Salinas City Council
February 24, 2026

Tuesday, February 24, 2026
4:00 PM
City of Salinas
200 Lincoln Ave., Salinas, CA 93901
www.cityofsalinas.org

SALINAS ROTUNDA
City Council
Mayor Dennis Donohue
Councilmembers:

Jose Luis Barajas, District 1 - Tony Barrera, District 2 Margaret D'Arrigo, District 3 - Gloria De La Rosa, District 4 Andrew Sandoval, District 5 - Aurelio Salazar, District 6 Rene Mendez, City Manager
Christopher A. Callihan, City Attorney
City Clerk’s Office: (831) 758-7381
Meeting Agenda - Final
1 February 24, 2026City Council Meeting Agenda - Final

ZOOM WEBINAR PARTICIPATION
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If prompted to enter a participant ID, press #.

PLEDGE OF ALLEGIANCE

ROLL CALL

CLOSED SESSION
Receive public communications from the audience on Closed session items.

The City Council will recess to closed session pursuant to:

ID#26-064 a. Labor Negotiations - California Government Code Section §54957.6 with its designated labor representatives Rene Mendez, City Manager; Lisa G.

Murphy, Assistant City Manager; Christopher A. Callihan, City Attorney; Katherine Hogan, Assistant City Attorney; Selina Andrews, Finance Director; Marina Horta-Gallegos, Human Resources Director; Sylvia Enriquez, Human Resources Manager; and Che Johnson, Liebert Cassidy Whitmore, regarding labor relations with Service Employees International Union (SEIU), SEIU Supervisors, Salinas Municipal Employees Association/SEIU, Association of Management Personnel, Police Officers Association, Police Management Association, International Association of Firefighters, Fire Supervisors Association, Confidential Non-Management Employees, Confidential Management Employees, and Department Directors.

THE CITY COUNCIL WILL RECONVENE IN THE ROTUNDA AT 4:30 P.M.

PROCLAMATION
National Engineers Week, February 22-28, 2026

CITY OF CHAMPIONS

2 February 24, 2026City Council Meeting Agenda - Final
Merele Quintero

PUBLIC COMMENT PROCEDURES
If you wish to make a general public comment or comment on a specific agenda item, you are encouraged to attend the City Council meeting in person. Public comment may also be submitted via email at [email protected] and will be entered into the record. Public comments generally are limited to two minutes per speaker; the Mayor may further limit the time for public comments depending on the agenda schedule.

GENERAL PUBLIC COMMENTS
Receive public communications on items that are not on the agenda and that are in the City of Salinas’ subject matter jurisdiction. Comments on Consideration, Public Hearing items, and the Consent Agenda should be held until the items are reached.

PRESENTATION
Councilmember comments on presentations are generally limited to three minutes.

ID#25-527 Salinas Youth Council Updates and Comments
Recommendation: No action required. The City of Salinas Youth Council will provide an administrative update to the City Council.

ID#26-063 Hartnell College Foundation - Salinas Valley Promise Receive presentation from Dr. Jackie Cruz and Dr. Gabriela Lopez.

CALIFORNIA GOVERNMENT CODE §84308 - LEVINE ACT
Government Code § 84308. Parties to any proceeding involving a license, permit or other entitlement for use pending before the City Council must disclose any campaign contributions over $500 (aggregated) within the preceding 12 months made by the party, their agent, and those required to be aggregated with their contributions under Government Code § 82015.5. The disclosure must include the amount contributed and the name(s) of the contributor(s).

CONSIDERATION
ID#26-038 2026 Legislative Platform
Recommendation: Receive and adopt the City of Salinas 2026 Legislative Platform.

ADMINISTRATIVE REPORTS
ID#26-034 Update On Predevelopment Activities for 34, 36, 38, 40, 37-39, and 45 Soledad Street in Chinatown
Recommendation: No action required. Receive an update on predevelopment activities for 34, 36, 38, 40, 37-39, and 45 Soledad Street in Chinatown.

ID#26-054 Rental Registration and Rent Stabilization 2025 Final Program Data and 2026 Implementation Activities

3 February 24, 2026City Council Meeting Agenda - Final
Recommendation: No action required. Receive an administrative report on Rental Registration and Rent Stabilization Program (Program) 2025 final Program data and 2026 Program implementation strategy.

ID#26-050 2025 Permit Center Annual Report
Recommendation: No action required. Receive the 2025 Permit Center Annual Report.

CONSENT AGENDA
Matters listed under the Consent Agenda may be enacted by one motion unless a member of the Council requests a separate vote or discuss. Members of the public may comment on the Consent Agenda items collectively during their public comment.

ID#26-001 Minutes
Recommendation: Approve minutes of January 13, 2026.

ID#26-065 Minutes
Recommendation: Approve minutes of February 3, 2026.

ID#26-019 2025 Annual Comprehensive Financial Report
Recommendation: Approve a Resolution accepting the Annual Comprehensive Financial Report (ACFR) for the Fiscal Year ended June 30, 2025.

ID#26-030 Amendment No. 3 to the On-Call Streetlight Agreement with St. Francis Electric, LLC.

Recommendation: Approve a Resolution authorizing the City Manager to execute Amendment No. 3 to the On-Call Streetlight Service Agreement with St. Francis Electric, LLC to increase the annual amount by $136,595 for a revised annual not-to exceed amount of $386,595; de-appropriating $137,000 from CIP 9163, Traffic Calming Improvements; and appropriating $137,000 to the Public Works Operating Budget.

ID#26-032 Appropriation of $1,190,337 of HOME-American Rescue Plan Funds to the Housing Authority of Monterey County
Recommendation: Approve a Resolution authorizing the appropriation of $1,190,337 of HOME-American Rescue Plan (HOME-ARP) Funds to the Housing Authority of Monterey County to provide supportive services through rental assistance for qualifying HOME-ARP populations at the Fairview Homekey permanent supportive housing site located at 1030 Fairview Avenue.

ID#26-049 All-Way STOP at California Street and East San Luis Street Recommendation: Approve a Resolution establishing an All-Way STOP at California Street and East San Luis Street.

ID#26-051 All-Way STOP Request for North Madeira Avenue and Roosevelt Street Recommendation: Approve a Resolution establishing an All-Way STOP at North Madeira Avenue and Roosevelt Street.

ID#25-507 City-Wide Parking Enforcement Agreement

4 February 24, 2026City Council Meeting Agenda - Final
Recommendation: Approve a Resolution authorizing the City Manager to execute a services agreement with LAZ Parking California, LLC for City-Wide Parking Enforcement Services in an amount not to exceed $1,949,175 through January 1, 2029 with and an option to extend the term for two (2) additional one-year periods.

ID#25-539 Zoning Code Amendment 2025-001; Rescind Section 37-50.250 (Accessory Dwelling Units) of Chapter 37 of the Salinas Municipal Code (Zoning Code), remove and modify applicable Zoning Code Accessory Dwelling Unit (ADU) definitions and development regulations and apply applicable State ADU law for the processing of ADU applications
Recommendation: Consider finding Zoning Code Amendment 2025-001 categorically exempt from the California Environmental Quality Act (CEQA) pursuant to CEQA Guidelines Section 15305; and adopt an Ordinance to comply amending Chapter 37 of the Salinas Municipal Code (Zoning Code) to rescind Section 37-50.250 (Accessory Dwelling Units), remove and modify Accessory Dwelling Unit (ADU) definitions of Section 37-10.250 ("A" definitions), modify the ADU development regulations of Sections 37-30.020, 37-30-060, 37-30-110, 37-30.160, 37-30.390, and 37-30.430, and apply applicable State ADU Law to process ADU applications.
2ND READING
ID#26-022 Ordinance amending Articles XIV and XIII of Chapter 16 of the Salinas Municipal Code
Recommendation: Adopt an Ordinance amending Article XIV of Chapter 16 of the Salinas Municipal Code to update regulations prohibiting camping on public property; adopt an Ordinance Amending Article XIII of Chapter 16 of the Salinas Municipal Code related to the storage of personal property on public property.
2ND READING
COUNCILMEMBERS’ REPORTS, APPOINTMENTS AND FUTURE AGENDA ITEMS Receive communication from Councilmembers on reports, appointments and future agenda items. Councilmember comments are generally limited to three minutes.

ADJOURNMENT
_____________________________
Patricia M. Soratos, City Clerk

AGENDA MATERIAL / ADDENDUM
Any addendums will be posted within 72 hours of regular meetings or 24 hours of special meetings and in accordance with Californian Government Code Section 54954.2 and 54956. City Council agenda reports and other writings distributed to the legislative body may be viewed at the Salinas City Clerk’s Office, 200 Lincoln Avenue, Salinas, and are posted on the City’s website at www.cityofsalinas.org in accordance with California Government Code section 54597.5. The City Council may take action that is different than the proposed action reflected on the agenda.

Disability-related modification or accommodation, including auxiliary aids or services, may be requested by any person with a disability who requires a modification or accommodation in order to participate in the meeting. Language interpretation may be requested as soon as possible but by no later than 5 p.m. of the last business day prior to the meeting. Requests should be referred to the City Clerk’s Office At 200 Lincoln

5 February 24, 2026City Council Meeting Agenda - Final
Avenue, Salinas, 758-7381, as soon as possible but by no later than 5 p.m. of the last business day prior to the meeting. Hearing impaired or TTY/TDD text telephone users may contact the city by dialing 711 for the California Relay Service (CRS) or by telephoning any other service providers’ CRS telephone number.

PUBLIC NOTIFICATION
This agenda was posted on February 20, 2026 in the Salinas Rotunda and City's website.

Meetings are streamed live at https://salinas.legistar.com/Calendar.aspx, televised live on Comcast Channel 25 and on http://www.youtube.com/thesalinaschannel at 4:00 p.m. on the date of the regularly scheduled meeting and will be broadcast throughout the day on Friday, Saturday, Monday and Wednesday following the meeting. For the most up-to-date Broadcast Schedule for The Salinas Channel on Comcast 25, please visit or subscribe to our Google Calendar located at http://tinyurl.com/SalinasChannel25. All past City Council meetings may also be viewed on the Salinas Channel on YouTube at http://www.youtube.com/thesalinaschannel.

6 City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-064, Version: 1
..Title
a. Labor Negotiations - California Government Code Section �54957.6 with its designated labor representatives Rene Mendez, City Manager; Lisa G. Murphy, Assistant City Manager; Christopher A. Callihan, City Attorney; Katherine Hogan, Assistant City Attorney; Selina Andrews, Finance Director; Marina Horta-Gallegos, Human Resources Director; Sylvia Enriquez, Human Resources Manager; and Che Johnson, Liebert Cassidy Whitmore, regarding labor relations with Service Employees International Union (SEIU), SEIU Supervisors, Salinas Municipal Employees Association/SEIU, Association of Management Personnel, Police Officers Association, Police Management Association, International Association of Firefighters, Fire Supervisors Association, Confidential Non-Management Employees, Confidential Management Employees, and Department Directors.

City of Salinas Printed on 2/20/2026Page 1 of 1
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7 City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#25-527, Version: 1
..Title
Salinas Youth Council Updates and Comments
..Recommended Action
No action required. The City of Salinas Youth Council will provide an administrative update to the City Council.

City of Salinas Printed on 2/20/2026Page 1 of 1
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CITY OF SALINAS

COUNCIL STAFF REPORT

DATE: FEBRUARY 24, 2026
DEPARTMENT: ADMINISTRATION
FROM: RENÉ MENDEZ, CITY MANAGER

SOPHIA ROME, COMMUNITY RELATIONS MANAGER

SALINAS YOUTH COUNCIL
TITLE: SALINAS YOUTH COUNCIL UPDATES AND COMMENTS

RECOMMENDED MOTION:

No action required. The City of Salinas Youth Council will provide an administrative update to the City Council.

EXECUTIVE SUMMARY:

The Council approved the establishment of a Youth Council Pilot Program through July 31, 2027.

As Youth Councilmembers, they work on community projects and serve as liaisons between the school district, schools, and the City. This Administrative Report is to provide updates on Youth Council activities and provide the Council with comments on agendized items.

BACKGROUND:

On October 22, 2024, the Council approved the establishment of a Youth Council Pilot Program through July 31, 2025. The Pilot Program was extended through July 31, 2027, by Council Resolution on June 17, 2025.

The Youth Council participates in activities like:

 Youth Council representation and participation at City Council meetings  Regular administrative updates to the SUHSD Board
 Serve as liaisons between the each SUHSD high schools’ Associated Student Body (ASB) youth leadership and principals to increase civic engagement and outreach  Leadership and skill development
 Community service projects

The purpose of the Youth Council is to increase youth representation in civic engagement, provide professional and leadership development opportunities for Salin as youth, and to serve as community connectors representing youth, their school sites, and school district.

9 Page | 2
CEQA CONSIDERATION:

Not a Project . The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing 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. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

CALIFORNIA GOVERNMENT CODE §84308 APPLIES:

No.

STRATEGIC PLAN INITIATIVE:

Youth and Seniors
 Improve, expand and develop youth and senior facilities and programs

Public Safety
 Increase collaboration with partner agencies to address public safety public health issues

City Services
 Promote equitable access to City services and foster inclusive development  Engage residents and improve communication with the community

DEPARTMENTAL COORDINATION:

The Youth Council is supported through the City Manager’s Office.

FISCAL AND SUSTAINABILITY IMPACT:

Fund General Ledger
Number
(Operating/CIP)
General Ledger
Account Name
Remaining
Budget
Appropriation
Amount
Requested

N/A N/A N/A N/A N/A

ATTACHMENTS:

None.
10 City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-063, Version: 1
..Title
Hartnell College Foundation - Salinas Valley Promise
City of Salinas Printed on 2/20/2026Page 1 of 1
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11 Presentor:

Salinas Valley Promise
Program
Data and Outcomes
Presentation for: Salinas City Council and Leadership
February 24, 2026
Presented by: Dr. Jackie Cruz and Dr. Gabriela Lopez
12 SALINAS VALLEY PROMISE GOALS
✔ COLLEGE AND VOCATIONAL TRAINING ACCESS AND COMPLETION ✔ ECONOMIC RECOVERY
✔ WORKFORCE & ECONOMIC MOBILITY
NOTE
85% of Hartnell students come from low-
income families
AND
Low-income FAFSA completers are 127%
more likely to enroll in college1
1Survey Data Strengthen Association Between FAFSA Completion and Enrollment
https://www.ncan.org/news/news.asp?id=456025
Eligibility Requirements
• Be a graduate of a high school or adult school in
the state of California*
• First-time college student (inclusive of dual
enrollment students)
• Enroll full-time (at least 12 units or more)
• Submit the FAFSA or the California Dream Act
Application**
• Participate in the student success seminar
course or enroll in a cohort based partner
program
• Participate in professional development
workshops and mentorship
• Maintain at least a 2.0 semester GPA
13 Program Benefits
• 2 years of free in-state tuition, regardless
of household income
• A free laptop OR textbook voucher
• Participation in a student success seminar
• Quarterly professional development
workshops with fellow Promise students
• Faculty Champions advocating for students
in each cohort
• Peer Mentoring in First Year of Program
Promise Peer Mentors, 2024-2025
14 15
College Type Cost of Attendance Net Price ($1-
30k Income)
Net Price ($30-
48k Income)
Net Price ($48k-
75k Income)
Community College $6,418 $5,059 $6,040 $8,517
CSU $11,226 $6,819 $7,708 $10,411
UC $12,953 $7,354 $8,294 $11,273
CSU Monterey Bay $14,487 $9,654 $11,487 $13,868
Monterey Peninsula College $13,498 $12,241 $13,519 $15,221 Hartnell College $2,895 $1,360 $1,477 $5,267
Source: Dept of Ed College Scorecard, 2024-25
Salinas Valley Promise is creating more accessibility & opportunity
16 Growth by Year
Almost at scale: Fall 2024 cohort represented 62% of first-time, full-time incoming class of students. 17 Enrollment Breakdown by City: 2019-2024
18 Salinas SVP Enrollment: 2019-2025
19 Impact of the Promise on Full-time Enrollment for First Time College Students
3% 93.7%
Full-Time Enrollment Growth Since
the Start of the Promise Program
• Prior to the start of Promise program, in Fall 2017, 552 entering students were enrolled full-time, compared to Fall 2024 enrollment of 1,069 students attending full-time, an increase of 93.7%. * The increase of full-time students is particularly important because full-time students complete a certificate, a degree or transfer to a university at a higher rate than part-time students. 20 Salinas Valley Promise vs. First Time Part-
Time Students
Note: Data was accessed from Hartnell Production Database on 1/21/25. Dual enrollment, JPA, and non-first time students are excluded from the cohort. 21 Data Results and Outcomes - Mentoring
3% 20.8%
Hartnell College was the first community college to partner with Mentor Collective.

