating revenues 13,839,000 15,112,115
Total operating revenues 232,609,708 213,047,925

OPERATING EXPENSES
Production and purchased power 115,103,859 99,258,029 Transmission 7,315,391 9,407,591
Distribution 28,037,148 24,307,700
Customer accounts, service and informational 4,980,831 5,317,453 Public benefits and administrative and general 21,899,305 21,830,191 Depreciation/Amortization 29,649,727 26,786,709
Total operating expenses 206,986,261 186,907,673
Operating income (loss) 25,623,447 26,140,252

NONOPERATING REVENUES (EXPENSES)
Subvention and grants 74,244 149,011
Payment in lieu of taxes (franchise transfer) (8,640,558) (8,075,815) Increase in value of certain NCPA projects and reserves 523,707 555,447 Investment income 9,906,899 6,858,825
Interest expense and fiscal charges (2,567,526) (2,731,435) Amortization of gain (loss) on refunding (103,857) (103,857) Loss on disposal of capital assets (512,789) (6,515,885) Lease revenue 293,397 1,785,905
Total nonoperating revenues (expenses) (1,026,483) (8,077,804) Income (loss) before capital contributions and transfers 24,596,964 18,062,448 Capital contributions - connection/impact fees 2,514,319 1,882,559 Capital contributions from developers and other agencies 81,304,510 8,710,776 Contributions in aid of construction 7,815,205 7,835,255 Transfers out (457,442) (435,356)
Change in net position 115,773,556 36,055,682
Net position-beginning 556,177,822 519,498,510
Restatements - change in accounting principle - 623,630 Net position-beginning, as restated 556,177,822 520,122,140 Net position-ending 671,951,378$ 556,177,822$
2024 2025
See Notes to Financial Statements.
12

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Statement of Cash Flows
For the Years Ended June 30, 2025 and 2024

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 220,551,283$ 194,595,821$
Payments to suppliers (125,955,015) (115,090,435)
Payments to employees (47,484,313) (44,133,468)
Receipts from counterparties - 7,900,000 Receipts returned to counterparties - (7,900,000) Other receipts 805,835 14,175,905
Net cash provided by (used for)
operating activities 47,917,790 49,547,823

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Payment in lieu of taxes (franchise transfer) (8,640,558) (8,075,815) Subvention and grants 185,944 179,090
Loans to developers (185,421) (791,487)
Transfers out (457,442) (435,356)
Net cash provided by (used for)
noncapital financing activities (9,097,477) (9,123,568)

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Capital contributions 11,035,873 7,835,255
Acquisition and construction of capital assets (36,941,726) (36,221,312) Principal paid on long term debt (4,320,000) (4,250,000) Principal paid on subscriptions (335,881) (331,476) Interest paid on capital debt (2,597,547) (2,787,867) Connection/impact fees 2,407,150 1,882,559
Proceeds from sales of assets 80,911 61,845 Net cash provided by (used for)
capital and related financing activities (30,671,220) (33,810,996)

CASH FLOWS FROM INVESTING ACTIVITIES
Lease payments received 311,633 1,825,112
Fair value adjustment 5,321,609 3,066,949
Interest on investments 3,846,984 3,387,453
Net cash provided by (used for)
investing activities 9,480,226 8,279,514
Net increase (decrease) in
cash and cash equivalents 17,629,319 14,892,773
Cash and cash equivalents-beginning 159,939,087 145,046,314 Cash and cash equivalents-ending 177,568,406$ 159,939,087$ 2024 2025
See Notes to Financial Statements.
13

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Statement of Cash Flows
For the Years Ended June 30, 2025 and 2024
2024 2025

RECONCILIATION OF OPERATING INCOME (LOSS)

TO NET CASH PROVIDED BY (USED FOR)

OPERATING ACTIVITIES
Operating income (loss) 25,623,447$ 26,140,252$
Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:

Depreciation/Amortization 29,649,727 26,786,709
(Increase) decrease in receivables (12,148,996) (4,427,075) (Increase) decrease in inventories (5,206,696) (1,439,114) (Increase) decrease in prepaids (4,406,970) (1,566,503) Increase (decrease) in accounts payable 13,524,211 696,640 Increase (decrease) in deposits payable 272,218 (27,586) Increase (decrease) in compensated absences 281,903 199,580 Increase (decrease) in net pension items 1,154,946 3,685,920 Increase (decrease) in net OPEB items (826,000) (501,000) Total adjustments 22,294,343 23,407,571
Net cash provided by (used for)
operating activities 47,917,790$ 49,547,823$

SCHEDULE OF NON-CASH NONCAPITAL, CAPITAL,

AND INVESTING ACTIVITIES
Net amortization of premium and deferred loss (241,426)$ (241,425)$ Contribution of capital assets 77,304,508 8,710,776 Change in JPA reserves 523,707 555,447
Gain/(loss) on disposition of capital assets (593,700) (6,577,730) Initiation of subscriptions - 22,964 Adjustments from change in accounting principle 623,630 - See Notes to Financial Statements.
14

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 1: SUMMARY OF SIGNIF ICANT 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 c onformity with accounting principles generally accepted in the United States of America. The Governmental Acco unting 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 ne t 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.
15

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) E. Joint Powers Authorities
T
he Electric Fund records its equity in the general operating r eserve 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
C
ertain payments to vendors reflect costs applicable to future fiscal years and are recorded as prepaid items in the financial statements.

G. Inventories
Invento
ries are valued at cost, using the weighted-average method and consist primarily of supplies and equipment held for internal consumption.

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 p osition 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 C ode. Significant customer deposits may be held in the form of certificates of de posit in the Electric Fund’s name with the interest paid to the customer.
16

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

J. Compensated Absences

Compensated Absences including accumulated unpaid vacation, sic k 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 r endered to customers. All re sidential and commercial ut ility customers are billed once per mont h. There are twenty-three bil ling 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. Th is analysis and allocation proc ess 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.
2025 2024
Beginning balance 4,853,273$ 5,277,323$
Net change 281,903 (424,050)
Ending balance 5,135,176$ 4,853,273$
Current portion 2,708,687$ 2,555,042$
17

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

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 re ported 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 it s investments based on the hierarchy established by GAAP. The fair value hierarchy, which has three levels, is b ased 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 (i ncluding 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 asse ts 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.

18

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

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. 101 – In June 2022, the GASB iss ued 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 was implemented in the current fiscal year. The effect on the Electric Fund’s financial statements is presented in Note 11 and the statement of revenues, expenses and changes in net position.

Effective in Future Fiscal Years

GASB Statement No. 103 – In April 2024, the G ASB 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. The Statement is effective for reporting period s 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 governme nt financial statements with essential information about certain types of capital assets. The Statemen t is effective for reporting periods beginning after June 15, 2025. 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

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)

GASB Statement No. 105 – In Dec ember 2025, the GASB issued Statement No. 105, Subsequent Events. The objective of this Statement is to improve the financial reporting requirements for subsequent events, thereby enhancing consistency in their application and better meeting the information needs of financial statement users. The Statement is effective for reporting periods beginning after June 15, 2026. 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 an d 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 whe n an expense is incurred for purposes for which both restricted and unrestricted net position is available.

20

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 2: CAPITAL ASSETS

Capital asset activity for the year ended June 30, 2025, is as follows:

Balance at
June 30, 2024 Additions Retirements Transfers
Balance at
June 30, 2025
Capital assets, not being depreciated
Land 5,467,335 $ - $ - $ 26,186$ 5,493,521 $ Construction in progress 10,402,357 35,260,318 - (21,669,623) 23,993,052 Total capital assets not being depreciated 15,869,692 35,260,318 - (21,643,437) 29,486,573 Capital assets, being depreciated
Buildings 28,679,133 - - 3,836,192 32,515,325 Improvements 1,878,973 - - 183,701 2,062,674 Vehicles and equipment 37,984,490 100,133 (473,051) 2,775,039 40,386,611 Landscaping 1,231,560 30,445 - - 1,262,005 Traffic signals 77,603,435 1,478,495 - 1,349,996 80,431,926 Plant and substations 97,616,063 186,031 (277,192) - 97,524,902 Distribution 413,762,630 5,592,044 (669,948) 13,498,509 432,183,235 Generation 219,618,605 71,598,773 - - 291,217,378 Subscriptions 1,370,888 - (223,228) - 1,147,660 Total capital assets being depreciated 879,745,777 78,985,921 (1,643,419) 21,643,437 978,731,716 Less accumulated depreciation for
Buildings (8,937,626) (756,939) - - (9,694,565) Improvements (1,388,113) (77,367) - - (1,465,480) Vehicles and equipment (20,707,263) (3,921,147) 473,051 - (24,155,359) Landscaping (636,362) (57,008) - - (693,370) Traffic signals (53,602,926) (2,610,209) - - (56,213,135) Plant and substations (41,239,105) (2,397,240) 187,170 - (43,449,175) Distribution (138,656,605) (9,589,416) 166,270 - (148,079,751) Generation (127,511,347) (9,936,198) - - (137,447,545) Subscriptions (603,620) (304,203) 223,228 - (684,595) Total accumulated depreciation (393,282,967) (29,649,727) 1,049,719 - (421,882,975) Net capital assets being depreciated 486,462,810 49,336,194 (593,700) 21,643,437 556,848,741 Capital assets, net 502,332,502$ 84,596,512$ (593,700)$ -$ 586,335,314$ 21