Since, the following community colleges have become partners:
“My mentor has been an amazing help in my life,
he makes me realize and see things more clearly.

Sometimes it's in front of your face but can't see
until someone puts it into words for you.”
22 Impact to Date (F19-SP25): Mentor Collective
2,258
Number of Students Matched with a Relevant
Peer Mentor
5,994
Communications Hours Saved
452
Hours Saved Matching
195
Number of Trained Mentors
23 Peer Mentors
I feel very supported by Hartnell College! When I ask for help, I always receive good advice. As a member of the Salinas Valley Promise program, I'm grateful for all the help I've received since the beginning of the semester.

As a member of Mentor Collective, being a mentee was the right decision to make because I feel very supported by my mentor. She is very helpful and checks in with me as well. I appreciate all her help. Overall, Salinas Valley Promise has made me feel guided.
- First Year Scholar, October 2024
24 2020 and 2021 Cohort Data Results and Outcomes –
Graduation Rates (2-Year)
Note: Hartnell College are measured by 6-year graduation data, but we are seeking to push ourselves to with ambitious goals.

Source: Graduation Data was accessed from Hartnell databases on 7/15/25. 25 Workforce Outcomes-Career Technical
Education (CTE) Graduates from Hartnell
Increase Their Employee Wages – 2025
< $19.99/hr
$20-$29.99/hr
$30-$49.99/hr
> $50/hr
26 2020 and 2021 Cohort Data Results and Outcomes –
Graduation Rates (3-Year)
Note: Hartnell College are measured by 6-year graduation data, but we are seeking to push ourselves with ambitious goals.

Source: Graduation Data was accessed from Hartnell databases on 07/15/2025. 27 2024 Data Results and Outcomes –
Persistence and Course Success
Persistence
In the Fall 2024, Promise participants
had a very high (88.2%) persistence rate
from Fall to Spring compared to 77.9%
persistence in other first time, full time
students not participating in the
Promise, a 10.3% higher average.

Course Success Rate
In the Fall 2024, First-time, full-time
Promise participants had a 3.2% higher
course success rate than other first time,
full time students who did not
participate in the Promise
AND
In Spring 2024, Promise participants had
a 6.7% higher success rate than other
first time, full time students who did not
participate in the Promise
Course Success Rate
Spring 2024
Compared to non-Promise
first time, full time
Course Success Rate
Fall 2024
Compared to non-Promise
First time, full time
students

6.7%
Persistence Rate
Fall 2024 to Spring
2025
Promise Students
versus non-Promise
first-time, full time
students

3.2%

10.3%
28 Workforce Outcomes- Graduates Improve Employment Status – Employment Status Outcomes 2025

78.5%

58.2%

71.4% 70.9%
Percent of respondents who report employment close or very close to field of study by employment status. 29 Workforce Development – STEM
Computer Science in 3 Years Program Outcomes
In collaboration with CSUMB, 230 students served in 8 cohorts.

Last graduating cohort June 2020.

Note: AS%: Percentage of students who started in
CSin3 in 2018FA and received AS.CISCS within 2 years
Source: AS% 2018-2020 from Hartnell Database and
other metric provided by Mindy Sanchez-Ryan
30 Note: * Respondents are Completers and Skill-building students who meet one of the following Criteria 1) Earned a certificate of 6 or more units, 2) Earned a vocational degree ,OR 3) Earned 9+ CTE units."
% Transfer: Percentage of respondents who transferred to 4- year colleges/universities
Source: CTE Employment Outcomes Survey (CTEOS)
% Employed
2018-19
% Employed
2019-20
% Employed
2020-21
HEALTH (Overall) 92% 96% 97%
Respiratory Care
Practitioner
100% 100% 95%
Registered Nursing 96% 94% 95%
Vocational Nursing 86% 96% 100%
Note: Number in blue has completers/leavers
less than 10.
"Employment"" is ""the percentage of CTE
program leavers and completers who did not
transfer to a two or four year institution and
were found during one of the four quarters
following the cohort year in an apprenticeship
program, Unemployment Insurance (UI) covered
employment, the federal Government, or the
military."""
Source: Career Technical Education (Perkins V),
https://misweb.cccco.edu/perkins/Core_Indicat
or_Reports/Summ_CoreIndi_TOPCode.aspx,
accessed on 7/28/22
Source: CTE Employment Outcomes Survey
Workforce Development – Nursing and Health Science
31 Workforce Development – Agriculture
Note: *Respondents are Completers and Skill-building
students who meet one of the following Criteria 1)
Earned a certificate of 6 or more units, 2) Earned a
vocational degree ,OR 3) Earned 9+ CTE units.“
% Transfer : Percentage of respondents who transferred
to 4 year colleges/universities
Source: CTE Employment Outcomes Survey (CTEOS)
Note: Number in blue has completers/leavers less than

10. "Employment"" is ""the percentage of CTE program
leavers and completers who did not transfer to a two or four year institution and were found during one of the four quarters following the cohort year in an apprenticeship program, Unemployment Insurance (UI) covered
employment, the federal Government, or the military.""" Source: Career Technical Education (Perkins V),
https://misweb.cccco.edu/perkins/Core_Indicator_Report
s/Summ_CoreIndi_TOPCode.aspx, accessed on 7/28/22
Source: CTE Employment Outcomes Survey
32 Funding & Budget Projections 2025-2026 (with all income sources) Budget Item Projected 2025-2026
Marketing and Promotional Materials $17,000
Supplies and materials $20,000
Mileage $250.00
Professional Development $10,000
Mentorship Management Platform and Scholarship Platform $30,000 Enrollment Tuition Waivers $125,000
Scholarships (Includes textbooks/laptop) 1400 Students @ $500.00 each $700,000 Total Programmatic Expenses $902,250
Faculty Stipends for Faculty Mentors with fringe benefits $30,000 Promise Program Coordinator with Benefits $180,000
Promise Program Specialist with Benefits $135,000
Peer Mentor Stipends $65,000
Promise & First Year Success Director with Benefits $202,000 Total Personnel Expenses with Salaries and Benefits $612,000 Subtotal $1,514,250
AB19 Funding $368,000
College Funds (Director Salary) $202,000
Lottery Funds $475,000
Other Grant Sources (Mentoring Platform) $30,000
Total Delta between existing college funding sources and the Salinas Valley Promise Program Funding Costs $439,250 33 OG Salinas Valley Promise Program Champions
Adrienne Laurent Pres. Michael
Gutierrez
Dr. Jackie Cruz Ruth Rodriguez
Ana Valles Dr. Willard
Lewallen
Andrea Bailey Margaret D’Arrigo
Aurelio Salazar,
Jr.

Michele Peregrin
Dr. Gabriela
Lopez
Mike Briley
Chelsy Pham Monica Tovar
Chris Lopez Olegario Gomez
Elliot Robinson Dr. Pablo Romero
Esther Rubio Rene Mendez
Funding
Supporters
34 Bud and Rebecca
Colligan
Salinas Valley Promise
Program Funders –
Thank you for your support!
35 Thank
You!
36 City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-038, Version: 1
..Title
2026 Legislative Platform
..Recommended Action
Receive and adopt the City of Salinas 2026 Legislative Platform.

City of Salinas Printed on 2/20/2026Page 1 of 1
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CITY OF SALINAS

COUNCIL STAFF REPORT

DATE: FEBRUARY 24, 2026
DEPARTMENT: CITY ADMINISTRATION
FROM: LISA MURPHY, ASSISTANT CITY MANAGER
TITLE: 2026 LEGISLATIVE PLATFORM

RECOMMENDED MOTION:

Motion to adopt the 2026 Legislative Platform.

EXECUTIVE SUMMARY:

The Legislative Platform (Platform) establishes the principles that will guide the City’s policy and legislative advocacy efforts at the regional, state, and federal level. The Platform focuses on the key areas that will enable the City of Salinas to deliver projects and programs to meet the needs of our community. Adopted annually, the City’s Platform serves as a reference to guide the development of positions on legislative proposals and provides guidance for the City Council and staff throughout the year.

BACKGROUND:

Each year the Platform will be updated to highlight legislative and funding priorities for consideration and adoption by the City Council. The following key areas have been identified as the City’s priorities, each with detailed policy positions:

1. Agriculture & Ag Tech

2. Healthcare

3. Housing & Homelessness

4. Transportation & Infrastructure

5. Economic & Community Development

6. Public Safety

7. Environmental Quality & Water Resources

8. Future Growth and Innovation

By adopting this Platform, the City Council authorizes the City’s participation in state and federal advocacy efforts that are aligned with municipal interests. Based on the adopted Platform, the City will evaluate and take formal positions on specific bills, budget proposals, and regulatory matters.

38 Page | 2
CEQA CONSIDERATION:

Not a Project . The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with certainty that th ere is no possibility that the activity in question may have a significant effect on the environment, the activity is not subject to CEQA. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

CALIFORNIA GOVERNMENT CODE §84308 APPLIES:

No, Government Code §84308/Levine Act does not apply to this item.

STRATEGIC PLAN INITIATIVE:

Adopting the 2026 Legislative Platform is consistent with the 2025-2028 Strategic Plan’s goals for Economic Development, Infrastructure, and Public Safety by turning the Strategic Plan’s priorities into advocacy. The advocacy includes seeking funding for projects as well as policy changes needed to achieve the goals.

DEPARTMENTAL COORDINATION:

City administration coordinated with all of the departments to gather input on their priorities.

FISCAL AND SUSTAINABILITY IMPACT:

There is no fiscal impact to adopting the Platform

ATTACHMENTS:

1. 2026 City of Salinas Legislative Platform
39 LegislativePlatform
City of Salinas State and Federal Legislative Platform
F e b r u a r y 2 0 2 6
P r e p a r e d b y :

J E A & A s s o c i a t e s
40 he City of Salinas, known as the "Salad Bowl of the World," is the largest city in Monterey County and a global leader in agriculture, Ag Tech, and innovation. With a population of over 160,000 residents, Salinas serves as a vibrant economic and cultural hub for the Central Coast. The city’s economy is anchored by a multi-billion-dollar agriculture industry, world- renowned produce production, and a rapidly growing
technology sector focused on sustainable farming and
automation. Salinas is also home to a diverse and resilient community, a rich cultural heritage, and a strategic location near major transportation corridors. Committed to inclusive growth, public safety, and environmental stewardship, the City of Salinas continues to invest in its infrastructure, workforce, and future—serving as a model for smart,
sustainable development in California.

T
About Us
City of Salinas
Contact
+831-758-7381
[email protected]
www.cityofsalinas.gov
41 m a y o r

CITY OF SALINAS
Dennis Donohue
C o u n c i l m e m b e r
D1, CITY OF SALINAS
Jose Luis barajas
c o u n c i l m e m b e r
D2, CITY OF SALINAS
tony barrera
C o u n c i l m e m b e r
D4,CITY OF SALINAS
Gloria de la rosa
C o u n c i l m e m b e r
D3, CITY OF SALINAS
Margaret d ’ Arrigo
C o u n c i l m e m b e r
D6, CITY OF SALINAS
aurelio salazar
C o u n c i l m e m b e r
D5,CITY OF SALINAS
Andrew sandoval

CITY COUNCIL
42 LEGISLATIVE PLATFORM: PURPOSE AND AUTHORITY
The policy positions outlined in the City of Salinas State and Federal Legislative Platform reflect the City Council’s strategic goals and priorities, as well as its stance on key legislative and regulatory issues currently under consideration or anticipated at the state and federal levels. This platform provides the foundation for the City’s active engagement in shaping state legislation, administrative regulations, and funding decisions that directly impact Salinas’ residents, economy, and infrastructure.

By adopting this platform, the City Council authorizes the City’s participation in state advocacy efforts, including support for judicial action aligned with municipal interests.

Guided by the principles in this document, the City will evaluate and take formal positions on specific bills, budget proposals, and regulatory matters.

Staff recommends this Legislative Platform be reviewed and updated annually to reflect shifts in the legislative landscape, emerging challenges, and priorities specific to Salinas and the greater Monterey County region—while remaining consistent with broader policy goals shared by municipalities throughout California.

43 CITY OF SALINAS LEGISLATIVE PLATFORM:

GOALS, PRIORITIES, & GUIDING PRINCIPLES
Strategic Goals and Priorities
• Strengthen Salinas’ position as a global leader in agriculture and innovation by expanding its Ag Tech sector and promoting regional, national, and international partnerships.
• Enhance the quality of life for residents by ensuring equitable access to affordable housing, comprehensive healthcare, public safety services, and recreational amenities.
• Foster sustainable economic and environmental growth through smart land use, green infrastructure investments, and a commitment to renewable resources. • Advocate for fiscal stability, disaster resilience, and modern infrastructure that supports thriving neighborhoods and future development.

Guiding Principles for Legislative Platform
• Advocate for fair, direct, and consistent state and federal investment in Salinas and its priority sectors, including agriculture, health, and infrastructure. • Oppose any policy or legislation that restricts local government authority or imposes mandates without adequate funding.
• Support budgetary and legislative measures that reflect Salinas’ long -term vision for economic growth, innovation, and equity across all communities.

44 CITY OF SALINAS LEGISLATIVE PLATFORM
Agriculture & Ag Tech
• Support legislation and funding that affirms Salinas’ global brand as the “Salad Bowl of the World,” reinforcing its agricultural leadership and economic significance.
• Seek targeted state funding for Ag Tech initiatives that enhance food safety, crop yield, and automation, while creating career pathways for local workers. • Promote international agricultural exchange and trade agreements that strengthen cross-border economic development, particularly with Mexico. • Secure increased water allocations—specifically 1,000,000 gallons/day—to support critical agricultural operations, industry growth, and climate resiliency. • Support state and federal legislation that provides grants and incentives that support Ag Tech programs including pilot demonstrations and field trials.

Healthcare
• Pursue ongoing funding streams for Salinas Valley Health and Natividad Medical Center to address regional service demands and public health disparities. • Advocate for loan forgiveness, scholarships, and other recruitment tools to attract high-quality medical professionals to underserved areas.

45 • Expand the availability and integration of mental health, behavioral health, and rehabilitation services, especially for vulnerable populations and the regional workforce.

Housing & Homelessness
• Support affordable housing programs for farmworkers, educators, and emergency personnel essential to the local economy.
• Pursue state investment in transitional and supportive housing units to reduce chronic homelessness and improve community stability.
• Back policy changes that reduce regulatory barriers to housing development while protecting the City’s local land-use control.
• Support legislation and programmatic funding for homeless services and encampment abatement.