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 2: CAPITAL ASSETS (CONTINUED)

Capital asset activity for the year ended June 30, 2024, 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, 2025 a nd 2024 was $29,649,727 and $26,786,709 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 cert ain 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 electron ic 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, 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$ 22

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
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 h eld by the City in a specif ic 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
C
ash and investments of the Elec tric 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 Ele ctric 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, 2025 consist of the following:
2025 2024
Cash and inv estments in City Treasury 166,266,864$ 149,146,902$ Restricted cash and investments with fiscal agent 11,301,542 10,792,185 Total cash and inv estments 177,568,406$ 159,939,087$
2025 2024
Cash on hand 2,950$ 3,450$
City of Roseville pooled cash and investments 166,263,914 149,143,452 Investments 11,301,542 10,792,185
Total cash and inv estments 177,568,406$ 159,939,087$
23

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 3: CASH AND INVESTMENTS (CONTINUED)
B. Investments Authorized by the California Government Code and the City’s Investment Policy T
he 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; a nd 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
T
he 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 at Time
of Purchase
Maximim
Percentage
Allowed
Maximim
Inv estment 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 30 days None None None
Bankers' Acceptances 180 days None 40% 30%
Commercial Paper (b) 270 days A-1 40% 10%
Medium-Term Notes 5 Years A 30% 10%
Collateralized Time Deposits 5 Years None 30% None
Negotiable Certificates of Deposit 5 Years A 30% None
Local Agency Investment Fund (LAIF) 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
(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 en terprise fund debt or inv estments.

Authorized Investment Type
(a) In specified fund accounts where liquidity is not the primary inv estment objectiv e, 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 approv al of extended inv estment terms. All longer-term inv estments must be federal Treasury of Agency securities. 24

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
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, 2025:

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
N/A - 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
Inv estment Agreements N/A A+ to AA
California Asset Management Pool (CAMP) N/A None
Local Agency Investment Fund (LAIF) N/A None
Guaranteed Inv estment Contract N/A None
Bankers' Acceptance
Money Market Funds
Authorized Inv estment Type
U.S. Treasury Obligations
Certificates of Deposit
Time Deposits
12 Months
or Less
More than
60 Months Total
City of Roseville Investment Pool 166,263,914$ - $
166,263,914$
Money Market Mutual Funds 9,150,805 - 9,150,805
Guaranteed Inv estment Contract (GIC) - 2,150,737 2,150,737 Total inv estments 175,414,719$ 2,150,737$ 177,565,456$ Remaining Maturity (in Months)
June 30, 2025
12 Months
or Less
More than
60 Months Total
City of Roseville Investment Pool 149,143,452$ -$
149,143,452$
Money Market Mutual Funds 8,641,448 - 8,641,448
Guaranteed Inv estment Contract (GIC) - 2,150,737 2,150,737 Total inv estments 157,784,900$ 2,150,737$ 159,935,637$ Remaining Maturity (in Months)
June 30, 2024
25

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

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, 2025 and 2024 for each inve stment type as provided by Standard and Poor’s investment rating system:

F. Fair Value Measurements

The Electric Fund categorizes its fair value measurements withi n 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 t he 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 Rosev ille Inv estment Pool 166,263,914 $
Money Market Mutual Funds 9,150,805
Guaranteed Investment Contract (GIC) 2,150,737
Total Investments 177,565,456 $
June 30, 2025
Total
Not Rated
City of Rosev ille Inv estment Pool 149,146,902 $
Money Market Mutual Funds 8,637,998
Guaranteed Inv estment Contract (GIC) 2,150,737
Total Inv estments 159,935,637 $
June 30, 2024
26

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 3: CASH AND INVESTMENTS (CONTINUED)

The Electric Fund has the following recurring fair value measurements as of June 30, 2025 and 2024:

Inv estment at Fair Value
Balance at
June 30, 2025
Significant
Other
Observable
Inputs (Level 2)
Money Market Mutual Funds 9,150,805 $ 9,150,805 $
Inv estments not subject to the Fair Value Heirarchy
City of Roseville Investment Pool 166,263,914
Investments Measured at Amortized Cost
Guaranteed Investment Contract (GIC) 2,150,737
Total Inv estments 177,565,456 $
Inv estment at Fair Value
Balance at
June 30, 2024
Significant
Other
Observable
Inputs (Lev el 2)
Money Market Mutual Funds 8,637,998$ 8,637,998$
Inv estments not subject to the Fair Value Heirarchy
City of Rosev ille Inv estment Pool 149,146,902
Investments Measured at Amortized Cost
Guaranteed Investment Contract (GIC) 2,150,737
Total Inv estments 159,935,637$
27

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 4: LEASES AND SUBSCRIPTION -BASED INFORMATION TECHNOLOGY ARRANGEMENTS

A. Lessor Leases

Lease Receivable for the year ended June 30, 2025, and June 30, 2024 are as follows:

Deferred Inflows of Resources for the year ended June 30, 2025, and June 30, 2024 are as follows:

2025 Balance as of Balance as of
July 1, 2024 Additions Reductions June 30, 2025
Lease Receivable
Buildings 742,577$ -$ 110,524$ 632,053$ Total Lease Receivable 742,577$ -$ 110,524$ 632,053$ 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$ 2025 Balance as of Balance as of
July 1, 2024 Additions Reductions June 30, 2025
Deferred Inflow of Resources:

Buildings 711,327$ -$ 118,554$ 592,773$ Total Deferred Inflows of Resources 711,327$ -$ 118,554$ 592,773$ 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$ 28

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 4: LEASES AND SUBSCRIPTION- BASED INFORMATION TECHNOLOGY AR RANGEMENTS (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 subscr iption 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. Subsequen tly, the subscription asset is amortized on a straight‐line basis over its useful life. Key estimates and judgments re lated to subscriptions include how the Fund determines (1) the discount rate it uses to discount the expect ed subscription payments to present value, (2) lease term, and (3) subscription payments.

• The Fund uses the interest rate charged by the vendor as the d iscount rate. When the interest rate charged by the vendor is not provided, the Fund generally uses its estimat ed incremental borrowing rate as the discount rate for subscriptions.

• The subscription term includes the noncancellable period of th e subscription. Subscription payments included in the measurement of the subsc ription liability are composed o f 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 chang es occur that are expected to significantly affect the amount of the subscription liability.

Amount of
SBITA Capital Accumulated
Assets Amortization
1,147,660$ (684,595) $
2025
Subscription Type
Software as a service
Amount of
SBITA Capital Accumulated
Assets Amortization
1,370,888$ (603,620) $
2024
Subscription Type
Software as a service
Principal Interest
2026 271,130 $ 8,200 $
2027 240,239 3,807
Total 511,369 $ 12,007 $
For the Year Ending June 30,
Subscription Liability
29

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

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.

Long-term debt activity for the year ended June 30, 2025, is as follow:

Long-term debt activity for the year ended June 30, 2024, is as follow:

B. 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.

Original Issue
Amount
Balance at
June 30, 2024 Additions Retirements
Balance at
June 30, 2025 Current Portion
Certificates of Participation:
39,940,000$ 5,000 $ - $ - $ 5,000$ - $ (728,254) - - - - - Total certificates of participation 39,211,746 5,000 - - 5,000 - Revenue Bonds:
56,210,000 49,665,000 - (1,170,000) 48,495,000 1,215,000 5,069,937 3,138,533 - (241,425) 2,897,108 - 34,770,000 32,525,000 - (3,150,000) 29,375,000 3,185,000 Total revenue bonds 96,049,937 85,328,533 - (4,561,425) 80,767,108 4,400,000 Total certificates of participation & revenue debt 135,261,683 85,333,533 - (4,561,425) 80,772,108 4,400,000 Subscriptions - 829,368 - (317,999) 511,369 271,130 Total 135,261,683 $ 86,162,901 $ - $ (4,879,424)$ 81,283,477 $ 4,671,130 $ 2004 Electric System Reveue, 3.00-5.25%,
due 2/1/34
Less: deferred bond discount

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
Original Issue
Amount
Balance at
June 30, 2023 Additions Retirements
Balance at
June 30, 2024 Current Portion
Certificates of Participation:
39,940,000$ 5,000 $ - $ - $ 5,000$ - $ (728,254) - - - - - Total certificates of participation 39,211,746 5,000 - - 5,000 - Revenue Bonds:
56,210,000 53,270,000 - (3,605,000) 49,665,000 1,170,000 5,069,937 3,379,958 - (241,425) 3,138,533 - 34,770,000 33,170,000 - (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 135,261,683 $ 90,962,838 $ 22,963 $ (4,822,900)$ 86,162,901 $ 4,638,000 $ 2004 Electric System Reveue, 3.00-5.25%,
due 2/1/34
Less: deferred bond discount
2020 Electric System Reveue Refunding

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

3.00-5.00%, due 2/1/37
Add: bond premium
30

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 5: LONG-TERM DEBT (CONTINUED)
C. Revenue Bonds
2017A
Electric System Revenue Refunding Bonds
On February 8, 2017, the City issued Revenue Bonds in the origi nal 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 ye ar. Principal payments are due annually on February 1 starting in 2022 and running through 2037. The balance outstanding as of June 30, 2025 is $48,495,000. 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, 2025 is $29,375,000.

D. Electric System Pledged Revenues
A
s of June 30, 2025, 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 $99,577,799. 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 fi scal year 2025, net revenues amounted to $59,523,787 which represents coverage of 864 percent over the $6,887,524 in debt service.

E. Original Issue Discounts and P remiums, 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 o f 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.

F. Debt Service Requirements
Annual debt
service requirements are shown for all long-term debt:

Principal Interest
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 4,535,000 2,057,303
2031-2035 24,915,000 8,433,004
2036-2040 30,365,000 1,833,800
Total 77,875,000$ 21,702,800$
For the Year Ending June 30,
31

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024

NOTE 6: PENSION PLAN

A. Plan Description

Substantially all Electric Fund employees are eligible to parti cipate 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 descripti on 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, 2025 and 2024, are summarized as follows:

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 t he 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 $9,359,353 and $8,644,684 for the year ended June 30, 2025 and 2024, respectively.

D. Pension Liability, Pension Expense and Deferred Outflows/Inf lows of Resources Related to Pensions

As of June 30, 2025 and 2024, the Electric Fund reported a net pension liability of $75,098,554 and $78,200,115 respectively for its proportionate share of the City’s Miscellaneous Plan’s net pension liability.

Hire date Prior to January 1, 2013 On or after January 1, 2013 Benefit v esting schedule 5 years serv ice 5 years serv ice 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% 7.75%
Required employer contribution rates 11.49% 15.59%
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 v arious funds. 32

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 6: PENSION PLAN (CONTINUED)
The net pension liability of the Plan was measured as of June 3 0, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2023. 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 2023 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, 2024 and June 30, 2023, for June 30, 2025 and 2024 was 23.23 percent and 23.95 percent respectively.

For the year ended June 30, 2025 and 2024, the Electric Fund re cognized pension expense of $10,514,299 and $12,329,356 respectively. At June 30, 2025 and 2024, the Electric Fund reported deferred outflows of resources and deferred inflows of resources related to pension from the following sources:

The amount of $9,359,353 reported at June 30, 2025 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, 2026. Other amounts reported as deferred outflows and inflows of resources related to pensio ns will be recognized as a r eduction to pension expense as follows:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
Employer contributions subsequent to measurement date 9,359,353$ - $ D
ifferences between expected and actual experience 4,516,294 - C
hanges in assumptions 1,714,474 -
N
et differences between projected and actual earnings on pension plan investments 1,904,301 -
T
otal 17,494,422$ -$
20 25
Deferred Outflows
of Resources
Deferred Inflows of
Resources
Employer contributions subsequent to measurement date 8,644,684$ - $ D
ifferences between expected and actual experience 3,387,703 - C
hanges in assumptions 3,534,699 -
N
et differences between projected and actual earnings on pension plan investments 6,183,843 -
T
otal 21,750,929$ -$
20 24
For the Year Ending June 30,
Net Deferred
Outflows/(Inflows)
of Resources
2026 3,528,892$
2027 5,099,149
2028 263,624
2029 (756,596)
Total 8,135,069$
33

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 6: PENSION PLAN (CONTINUED)
E. Actuarial Assumptions
T
he 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, 2023 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.

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) an d 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 flo ws 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.

Year Ended June 30, 2025 June 30, 2024
Valuation Date June 30, 2023 June 30, 2022
Measurement Date June 30, 2024 June 30, 2023
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.90% 6.90%
Inflation 2.30% 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 6.80% (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; Lev el % of pay
Derived using CalPERS membership data
34

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 6: PENSION PLAN (CONTINUED)
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.

F. Discount Rate
T
he discount rate used to measure the total pension liability was 6.90 percent for the Plan as of the measurement date of June 30, 2024 and 2023. 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 w as projected to be available to make all projected future benefit payments of current active and inactive employee s. 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 th e City’s Miscellaneous Plan Net Pension Liability to Changes in the Discount Rate
T
he 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:

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 st udy Asset Class (1)
2025 2024
1% Decrease 5.90% 5.90%
Net Pension Liability 105,232,034$ 107,734,441$
Current Discount Rate 6.90% 6.90%
Net Pension Liability 75,098,554$ 78,200,115$
1% Increase 7.90% 7.90%
Net Pension Liability 50,201,972$ 53,853,671$
35

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 6: PENSION PLAN (CONTINUED)
H. Pension Plan Fiduciary Net Position
Det
ailed information the City’s collective net pension liabilit y 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: POST - EMPLOYMENT 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 pla n 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.

Contributions – Contribution requirements of the Electric Fund are establishe d and may be amended by the City Council. The Council established rates based on an actuari ally determined rate. For the year ended June 30, 2025 and 2024, the Electric Fund contributed $806,000 and $1,715,212 respectively.

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

As of June 30, 2025 and 2024, the Electric Fund reported a net OPEB liability of $9,376,000 and $10,071, 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, 2025, 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 2025 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, 2025 and 2024, was 15.30 percent 13.08 percent respectively. 36

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 7: POST - EMPLOYMEN T BENEFITS (CONTINUED)
For the year ended June 30, 2025 and 2024, the Electric Fund recognized OPEB expense (income) of $10,595 and ($64,627) respectively. At June 30, 2025 and 2024, the Electric Fund reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources:

Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB w ill be recognized as an reduction to pension expense for the year ending June 30, 2025 are as follows:

Deferred Outflows
of Resources
Deferred Inflows of
Resources
Changes in assumptions 357,684 $ 1,877,618$
Differences between expected and actual experience 1,273,316 1,889,235 Net differences between projected and actual earnings on plan investments - 1,009,147
Total 1,631,000$ 4,776,000$
2025
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
For the Year Ending June 30,
Net Deferred
Outflows/(Inflows)
of Resources
2026 (650,027) $
2027 (1,204,459)
2028 (930,098)
2029 (561,627)
2030 118,033
Therafter 83,178
Total (3,145,000)$
37

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 7: POST - EMPLOYMEN T BENEFITS (CONTINUED)
The Electric Fund’s proportion of the City’s total OPEB liabili ty in the June 30, 2023 ac tuarial 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 2000 to 2019. Further details of the Experience Study can be found on the CalPERS website.

In measurement year ended June 30, 2025 and 2024, the discount rate was 6.25 percent.

The table below reflects long-term expected real rate of return by asset class for the year ended June 30, 2025 and June 30, 2024. The rate of return was calculated using the capital market assumptions applied to determine the discount rate and asset allocation. These geom etric rates of return are net of administrative expenses.

Year Ended June 30, 2025 June 30, 2024
Valuation Date June 30, 2023 June 30, 2023
Measurement Date June 30, 2025 June 30, 2024
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate 6.25% 6.25%
Inflation 2.50% 2.50%
Payroll Growth 2.75% 2.75%
Projected Salary Increase 2.75% 2.75%
Investment Rate of Return 6.25% 6.25%
Healthcare cost trend rate
Mortality
Entry-Age Normal Cost Method; Lev el % 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.

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%
Asset Class
38

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 7: POST - EMPLOYMEN T BENEFITS (CONTINUED)
A. Discount Rate
T
he discount rate used to measure the total OPEB liability was 6.25 percent as of measurement date of June 30, 2025 and 2024. 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 al l 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 th e Plan’s net OPEB Liability to changes in the discount rate
T
he 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:

C. Sensitivity of the Electric Fund’s proportionate share of th e Plan’s net OPEB Liability to changes in the healthcare cost trend rate
T
he 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:
1% decrease Current 1% increase

5.25% 6.25% 7.25%
Net OPEB Liability 14,109,065$ 9,376,000$ 5,464,526$ 2025
1% decrease Current 1% increase

5.25% 6.25% 7.25%
Net OPEB Liability 13,590,479$ 10,071,000$ 6,326,276$ 2024
1% decrease Current 1% increase
(5.5% (6.5% (7.5%
decreasing to decreasing to decreasing to

2.75%) 3.75%) 4.75%)
Net OPEB Liability 5,819,517$ 9,376,000$ 12,916,904$ 2025
1% decrease Current 1% increase
(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
39

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 7: POST - EMPLOYMEN T BENEFITS (CONTINUED)
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.

NOTE 8: NORTHERN CALIFORNIA POWER AGENCY (NCPA)
A. General
T
he 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 acquis ition and use of electrical generation and transmission facilities, and to optimize the use of those facil ities 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, 2025, the City had expenses totaling $8,793,791 from resource contracts and the sale of energy generated by NCPA. In contrast, for the fiscal y ear ending June 30, 2024, the City had expenses totaling $7,425,716 from resource contracts and the sale of energy generated by NCPA.

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

June 30, 2025 June 30, 2024
General Operation Reserve (included advances) 5,618,599$ 5,008,942$ Associated Member Services (including advances) 116,313 100,313 Undiv ided equity interest, at cost, in certain NCPA Power Projects:

Geothermal Projects 1,107,007 762,998
Calav era Hydroelectric Project 337,938 490,690 Combustion Turbine Project No. 2 19,535 312,742 Total 7,199,392$ 6,675,685$
40

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 8: NORTHERN CALIFORNIA POWER AGENCY (NCPA) (CONTINUED) 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 conseque nces 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 i ntended to minimize the number and amount of individual reserves needed for each project, protect NCPA’s fin ancial condition and maintain its credit worthiness.

These funds are available on demand, but the City maintains fun ds 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 financ e other projects of NCPA without the member’s permission.