Transportation & Infrastructure
• Support infrastructure investments that enhance freight corridors and accommodate commercial growth, including logistics expansions like Amazon’s Salinas hub.
• Expand and modernize regional transit systems to improve access to jobs, reduce emissions, and improve connectivity across the Monterey Bay area. • Secure continued Measure G and other state funding sources to improve roads, address traffic congestion, and upgrade pedestrian and bike infrastructure. • Support advancement and funding for air mobility programs, innovation, and infrastructure.
46 Economic & Community Development
• Encourage business attraction and retention through policies that support industrial innovation, tax incentives, and streamlined permitting processes. • Invest in quality-of-life infrastructure such as parks, libraries, and community centers to support both urban neighborhoods and agricultural communities. • Rehabilitate outdated public infrastructure, aligning capital improvement plans with the needs of a growing and diverse population.

Public Safety
• Seek sustainable funding to increase police staffing, training, and community policing strategies that build trust and safety.
• Fund the design and construction of a new firehouse to meet growing service demand and reduce emergency response times.
• Invest in comprehensive emergency preparedness, including wildfire resilience, urban flooding mitigation, and rural response capabilities. • Monitor and evaluate legislation related to loitering with intent to purchase commercial sex; ensure any new crime definitions do not disproportionately impact vulnerable populations, including sex trafficking victims, and advocate for survivor-centered approaches that improve public safety while protecting civil rights.

47 Environmental Quality & Water Resources
• Promote water conservation, stormwater capture, and groundwater recharge projects that serve both agricultural and residential users. • Balance environmental regulation with practical economic development goals to sustain Salinas’ agricultural base and green space planning. • Secure state investment in water recycling, desalination exploration, and drought-proof technologies to future-proof Salinas’ water supply.

Future Growth & Innovation
• Support Ag Tech expansion as a foundational component of Salinas’ 21st-century economy, connecting education, startups, and industry.
• Plan for and invest in future housing and infrastructure to support projected job growth and demographic expansion.
• Modernize the City’s welcome center as a hub for tourism, business support, and cultural engagement.
• Advocate for policies and funding that position Salinas as a leader in smart city planning, technological innovation, and inclusive economic development. 48 City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-034, Version: 1
..Title
Update On Predevelopment Activities for 34, 36, 38, 40, 37-39, and 45 Soledad Street in Chinatown ..Recommended Action
No action required. Receive an update on predevelopment activities for 34, 36, 38, 40, 37-39, and 45 Soledad Street in Chinatown.

City of Salinas Printed on 2/20/2026Page 1 of 1
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CITY OF SALINAS

COUNCIL STAFF REPORT

DATE: FEBRUARY 24, 2026
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
BY: GRANT LEONARD, PLANNING MANAGER
TITLE: UPDATE ON PREDEVELOPMENT ACTIVITIES FOR 34, 36, 38, 40, 37-39, AND 45 SOLEDAD STREET IN CHINATOWN

RECOMMENDED MOTION:

Receive an update on predevelopment activities for 34, 36, 38, 40, 37 -39, and 45 Soledad Street in Chinatown. No action required.

EXECUTIVE SUMMARY:

The City is currently in the process of developing site plans and architectural renderings for mixed- use affordable housing developments to be located on City-owned property at 34, 36, 38, and 40, 37-39, and 45 Soledad Street.

BACKGROUND:

As part of the on -going efforts to implement the Chinatown Revitalization Plan (2019), the City purchased 34, 36, 38, and 40 Soledad Street, 37-39 Soledad Street (Republic Café), and 45 Soledad Street. In 2023 the City applied for and received $1,555,000 in Regional Early Action Planning Grant (REAP 2.0) funding from the Association of Monterey Bay Area Governments (AMBAG) to complete predevelopment activities for the development of mixed-use affordable housing in the Chinatown neighborhood.

In February 2024, the City entered into a profess ional services agreement with TEF Architecture and Interior Design, Inc. (TEF) to develop conceptual site plans and architectural renderings for a mixed-use affordable housing development to be located at 34 -38 Soledad Street, with the intent of obtaining planning entitlements prior to issuing a Request for Proposals to developers to then develop the sites. The agreement with TEF was later amended to include design and entitlement work for 37 -39 and 45 Soledad Street, as well as preparation of construction documents for emergency stabilization and subsequent rehabilitation of 37-39 Soledad Street (Republic Café).

To date, TEF has prepared conceptual site plans and architectural renderings for 34, 36, 38, 40 and 45 Soledad Street that have been informed by site visits, the historic context of the property and 50 Page | 2
neighborhood, multiple stakeholder meetings, and consultation with affordable and market rate housing developers. Concepts for 37 and 39 Soledad are currently being finalized along with the construction documents for the emergency stabilization and future rehabilitation.

An important aspect of the predevelopment process has been the close and continued engagement with the Chinatown community stakeholders. Since 2024, the City and TEF have regularly consulted with the Chinatown Collaboration, Salinas Downtown Community Board, neighboring property owners such as Dorothy’s Place and Victory Mission, and the general public on the design and use of future buildings located on 34, 36, 38, 40, 37-39, and 45 Soledad Street. The result is a mixed-use, multi -site development that includes multiple ground -floor commercial spaces, approximately 85 affordable housing units comprised of studios, 1 -bedroom, 2 -bedroom, 3 - bedroom, and senior units, and space within th e Republic Café (37 Soledad Street) for the Asian Cultural Experience of Salinas to develop a cultural museum dedicated the history of Chinatown.

The exterior designs of the buildings also include elements of the historic architecture of Chinatown, thereby contributing to the unique look and feel of Chinatown.

In December 2025, the City and TEF submitted an entitlement application 34, 36, 38, 40 Soledad Street, are currently responding to comments received through the departmental review and intend to submit a revised application in March 2026. Simultaneously, the City and TEF are preparing to submit an entitlement application for 45 Soledad Street in March 2026. Following approval of the entitlement applications, the City will prepare and issue a Request for Proposals soliciting proposals from housing developers to construct the projects.

Finally, the City and TEF are preparing construction documents for the emergency stabilization of 37-39 Soledad Street to submit a building permit application in the Spring of 2026, followed by construction documents for the complete rehabilitation of 37-39 Soledad Street (Republic Café) to submit a building permit application in the Summer of 2026. A detailed cost estimate is being prepared with the construction documen ts, but the preliminary estimate is approximately $2 million for the emergency stabilization and $3 million for the rehabilitation. Construction of the stabilization and rehabilitation of the Republic Café (37-39 Soledad Street) are currently planned to be undertaken by the City, subject to funding availability.

CEQA CONSIDERATION:

Not a Project . The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing a significant effect on the environment. Where it can be seen with cert ainty 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. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, t his matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

51 Page | 3
CALIFORNIA GOVERNMENT CODE §84308 APPLIES:

No.

STRATEGIC PLAN INITIATIVE:

Development of City-owned properties in Chinatown advances the City Council’s 2025-2028 Housing and Economic Development initiatives by supporting the development of mixed-use affordable housing and the revitalization of the Chinatown neighborhood.

DEPARTMENTAL COORDINATION:

The Community Deve lopment Department is leading this effort with close coordination with Public Works and Finance Departments.

FISCAL AND SUSTAINABILITY IMPACT:

There is no fiscal impact for the report. Funding for this project comes from the Regional Early Action Planning Grant (REAP 2.0) funds from the Association of Monterey Bay Area Governments (AMBAG) and the City’s Chinatown Revitalization CIP (9070).

Fund

General Ledger Number
(Operating/CIP)
General Ledger Account
Name

Remaining Budget
Appropriation
Amount Requested

N/A N/A N/A N/A N/A

ATTACHMENTS:

1. Presentation
52 Update on
Predevelopment for
34, 36, 38 ,40, 37-39,
and 45 Soledad Street
in Chinatown
2/24/2026
City Council
53 Background
34-40 Soledad St.
00 01
02 03 45 Soledad St.
04 37- 39 Soledad St.

Design Precedents
05 Schedule and Next steps
Agenda
54 3
Chinatown Revitalization
● Continued implementation of 2019
Chinatown Revitalization Plan
○ Safety and Homelessness
○ Infrastructure Improvements
○ Economic Development
○ Housing Development
00 Site Context
55 4
● City purchase of vacant properties
○ 45 Soledad Street
○ 34, 36, 38, 40 Soledad Street (one
property)
○ 37-39 Soledad Street (Republic
Cafe)
● Grant funding for predevelopment
work in 2024
○ $1.5 million Regional Early Action
Planning Grant
○ TEF Design selected for design
and entitlement work
Project Background
45 Soledad Street
34, 36, 38, 40 Soledad Street
56 37
45 40
38 36
34 39
34 & 36 Soledad: 1-story buildings,
formerly commercial/ restaurant
use - demolished in 2025 after fire
38 Soledad: 2-story building,
formerly Arre’s Pool Hall +
apartments, eligible Historic
Resource - demolished in 2025
after fire
40 Soledad: Empty lot
37-39 Soledad: Republic Cafe,
NRHP listed property + Lotus Inn
45 Soledad: 2-story building,
formerly mixed use - demolished in
2017 after fire
Project Map
57 6
● Complete all required predevelopment
tasks before a developer is selected
○ Planning entitlements
● Ensure community engagement
○ Design that reflects the rich history
and architecture of Chinatown
● 100% affordable mixed use development
○ Varied income levels
○ Mix of unit types - studio, family,
senior
○ Commercial spaces designed for
success
Goals for Predevelopment
58 May 2024: Project Kick-Off (34-40 Soledad)
June 2024: Community Visioning Community
July 2024: Meeting with Historic Resources Board (34-40 Soledad) Aug. 2024: Developer Consultations (34-40 Soledad)
Jan. 2025: Project Kick-Off (45 Soledad)
Feb 2025: Meeting with Historic Resources Board (45 Soledad) March 2025: Market Study (34-40 & 45 Soledad)
April 2025: Community Visioning Workshop (45 Soledad)
June 2025: Costing Package (34-40 & 45 Soledad)
In Progress: CEQA Exemption is being prepared
34-40 Soledad Site Plan Review submitted to City Dec 22nd 2025 Background on Process to Date
59 01
Mural by Josh Wigger
Mural by BiP Apollo
Design Precedents
60 Morning Star
Japantown, SF
Gum Moon
Chinatown, SF
Tahanan - SOMA Pilipinas, SF

MERCY HOUSING
Park View Terrace, SF

CHINATOWN CDC
Casa de la Mision, The Mission, SF

MERCY HOUSING
Pok Oi - Boston, MA
CHINESE CONSOLIDATED BENEVOLENT ASSOC.

Maceo May - Treasure Island

CHINATOWN CDC
900 Pacific - SF

CHINATOWN CDC
951 N Broadway - Los Angeles
61 ● Barrel clay tile awnings
● Small decorative tile wall accents
● Stucco finish with warm earth tone colors
Spanish Revival Influence
330 Alvarado Street - Monterey, CA
186 Lighthouse Ave - Monterey, CA
439 Soledad Street - Salinas, CA
Historic Design Context - Early Settlement of the Salinas Valley 62 ● Chinese Red color - Good fortune, joy and celebration ● Moongate - symbolizes a passage into serenity, renewal and good fortune in connection to lunar deities.

Chinese Influence
Historic Design Context - Establishment of Salina’s Chinatown 946 Mei Ling Way - Los Angeles, CA
951 N Broadway - Los Angeles, CA
Moongate Lounge, SF
E.A. Library, UC Berkeley
63 ● A welcoming and secure entry
● Easy wayfinding
● Inspired by Chinese motif
Moon Gate
Moongate Lounge, SF
Blue Oak Landing, SF - Eden Housing
Dr. Sun Yat-Sen, Vancouver
Hortus Haren Botanical Garden, Netherlands
Design Concepts
64 ● Japanese joinery techniques
● Perforated metal to match moongate entry
● Visually connect 34-40 and 45 Soledad with a similar design element Solar Shades
Casa de la Mision, SF

MERCY HOUSING
388 Fulton St, SF
7x7 DEVELOPMENT
388 Fulton St, SF
7x7 DEVELOPMENT
Design Concepts
65 ● Inspired by Asian cultural relevance
● Connecting the two taller volumes of 34-40
● Celebrating the historic replica in the center and its presence on the site String of Lanterns
Stainless Steel Lantern
Chinatown, SF
SOMA Pilipinas Patrol Lantern Festival + Parade, SF
Lantern Festival
Design Concepts
66 Mural Opportunities
● Breaking up large expanse of wall in an economical way ● Celebrates local artists and ideas, giving voice to the community The murals shown at 34–40
and 45 Soledad showcase a
selection of Belle Yang’s art
and are used with her
permission.

ABOUT BELLE YANG:
“Born in Taiwan, Belle Yang is
author and illustrator of adult
nonfiction books, children's
books and a graphic memoir.

She spent part of her
childhood in Japan. At age
seven she emigrated to the
United States with her mother
and father. She attended
Stirling University in Scotland,
graduated from the University
of California, Santa Cruz in
biology but went on to study
art at Pasadena Art Center
College of Design and the
Beijing Institute of Traditional
Chinese Painting.”
Lotus in Rain
After Brueghel
Odello Artichoke Field #2
Design Concepts
67 Render
16 Conceptual Soledad Gateway
68 Render
17 Artwork Credit: Belle Yang
Mural Art Work Potential
Conceptual Neighborhood Square
69 34-40 Soledad02 34-40 Soledad
70 34-40 Soledad
Ground Floor Plan
Retail
Lobby/Resident Services
Back of House/Mechanical
Parking/Circulation
71 34-40 Soledad
Floor Plan - Level 2
Studio
1 Bedroom
2 Bedroom
3 Bedroom
Community
72 34-40 Soledad
Floor Plan - Level 3-6
Studio
1 Bedroom
2 Bedroom
3 Bedroom
Community
73 34-40 Soledad
Level 1
Commercial Space 5,876 SF
Resident Lobby/Service 1,155 SF
Car Parking Spaces 11 spaces
Bike Long Term Storage 18 spaces
Bike Short Term Storage 4 spaces
Level 2
Shared Open Space 2,897 SF
Community Room 777 SF
Levels 2-6: 55 Residential Units
Studios 15 27%
1 Bed 10 18%
2 Bed 15 27%
3 Bed 15 27%
Mixed Use
Commercial + Multi-Family Affordable Housing
Project Name | TEF Design 22
Artwork Credit: Belle Yang
Mural Art Work Potential
74 23
34-40 Soledad
Soledad Street Elevation
75 24
Artwork Credit: Belle Yang
Mural Art Work Potential
34-40 Soledad
Market Way Elevation
76 04
45 Soledad03
77 45 Soledad
Ground Floor Plan
Retail
Lobby/Resident Services
Back of House/Mechanical
Parking/Circulation
78 45 Soledad
Floor Plan - Level 2
Studio
1 Bedroom
Community
Resident Services
79 45 Soledad
Floor Plan - Level 3-6
Studio
1 Bedroom
80 Project Name | TEF Design 29
Photo: Larry Hirahara
Mixed Use - Commercial + Affordable Senior Housing
5-Stories: 30 Units
Level 1
Commercial Space
Resident Lobby/Service
Car Parking Spaces
Levels 2-5: 30 Units
Classroom
Community Room
Studios
1 Bed
*AREA EXPECTED TO DECREASE WITH FURTHER

MEP DEVELOPMENT
45 Soledad
+/- 1,900 SF*
+/- 650 SF
1 space
+/- 300 SF
+/- 460 SF
16 14
Artwork Credit: Belle Yang
Mural Art Work Potential
81 30
45 Corner
View
45 Soledad
Soledad Street Elevation
82 31
45 Corner
View
Artwork Credit: Belle Yang
Mural Art Work Potential
45 Soledad
Market Way Elevation
83 37-39 Historic Structures Report, Stabilization & Rehab Design04 84 Historic Structures Report Findings
Photo: Larry HiraharaProject Name | TEF Design
Republic Cafe
37 Soledad Street
Historical Significance:
● Listed Salinas Historic Resource: 1989
● Designated in National Register of Historic Places: 2011 Historic Structures Report Findings:

Eligible for National Register of Historic Places under the following:
● Criterion A: Associated with cultural heritage as prominent ethnic minority business
● Criterion B: Association with Wallace Ahtye Sr. & Lily Ahtye ● Criterion C: Architecturally distinctive example of Chinese- inspired architecture
Lotus Inn
39 Soledad Street
Historical Significance:
● Listed Salinas Historic Resource: 1989
● Eligible for National Register of Historic Places
Historic Structures Report Findings:

Eligible for National Register of Historic Places under the following:
● Criterion A: Associated with cultural heritage as prominent ethnic minority business
● Criterion C: Architecturally distinctive example of Chinese- inspired architecture
85 feature is present on both
37 & 39 Soledad Street
West Facade Character Defining Features
*
86 37-39 Soledad Street
Emergency Stabilization Scope of Work
● Stabilize front facade
● Repair fire damaged components
● Install Fire Sprinkler System
● Stabilize building structure
● Make watertight (roof replacement)
and vandal resistant
87 Areas of Temporary
Reconstruction
88 37-39 Soledad
Soledad Street Elevation
89 Project Name | TEF Design 38
37-39 Soledad Street
Level 1 Concept Plan
Museum Area
Commercial Area
90 37-39 Soledad Street
Mezzanine Concept Plan
Museum Area
91 Project Name | TEF Design 40
37-39 Soledad Street
Level 2 Concept Plan
37-39 Soledad Street
Residential Area
Future Program
92 Project Name | TEF Design
37-39 Soledad Street
Level 3 Concept Plan
Museum Area
93 TEF Design | tefarch.com
MAR
37 - 39 HSR

EMERGENCY STABILIZATION DESIGN
August 2025 - June 2026
34 - 40

SCHEMATIC
DESIGN
37 - 39 Rehab

SCHEMATIC DESIGN

APR MAY JUNE JULY AUG SEPT OCT NOV DEC JAN FEB MAR APR MAY JUNE JULY 34 - 40, 45

CONCEPT DESIGN
34 - 40

SITE PLAN REVIEW
2025 2026
45 PREVIOUS CONCEPT
DESIGN
45 SITE PLAN REVIEW +

SCHEMATIC DESIGN
45 CONCEPT
DESIGN
37 - 39 Rehab

PERMITTING
37 - 39 Rehab

CONSTRUCTION DOCUMENTS
JUNE/2026

STABILIZATION

CONSTRUCTION STARTS
AUG
05 Schedule & Next Steps
94 ● Submit 45 Soledad Site
Plan Review
● Respond to 34-40 City
Planning Comments
● Finalize designs for 34-
40 and 45 Soledad
Street
● Prepare construction
documents for 37-39
Soledad Street
● Prepare Developer
Request for Proposals
34-40 Soledad
45 Soledad
39 Soledad
37 Soledad
Victory Mission
Dorothy’s Place
Buddhist
Temple of
Salinas

MARKET WAY

SOLEDAD STREET
Next Steps

CALIFORNIA STREET
95 44
34-40 Soledad
45 Soledad
Conceptual Project Aerial
96 Questions?
For more information, contact Grant Leonard
(831) 758-7579
https://www.cityofsalinas.org/Your-Government/Departments/Community-Development 97 City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-054, Version: 1
..Title
Rental Registration and Rent Stabilization 2025 Final Program Data and 2026 Implementation Activities ..Recommended Action
No action required. Receive an administrative report on Rental Registration and Rent Stabilization Program (Program) 2025 final Program data and 2026 Program implementation strategy.

City of Salinas Printed on 2/20/2026Page 1 of 1
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CITY OF SALINAS

COUNCIL STAFF REPORT

DATE: FEBRUARY 24, 2026
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
THROUGH: ORLANDO REYES, ASSISTANT DIRECTOR
BY: VINCENT MONTGOMERY, PLANNING MANAGER

LAURA GAMA, ADMINISTRATIVE ANALYST

AQUONTIS GARLINGTON, ADMINISTRATIVE AIDE

TITLE: RENTAL REGISTRATION AND RENT STABILIZATION 2025
FINAL PROGRAM DATA A ND 2026 IMPLEMENTATION

ACTIVITIES

RECOMMENDED MOTION:

Receive an administrative report on Rental Registration and Rent Stabilization Program (Program) 2025 final Program data and 2026 Program implementation strategy. No action required.

EXECUTIVE SUMMARY:

This administrative report provides final 2025 Program data, including excess fee revenue reimbursement methodology, process, and timing . It also outlines next steps for ongoing 2026 Program administration , including expanding community outreach with community partners , property owners and managers, and tenants to increase participation and system improvements to streamline registration with the community’s feedback.

DISCUSSION:

2025 Final RR/RSO Program Data

The 2025 Rental Registration and Rent Stabilization Program completed its first full implementation cycle, with strong participation occurring in the first quarter of the calendar year.

Between January 1, 2025, and March 31, 2025, a total of 7,806 registered units were received, of which 3,199 units registered under the Rental Registry Program and 4,607 units registered under the Rent Stabilization Ordinance. Beginning in the second quarter of the 2025 calendar year , 99 Page | 2
registration volume declined sharply as the Program entered delinquency and late‑fee assessment and City Council discussed and considered repealing the four ordinances. By calendar year end, 12,938 units were registered representing an estimated 45% participation rate. Total 2025 Program Fees Paid of $1,700,710 exceeded 2025 Program expenditures of $602,922 for an excess revenue balance of $1,097,788, less late fees, adjustments, and refunds . Tables 1 and 2 below provide a breakdown of revenues, expenditures, and remaining 2025 Program balance.

Table 1: 2025 Program Revenue
January 1 to December 31, 2025
Program
Fee
Amount
Units
Registered Fees Paid Late Fees Total
Rental Registration $45 3,990 $179,550 $7,242 $186,792 Rent Stabilization $170 8,948 $1,521,160 $30,927 $1,552,087 Adjustments &
Refunds ($2,068) ($2,068)
Total Revenue 12,938 $1,700,710 $36,101 $1,736,811

Table 2: 2025 Program Expenditures & Balance Summary
January 1 to December 31, 2025
Program Expenditures $520,040
Loan Repayment to General Fund $205,203
Grant Funding ($122,321)
Total Program Expenditures $602,922
Total Fees Paid $1,700,710
Revenue Surplus for Refund $1,097,788

2025 Program Refund Methodology, Process and Timing

Program staff worked with Finance, the City Attorney and Economic & Planning Systems (EPS) to establish a methodology for calculating the proportional refund of fees paid. The percentage of the overcharge, the surplus divided by total fees paid, would be used to determine the proportional amount of refund per unit . Late fees will not be refunded. As shown in the table below, the percentage of overcharge is sixty-five percent (65%). In other words, the Rental Registry Program fee of $45 and the Rent Stabilization fee of $170 were established 65% higher than needed to cover expenses. To calculate the proportional refund amount per un it, 2025 Program fees were multiplied by 65%. Paid registrants will receive refund of $29.05 for each Rental Registry unit and $109.73 for each Rent Stabilization unit.

100
Page | 3
Table 3: Refund Calculation

Percentage of Overcharge
Fee
Charged
Overcharge
%
Refund
per
unit
Expenditures/Revenue Surplus

$1,095,788/$1,700,710 = 65%
Rental
Registry $45 65% $29.05
RSO $170 65% $109.73

Refund checks will be processed beginning March and issued on a rolling basis per the timeline below. Program staff is working to verify payee names and mailing addresses of 3,236 registrants.

2026 Program Implementation Strategy
On December 9, 2025, the City Council established a 2026 Rental Registration fee of $29 and a Rent Stabilization fee of $112 , reducing fees in comparison to 2025 Program, however sized to together support the administration, compliance monitoring, and ongoing operations of the City’s rental housing programs. The 2026 registration cycle began on January 1st. An email notification was sent via Tolemi’s Slate platform to all registrants informing them that their rental registration license(s) was expiring and provided an opportunity to renew.

Delinquency notices were mailed on February 17, 2026, establishing a final registration deadline of April 3, 2026, before late penalties apply. Beginning April 4, 2026, late fees will accrue at 10% and increase every 45 days until 2026 registration and payment is completed. If a unit remains unregistered 180 days after the delinquency notice, the City is authorized to take enforcement action (including the issuance of citations or action to recover any unpaid amounts) in accordance with the Municipal Code. This schedule establishes a structured annual process to support timely compliance and effective program administration.

March 2026:
confirm
names/addre
ss
April 2026:
vendor set
up in
City's ERP
May 2026:
process/mai
l checks
June 2026:
process/mai
l checks
July 2026:
program
reconciliat
ion
Registrants will begin
receiving refunds
101
Page | 4
In 2026, staff will continue to advance Program implementation and improvements including, but not limited to:
 Updating the City’s rental registration and rent stabilization webpages to ensure that program information is clear, accessible, and easy for both landlords and tenants to navigate. Updates will focus on reorganizing content, simplifying instructions, and improving the visibility of key resources.
 Expanding targeted outreach and education through renewal notices, delinquency mailers, district-based workshops, and landlord and tenant workshops in partnership with community organizations, landlords, and property managers.  Providing direct customer support through open office hours aligned with the Permit Center schedule, offering in‑person assistance from 8:00 a.m. to 5:00 p.m. with Qless appointments between 9:00 –11:00 a.m. and 1:30 –4:00 p.m., and walk‑in availability as time permits.
 Improving the petition process and reducing petition cost through uniform guidance for landlords and tenants that outlines petition workflows, documentation requirements, system functionality, and processing time frames.
 Continuing to work with Tolemi to address user feedback and pursue enhancements that improve usability, accuracy, and overall platform and program efficiency.  Building internal infrastructure for outcome tracking, standardizing inquiry triage protocols, and expanding tr aining for frontline staff on common registration and petition scenarios to streamline processing and response times.
 Recruiting and hiring of the Limited‑Term Community Development Analyst position to sustain operational capacity.

Next Steps

Next steps for the Program implementation include providing quarterly updates to the City Council to enhance transparency, track participation rates, and monitor key performance indicators such as registration completion, petition volume, and inquiry response times. Quarterly reports will also include status updates on the implementation activities listed above.

CEQA CONSIDERATION:

Not a Project . The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing 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.

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Page | 5
CALIFORNIA GOVERNMENT CODE §84308 APPLIES:

No.

STRATEGIC PLAN INITIATIVE:

The Residential Rental Registration and Rent Stabilization Program does not directly align with objectives under the City Council’s 2025-2028 Strategic Plan Goal of Housing. Examination of a Rent Stabilization Program was an identified objective under the 2022-2025 Goal of promoting Housing/Affordable Housing.

DEPARTMENTAL COORDINATION:

The Program is administered by the City’s Community Development Department in coordination with the City Attorney and Finance Department. These three departments worked collaboratively to prepare this report.

FISCAL AND SUSTAINABILITY IMPACT:

The Rental Registration and Rent Stabilization Program is to be cost neutral, with no impact on the General Fund. The 2025 Program Year concluded with total revenues of $1,736,811 and total expenditures of $602,922, resulting in a remaining balance of $1,133,889 . This balance reflects the first‑year ramp‑up period, during which participation levels, system development, and operational ne eds were still stabilizing. Excess revenue (remaining balance less late fees) of $1,097,788 will be returned following the methodology and process described above.

Fund

General Ledger Number
(Operating/CIP)
General Ledger Account
Name

Remaining Budget
Appropriation
Amount Requested

N/A N/A N/A N/A N/A

ATTACHMENTS:

PowerPoint Presentation

103
Rental Registration and
Rent Stabilization
Program 2025 Data and
2026 Implementation
Activities
February 24, 2026
City Council
Orlando Reyes-Rodas
104
2025 Rental Registration and Rent Stabilization Program Detailed Program Revenue
2025 Program Revenue
January 1 to December 31, 2025
Program
Fee
Amount
Units
Registered Fees Paid Late Fees Total
Rental Registration $45 3,990 $179,550 $7,242 $186,792
Rent Stabilization $170 8,948 $1,521,160 $30,927 $1,552,087 Adjustments &
Refunds ($2,068) ($2,068)
Total Revenue 12,938 $1,700,710 $36,101 $1,736,811
105
2025 Rental Registration and Rent
Stabilization Program Summary
2025 Program Summary
January 1 to December 31, 2025
Program Expenditures $520,040
Loan Repayment to General Fund $205,203
Grant Funding ($122,321)
Total Program Expenditures $602,922
Total Fees Paid $1,700,710
Revenue Surplus for Refund $1,097,788
106
2025 Rental Registration and Rent Stabilization Program Refund Methodology
Percentage of Overcharge
Units
Registered
Fees
Charged
Overcharge
% Refund per Unit
Expenditures/Revenue Surplus
$1,095,788/$1,700,710 = 65%
Rental Registry $45 65% $29.05
Rent
Stabilization $170 65% $109.73
107
2025 Rental Registration and Rent Stabilization Program Refund Process and Timeline
108
2026 Program Implementation Strategy
• Reduced RR and RSO fees from $45 and $170 to $29 and $112, respectively • Expand outreach through notices, workshops, and community partnerships • Update webpages for clarity, accessibility and navigation • Continue in-person support and scheduled office hours • Continue working with Tolemi to incorporate user feedback on system • Streamline the petitions process with clear guidance, processing timelines, and requirements for documentation
• Strengthen internal tracking, training, and staffing capacity 109
Questions?
For more information, contact the Housing and Community Development Division (831) 758-7334
https://www.cityofsalinas.org/Your-Government/Departments/Community-Development 110
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-050, Version: 1
..Title
2025 Permit Center Annual Report
..Recommended Action
No action required. Receive the 2025 Permit Center Annual Report.

City of Salinas Printed on 2/20/2026Page 1 of 1
powered by Legistar™
111

DATE: FEBRUARY 24, 2026
DEPARTMENT: COMMUNITY DEVELOPMENT
FROM: LISA BRINTON, DIRECTOR
WITH: BY: ANGELINE ANZINI, CHIEF BUILDING OFFICIAL

ODED ZALMANOVITCH, MANAGEMENT ANALYST

KAREN ZAPATA, ADMINISTRATIVE ANALYST

CRISTINA SIFUENTES, PERMIT ANALYST

TITLE: 2025 PERMIT CENTER ANNUAL REPORT
RECOMMENDED MOTION:

No action required. Receive the 2025 Permit Center Annual Report.

EXECUTIVE SUMMARY:

The 2025 Annual Report covers the past calendar year and consists of this staff report, the attached 2025 Permit Center Annual Report Dashboard, the 202 5 Permit Center Key Actions Taken, the 2025 Finance Committee Presentation and the 2026 Draft Values in Action Plan. The staff report analyzes performance measure data, summarizes the actions taken to address the barriers presented to the Finance Committee regarding the Future Growth Area and permit processing, and introduces a Draft Values in Action Pla n for improvements in 2026. The Dashboard presents performance measure data visually and shows year-over-year (2023-2025) comparisons for Permit Services, other Community Development divisions and City departments (Current Planning, Code Enforcement, Development Engineering, Fire and Small Business Support), which are integral to Permit Center activities and processes. The 202 5 Key Actions Taken and the 2026 Draft Values in Action Plan attachments present the changes made to improve staffing, workflow, communication, and training in more detail and include recommended actions for 2026.