B. Projects

1. Geother
mal 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 supple mental 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 r einjection wells and is attempting to increase water reinjection at strategic loca tions. NCPA, together with other s team 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 Ser ies A) for Plant Number 1. In 2016, NCPA refinanced a portion of the outstanding Geothermal Project Numb er 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, 2025, the book value of this Project’s plant, equipment and other assets was $138,069,195 while its long-term debt was fully paid off on July 1, 2024 and other liabilities totaled $124,032,515. 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.

On October 28, 2004, NCPA approved a resolution to finance the expansion and remodeling of the NCPA main office building located in Roseville. The expansion is included as pa rt of the Geothermal Projects funded by the bonds mentioned above. The City will recover its 7.883 percent share of the cost of the expansion which was $204,958, with a 5% return on the investment over a ten year period. As of June 30, 2018 the City was paid in full. 41

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 8: NORTHERN CALIFORNIA POWER AGENCY (NCPA) (CONTINUED)

2. Calaveras Hydroelectric Project
I
n 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, 2025, the balance of the 2019 Hydroelectric Project Number One Revenue Bonds was fully paid. At June 30, 2025, the book value of this Project’s plant, equipment and other assets was $211,537,450, while its long-term debt totaled $143,859,682, and other liabilities totaled $64,861,611. The Ci ty’s share of the Project’s long-term debt amounted to $17,293,162 at that date. At June 30, 2024, the book value o f this Project’s plant, equipment and other assets was $222,953,000, while its l ong-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.

3. Combustion Turbine Project No. 2 (Steam Injected Gas Turbine Proj ect) T
he 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 Facili ties 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, 2025, the book value of this Project’s plant, equip ment and other assets was $6,151,518 while its long-term debt was fully paid off on August 1, 2024, and other liabilities totaled $6,097,998. 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 long-term debt amounted to $1,816,812 at that date.

C. NCPA Financial Information
N
CPA’s financial statements can be obtained from NCPA, 651 Commerce Drive, Roseville, California 95678. 42

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
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 prep aration 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
T
he City is a member of the California Joint Powers Risk Manage ment Authority (CJPRMA) which covers general liability claims, property, and boiler and machinery losses. On ce 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.

Workers’ Compensation
The City is also a member of the Local Agency Workers’ Compensa tion 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. 43

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 9: RISK MANAGEMENT (CONTINUED)
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 U
nder 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, 2025 and 2 024, was $17,263,162 and $21,924,815, 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 2.14 percent of TANC’s share of transfer capabil ity in the California-Oregon Transmission Project (COTP) (approximately 32MW). The City is responsible for a shar e of debt service on debt issued by TANC under a take-or-pay agreement, approx imately $346,000 annually throug h 2039. The City’s estimated share of debt outstanding at June 30, 2025 and 2024 was $3,471,507 and $3,641 ,409 respectively. In August 2024, TANC approved the execution and delivery of a Credit Agreement with JPMorgan Chase Bank, National Association, establishing a line of credit pursuant to which TANC may borrow, pay down, refund and re-borrow, through the issuance and sale from time to time of short term variable rate notes (“TANC short term notes”), an aggregate amount outstanding at any time of up to $120,000,000 for the purpose of financing improvements to the COTP on an interim basis. TANC executed the TANC Cr edit Agreement in September 2024. As of June 30, 2025, $91,700,000 of the principal amount of TANC short-term notes were outstanding unde r the TANC Credit Agreement. The City's estimated share of the principal amount outstanding at June 30, 2025 was $1,907,219.

The City has various long-term contracts with WAPA that provide energy, interconnection, and transmission services. Under its Base Resource Contract in place from 2005 t hrough 2024, the City had a 4.85333% share of the Base Resource output of the Central Valley Project (the “CV P”), which provided varying amounts of capacity and energy annually depending upon hydrological conditions. In an average year, the Base Resource product provided the City with approximately 54 MW of capacity during peak summer months and 155 gigawatt-hours (GWh) of annual energy. The City negotiated a new contract beginning January 1, 2025 with an allocation of 4.76605% that continues through December 31, 2054, which provides the Ci ty with approximately 59 MW of capacity. The City is directly connected to WAPA’s transmission system and acquires network transmission service from WAPA, as well as reserves that include regulation, frequency response, and operating reserves. 44

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 10: CONTINGENT LIABILITIES (CONTINUED)
B. Federal and State Grant Programs
T
he City participates in Federal and State grant programs. Thes e programs have been audited by the City’s independent accountants in accordance with the provisions of th e federal Single Audit Act as amended and applicable State requirements. No cost disallowances were propo sed 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
T
he 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.

D. Other Commitments
T
he Electric Fund had the following outstanding significant commitments at June 30, 2025 and 2024:
2025 2024
Amount Amount
Projects (in millions) (in millions)
Purchase Contracts:

Roseville Energy park long-term service agreement 22.9$ 2

6.4$
N
et power purchase contracts 30.9 4.8
Natural gas forward obligation 22.7 38.7
R
enewable power purchase obligations 56.9 7.6
SWAP Contracts:

Forward Contract, Power (1) 5.6 4.3
Forward Contract, Natural Gas (1) 9.6 5.3
(1) The City enters into contracts to hedge its exposure to power and naturalg a sp r i c e fluctuations and to procure energy supplies. These forward contracts for both power and natural gas are intended to stabilize future costs and reduce the impac t of market v olatility. 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 participantsor 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. 45

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Notes to the Financial Statements
For the Years Ended June 30, 2025 and 2024
NOTE 11: RESTATEMENTS
During the current year, the City implemented GASB Statement No . 101, Compensated Absences. In addition to the value of unused vacation time owed to employees upon separation of employment, the City now recognizes an estimated amount of sick leave earned as of year-end that will be used by employees as time off in future years as part of the liability for compensa ted absences. The effects of the change in accounting principle are summarized below in the “Adjustment - GASB 101 Implementation” column in the table below.

NOTE 12: SUBSEQUENT EVENTS
Management has evaluated subsequent events through January 29, 2026, which is the date the financial statements were available to be issued.

On January 27, 2026, the Electric Utility issued $72,695,000 of Electric System Revenue Bonds, Series 2026, with a five percent coupon rate and a final maturity in 2046. The net proceeds of the 2026 Bonds will be used to finance the Roseville Power P lant #2 Repower Project and other capital improvements to the Electric System. This transaction occurred after the fiscal year ended June 30, 2025 and is not reflected in the accompanying financial statements.

No other events requiring disclosure were identified.

Net Position
balance at Net Position
June 30, 2023 Adjustment balance at
as previously GASB 101 June 30, 2023
reported Implementation as restated
519,498,510$ 623,630$ 520,122,140$
46

REQUIRED SUPPLEMENTARY INFORMATION
47

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Schedule of the Electric Fund's
Proportionate Share of the City's Miscellaneous Plan Net Pension Liability As of June 30, for the Last Ten Fiscal Years
2016 2017 2018 2019
Measurement date 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Proportion of the City's miscellaneous plan 21.27% 15.10% 24.20% 24.80% net pension liability
Proportionate share of the City's miscellaneous plan 37,644,806$ 45,137,479$ 55,319,523$ 58,193,004$ net pension liability
Covered payroll 15,098,184$ 16,397,168$ 19,055,633$ 19,169,023$ Proportionate share of the net pension liability as a
percentage of covered payroll 249.33% 275.28% 290.31% 303.58% Miscellaneous plan fiduciary net position as a
percentage of the total pension liability 66.97% 63.89% 63.85% 65.21% 48

2020 2021 2022 2023 2024 2025
6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024

25.60% 25.93% 24.58% 24.07% 23.95% 23.23%
63,291,847$ 68,619,020$ 47,478,679$ 74,341,652$ 78,200,115$ 75,098,554$ 20,288,169$ 20,586,805$ 22,270,720$ 21,355,722$ 22,445,040$ 23,606,035$ 311.96% 333.32% 213.19% 348.11% 348.41% 318.13%

65.09% 64.55% 75.39% 63.82% 63.92% 66.26%
49

CITY OF ROSEVILLE ELECTRIC ENTERPRISE FUND
Schedule of Pension Contributions
As of June 30, for the Last Ten Fiscal Years
2016 2017 2018 2019
Valuation Date June 30, 2014 June 30, 2015 June 30, 2016 June 30, 2017 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Actuarial Determined Contribution 3,884,489$ 4,699,119$ 4,463,913$ 5,112,952$ (3,884,489) (4,699,119) (4,463,913) (5,112,952) -$ -$ -$ -$ Covered payroll 16,397,168$ 19,055,633$ 19,169,023$ 20,288,169$ Contributions as a percentage of covered payroll 23.69% 24.66% 23.29% 25.20% 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
Contribution in relation to the Actuarially Determined Contribution

2.80%

6.80%, net of pension plan investment expenses, including inflation.

Varies by Entry Age and Service
Market Value

2.30%
Contribution Deficiency (Excess)
June 30, 2023
The probabilities of retirement are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.

The probability of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of scale MP-2020 published by the Society of Actuaries.