BACKGROUND:

In May 2025, the Finance Committee received a presentation on Future Growth Area and Housing Permit processing. The report identified length of time, lack of clarity and the interpretation of conflicting regulations as common applicant complaints. To address these barriers, staff identified opportunities for improvement through increased staffing, establishment of clear decision-making processes, strengthening compliance with legislation, codes, and regulations and identifying opportunities for streamlining processes through the Zoning Code Update, currently underway.

CITY OF SALINAS

COUNCIL STAFF REPORT

112

The Permit Center’s efforts in 2025 focused on preparing for the Future Growth Area (FGA) applications and continuing to meet steady permit demand, especially related to ADU permit coordination. The following sections highlight key accomplishments in increased staffing, efficiencies and coordination and the regulatory environment and the overall outcomes in 2025.

Staffing Resources
The FY 2025/2026 Operating Budget included several new positions to support processing subdivision maps for the FGA and prioritizing quality reviews of ADUs by increasing staff capacity to keep these reviews in house. Added full -time positions included Senior Planner, Associate Planner, Permit Technician, Permit Clerk, and Plan Checker I to focus on FGA and ADU application processing. As shown in the table below, in 2025, working collaboratively with Human Resources, the department was able to fill several of these new positions and vacancies.

Division Vacant Added in the FY 25/26
Budget
Filled
Permit
Services
Permit Tech
Permit Clerk
Plan Checker I
Management Analyst
Supervising Plan Checker
Combo Building Inspector I
Combo Building Inspector II
Permit Tech
Permit Clerk
Plan Checker I
(2) Permit Tech
(2) Permit Clerk
(2) Plan Checker I
Management Analyst
Supervising Plan Checker
Combo Building Inspector I
Combo Building Inspector II
Current
Planning
Senior Planner
Administrative Aide
Senior Planner: later
swapped for a Management
Analyst
Associate Planner
(1) Senior Planner
Administrative Aide
Associate Planner

Code
Enforcement
(2) Code Enforcement Officer I/II (2) Code Enforcement Officer I /a Recruiting for the 2nd Senior Planner

The added full-time Permit Clerk and two vacancies were filled to support customer service and simple permit processing. The added Permit Technician and two vacancies were filled to process building permit applications. In addition, Building Combination Inspector I and Building Combination Inspector II vacancies were filled. The Management Analyst position was filled to aid in process ing improvements, organization, budget ing, data analysis and reporting, and to provide permitting technology support. The key position of Supervising Plan Checker was filled through an internal promotion after an extensive recruitment process and a two-year vacancy with much creative collaboration by Human Resources and Permit Services. Two Plan Checker I positions were filled at a lower level with a commitment to train up to the desired level of Plan Checker II. Current Planning filled a full-time Senior Planner position, and the new Associate Planner position was filled through internal promotion. One Administrative Aide vacancy was filled. Code Enforcement filled two full-time Code Enforcement Officer I vacancies.

Remaining vacancies include two Plan Checker II, backfilling the Assistant Planner position now vacant due to promotion. When recruitment for the second Senior Planner position was unsuccessful, a position swap for a Management Analyst was requested an d approved.

Recruitment is currently in process for a new Management Analyst position. Staffing up Plan Checkers and Inspectors will continue to be top priority in 2026 as the residential subdivisions in 113
the Future Growth Area (FGA) begin to submit applications for building permits. Plan review contracts with five consultants continue to be maintained to leverage staff workload for timely delivery of permits and to fill the void of higher-level Plan Checkers to review commercial work.

Communication and Training
Due to a limited availability of technically experienced and certified candidates in the labor market, the recruitment strategy for Permit Services was adjusted to hire entry-level staff with strong potential and a demonstrated commitment to public s ervice. The d epartment has prioritized investing in all employees through structured training, mentorship, and professional development to build the technical expertise and certifications needed to support operations . Mornings on the first Friday of the month, the Community Development Department continued to conduct training and team -building activities throughout 2025. Most of these sessions had an emphasis on interpersonal communication and the values of the Community Development Department and City. Staff were provided with additional training opportunities through Regional Government Services (RGS), DiSC Assessments, Sustainovation, and other technical training and certifications. Through these trainings a shift in the culture of our organization is occurring, which is strengthening leadershi p and communication, to improve collaboration, workflows, and responsiveness.

Division managers from the Community Development Department attended three all-day training sessions through the RGS Leadership Academy. The in -person training, exclusively for public sector managers, focused on practical leadership skills needed in local government. Key areas of learning include equipping managers to effectively lead and motivate staff by streng thening communication, influence, accountability, and performance management, while navigating supervisory and leadership responsibilities.

To improve communication, all Community Development staff completed a DiSC assessment to learn more about individua l communication styles. The four main behavioral styles are Dominance, Influence, Conscientiousness and Steadiness. Next the department attended a half- day training session where staff were grouped by behavioral style and learned about all of the DiSC behaviors. Finally, each division met separately to focus on how to use DiSC to aid internal and external communication and how we can improve to better meet our City and Department values.

The City launched the first Sustainovation cohort and five Community Development Department staff members were selected to attend. There were four full -day sessions which focused on effective teams, productivity, mission, vision, values and communication, goals, priorities, accountability and ownership. These trainings lar gely shaped the way we plan to focus on improvements in 2026.

Technical training continued to be a priority in 2025. The American Planning Association held its convention in Monterey, and six of the seven Current Planning staff members were able to attend.

The updates to the California Building Standards went into effect on January 1, 2026. All Permit Services Plan Checkers, Inspectors, their supervisors, and the Chief Building Official were able to attend training to better understand the updates to building codes. As of January 2025, all Plan Checkers have obtained their certification as Residential Plans Examiners through the International 114
Code Council.

Based on the training management staff attended, Community Development has shifted methods for developing and implementing improvements. While the assessments provided by MRG in 2023 and 2024 were the catalyst for many needed improvements , a Draft Values in Action plan was created to align Department functions with City values (See attachment). These methods strengthen the connection of staff’s daily work to City values, add a qualitative element that numbers alone do not address, create a benchmark for future annual reports and support continuous improvement.

Workflows Improvements
Several of t he solutions to the problems identified in the May 2025 Finance Committee report require the refinement or creation of new workflows for processing tentative maps in the Future Growth Area and accessory dwelling units.

Future Growth Area. Improvements for the workflows for the FGA included designating a project manager to facilitate decision making and regularly scheduled FGA coordination meetings. The primary internal stakeholders currently meet twice monthly with meeting frequency increasing to weekly when more subdivisions get further along in the entitlement process. Individual planners have been assigned to projects to be the designated point of contact. This provides accountability and makes it easier for applicants to navigate the complex processes. The designated planner also serves as lead on tracking and ensuring compliance with regulatory steps in the discretionary process.

Tentative map processing under SB330 presents unique challenges. Specifically, SB330 tentative map processing will include requests for waivers, incentives and or concessions or any combination thereof. At which point, relief from zoning and/or specific plan regulations is expected to be requested. Recent review letters regarding tentative maps include a template table where t he applicant can formally request the waivers and other requests for relief from development standards. This newly implemented staff process allows applicants and reviewers to communicate and collaborate better to move through the process more quickly.

The Future Growth Area GIS Dashboard is currently being developed to provide a comprehensive overview of the status of subdivision tentative maps and related development applications. The Dashboard serves as both a communication tool and a milestone -tracking system, enabling departments to monitor project progress, help troubleshoot issues which arise, and better forecast staffing and resource needs. To support compliance with the State’s subdivision processing timeline requirements, the Public Works GIS te am is leading the development of the dashboard within the City’s GIS software system. Through collaboration among the Community Development, Public Works, and Fire Prevention Departments, a coordinated tracking platform is being created to improve communic ation and facilitate subdivision project management. While the City monitors statutory timelines, project schedules are also influenced by applicant decisions and external market conditions, including labor availability, material costs, and interest rates.

Overall, the Future Growth Area GIS Dashboard strengthens interdepartmental coordination, improves transparency in subdivision tracking, and supports more effective long-term planning for staff resources and development activity.
115

Accessory Dwelling Units . Data shows most of Permit Services staff time is spent on Building Permits for ADUs. Homeowners are often unfamiliar with preparing plans and constructing an entire home, which leads to more staff time being spent by Plan Checkers and Inspectors supporting ADU construction. Permit Services has begun training Plan Checkers with the goal of creating an ADU team to keep the majority of ADU plan reviews in house because the community often expresses the preference of working with City staff over outside consu ltants. The Plan Checkers and Inspectors began meeting monthly to analyze issues that are frequently coming up , apply regulations consistently, and find solutions to help the public. A common issue for owner - builders constructing ADUs is understanding the timing and type of inspection to request. Permit Services Inspectors created a visual aid to help homeowners connect the name of an inspection to the part of the building constructed and it is currently being used. Owner-Designer-City meetings are a goal which is still in development. These meetings will minimize resubmissions through early communication and education. Without a S enior Planner to schedule and facili tate these meetings, expanded discussion occurs during Design Review C and Permit Coordination meetings.

The pivot to a management analyst should help facilitate the scheduling and coordination of these meetings in 2026.

Legislation, Codes, and Regulations
The City started a comprehensive Zoning Code Update (ZCU) in 2025, which also provides an opportunity to streamline regulations, standards, and process es, all of which expedite permit processing. The primary goal of the ZCU is to create a user -friendly, clear, and concise Zoning Code that will simplify the entitlement process for all stakeholders through objective development and design standards. This is an opportunity to improve how entitlement applications are processed, providing greater clarity regarding project requirements. Streamlining the Zoning Code will establis h more straightforward pathways for project approvals, potentially accelerating timelines for hearings and determinations, and enhancing the overall experience for those seeking to develop in Salinas. In 2025, the City selected PlaceWorks Inc. as the consu ltant to support this three-phase effort and drafted an engagement plan to ensure stakeholders including professionals, designers, contractors, business associations, business and property owners, and residents will be actively engaged in the ZCU process.

The ZCU is split into three phases to address compliance and priority needs, ensure consistency with the General Plan Update once adopted, and ultimately develop a new code. Phase One will address amendments to the current Zoning Code to bring it into co mpliance with State Housing Law prior to completion of the General Plan Update and will consider opportunities for streamlining and clarification that do not need to wait for the full comprehensive update.

Completion of Phase One is anticipated by mid-2026. Phase Two includes bridge amendments to bring the current Zoning Code into consistency with the General Plan Update once the latter is adopted. Phase Two will include map and text amendments to the current Zoning Code to ensure consistency with the proposed Place Types and Land Use Element. By drafting these amendments concurrently with the completion of the General Plan Update, the City will avoid a long period of inconsistency. Completion of Phase Two is anticipated by early-2027 but exact timing will depend on adoption of the General Plan Update. Phase Three is the completion of a new and revised Zoning Code. Objectives of the new Zoning Code include a code that is easier for the public and staff to understand and use, visually rich with easily shareabl e graphics, and streamlined with 116
objective development standards that are consistent with development needs and community vision. This also includes full implementation of relevant portions of the General Plan Update.

Completion of Phase 3 is anticipated by the end of 2027, early 2028.

The City adopted the 2025 California Building Standards, which went into effect January 1, 2026.

In addition, the state legislature continues to create large quantities of new laws which impact development, construction, and permitting requirements. Many of these laws require the creation of new processes, the development and purchase of technology, and education of the public, in addition to the regular triennial California Building Standards. During 2025, measures were developed and implemented to gain compliance with the following laws that impact permit processing:
 AB 42 Tiny homes: temporary sleeping cabins: fire sprinkler requirements  AB 306 Freeze on Local Residential Code Amendments
 AB 1132 Solar energy systems: permit fees.
 AB 1332 Accessory dwelling units: preapproved plans.
o A process has been developed and will be implemented in the first quarter of 2026.
 AB 1738 Building standards: installation of electric vehicle charging stations: existing buildings.
 AB 253 Residential Private Permitting Review Act
 SB 379 The Solar Access Act
o A process has been developed and will be implemented in the first quarter of 2026.
 AB 2579 Exterior Elevated Elements Inspection Update

Compliance with the following laws will be a focus in 2026:
 SB 79 Abundant and Affordable Homes Near Transit Act
 AB 130 California Environmental Quality Act (CEQA): housing development:
environmental review exemptions.
 SB 131 CEQA streamlining and procedural reforms for qualifying housing projects.  SB 808 Housing Entitlement and Permitting Dispute Resolution  AB 2114 (2025) - Expand Inspector Qualifications
 AB1046 Alquist-Priolo Earthquake Fault Zoning Act: exemptions.  AB 2234 Planning and zoning: housing: post-entitlement phase permits. o Currently in compliance, but data collection for tracking will be improved in 2026.
 SB 897 Accessory dwelling units: junior accessory dwelling units.  SB 9 California Housing Opportunity and More Efficiency Act

Planning Entitlement and Construction Permitting Processes Current Planning, at the Permit Center, processes and reviews development applications to ensure compliance with the City’s General Plan and Zoning Ordinance and other applicable plans, regulations and standards. A project within the City’s jurisdiction will require either a permit or a land use entitlement. Land use entitlements are legal rights granted to property owners or developers to use land for specific purposes, such as residential, commercial, or industrial development. During the entitlement rev iew process, the City planner acts as a project manager 117
and coordinates with various City divisions/departments such as Engineering, Fire, Housing, Building, Parks and Police for inputs. Land use entitlements projects would involve a discretionary action which would require CEQA (California Environmental Quality Act) review and would also be subject to the Permit Streamlining Act.

Many projects in the City qualify for Categorical Exemptions such as Section 15332 (Class 32) of the CEQA Guidelines. Therefo re, no hearing is required, the project would be approved by the City Planner unless a protest is received from the public. If a project requires a public hearing due to the requirements outlined in the Zoning Code, the decision maker, such as the Planning Commission and/or City Council would take action. If a project is not exempt under CEQA, additional environmental analysis would be required under CEQA. This would involve the preparation of an Initial Study (IS) and/or Environmental Impact Report (EIR). The lead agency has 6 months to prepare an IS and 12 months to prepare an EIR. This environmental analysis would result in a Negative Declaration or Mitigation measures to reduce environmental impacts to less than significant impacts. Once the planning en titlement is approved by the appropriate hearing body, the project goes into the building permit phase submittal. Depending on the complexity of each project, it could take an additional 6 to 12 months for review prior to the issuance of the building permit and includes coordination with the designer or architect. A flowchart of the process for the Mortensen Subdivision is provided on slide 25 of Attachment 1, the 2025 Permit Center Annual Report Dashboard.

The construction permit process is structured to ensure projects comply with applicable codes and development standards while providing an efficient path to approval. Permits are divided into two categories: simple permits and building permits, each designed to address different levels of project complexity.

Simple permits apply to very small construction projects, such as re -roofs with no change in roofing material, residential electrical panel upgrades, and residential water heater replacements.

These permits are approved administratively and do not require plan review. Once an application is received, staff verify the scope of work and applicable requirements, the permit is approved, and typically ready to be issued within one to two business days. This process is shown as a flow chart on slide 15 of Attachment 4, the 2025 Permit Center Annual Report PowerPoint Presentation.

Building permits are required for more complex construction projects, ranging from residential remodels to new commercial construction. Applicants typically begin by consulting with planning staff to confirm zoning requirements and applicable development standards. Then the applicant researches project costs, secures financing, and has detailed construction plans prepared. The plans must comply with State building codes. After submission, staff conduct a formal plan review to evaluate compliance with all relevant regulations. Any required corrections must be address ed before approval. Once the permit is issued, construction may begin, with inspections conducted at key stages to ensure compliance. The process concludes with final inspections, after which the project is considered complete. A timeline depicting a real permit example and a flowchart of the building permit process are provided on slides 16 and 17 of Attachment 4, the 2025 Permit Center Annual Report PowerPoint Presentation.

In 2024 plan review turnaround times slowed down due to vacancies and the use of consultants 118
with a slower industry standard. As a result, the percentage of on-time plan reviews for 2024 was 61%. In 2025, the Supervising Plan Checker and two Plan Checker I positions were filled. With adequate staffing levels, plan review improved provi ding on time plan reviews with a significant increase in reviews completed on time between 2024 and 2025.

2025 Major Projects
In 2025, construction valuation of submitted applications was just over $253.5 million, which is about a 50% decrease from 2024. This was expected, because the 2024 construction valuation was primarily tied to the 3.5 million square foot Amazon Fulfillment Center. The major projects constructed in 2025 are shown in the table below.

Highlighted 2025 Major Projects
Project Name Address Status
Dave and Buster’s,
commercial, recreational, and
entertainment use,
1104 Northridge Mall
Salinas, CA 93906
Planning Entitlement Approved
Change use of 9,000 sf.

Building from Retail to Dental
office
110 John St. Salinas, CA
93901
Planning Entitlement Approved
New Concrete Tilt-up - RSD
Distribution Warehouse
641 Work St. Salinas,
CA 9390
Building Permit Issued
Chick-fil-a restaurant 4363 E Market St. Salinas,
CA93905
Building Permit Issued
Renovation of Fire Station 1 216 W Alisal St. Salinas, CA 93901
Building Permit Finaled
New Warehouse Building
with Office
681 Work St. Salinas CA
9390
Building Permit Finaled
5 Apartment Buildings,
totaling 50 dwelling units
Constitution Blvd. Salinas,
CA 9390
Building Permits Finaled
Cannacruz Commercial
Cannabis Business
1228 S. Main St, CA 93901 Building Permit Finaled and use operating

Building permit applications for Phase 1 of East Boronda in the Central Area of the Future Growth Area, along with site improvements for 11 Hill Circle r esidential subdivisions, were received in late 2025. Additional building permit applications related to the Future Growth Area are anticipated in 2026. To meet this demand, staff will focus on filling plan review staff vacancies and will be requesting additional inspection staff through the budget process for FYs 2026/27 and 2027/28.

In conclusion, Community Development is committed to enhancing productivity and reducing permit processing timelines for the members of our community through collaboration and working as a team. The attached 2025 Dashboard and PowerPoint presentation provide a detailed overview of the data analyzed by staff to understand and improve our work processes. The highlighted data sets illustrate key areas of impact, showcasing the positive outcomes of changes implemented in 119
2025. The attached Draft Values in Action Plan points towards the Permit Center’s goals for 2026.

The Permit Center team remains dedicated to continuous evalu ation and improvement, with a strong focus on delivering exceptional customer service and continued improvements and advancements to serve the community efficiently and effectively. Staff invite the City Council to review and provide feedback on the information provided.

CEQA CONSIDERATION:

Not a Project . The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

In addition, CEQA Guidelines Section 15061 includes the general rule that CEQA applies only to activities which have the potential for causing 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. Because the proposed action and this matter have no potential to cause any effect on the environment, or because it falls within a category of activities excluded as projects pursuant to CEQA Guidelines section 15378, this matter is not a project. Because the matter does not cause a direct or foreseeable indirect physical change on or in the environment, this matter is not a project. Any subsequent discretionary projects resulting from this action will be assessed for CEQA applicability.

CALIFORNIA GOVERNMENT CODE §84308 APPLIES:

No.

STRATEGIC PLAN INITIATIVE:

Permit Center operations support City Council 2025 –2028 Goals and Strategies related to Economic Development and Housing, including Affordable Housing, through the entitlement and permitting of commercial and residential development that generates jobs, revenue, and a diverse range of housing options for the community. A continued focus on workflow efficiencies and the strategic use of technology for electronic appli cation submittal, plan review, and permit issuance advances the Council’s commitment to effective, transparent, and responsive government services.

DEPARTMENTAL COORDINATION:

Permit Center operations span multiple Community Development divisions and City departments including Permit Services, Current Planning, Code Enforcement, Economic Development (Small Business Support), Housing and Community Development and Public Works, Fire, and Finance Departments. Effective coordination of all Permit Center functions is vital to streamline permitting processes to provide quality customer service and economic growth through development.

FISCAL AND SUSTAINABILITY IMPACT:

There is no fiscal impact associated with this administrative report. The Permit Services Divis ion is an Enterprise Fund (6900) and is intended to act as a self-supporting fund which means that the fees for service and surcharges are collected to cover most or all the cost of operations. 120

Fund General Ledger Number
(Operating/CIP)
General Ledger
Account Name
Remaining Budget
Appropriation
Amount
Requested
n/a n/a n/a n/a n/a

ATTACHMENTS:

Attachment 1: 2025 Permit Center Annual Report Dashboard Attachment 2: 2025 Permit Center Annual Report PowerPoint Presentation Attachment 3: 2025 Permit Center Key Actions Taken
Attachment 4: 2025 Finance Committee Presentation
Attachment 5: 2026 Draft Values in Action Plan

121
Dashboard Permit
Center Update
2025
Februar y 24, 2026
C ommunity Development
Lisa B rinton, Director
122
2025 Permit Center
Annual Report Contents
2025 Permit Center Staff Report
2025 Permit Center Annual Report Dashboard
2025 Permit Center Annual Report PowerPoint Presentation 2025 Permit Center Key Actions Taken
2025 Finance Committee Presentation
2026 Draft Values in Action Plan
123
Dashboard
Table of Contents
Permit Services
• Permit Center Calls by Year
• Counter Transactions byDivision
• City Reports
• Customer SurveyResponses
• Total Permits Applied by Year
• Construction Permits by Year
• Total Permits Applied by Type
• Accessory Dwelling Unit (ADU) Permits by Year
• Salinas Plan Review Timelines
• Building Plan Reviews Completed on Time
• Permits Approved by Review Cycle
• Building Inspections Completed by Year
• Building Permit Inspections Completed by Permit Type
• Future Growth Area
• FGA Subdivision Status
Other Services
• Current Planning – Performance Measures by Year
• Current Planning – Application Intake by Year
• Current Planning – Application Intake 2025
• Current Planning – Application Approvals
• SB330 Timeline - Motensen
• Fire Overview for 2025
• Fire Inspection Cases and Inspections by Year (2023-2025) • Fire Prevention – Total Number of Permits Issued for 2025 • PermitTRAK: Types ofInspections Conducted for 2025
• CodeTRAK: Types of Inspections Conducted for 2025
• Development Engineering Overview for 2025
• Development Engineering – Total Permits Issued in 2025 • Development Engineering – Reviews Completed by Permit Type in 2025 • Development Engineering – Inspections Completed by Permit Type for 2025 • Code EnforcementCases & Inspections by Year
• Code EnforcementCase Opened by Type 2025
• Small Business Support - Services for 2025
124
Summary of 2025 Permit Center Activity
Over the past year, the Permit Center continued to operate at a high and stable level, sustaining the elevated workload first seen in 2024. Overall activity in 2025 remained largely consistent, with a four percent (4%) decrease in permit applications, a four percent (4%) increase in plan reviews, and a 12.5% increase in inspections compared to the prior year.

Call volumes remained steady. In -person front counter transactions declined by 30%, despite the rest oration of expanded public hours from 8:00 a.m. to 5:00 p.m., Monday through Friday, reflecting the community’s continued shift toward online permit services.

Residential development remained the primary driver of activity, accounting for 80% of all building permit applications and 66% of inspections. Accessory Dwelling Unit (ADU) activity in 2025 aligned with recent historical trends, decreasing six percent (6% ) from 2024 while increasing five percent (5%) compared to 2023. ADUs represented 39% of all inspections, and residential ADU plan reviews remained stable year over year at 629 reviews.

Commercial activity increased in 2025, with the Permit Center accepting nearly 100 tenant improvement permit applications. These projects included major investments by national businesses such as Archer Aviation, Dave & Buster’s, and Walmart, alongside con tinued reinvestment by local establishments including Sweet Reba’s, the El Rey Theater, and Brewjee Coffee Co. The City also sustained a significant volume of permitting and inspection activity related to the Amazon project. By strategically utilizing cons ultant support, this workload was absorbed without measurable impacts to permit processing, plan review, or inspection timelines.

Taken together, these trends reflect a Permit Center that continues to adapt to evolving service demands, expand digital access, and support both residential development and economic investment, while maintaining consistent, reliable service for the community.

The following dashboard charts provide a visual representation of these key trends and performance metrics, offering a clear, at -a-glance view of permit activity, service delivery, and workload across the Permit Center. Together, the data and visuals highlight patterns, progress, and areas of focus, supporting informed decision-making by City leadership while maintaining transparency and accessibility for the community.

125
Permit Services
• Administration
• Plan Review
• Inspection
126
Permit
Center Calls
by Year23748
26034 25970
22500
23000
23500
24000
24500
25000
25500
26000
26500
2023 2024 2025
• The volume was steady from
2024 to 2025 with less than a
1% decrease
127
Counter Transactions by Division
668
116
942
1641
2287
642
266
966
1850
2739
519
142
1046
1564
1930
0 500
1000
1500
2000
2500
3000
Code Enforcement Fire Engineering Current Planning Permit Services 2023 2024 2025
• Engineering and Fire moved to City Hall
• Permit Center counter hours increased 8AM-5PM
128
City Reports
490
501 499
100
150
200
250
300
350
400
450
500
550
CY 2023 CY 2024 CY 2025
CY 2023 CY 2024 CY 2025
• Real Estate point of sale requirement
129
2025 Customer Survey Responses
• Contractor: "It so was easy to work with you
guys once again! Making my job easier every
time I come in"
• Contractor: “Lucy and Jordan were very
helpful. Your department is head and
shoulders above the other departments in
the State. We do all the ADA for the roughly
600 7-Eleven stores in CA, so we work with a
lot of building officials.
• Resident "Oscar was proactive, helpful, and
was able to answer questions in detailed.

Great customer service skills. Thank you."
73%
24%
3%
2024
172 Responses

68.5 26.5

4.9 2025
Exceeded My Expectations Met My Expectations Did Not Meet My Expectations 162 Responses
130
Total Permits
Applied by
Year
998
1503
1371
1586
1812
2073
0 500
1000
1500
2000
2500
2023 2024 2025
Simple Building
Total: 3,315
Total: 3,444
• Building* permits increased 31%
from 2023 and 14% from 2024
• Simple* permits decreased 9%
from 2024 to 2025
*Building permits require at least one plan review. Simple permits are fast-tracked (1–2 days) Total: 2,584
131
Construction
Permits by
Year
• Finaled permits increased by 19% from
2024 to 2025
• Volume of 2025 applied and issued
permits hovered between 2023 and
2024 values
• Approved permits had a small 1%
increase
2768
3601
3444
2244
2955 2984
2199
2892 2936
1743
2152
2560
0 500
1000
1500
2000
2500
3000
3500
4000
2023 2024 2025

APPLIED APPROVED

ISSUED FINALED
132
Total Permits Applied by Type
40 4
168
27 1
247
498
297
29 10
50 179
14 44
122
3 41 48
584 601
48 389
0 100
200
300
400
500
600
700

COMMERCIAL DEMOLITION ELECTRICAL MECHANICAL MIXED USE PLUMBING REROOF RESIDENTIAL REVISION SIGN PERMIT SOLAR Simple Building
• Most building permits require at least one plan review • Simple permits are fast-tracked (3 days or less)
133
Accessory
Dwelling
Unit (ADU)
Permits by
Year
• The 2025 volume of applied,
approved, and issued and permits
hovered between 2023 and 2024
values
• Finaled ADUs increased
by 23% from 2024 to 2025 and 44%
from 2023 to 2025
242
270
254
205
227 222
197
216
208
96 114
140
0 50
100
150
200
250
300
2023 2024 2025
Applied Approved Issued Finaled
134
Salinas Plan Review Timelines
135
Building Plan Reviews Completed on
Time
5024
4443
6356
6963
7256 7523
0 1000
2000
3000
4000
5000
6000
7000
8000
2023 2024 2025
On Time Reviews Total Reviews
61% 84%72%
• 23% difference in on time reviews from 2024 to 2025
• Volume of reviews held steady from 2024 to 2025
136
Permits Approved by Review Cycle
550
416
246
142
90 32 17 7 3 2
749
498
236
154
98 46 42
4 6 0
786
638
267
151
78 45
14 4 5 0
0 100
200
300
400
500
600
700
800
900
1ST REVIEW 2ND REVIEW 3RD REVIEW 4TH REVIEW 5TH REVIEW 6TH REVIEW 7TH REVIEW 8TH REVIEW 9TH REVIEW 10TH REVIEW 2023 2024 2025
• Year over year, permits are being
approved in fewer review cycles
• No 10th Review cycles in 2025
137
Building
Inspections
Completed
by Year
715 1016 1158
13787
16850
18944
0 5000
10000
15000
20000
25000
2023 2024 2025
Virtual In Person
14,502
17,866
20,102
• 39% Increase from 2023
• 13% Increase from 2024
138
Building Permit Inspections Completed by Permit Type
4 2424
12 525 362 80
700
1618
13226
129
1022
0 2000
4000
6000
8000
10000
12000
14000
•
•
139
Future
Growth
Area
140
FGA Subdivision
Status
Tentative Map Completeness Review
•Christensen – CASP (670 Dwelling Units) – Under Review •Bardin Ranch – EASP (859 Dwelling Units) – Under Review Tentative Map Consistency Review
•Bondensen - WASP (638 Dwelling Units) – Applicant to Submit •Mortensen - WASP (391 Dwelling Units) – Applicant to Submit •Madolora - WASP (648 Dwelling Units) – Applicant to Submit Site Plan Review
•East Boronda Phase One – CASP (415 Dwelling Units) -Under Review Building Permit Application Review
•East Boronda Phase One – CASP - 12 Model Homes
•East Boronda Phase One – CASP - Three Apartment Buildings (50 Dwelling Units Total)
141
Other Services
• Current Planning
• Fire Prevention
• Developmental Engineering
• Code Enforcement
• Small Business Support
142
Current Planning–
Performance Measures by Year
Performance
Measure 2023 2024 2025
Number of discretionary
and administrative permits
processed
471 563 476
Number of building permit
reviews conducted 2,251 2,647 2,243
Percent of building permit
reviews processed within
prescribed timeframes
93% 92% 87%
Average # days to Approval
from Completeness for Site
Plan Reviews
38 39 21
• Customers Served (2025CY):
• Public Counter: 1,564
• Phones: 1,680
143
Current Planning- Application Intake by Year
Type of Permit 2023 2024 2025
Conditional Use Permit 47 72 34
General Plan Amendment 2 0 1
Home Occupation Permit 216 207 216
Planned Unit Development 3 1 3
Prelim Project Review 4 12 10
Resubdivision 5 8 5
Rezone 1 0 1
Site Plan Review 24 25 20
Temp Land Use 136 148 140
Tentative Map 2 3 4
Total 440 476 434
0 50
100
150
200
250
300
350
400
450
500
2023 2024 2025
Total Application intake
Year
144
Current Planning– Application Intake
2025
Highlights of the 535 applications
received in 2025:
•34 Conditional Use Permits
•20 Site Plan Reviews
•4 Tentative Maps
•6 Commercial Cannabis Permits
$10.7M Tax Revenue
•10 Prelim Project Reviews
1074780
816858
522640
0 200000
400000
600000
800000
1000000
1200000
2023 2024 2025
Cannabis Revenue
145
Current Planning– Application
Approvals
5 6
34 1 6 1 1
216
15 3 1
22 13
3 10 5 1
20 140
4 4 4 7 1
123
35 5 1
214
15 3
20 8 1 4 10
139
3 3 6 1 5
0 50
100
150
200
250

INTAKE APPROVAL
146
Applicant resubmitted on
11/20/25
Applicant resubmitted on 9/3/25.