Entry age normal cost method
Level percentage of pay, a summary of the current policy is provided 50

2020 2021 2022 2023 2024 2025
June 30, 2018 June 30, 2019 June 30, 2020 June 30, 2021 June 30, 2022 June 30, 2023 Miscellaneous Miscellaneous Miscellaneous Miscellaneous Miscellaneous Miscellaneous 5,888,148$ 7,058,610$ 7,457,891$ 8,057,403$ 8,644,684$ 9,359,353$ (5,888,148) (7,058,610) (7,457,891) (8,057,403) (8,644,684) (9,359,353) -$ -$ -$ -$ -$ -$ 20,586,805$ 22,270,720$ 21,355,722$ 22,445,040$ 23,606,035$ 25,220,050$

28.60% 31.69% 34.92% 35.90% 36.62% 37.11%
51

CITY OF ROSEVILLE ELECTRIC ENTERPRISE 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. 52

2021 2022 2023 2024 2025
June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 June 30, 2025

11.72% 12.45% 12.43% 13.08% 15.30%
11,681,000$ 10,427,000$ 9,778,000$ 10,071,000$ 9,376,000$ 22,270,720$ 21,355,722$ 22,445,040$ 23,606,877$ 25,102,548$

52.45% 48.83% 43.56% 42.66% 37.35%

58.95% 60.73% 64.17% 68.43% 74.38%
53

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

6.25%

2.50%
Aggregate of 2.75%
54

2021 2022 2023 2024 2025
June 30, 2019 June 30, 2021 June 30, 2021 June 30, 2023 June 30, 2023 2,286,000$ 1,936,000$ 1,602,000$ 1,375,231$ 1,638,783$ (2,286,000) (1,936,000) (1,602,000) (1,375,231) (1,638,783) -$ -$ -$ -$ -$
22,270,720$ 21,355,722$ 22,445,040$ 23,606,877$ 25,102,548$

10.26% 9.07% 7.14% 5.83% 6.53%
Level percent of pay
Entry Age Normal, level percent of payroll
Investment gains and losses spread over 5 year rolling period Derived using CalPERS membership data

6.25%

2.50%
Aggregate of 2.75%
55

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 gene rally 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 Electric Fund (hereafter, the Fund) of the City of Roseville, California (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Ci ty’s basic financial statements, and have issued our report thereon dated January 29, 2026.

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 allo w 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 b asis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less s evere 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 contr ol 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 the 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 ma terial effect on the financial statements.

However, providing an opinion on compliance with those provisio ns 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.

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 e ffectiveness of the Fund’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 Fund’s internal control and compliance. Acco rdingly, this communication is not suitable for any other purpose.

Sacramento, California
January 29, 2026

LSLCPAS.COM
January 29, 2026

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 (hereafter, the Fund of the City of Roseville, California (hereafter, the City) for the year ended June 30, 2025. Profess ional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government 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 30, 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 the City are described in Note 1 to the financial statements. As described in Note 1 to the financial statements, the City changed accounting policies related to com pensated absences by adopting Statement of Governmental Accounting Standards (GASB Statement) No. 101, Compensated Absences, in fiscal year 2025.

Accordingly, the cumulative effect of the accounting change as of the beginning of the year is reported in the Statement of Revenues, Expenses and Changes in Net Position. We noted no transactions entered into by the City 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 stat ements 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 net pension liability and net other post-employment benefits liability are based on actuarial valuations. We evaluated the methods, assumptions, and data used to develop the net pension liability and net other post-employment benefits liability in determining that they are 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 l ikely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We are pleased to report that no misstatements were identified during the course of our audit.

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 sign ificant to the financial statements or the auditors’ 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 January 29, 2026.

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 professi onal standards require the con sulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledg e, 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 audi tors. 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 discussio n and analysis and the required pension and other post-employment benefits schedules, which are required supplementary information (RSI) that supplements the basic financial statements. Our procedures consisted of inq uiries of management regarding the methods of preparing the information and comparing the information for con sistency 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 2025-2026

GASB Statement No. 103, Financial Reporting Model Improvements.

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

GASB Statement No. 105, Subsequent Events.

Future Projects

Comprehensive Project, Revenue and Expense Recognition.

To the Honorable Mayor and Members of the City Council
Electric Department
City of Roseville, California

Major Project, Going Concern Uncertainties and Severe Financial Stress.

Major Project, Infrastructure Assets.

Practice Issue, Subsequent Events.

Restriction on Use

This information is intended solely for the information and use of 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,

Sacramento, California

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
FOR THE YEAR ENDED JUNE 30, 2025 ANNUAL FINANCIAL REPORT

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST

Annual Financial Report

For the Year Ended June 30, 2025

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Annual Financial Report
For the Year Ended June 30, 2025
Table of Contents
Page

Independent Auditors’ Report
................................................................................................................................. 1 Financial Statements
Statement of Fiduciary Net Position ................................................................................................................. 4 Statement of Changes in Fiduciary Net Position ............................................................................................. 5 Notes to Financial Statements ......................................................................................................................... 6 Required Supplementary Information
Schedule of Changes in Net OPEB Liability and Related Ratios ................................................................. 13 Schedule of Employer Contributions ............................................................................................................. 15 Schedule of Investment Returns .................................................................................................................... 17

LSLCPAS.COM
INDEPENDENT AUDITORS’ REPORT
To the Honorable Members of the City Council
City of Roseville, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the City of Roseville Other Post-Employment Benefit Trust (hereafter, the Trust) a pension (and other employee benefits) trust fund of the City of Roseville, California (hereafter, the City) as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Trust’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 financial position of the Trust as of June 30, 2025, and the changes in financial position, for the year then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinion
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 Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and the Trust 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 Trust and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2025, the changes 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.

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.

To the Honorable Members of the City Council
City of Roseville, California

Auditors’ 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 auditors’ 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:

• Exercise professional judgment and maintain professional skepticism throughout the audit.

• 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.

• 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.

• 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, required other post- employment 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.

Management has omitted management 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

To the Honorable Members of the City Council
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 19, 2026, on our consideration of the City’s internal control over the Trust’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 Trust’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 Trust’s financial reporting and compliance.

Sacramento, California
February 19, 2026
3

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Statement of Fiduciary Net Position
June 30, 2025
Assets:

Investments:

Cash equivalents 769,015$
Money market funds 575,993
Mutual funds - equity 92,652,924
Mutual funds - fixed income 67,215,361
Real estate investment partnership 16,476,237
Receivables:

Accounts 234,328
Total Assets 177,923,858
Liabilities:

Accounts payable 5,101
Total Liabilities 5,101
Net Position:

Net Position restricted for postemployment benefits other than pensions 177,918,757 Total Net Position 177,918,757$
See Notes to Financial Statements.
4

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025
Additions:

Employer contributions 11,113,404$
Investment income 17,672,607
Total Additions 28,786,011
Deductions:

Retiree health plan benefit payments 10,091,946
Contract services 34,976
Total Deductions 10,126,922
Net increase in fiduciary net position 18,659,089
Net position restricted for postemployement benefits other than pensions Beginning of the Year 159,259,668
End of the Year 177,918,757$
See Notes to Financial Statements.
5

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Note to the Financial Statements
For the Year Ended June 30, 2025

NOTE 1: SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Plan Description

The City of Roseville, California, (City) sponsors and administers a defined benefit other post-employment benefit plan (Plan) for benefits other than pension. The Plan is a single-employer system and an integral part of the City.

The accompanying financial statements are included as an other postemployment benefits trust fund in the basic financial statements of the City.

Basis of Accounting

The Plan’s financial statements are prepared using the accrual basis of accounting. Contributions are recognized when they become due. Trust maintenance and professional service fees are recognized when they are incurred.

Fair Value Measurement and Application

Fair value measurements are categorized within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.

The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of the fair value hierarchy are described as follows:

Level 1 – Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in active markets that the Trust has the ability to access.

Level 2 – Inputs to the valuation methodology include:

• Quoted prices for similar assets or liabilities in active markets; • Quoted prices for identical or similar assets or liabilities in inactive markets; • Inputs other than quoted prices that are observable for the asset or liability; and • Inputs that are derived principally from or corroborated by observable market data by correlation or other means.

Level 3 – Inputs to the valuation methodology are unobserva ble and significant to the fair value measurement.

Unobservable inputs reflect the Trust’s own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk).

Use of Estimates

The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Actual results could differ from those estimates.

6

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Note to the Financial Statements
For the Year Ended June 30, 2025

NOTE 2: PLAN DESCRIPTION

The City provides medical benefits to substantially all retirees covered by the Plan. Authority to establish and amend the benefit terms with the Plan is granted to the City Council.

Plan Membership

Plan membership at June 30, 2025 consisted of the following:

Contributions

City Council has the authority to establish and amend contribution requirements. City Council establishes contributions based on actuarially determined amounts. For the year ended June 30, 2025 contributions to the Plan were $11,113,404.

Benefits Provided

Benefits are provided pursuant to agreements with individual labor units, documented through memorandums of understanding and resolved by City Council. A summa ry of eligibility and benefits offered are shown on the following page:

Inactive plan members currently receiving benefits 901
Inactiv e plan members entitled to benefit payments 116 Activ e Members 1,523
Total 2,540
7

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Note to the Financial Statements
For the Year Ended June 30, 2025

NOTE 2: PLAN DESCRIPTION (CONTINUED)

The City of Roseville Other Post-Employment Benefit Plan reports the assets and activities of all benefit tiers in a trust fund. All assets accumulated for the payment of benefits may be used to pay benefits of any of the plan members or beneficiaries.