Applicant submitted full application
on 5/14/25.
• Agency has 30 days to determine
completeness and notify applicant.
• Incompleteness letter was issued
on 6/13/25.
• Applicant has 90 days to resubmit
(Due 9/11/25).

Incompleteness letter sent out by
staff on 10/2/25.
• Preliminary Application
Submitted on 12/10/24
• Establishes vested rights or
applicable rules on day of
submission.

Applicant has 180 days to submit
full application or vesting tentative
rights expire (Due 6/8/25).

Completeness letter sent to
Applicant on 12/19/25
Once application is “deemed
complete,” agency has 30 days to
review application for consistency
with applicable standards. For
projects with 150 unis or more,
agency has 60 days.

Note: To date, applicant has not submitted for consistency review. There is no deadline at this stage for applicant to submit for consistency review.

SB330 Timeline –Mortensen
147
•Customers Served at Counter: 142
•Phone Calls: 10,153
•SFD Permits Issued: 364
•Fire Plan Checks Conducted: 703
•DRC Projects Reviewed: 120
•Inspections Completed (CodeTRAK): 1,217
•Inspection Completed (PermitTRAK): 1,234
•Fireworks Citations Issued: 96
•Fireworks Citations Collected: $218,500
Fire Overview for 2025
148
CY 2023 CY 2024 CY 2025
Code TRAK 1021 1188 1,217
Permit TRAK 927 942 1,234
1021
1188 1,217
927 942
1,234
0 200
400
600
800
1000
1200
1400
Number of Inspections Conducted
Fire Inspection Cases & Inspections by Year
149
1 5
1 4 3
8 2 5
55 2
23 78
2 6
19 5 8
2 2 4
8 91
1 29
0 10
20 30
40 50
60 70
80 90
100
Number of Permits
Permit Subtypes
Fire Prevention - Total Number of Permits Issued: 364
Date Range: 01/01/2025-12/31/2025
150
6 11 10
58 1
75 1
106
67 91
2 22
287
19 11 8
19 5 12
235
2 6 8 9 13 6
138
5 1
0 50
100
150
200
250
300
350Number of Inspections
Types of Inspections
PermitTRAK: Types of Inspections Conducted: 1,234
Date Range: 01/01/2025-12/31/2025
151
240
111
211
30 16
1 15
56 6 3 11 6
236
1 9 1 1 11 3 1
34 2
43 7 3 6
67 1
85 0
50 100
150
200
250
300Number of Inspections
Types of Inspections
CodeTRAK: Types of Inspections Conducted: 1,217
Date Range: 01/01/2025-12/31/2025
152
Development Engineering 2025
Overview
•Customers Served at Counter: 1046
•Encroachment Permits Issued: 741
•Vendor Permits Issued: 204
•Encroachment Permit Reviews: 1,379
•Building Permit Reviews: 1,072
•Planning Permit Reviews: 183
•Inspections Completed: 5,794
153
Development Engineering–Total Permits
Issued in 2025
745
0 9
204
0 100
200
300
400
500
600
700
800
Encroachment Grading & Draiange Stormwater Quality Vendor 154
Development Engineering–Reviews
Completed by Permit Type in 2025
486
1 1379
586
183
0 200
400
600
800
1000
1200
1400
1600
Building Grading & Drainage Encroachment Addressing Planning 155
Development Engineering–Inspections
Completed by Permit Type in 2025
5302
391
101
0 1000
2000
3000
4000
5000
6000
Encroachment Grading & Drainage Stormwater Quality
156
Code
Enforcement
Cases &
Inspections
by Year
1691 1703 1721
1227
1586 1557
3758
4829
2840
0 1000
2000
3000
4000
5000
6000
2023 2024 2025
Cases Opened Cases Closed Total Inspections Completed
157
Code Enforcement Cases Open by Type
2025
DANGEROUS BUILDING - 2%
ILLEGAL AUTO REPAIR - 2%
ILLEGAL OCCUPANCY - 6%
INOPERABLE VEHICLE - 4%
OTHER - 1%
PROHIBITED VEHICLES - 4%
PUBLIC NUISANCE - 0%
RECREATIONAL VEHICLE - 5%
REFUSE PROHIBITED - 2%
SUBSTANDARD HOUSING - 6%
WEEDS PROHIBITED - 9%
WORK WITHOUT PERMIT - 4%
ZONING VIOLATIONS - 55%
PROHIBITED ANIMALS - 0%
PROHIBITED SIGNS - 0%
Permitted Vendor - 1%
UNPERMITTED VENDOR 1%
158
Small Business Support
31 122170
2025 Inquiries By The Numbers
Total: 323
Counter Email Phone
58%
31%
4%
8%
0%
10%
20%
30%
40%
50%
60%
70%
Start A Business
/ Permitting
City Grants Outreach
Partnerships
City-Owned
Properties
2025 Inquiries By Type
159
Questions?
For more information, contact Permit Services
(831) 758-7251
https://www.cityofsalinas.org/Your-Government/Departments/Community-Development 160
2025 Key Actions Taken
Training
 Continued monthly Community Development Department “First Friday” trainings focused on communication, teamwork, and City values.
 All Community Development staff completed DiSC assessments and participated in department-wide and division-specific communication training.  Division managers attended three full-day, in-person RGS Leadership Academy training courses focused on public sector leadership, accountability, and performance management.
 Five Community Development staff completed the Sustainovation training program emphasizing team effectiveness, mission, values, productivity, and accountability.
 Six of seven Current Planning staff attended the American Planning Association (APA) Conference.
 All Permit Services plan checkers, inspectors, supervisors, and the Building Official completed training on the 2025 California Building Standards.  All Permit Services Plan Checkers obtained International Code Council (ICC) Residential Plans Examiner certification.
 Permit Services Plan Checker training initiated to develop an in-house ADU plan review team.

Staffing
 Added one full-time Permit Clerk and filled two additional Permit Clerk vacancies to support customer service and simple permit processing.  Added one full-time Permit Technician and filled two Permit Technician vacancies to support building permit intake and processing.
 Filled one Building Combination Inspector I and one Building Combination Inspector II vacancy.
 Permit Services filled a new Management Analyst position to support process improvement, data analysis, reporting, budgeting, and permitting technology.  Filled the Supervising Plan Checker position after a two-year vacancy through internal promotion.
 Filled two Plan Checker I positions with a commitment to train staff to higher certification levels.
 Permit Services maintained contracts with five plan review consultants to manage workload and commercial plan review needs.
 Current Planning added and filled one Senior Planner. 161
 Current Planning added and filled an Associate Planner position.  Current Planning filled an Administrative Aide vacancy.  Current Planning began recruitment for a Management Analyst.  Code Enforcement filled two full-time admin vacancies for Administrative Analyst and Administrative Clerk.
 Code Enforcement filled two full-time Code Enforcement Officer I vacancies.

Workflow
 Established and refined permit policies, procedures, and checklists to align with new legislation and improve customer guidance.
 Shifted more permit activity online, resulting in reduced front counter demand and increased use of email communication.
 Began monthly coordination meetings between plan checkers and inspectors to identify recurring issues and develop consistent solutions.  Created and implemented visual inspection guides to help homeowners better understand inspection types and sequencing, particularly for ADUs.  Initiated development of an in-house ADU plan review team to reduce reliance on consultants and improve customer experience.
 Continued updates to Trakit and the Paperless Permit Portal and evaluated additional technology solutions to improve efficiency.
 Leveraged consultants to manage large-scale projects (including Amazon) without impacting permit processing timelines.
 Advanced implementation of Municipal Resource Group (MRG) recommendations through operational changes and the Values in Action framework.

Legislation
 Adopted the 2025 California Building Standards (effective January 1, 2026).  Developed and implemented processes to comply with new state laws impacting permit processing, including:
o AB 42 – Tiny homes and temporary sleeping cabins
o AB 306 – Freeze on local residential code amendments
o AB 1132 – Solar energy system permit fees
o AB 1332 – ADU preapproved plans (process developed for 2026 implementation)
o AB 1738 – EV charging stations in existing buildings
o AB 253 – Residential Private Permitting Review Act
162
o SB 379 – Solar Access Act (process developed for 2026 implementation) o AB 2579 – Exterior Elevated Elements inspection updates

 Continued the Comprehensive Zoning Code Update (ZCU) to streamline entitlement processes, simplify regulations, and improve clarity for applicants and staff. Phase One of the zoning code has been initiated to address amendments to the current Zoning Code and bring it into compliance with State Housing Law prior to completion of the General Plan Update. Opportunities for streamlining and clarification will be considered to eliminate the need to wait for the full comprehensive update. Completion of Phase One is anticipated by mid-2026.

163

164

165
Future Growth
Area and
Housing Permit
Processing
May 13, 2025
Finance Committee
Lisa Brinton,
Community
Development Director
166
Overview
Staffing
Capacity
Efficiencies &
Coordination
Regulatory
Environment
Staff resources are insufficient
compared to volume
Division and department
coordination is lacking process for
final decision-making
Zoning, building, engineering and fire
codes have different criteria that can
be confusing or even conflicting
Internal HurdlesCustomer Complaints
Length of time
Lack of Clarity
Interpretation
of Conflicting
Regulations
167
Future Growth
Area (FGA)
Coordination
168
FGA Internal Hurdles
Staffing
Capacity
Efficiencies &
Coordination
Regulatory
Environment
Lack of staffing experience and technical
expertise in processing subdivision maps
and complex entitlements
Lack of designated project manager to
facilitate and expedite decision-making
New regulatory environment of SB 330,
Density Bonus Law, etc.
169
Current Planning Staffing Request - FGA Support
Assistant Community
Development Director
Current Planning Code EnforcementAdvanced Planning and Project Implementation (APPI)
Senior Planner
Discretionary
Senior Planner
Ministerial
Senior Planner
FGA/Project Management
Proposed FY 25/26
Associate
Planner
Assistant
Planner
Assistant
Planner
Assistant
Planner
Associate
Planner
Future Proposed
Consultants
170
Proposed FGA Coordination Team
• FGA project management
• Weekly primary team meetings
• Regular updates to coordination team
• Secondary decision-maker involvement
Senior Planner
Community
DevelopmentPrimary Team
Public Works Fire
Library and
Community
Services
Secondary
Decision-
Makers
Police Administration
& City Attorney
171
Improved FGA Team Coordination
Staffing
Capacity
Efficiencies &
Coordination
Regulatory
Environment
Add a Senior Planner with high-level
technical expertise to provide project
management
Provide a designated point of contact for
internal accountability and for applicants to
navigate processes
Serve as lead on tracking and ensuring
compliance with regulatory processes
172
Accessory
Dwelling Unit
(ADU)
Coordination
ADU inspected by City of Salinas in 2025
173
ADU Internal Hurdles
Staffing
Capacity
Efficiencies &
Coordination
Regulatory
Environment
Plans have a high number of review
cycles; due to vacancies consultants
currently process reviews
Residents need more guidance than
experienced developers
Designers and/or owners do not
understand complex regulations or
submit incomplete plans
Requirements by Permit Center Function
Permit Services – Building Code: Distance
requirements depend on construction method
Current Planning – Zoning Code: 6 ft apart or
structurally connected via a wall, breezeway, etc.

Fire Prevention – Fire Code: Adding sprinklers can
impact distance requirements between structures
Example: ADU Setback Requirements
174
Permit Services Staffing Request and Integration
Chief Building Official
Plan Check Supervisor
Future Proposed
Plan Checker I
(Sr) Plan Check Engineer
vacant
Senior Planner
FGA/Project Management
Proposed FY 25/26
Plan Checker II
Building Permit
Specialist/Plan Checker I
Plan Checker I
Future Proposed
Consultants
ADU Team
175
Improved ADU T eam Coordination
Staffing
Capacity
Efficiencies &
Coordination
Regulatory
Environment
Prioritize quality reviews by
increasing capacity to spend more
time with homeowners and designers
Begin Owner-Designer-City meetings
to minimize resubmissions through
early communication and education
Improve communication of complex
regulatory environment with
dedicated internal review team
City of Salinas’ ADU Pre-Approved Plans
176
Comprehensive Zoning Code Update
Regulatory
Environment
Objective Design Standards
Appropriate Level of Permit
Processing
User-Friendly, Clear and Illustrative
Examples and Documentation
Development Design Standards
Level of Permit Processing
Administrative or Ministerial or Discretionary
Ease of Use and Interpretation
OpportunitiesAreas of Focus
177
Business
Navigator
• Assists entrepreneurs and small business
owners with navigating regulatory processes
• Provides connections to technical and
financial resources
• Limited Term Position Ends June 30, 2025
• Proposed new staff position
178
Questions?
For more information, contact the Community Development Department (831) 758-7387
https://www.cityofsalinas.org/Your-Government/Departments/Community-Development 179

Draft Values in Action Plan

Value / Definition How It Is Seen How It Is Measured Stage Development Implementation

Achieved

Accountability

Own the outcome:

We individually follow
through on commitments,
make data-informed
decisions, and proactively
step in to get things done.

Disc Agreement

Maintain accountability
and professional respect
across divisions.

Permit Services:

Inspections are
scheduled promptly at the
requested time when the
permit holder provides at
least one business days'
notice.

Code Enforcement:

Complaints are
processed in a timely
matter once received.

Permit Techs:

Permit intakes are
processed in compliance
with state law.

Current Planning:

Projects are processed in
compliance with state
law.

Permit Services:
90% percent of building
permit inspections
scheduled within one
business day.

Code Enforcement:

Complaints are inputted
into TRAKIT and
scheduled for inspection
within a week of input.

Permit Techs:

Meets or exceeds state
timelines for
completeness.

Current Planning:

Meets or exceeds state
timelines for
completeness.

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Value / Definition How It Is Seen How It Is Measured Stage 180

Development

Implementation

Achieved

Service Excellence

Anticipate, respond and
deliver: We commit to
provide high quality
effective service to all.

Disc Agreement

Provide consistent,
empathetic service to the
public.

Permit Services:

ADU permits are plan
reviewed in-house rather
than sent out to
consultants.

Code Enforcement:

Staff responds to
phone calls and email
inquiries in a timely
matter.

Permit Clerks:

Staff guide applicants
through processes.

Current Planning:

Planning services are
timely and responsive.

Permit Services:
95% of ADU permit
applications received are
reviewed in-house.

Code Enforcement:

Response time is
typically one business
day.

Permit Clerks:

Response time and
effective guidance.

Current Planning:

Email response time is
within one business day.

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Value / Definition How It Is Seen How It Is Measured Stage 181

Development

Implementation

Achieved

Collaboration

Better together:

We unite ideas, resources
and efforts with internal
and external partners to
deliver exceptional
services.

Disc Agreement

Collaborate with a
solution-oriented mindset.

Permit Services:

Cross-train to align plan
review with inspection
field practices and ensure
compliance regulations
are being applied
consistently.

Code Enforcement:

Working closely with the
Salinas Police
Department to
collaborate on cases.

Permit Techs:

Staff coordinate internally
to ensure compliance.

Current Planning:

Planning staff coordinate
through meetings and
shared resources.

Permit Services:

Each plan checker
participates in cross-
training with inspectors
once a month.

Code Enforcement:

Attend trainings and stay
in communication about
active cases.

Permit Techs:

Procedure development,
routing, and PRA
turnaround times.

Current Planning:
80% of DRC applicant
meetings filled for the
calendar year.

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Value / Definition How It Is Seen How It Is Measured Stage Development Implementation Achieved
182

Innovation

Seek, create, explore:

We embrace bold ideas
and new technology that
improve public service,
efficiency and
effectiveness.

Disc Agreement

Adapt communication
style to audience and
context

Permit Services:

Provide applicants with
clear online guidance for
virtual inspections and
limitations.