Eligibility: Retire directly from the City under CalPERS (age 50(a) and 5 years of CalPERS service or disability retirement) Benefit:

City paid premium, subject to the following caps: Management/Confidential 2025 Roseville Police Association
Management/Confidential 1,347$ Rosev ille Firefighters Association Rosev ille Police Association 1,347 International Brotherhood of Electrical Workers Rosev ille Firefighters Association 1,347
International Brotherhood of Electrical Workers 1,347 Stationary Engineers Local 39 Rosev ille Police Officers Association
City paid premium, subject to the following caps:
2025 Subject to v esting schedule
Stationary Engineers Local 39 1,347 $
Rosev ille Police Officers Association 1,347 Less than 10 years (b) 10 years
11 years
12 years
13 years
14 years
Payroll % 15 years
11 % 16 years
22 % 17 years
33 % 18 years
44 % 19 years
5+ 5% 20+ years
Fiv e years City serv ice required
Stationary Engineers Local 39 100% vested if disabled
Management/Confidential Must retire from City to receive City health International Brotherhood of Electrical Workers Savings account contributions Rosev ille Police Officers Association
Rosev ille Police Association
PEMHCA Minimum PEMHCA Minimum
Roseville Health Savings Account: Roseville Health Savings Account:

Employee contribute percent of payroll to health savings account Employee contribute percent of payroll to health savings accoun t
Payroll % Payroll %
11 %1 1 %
22 %2 2 %
33 %3 3 %
44 %4 4 %
5+ 5% 5+ 5%
Non-Represented: Eligible for PEMHCA
Dental Vision and Life: None
Surviving Spouse Contribution: Retiree medical benefit continues to surviving spouse if retire elects CalPERS survivor annuity. (a) Age 52 for Miscellaneous PEPRA employees.
(b) City must pay at least the PEMHCA minimum.
(c) Eligible for PEMHCA minimum only.

Years of City Service Years of City Service
City contribution of $100/month after 5 years City Service. 10 years of City Service required
City contribution of $100/month after 5 years City Service. 10 years of City Service required
100%
Tier 3 Non-RFF
Hired on or after January 1, 2014(c)
Tier 4 RFF
Hired on or after October 1, 2013(c) Hired on or after January 1, 2004 95%
Hired after January 1, 2012 and before August 15, 2015 55% $720/month - subject to Tier 2 vesting schedule based on City Service Employees contribute to percent of payroll to PFM trust starting 2012:
60%
65%
70%
Years of City Service 75%
80%
85%
90%
Tier 3 50%
Tier 1 Tier 2
Hired prior to January 1, 2004 Hired on or after January 1, 2004 Group
Hired on or after January 1, 2005
Hired on or after January 1, 2005
Group
CalPERS Serv ice Percent of CAP
0%
8

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Note to the Financial Statements
For the Year Ended June 30, 2025

NOTE 3: INVESTMENTS

Investment Policy

The Plan's policy regarding the allocation of invested assets is established and may be amended by the City Council by a majority vote of its members. It is the policy of the City Council to pursue an investment strategy that reduces risk through the prudent diversification of the portfolio across a broad selection of distinct asset classes. The Plan's investment policy aims to achieve lo ng-term growth of trust assets. The following was the adopted asset allocation policy as of June 30, 2025:

Concentrations

The following investments were greater than 5% of the pool:

Money-weighted rate of return

For the year ended June 30, 2025, the annual money-weighted rate of return on OPEB plan investments, net of OPEB plan investment expense, was 11.07%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.

Fair Value Measurements

The Trust has the following recurring fair value measurements as of June 30, 2025:

The money market funds are based on cost as the amounts are due within 90 days and are not traded on the market.

Target
Equities 60%
Fixed Income 40%
100%
Fair Value %
First American Multi-Manager Fixed Income Fund 67,215,361$ 37.83% First American Multi-Manager Domestic Equity Fund 57,710,629 32.48% First American Multi-Manager International Equity Fund 34,942,295 19.66% Issuer
Fair Value Level
Cash equivalents 769,015$ Uncategorized
Money market funds 575,993 1
Mutual funds - equity 92,652,924 2
Mutual funds - fixed income 67,215,361 2
Non-real estate investment partnerships 562,105 3 Real estate investment partnership 15,914,132 3
Total Inv estments by Fair Value Lev el 177,689,530$
Investment Type
9

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Note to the Financial Statements
For the Year Ended June 30, 2025

NOTE 4: NET OPEB LIABILITY OF THE CITY

The components of the net OPEB liability of the City measured as of June 30, 2025 are shown below. The total OPEB liability is based on an actuarial valuation as of June 30, 2023, rolled forward to June 30, 2025.

Actuarial assumptions

The total OPEB liability was determined by an actuarial valuation as of June 30, 2023, rolled forward to June 30, 2025, using the following actuarial assumptions, applied to all periods included in the measurement.

Mortality, withdrawal and disability rates for service retirements and beneficiaries were based on CalPERS 2000 - 2019 Mortality Table projected fully generational with Scale MP-2021 modified to converge to ultimate improvement rates in 2024.

Long-term expected rate of return

The geometric real rates of return for each major asset class included in the Plan’s target asset allocation as of June 30, 2025 are summarized in the following table:

Discount rate

The discount rate was set equal to the long-term expected rate of return. The long-term expected rate of return of

6.25% was used since current assets, future City contributions, and future member contributions are projected to be sufficient to cover all future benefit payments and expenses.

Total OPEB Liability 239,233,531$
Plan Fiduciary Net Position 177,945,194
City's Net OPEB Liability 61,288,337$
Plan fiduciary net position as a percentage of the total OPEB liability 74.38% Inflation 2.50%
Payroll increase 2.75%
Inv estment rate of return 6.25%
Healthcare cost trend 7.90% for 2026 for Non-Medicare, decreasing to 3.45% in 2076;

6.90% for 2026 for Medicare, decreasing to 3.45% in 2076 Target
Expected
Real Rate
of Return
Global Equity 52% 4.56%
Private Equity 5% 7.09%
Fixed Income 33% 0.78%
Private Debt 5% 4.38%
Real Assets 5% 4.03%
100%
Assumed long-term rate of inflation 2.50%
Expected Long-Term Net Rate of Return, Rounded 6.25%
10

CITY OF ROSEVILLE, CALIFORNIA

OTHER POST-EMPLOYMENT BENEFIT TRUST
Note to the Financial Statements
For the Year Ended June 30, 2025

NOTE 4: NET OPEB LIABILITY OF THE CITY (CONTINUED)

Sensitivity of the net OPEB liability to changes in the discount rate

The following presents the net OPEB liability of the City, calculated using the discount rate of 6.25%, as well as what the City’s net OPEB liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5.25%) or 1 percentage-point higher (7.25%) than the current rate:

Sensitivity of the net OPEB liability to changes in the healthcare cost trend rate

The following presents the net OPEB liability of the City, calculated using the healthcare cost trend rate of

6.5% with annual decreases from prior year decreasing to 3.75%, as well as what the City’s net OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1 percentage point lower (5.5% with annual decreases from prior year decreasing to 2.75%) or 1 percentage point higher (7.5% with annual decreases from prior year decreasing to 4.75%):

1% Decrease
(5.25%)
Current
Discount Rate
(6.25%)
1% Increase
(7.25%)
City's Net OPEB Liability 92,216,112$ 61,288,337 $ 35,715,859 $ 1% Decrease
(5.5% decreasing
to 2.75%)
Current Healthcare
Cost Trend Rate
(6.5% decreasing
to 3.75%)
1% Increase
(7.5% decreasing
to 4.75%)
City's Net OPEB Liability 38,036,061$ 61,288,337$ 84,424,211$ 11

REQUIRED SUPPLEMENTARY INFORMATION
12

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 2020
Measurement Date June 30, 2018 June 30, 2018 June 30, 2019 June 30, 2020 Total OPEB Liability
Service cost 6,814,000$ 6,665,000 $ 6,021,000 $ 5,701,000 $ Interest on the total OPEB liability 14,435,000 15,256,000 14,291,000 14,961,000 Differences between expected and actual experiences - (29,958,000) - (17,999,000) Changes in assumptions - 11,123,000 - (5,591,000) Benefit payments, including refunds of employee contributions (8,475,000) (8,449,000) (8,550,000) (9,988,000) Net change in total OPEB liability 12,774,000 (5,363,000) 11,762,000 (12,916,000) Total OPEB liability - beginning 219,497,000 232,271,000 226,908,000 238,670,000 Total OPEB liability - ending (a) 232,271,000 226,908,000 238,670,000 225,754,000 Plan Fiduciary Net Position
Contributions - employer 12,129,300 14,213,477 15,342,178 16,425,867 Miscellaneous revenue - - 69,429 - Net investment income 6,832,238 5,902,312 7,122,750 5,318,871 Benefit payments (6,886,960) (8,449,000) (8,550,000) (9,988,000) Administrative expenses (183,025) (210,775) (144,591) (34,934) Net change in plan fiduciary net position 11,891,553 11,456,014 13,839,766 11,721,804 Plan fiduciary net position - beginning 60,772,073 72,663,626 84,119,640 97,959,406 Plan fiduciary net position - ending (b) 72,663,626 84,119,640 97,959,406 109,681,210 Net OPEB Liability/(Assets) - ending (a) - (b) 159,607,374$ 142,788,360$ 140,710,594$ 116,072,790$ Plan fiduciary net position as a percentage of the total OPEB liability 31.28% 37.07% 41.04% 48.58% Covered-employee payroll 101,578,000$ 106,770,729 $ 108,508,739 $ 107,995,767 $ Net OPEB liability as a percentage of covered-employee payroll 157.13% 133.73% 129.68% 107.48% Notes to Schedule:

Changes in assumptions: None
Changes of benefit terms: None
** Historical information is required only for the measurement periods for wh ich GASB 75 is applicable. Fiscal Year 2017 was the first year of implementa tion. Future years' information will be displayed up to 10 years as information becomes available. 13

2021 2022 2023 2024 2025
June 30, 2021 June 30, 2022 June 30, 2023 June 30, 2024 June 30, 2024 5,414,588$ 5,759,625 $ 5,143,281 $ 5,284,721 $ 4,492,324 $ 14,125,117 14,588,405 12,237,069 12,595,833 14,437,618 - (21,544,252) - 12,744,845 - 7,744,727 (17,673,776) - (5,911,337) - (10,333,464) (10,649,042) (11,021,257) (11,543,549) (12,411,945) 16,950,968 (29,519,040) 6,359,093 13,170,513 6,517,997 225,754,000 242,704,968 213,185,928 219,545,021 232,715,534 242,704,968 213,185,928 219,545,021 232,715,534 239,233,531 15,353,152 15,400,470 11,961,366 12,510,667 13,432,052 - - - - - 28,457,424 (18,288,504) 10,511,924 17,394,919 17,708,370 (10,333,464) (10,649,042) (11,021,257) (11,543,549) (12,411,945) (81,197) (75,790) (40,389) (59) (21,164) 33,395,915 (13,612,866) 11,411,644 18,361,978 18,707,313 109,681,210 143,077,125 129,464,259 140,875,903 159,237,881 143,077,125 129,464,259 140,875,903 159,237,881 177,945,194 99,627,843$ 83,721,669$ 78,669,118$ 73,477,653$ 61,288,337$

58.95% 60.73% 64.17% 68.43% 74.38%
115,547,480$ 128,628,850 $ 142,721,264 $ 154,106,009 $ 164,068,941 $

86.22% 65.09% 55.12% 47.68% 37.36%
14

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 16,740,000$ 15,132,000 $ 15,342,000 $ 13,739,000$ (12,129,300) (14,213,000) (15,226,000) (16,485,000) 4,610,700$ 919,000 $ 116,000 $ (2,746,000) $ 101,578,000$ 106,770,729 $ 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

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 2000-2019 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

2021 2022 2023 2024 2025
June 30, 2019 June 30, 2021 June 30, 2021 June 30, 2023 June 30, 2023 14,026,000$ 10,687,000 $ 10,591,000 $ 10,514,000 $ 10,711,000$ (15,353,152) (15,400,470) (11,961,366) (12,510,667) (13,432,052) (1,327,152)$ (4,713,470)$ (1,370,366)$ (1,996,667)$ (2,721,052)$ 115,547,480$ 128,628,850 $ 142,721,264 $ 154,106,009 $ 164,068,941$

13.29% 11.97% 8.38% 8.12% 8.19%

2.75% 2.50% 2.50% 2.50% 2.50%

3.00% CPI plus
merit increases

2.75% CPI plus
merit increases

2.75% CPI plus
merit increases

2.75% CPI plus
merit increases

2.75% CPI plus
merit increases

6.00% 5.75% 5.75% 5.75% 6.25%
16

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 nine years are shown.

Annual money weighted rate of return, net investment expense 17

2021 2022 2023 2024 2025

25.81% -12.28% 7.94% 12.08% 11.07%
18

LSLCPAS.COM

INDEPENDE
NT 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 Hon
orable 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 of the Other Post-Employment Benefit Trust (hereafter, the Trust), a fund of the City of Roseville, Calif ornia (hereafter, the City), as of and for the year ended June 30, 2025, and the related notes to the financial st atements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated February 19, 2026.

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 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.

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 misstatem ent 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 co ntrol 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 the 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 di rect and material effect on the financial statements.

However, providing an opinion on compliance with thos e 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.

To the Honorable Members of the City Council
City of Roseville, California

Purpose of This Report

The purpose of this report is solely to describe the sc ope 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.

Sacramento, California
February 19, 2026

LSLCPAS.COM
February 19, 2026
To the Honorable Mayor and Members of the City Council
City of Roseville, Californi
a
We have audited the financial statements of the Other Post-Employment Benefit Trust (hereafter, the Trust), a fund of the City of Roseville, California (hereafter, the City) for the year ended June 30, 2025. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government 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 30, 2025. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters
Qualitative Aspe
cts of Accounting Practices
Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the 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 2024-2025. We noted no transactions entered into by the 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.

Accounting estimates are an integral part of the finan cial 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 si gnificantly from those expected. The most sensitive estimate affecting the Trust’s financial statements was:

Manag
ement’s estimate of the net other post-empl oyment benefits liability is based on actuarial valuations. We evaluated the methods, assumptions, and data used to develop the net other post- employment benefits liability 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
Professio
nal 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. We are pleased to report that no misstatements were identified during the course of our audit.

Disagreem
ents 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 auditors’ report. We are pleased to report that no such disagreements arose during the course of our audit.

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 February 19, 2026.

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 Trust’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our profe ssional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, ther e 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 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 required other post-employment benefits schedules, which is required supplementary information (RSI) that supplements the basic financial stat ements. Our procedures consisted of inquiries of management regarding the methods of prepa ring 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 2025-2026

GASB Statement No. 103, Financial Reporting Model Improvements.

GASB Statement No. 104, Disclosure of Certain Capital Assets

Future Projects.

GASB Statement No. 105, Subsequent Events.

Comprehensive Project, Revenue and Expense Recognition.

Major Project, Going Concern Uncertainties and Severe Financial Stress.

Major Project, Infrastructure Assets.

Practice Issue, Subsequent Events.

To the Honorable Mayor and Members of the City Council
City of Roseville, California

Restriction on Use

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

Very truly yours,

Sacramento, California

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
(A COMPONENT UNIT OF THE CITY OF ROSEVILLE, CALIFORNIA) FOR THE YEAR ENDED JUNE 30, 2025 BASIC FINANCIAL STATEMENTS

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
(A COMPONENT UNIT OF THE CITY OF ROSEVILLE, CALIFORNIA)

Basic Financial Statements

For the Year Ended June 30, 2025

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
(A COMPONENT UNIT OF THE CITY OF ROSEVILLE, CALIFORNIA)

Basic Financial Statements

For the Year Ended June 30, 2025

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 ............................................................................... 16

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

Opinion

We have audited the accompanying financial statements of the Ro seville Natural Gas F inancing Authority (hereafter, the Authority) a component unit of the City of Roseville, California (hereafter, the City) as of and for the year ended June 30, 2025, 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 financial position of the Authority as of June 30, 2025, 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 Opinion

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 Auditors’ Responsibilities for the Audit of the Financial State ments section of our report. We are required to be independent of the Authority and to meet our other ethical resp onsibilities, 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 Authority and do not purport to, and do not, present fairly the financial position of the City as of June 30, 2025, the changes in its financial position, or, where applicable, its cash flows for the year then ended in accordance with accou nting principles generally accepted in the United States of America. Our opinion is 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.

To the Board of Directors
Roseville Natural Gas Financing Authority
Roseville, California

Auditors’ 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 is sue an auditors’ 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 a uditing standards and Government Auditing Standards will always detect a material m isstatement 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 au diting standards and Government Auditing Standards, we:

• Exercise professional judgment and maintain professional skept icism throughout the audit.

• 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 th ose risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.

• Obtain an understanding of inter nal 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.

• 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

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

2

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 repo rt dated February 19, 2026, on our consideration of the City’s internal control over 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 intern al control over financial reporting and compliance and the results of that testing, and not to provide an opinion on t he effectiveness of the City’s internal control over 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 City’s internal control over Authority’s financ ial reporting and compliance.

Sacramento, California
February 19, 2026

3

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Statement of Net Position
June 30, 2025
Assets:

Current:

Restricted investments with fiscal agents 5,139,255$
Total Current Assets 5,139,255
Noncurrent:

Prepaid purchased gas 45,847,175
Derivative instruments - fair value 23,318,166
Total Noncurrent Assets 69,165,341
Total Assets 74,304,596
Liabilities:

Current:

Accounts payable 1,755
Accrued interest payable 859,313
Deposits payable 51,705
Due to City funds 676,173
Revenue bonds - current 14,530,000
Total Current Liabilities 16,118,946
Noncurrent:

Revenue bonds 32,771,819
Total Noncurrent Liabilities 32,771,819
Total Liabilities 48,890,765
Deferred Inflows of Resources:

Accumulated increase in fair value of hedging derivatives 23,318,166 Total Deferred Inflows of Resources 23,318,166
Net Position:

Restricted for debt service 5,139,255
Unrestricted (3,043,590)
Total Net Position 2,095,665$
See Notes to Financial Statements.
4

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Statement of Revenues, Expenses
and Changes in Net Position
For the Year Ended June 30, 2025
Operating Revenues:

Gas supply revenue 16,528,513$
Total Operating Revenues 16,528,513
Operating Expenses:

Natural gas purchases 17,397,480
Administration 6,715
Total Operating Expenses 17,404,195
Operating Income (loss) (875,682)
Nonoperating Revenues (Expenses):

Interest revenue (loss) 3,245,744
Interest, fiscal charges (expense), and amortization (2,903,004) Total Nonoperating
Revenues (Expenses) 342,740
Changes in Net Position (532,942)
Total Net Position - Beginning 2,628,607
Total Net Position - Ending 2,095,665$
See Notes to Financial Statements.
5

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Statement of Cash Flows
For the Year Ended June 30, 2025
Cash Flows from Operating Activities:

Cash received from customers 14,198,463$
Cash paid to suppliers and service providers (2,272,777) Net Cash Provided by Operating Activities 11,925,686
Cash Flows from Non-Capital
Financing Activities:

Transfers from City for short-term borrowings 228,770
Net Cash Used by
Non-Capital Financing Activities 228,770
Cash Flows from Capital
and Related Financing Activities:

Principal paid on long term debt (13,865,000)
Interest paid on long term debt (3,638,915)
Net Cash Provided (Used) by
Capital and Related Financing Activities (17,503,915)
Cash Flows from Investing Activities:

Interest received 3,245,744
Net Cash Provided by
Investing Activities 3,245,744
Net Increase (Decrease) in Cash
and Cash Equivalents (2,103,715)
Cash and Cash Equivalents at Beginning of Year 7,242,970 Cash and Cash Equivalents at End of Year 5,139,255$
Reconciliation of Operating Income to Net Cash
Provided by Operating Activities:

Operating Income (loss) (875,682)$
Adjustments to Reconcile Operating Loss
Net Cash Provided by Operating Activities:
(Increase) decrease in prepaid expense 15,404,700
Increase (decrease) in accounts payable (13,314)
Increase (decrease) in accrued liabilities (259,968)
Increase (decrease) in deposits payable (2,330,050)
Total Adjustments 12,801,368
Net Cash Provided by
Operating Activities 11,925,686$
Non-Cash Investing and Financing Activities:

Change in the fair value of derivatives 4,066,685$
Amortization of bond premium (735,911)
See Notes to Financial Statements.
6

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

NOTE 1: SUMMARY OF SIGNIF ICANT 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 Age ncy of the former City of Roseville Redevelopment Agency (Successor Agency), a fiduciary fund of th e 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 uni t 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 Ci ty. 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 fin ancial 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 conf ormity with accounting principles generally accepted in the United States of America. The Governmental Acco unting 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 expense s, 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 i nvesting activities and result from non-exchange transactions or ancillary activit ies. The principal non-operati ng 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

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

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 o f 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 associate d 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 in vestments based on the hierarchy established by generally accepted accounting principles. The fair value hierar chy, 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 forwar d purchase agreement with Wells F argo 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 gene rally accepted accounting principles (GAAP) requires management to make estimat es and assumptions that affe ct 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. A ctual results could differ from those estimates.

H. New Accounting Standards Implemented

The following Government Account ing Standards Board (GASB) pron ouncement was effective for the fiscal year ended June 30, 2025:

1. GASB Statement No. 101, Compensated Absences

The objective of this Statement is to better meet the informati on 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.

2. GASB Statement No. 102, Certain Risk Disclosures

This Statement requires a government to assess whether a concen tration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. Additionally, this Statement requires a gov ernment to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements. 8

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

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 Ex change Commission (SEC). The Assistant City Manager/Chief Financial Officer conducts City Pool oversight. Investments in the City Pool at June 30, 2025, are stated at fair value. The City Pool values participant shares o n an amortized cost basis during the year and adjusts to fair value at year-end. The fair value adjustment at June 30, 2025 decreased the Authority’s investment income by $18,663.

As of June 30, 2025, the Trustee was holding cash and investmen ts totaling $5,139,255 pursuant to the terms of the Gas Revenue Bonds, Series 2007 Indenture. These cash and in vestments consisted of $877,216 invested mainly in First American Treasury Obligation Fund and Californi a Arbitrage Management Monday Market Fund and $4,262,039 invested in a forward purchase agreement with Wells Fargo Bank.

The Authority is a Participant in CAMP. CAMP is an investment p ool offered by the California Asset Management Trust (Trust). The Trust is a joint powers authority and public agency created by the Decl aration of Trust and established under the provisions o f the California Joint Exercise of Powers Act (California Government Code Sections 6500 et seq., or the “Act”) for the purpose of exercis ing 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 the fair value amounts provided by CAMP, which is the same as the value of the pool share. At June 30, 2025, the fair value approximated is the Authority’s cost, and these investments had an average maturity of 41 days. CAMP is not registered with the Securities and Exchange Commission and is not rated.

The Authority reports its investments in CAMP at fair value whi ch is the same as the value of the pool share. At June 30, 2025, the fair value approximated the Authority's cost, and these investments had an average maturity of 41 days.

Money market mutual funds were available for withdrawal on dema nd and at June 30, 2025 and had an average maturity of 47 days for the Dreyfus U.S. Treasury Money Market Fund and 42 days for the First American Money Market Fund.
9

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

NOTE 2: CASH AND INVESTMENTS (CONTINUED)

A. Investments Authorized by Debt Agreement

The Authority must maintain required amounts of cash and invest ments with a trustee under the terms of the Gas Revenue Bonds, Series 2007 In denture. These funds are unexp ended bond proceeds o r are pledged as reserves to be used if the Authority fails to meet its obligati ons 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 inv estment types that are authorized for investments held by fiscal agents.

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 t he lowest level input that is significant to the valuation. The Authority’s assessment of the significance of pa rticular 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.

Maximum
Maturity
Minimum Credit
Quality
U.S. Treasury Obligations 5 Years None
U.S. Agency Securities 5 Years None
Local Agency Bonds 5 Years None
Forward Purchase Agreements N/A AA-
Repurchase Agreements N/A - 30 days None to A
Commercial Paper 180 - 270 Days A-1 to AA
Medium-Term Notes 5 Years A
Collateralized Certificates of Deposit N/A - 30 days None to A-1 Local Angency Investment Fund (LAIF) N/A None
Insured Sav ings Accounts N/A None
Money Market Funds N/A AAm to AAAm
Supranationals N/A None
Mortgage Pass-Through Securities N/A None
CAMP N/A None
Authorized Inv estment Type
10

ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

NOTE 2: CASH AND INVESTMENTS (CONTINUED)

The following table summarizes t he investments of the Authority for which fair values are determined on a recurring basis as of June 30, 2025:

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 elec tricity. In pursuit of that objective the City and Successor Agency formed the Authority for the purpose of acquir ing, 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 Bond s, 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 con tract quantities vary from month to month but not from year to year. This commitment totals 2,352,000 MMBtus (mil lions 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 to be amortized as daily contract quantities are delivered.

The agreement provides for payments to be made by the Gas Suppl ier if it fails to deliver the daily contract quantities and may be terminated by the Authority in the event of non-performance by the Supplier. The Agreement will automatically terminate if there is a termination of the C ommodity Swap (See Note 3D) which is not due to default by the Authority or if there is an event of default und er 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 othe r available funds, to redeem the Bonds. The Gas Supplier’s commitments under this agreement are guaranteed by i ts parent company, Merrill Lynch & Co. Inc. under a guarantee agreement with the Authority.

As of June 30, 2025, the book value of prepaid gas under this agreement amounted to $45,847,175.

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 from 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, 2025.

Fair Value
Quoted Prices In
Activ e Markets
for Identical
Assets (Lev el 1)
Significant
Observable
Inputs (Level 2)
Significant
Unobservable
Inputs (Level 3)
Forward Purchase Agreement 4,262,039 $ - $ - $ 4, 262,039$ Money Market Mutual Funds 877,216 877,216 - - 5,139,255 877,216$ - $ 4, 262,039$ Total Investments 5,139,255 $
Investments at Fair Value
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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

NOTE 3: GAS SUPPLY ACQUISITI ON AND RESALE (CONTINUED)

C. Supply Agreement

Pursuant to a Natural Gas Supply Agreement dated February 1, 20 07, the Authority has agreed to sell to the City a twenty-year supply of natural gas. This Supply Agreement is c oterminous 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 termin ation 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 w ill 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.

Detail of the commodity swap agreement is 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 R evenue 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 wi ll 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, 2024 Retirements
Balance at
June 30, 2025 Current Portion
Revenue Bonds

4.00%-5.00%, due 2/15/28 209,350,000$ 59,695,000 $ 13,865,000 $ 45,830,000 $ 14,530,000 $ Add: bond premium 15,454,116 2,207,730 735,911 1,471,819 - Total revenue bonds 224,804,116$ 61,902,730$ 14,600,911$ 47,301,819$ 14,530,000$ 2007 Gas Revenue Bonds
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ROSEVILLE NATURAL GAS FINANCING AUTHORITY
Notes to the Financial Statements
For the Year Ended June 30, 2025

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 b onds 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 exposure s to power and 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 i nstruments, 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 inflow or outflow of resources on the statement of net position. For the reporting period, all of the Authority’s derivatives are considered effective hedges.

For energy derivatives, fair values are estimated 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 amou nts of derivative instruments outstanding as of June 30, 2025:

Principal Interest Total
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
45,830,000$ 4,658,250$ 50,488,250$
Reconciliation of long-term debt
Add: bond premium 1,471,819
Net long-term debt 47,301,819$
Year Ending June 30,
2026
2027
2028
Notional Level
Classification Amount Classification Amount
Effective Cash Flow Hedges
Pay fixed SWAP, Natural Gas Deferred Outflow 1,622,273$ Deriv ativ e 3,823,468 $ 6,469,500 mmBtu 2 Receive fixed SWAP, Natural Gas Deferred Outflow 2,444,412 Deriv ativ e 19,494,698 75,000-372,000 2 23,318,166$ monthly mmBtu
2025 Change in Fair Value Fair Value, June 30, 2025
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