Code Enforcement:

Mobile devices updated
for new software needs
and for easier program
use.

Permit Clerks:

Improved digital platforms
for easier use.

Current Planning:

Planning uses technology
to improve efficiency.

Permit Services:

Creation of guides to be
provided online and a
correlation to the number
of virtual inspections
completed.

Code Enforcement:

Percent of field devices
supporting current
software and allow for
work to be done on the
field.

Permit Clerks:

Website completed and
tested.

Current Planning:

Create two GIS layers to
help staff with decision
making.

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Value / Definition How It Is Seen How It Is Measured Stage Development

Implementation

Achieved

183

Trust

Earned through action:

We foster strong lasting
community partnerships
with integrity,
transparency, and
consistent results.

Disc Agreement

Communicate clearly,
respectfully, and in a
timely manner.

Permit Services:

Promptly respond when
there is an accident
damaging a structure or
reports of work without a
permit.

Code Enforcement:

Complaints are received
and the case remains
open until it is in
compliance.

Permit Clerks:

Transparent permit
information.

Current Planning:

Consistent and
transparent policies.

Permit Services:

Provide a site visit within
one business day of an
accident damaging
buildings or a report of
unpermitted work when
notified.

Code Enforcement:

Percent of compliance
from the day the case is
opened to when it is
cleared.

Permit Clerks:

Number of reports
published and
ProjectDox access
provided.

Current Planning:

Add three new guides
related to planning
processes to the website.

☐









☐

☐

☐

☐

☐

☐

☐

184
Permit Center
2025 Annual
Report
February 24, 2026
Community Development
Lisa Brinton, Director
185
2025 Permit Center Annual
Report Contents
2025 Permit Center Staff Report
2025 Permit Center Annual Report Dashboard
2025 Permit Center Key Actions Taken
2025 Permit Finance Committee Presentation
2025 Permit Center Annual Report PowerPoint Presentation 2026 Permit Draft Values in Action
186
2025 Identified Issues and Resource Needs
Staffing
Capacity
Efficiencies &
Coordination
Regulatory
Environment
Staff resources are insufficient
compared to volume
Division and department
coordination is lacking process for
final decision-making
Zoning, building, engineering and fire
codes have different criteria that can
be confusing or even conflicting
Internal HurdlesCustomer Complaints
Length of time
Lack of Clarity
Interpretation
of Conflicting
Regulations
187
2025 Staffing
Permit Services Organizational Chart
Community Development
Director
Chief Building Official
Supervising Plan
Checker
Plan Checker I
Plan Checker I
Plan Checker I/II
Plan Checker I/II
Inspection Services
Manager
Combo Building
Inspector II
Combo Building
Inspector II
Combo Building
Inspector I
Combo Building
Inspector I
Combo Building
Inspector I
Management
Analyst
Administrative
Analyst
Permit Center Coordinator
Permit Analyst
Permit Clerk
Permit Clerk
Permit Clerk
Permit Tech
Permit Tech
Permit Tech
Permit Tech
*Represents vacant positions
*Represents vacancies filled
188
First Fridays
Department wide
training and team
building
Technical
Training
American
Planning
Association
2025 Building
Code Updates
RGS Training
Academy
Practical
leadership skills
for managers
in local
government
DiSC
Understanding
behavioral styles
to aid internal
and external
communication
Sustainovation
Rethinking our
existing processes
to
make them more
sustainable
Staff Training
189
Draft Values in Action
190
Pre-Approved ADU Plans
• The average time from permit
ap
plication to approval for
Pre-Approved ADUs is 53 days
less than regularly designed
ADUS.
• 60 homeowners have used the
f
ree plans to apply for a detached
ADU.
191
ADU Workflow Improvements
Currently, all Building plan
checkers and inspectors have
obtained certification as
residential plans examiners.

Certification
Building plan checkers are
completing training with the
goal to Shift ADU plan
reviews from consultants to
City staff.

Training
Building inspectors are
providing homeowners with
Code Check booklets to help
them learn important code
requirements.

Resources
Building Inspectors created a
visual guide to help
homeowners identify which
inspection to request.

Guides
192
Accessory
Dwelling
Unit (ADU)
Permits by
Year
• The 2025 volume of
a
pplied, approved, and issued
and permits hovered between
2023 and 2024 values
• Finaled A DUs increased by 23
% from 2024 to 2025 and
44% from 2023 to 2025
242
270
254
205
227 222
197
216
208
96 114
140
0 50
100
150
200
250
300
2023 2024 2025
Applied Approved Issued Finaled
193
Building Permit Inspections Completed by Permit Type
4 2424
12 525 362 80
700
1618
13226
129
1022
0 2000
4000
6000
8000
10000
12000
14000
• Residential building permit
inspections exceed all other types
194
FGA Subdivision Status
Name Area Units Completeness
Review
Consistency
Review
Site Plan
Review
Building Permit
Application
Review
Christensen CASP 670 Dwelling Units
Bardin Ranch EASP 859 Dwelling Units
Bondensen WASP 638 Dwelling Units
Madolora WASP 648 Dwelling Units
Mortensen WASP 391 Dwelling Units
Tentative Map Approved
East Boronda
Phase One
CASP 415 Dwelling Units
East Boronda
Phase One
CASP 3 Apartment
Buildings (50
Delling Units
Total)
East Boronda
Phase One
CASP 12 Model Homes
N/A
195
Preliminary
Application
Full
Application
180 days to
submit full
application
Completeness
Agency – 30
days to review
Applicant – 90
days to resubmit
Consistency
Agency – 30
days* to review
SB330 Timeline –
Tentative Map Application
Applicant submitted
preliminary application on
12/10/24
Applicant submitted full application
on 5/14/25
Incompletenes
s letter sent by
City 6/13/25
Applicant
Resubmitted
9/3/25
Incompleteness
letter sent by
City 10/2/25
Applicant
resubmitted
on 11/20/25
Completeness
letter sent by
City on 12/19/25
196
Future Growth Area
GIS Dashboard
The Future Growth
Area GIS Dashboard
is in development to
deliver a real-time
overview of
subdivision maps
and development
activity.

Communication
Tool: Centralizes
subdivision data to
improve
transparency and
departmental
visibility.

Milestone Tracking:

Tracks statutory
timelines, flags
issues early, and
supports resource
planning.

Collaborative
Platform: Developed
through
coordination among
Community
Development, Public
Works, and Fire
Prevention.
197
Total Permits
Applied by
Year
998
1503
1371
1586
1812
2073
0 500
1000
1500
2000
2500
2023 2024 2025
Simple Building
Total: 3,315
Total: 3,444
• Building* permits increased 31%
f
rom 2023 and 14% from 2024
• Simple* permits decreased 9%
f
rom 2024 to 2025
*Building permits require at least one plan review. Simple permits are fast-tracked (1–2 days) Total: 2,584
198
Go to
Permitting
Portal
found on City
website
Submit
Application
+
Upload
Supporting
Documents
City Verifies
Documents
+
Sends
Invoice
Pay
Permitting
Fees
Final
Inspections
Conducted
Project
Done!!!
Schedule
Inspections
Permit
gets Issued!
Simple Permit Process
Begin
Construction
199
Consult
with
Current
Planning
Research
Cost and
Financing
Prepare
Plans
Submit Your
Application
Plan
Review
Project
Gets
Approved
Permit Issued
Congrats!!!
You now have
your permit.

Begin
Construction
Schedule
Inspections
Final
Inspections
Conducted
Project Done!!!
Building Permit Process
200
Salinas Plan Review Timelines
201
Building Plan Reviews Completed on
Time
5024
4443
6356
6963
7256 7523
0 1000
2000
3000
4000
5000
6000
7000
8000
2023 2024 2025
On Time Reviews Total Reviews
61% 84%72%
• 23% difference in on time reviews from 2024 to 2025
• Volume of reviews held steady from 2024 to 2025
202
Permits Approved by Review Cycle
550
416
246
142
90 32 17 7 3 2
749
498
236
154
98 46 42
4 6 0
786
638
267
151
78 45
14 4 5 0
0 100
200
300
400
500
600
700
800
900
1ST REVIEW 2ND REVIEW 3RD REVIEW 4TH REVIEW 5TH REVIEW 6TH REVIEW 7TH REVIEW 8TH REVIEW 9TH REVIEW 10TH REVIEW 2023 2024 2025
• Year over year, permits are being
approved in fewer review cycles
• No 10th Review cycles in 2025
203
Complete
application
submitted
by
applicant
Sent to
applicant for
corrections
from Building
and
Planning
Reviewed
by Building,
Addressing,
and
Planning
2nd round
reviewed
by Building
and
Planning
Application
approved.

Sent to
applicant to
pay
permitting
fees
8 DAYS 11 DAYS 6 DAYS 6 DAYS 9 DAYS 1 DAY
Plans
Stamped –
Permit
Issued
Time with City – 18 Days
Time with Applicant – 23 Days
Building Permit Applied to Approved
Real Permit Example:
749 square foot ADU
Total Days: 41
204
Complete
application
submitted
by
applicant
Sent to
applicant
for
corrections
from
Building
and Fire
Reviewed
by Building,
Fire, and
Planning
2nd round
Reviewed
by Building
and Fire
Application
approved.

Sent to
applicant to
pay
permitting
fees
5 DAYS 13 DAYS 62 DAYS 9 DAYS 113 DAYS 8 DAYS 9 DAYS 2 DAYS 3 DAYS 2 DAYS Plans
Stamped –
Permit
Issued
Time with City - 34 Days
Time with Applicant – 192 Days
Building Permit Applied to Approved
Real Permit Example:

Commercial Tenant Improvement
Sent to
Applicant
for
corrections
from
Building
3rd round
reviewed
by Building
4th round
reviewed
by Building
Sent to
Applicant
for
corrections
from
Building
Total Days: 226
205
Jan-March April-June July-
September
October-
December
Projected General Plan Update Timeline 2026
First Public Review Draft
comment period
Workshop event – 3/7
Prepare public review
draft EIR
Prepare updated EDE
Release first public
review draft CAP
Revise General Plan based
on comments
Release Second Public
Review Draft General Plan
with CAP and EIR for 45-day
comment period
Study sessions/briefings on
EIR, CAP , and revised
General Plan and approval
process
Revise documents following
comment period
Publish revised General Plan,
CAP , and EIR
Start approval process
• Monterey County Airport LU
C
ommission
• Planning Commission
• Traffic and Transportation
C
ommission
• City Council certification and
a
doption
206
Zoning Code Update
Multi-phase approach
Phase 1:
◦ Housing law compliance - o utlined in Housing Element ◦ Objective design and approval standards
◦ ADUs and SB-9
◦ Other priority items and legal compliance – d riveways, cannabis, cottage food Phase 2:
◦ Consistency with General Plan Update once adopted
◦ Amending current code to implement new land uses
Phase 3:
◦ Complete zoning overhaul striving for ease of use and streamlining Fall 2025 Summer 2026
Fall 2025 Spring 2027
Fall 2025 Fall 2027
207
Front Counter
Customers: 1,564
Current
Planning
Fire
Prevention
Small Business
Support
Code
Enforcement
Development
Engineering
Front Counter
Customers: 142
Permits Issued: 364
Plans Checked: 703
Completed
Inspections: 2,451
Fireworks Citations: 96
Front Counter
Customers: 1,046
Permits Issued: 941
Plans Checked: 2,634
Completed
Inspections: 5,794
Building Permits
Reviewed for
Compliance:

Opened cases: 1,721
Completed
Inspections: 2,840
Closed cases: 1,557
Customer Assistance
Interactions: 323
Approved Planning
Applications: 535
2025 Division Highlights
208
Calls Received:

Held steady from 2024
Counter Transactions:
30% decrease from 2024
City Reports:

Held steady for 2024
Permit Applications:
4% decrease form 2024
Administration Building
Plan Review
Building
Inspections
Plan Reviews:
4% increase from 2024
On time Plan Reviews:
23% increase from 2024
Permits Approved:
2% increase from 2024
Completed Inspections:

Field: 18,944
Virtual: 1,158
13% increase from 2024
2025 Permit Services Activity
209
Construction
Permits by Year
• Finaled p ermits increased by
19% from 2024 to 2025
• Volume of 2025 applied and
i
ssued permits hovered
between 2023 and 2024 values
• Approved permits had a s mall
1% increase
2768
3601
3444
2244
2955 2984
2199
2892 2936
1743
2152
2560
0 500
1000
1500
2000
2500
3000
3500
4000
2023 2024 2025

APPLIED APPROVED

ISSUED FINALED
210
Permits Issued
1100 Northridge Mall 20 W Gabilan St.
904 N Sanborn Rd
211
Finaled Buildings and Facilities
900 Northridge Mall683 Freemont St
212
Finaled Buildings and Facilities
713 La Guardia St 919 Iverson St 930 S Main St
213
Questions?
For more information, contact Permit Services
(831) 758-7251
https://www.cityofsalinas.org/Your-Government/Departments/Community-Development 214
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-001, Version: 1
Minutes
Approve minutes of January 13, 2026.

City of Salinas Printed on 2/3/2026Page 1 of 1
powered by Legistar™
215
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-065, Version: 1
..Title
Minutes
..Recommended Action
Approve minutes of February 3, 2026.

City of Salinas Printed on 2/20/2026Page 1 of 1
powered by Legistar™
216
City of Salinas
Legislation Text
200 Lincoln Ave., Salinas,
CA 93901
www.cityofsalinas.org
File #: ID#26-019, Version: 1
..Title
2025 Annual Comprehensive Financial Report
..Recommended Action
Approve a Resolution accepting the Annual Comprehensive Financial Report (ACFR) for the Fiscal Year ended June 30, 2025.

City of Salinas Printed on 2/20/2026Page 1 of 1
powered by Legistar™
217

Page | 1

CITY OF SALINAS

COUNCIL STAFF REPORT

DATE: FEBRUARY 24, 2026
DEPARTMENT: FINANCE
FROM: SELINA ANDREWS, FINANCE DIRECTOR

ABE PEDROZA, ASSISTANT FINANCE DIRECTOR
TITLE: 2025 ANNUAL COMPREHENSIVE FINANCIAL REPORT

RECOMMENDED MOTION:

A motion to a pprove a resolution r eceiving and accepting the Annual Comprehensive Financial Report for the Fiscal Year Ended June 30, 2025.

EXECUTIVE SUMMARY:

The Annual Comprehensive Financial Report (ACFR) serves as a comprehensive financial document that provides an in -depth account of a government entity's financial performance, position, and cash flows over a specific fiscal year. It provides transparency, accountability, and insight into the City of Salinas’ (City) financial health, enabling stakeholders, including City Council, residents of Salinas, creditors, investors, and other interested parties, to make informed decisions. The full audit report is included as Attachment A.

BACKGROUND:

The City contracts with an independent certified public accountant to examine the books, records, inventories, reports, and processes that involve any officers and employees who receive, handle, or disburse public funds each fiscal year (FY) . The FY 2024-25 audit was performed by Pun and Associates, LLP , an experienced firm that specializes in audit services for California public agencies. The information contained in the ACFR provides detailed financial information which the Salinas community and others can use to better understand the fiscal standing of the City.

In addition, the financial information contained in the document is one element that the credit rating agencies review annually to affix a credit rating for the City’s outstanding debt obligations.

The annual audited financial statements are also required by continuing disclosure agreements for the outstanding bonds issued by the City.

In 2022, the City contracted with Pun and Associates, LLC (Auditors), a firm of Certified Public Accountants licensed to practice in the State of California, to perform the City’s annual independent audit for the Fiscal Years ended June 30, 20 22, June 30, 20 23, and June 30, 20 24, with two one-year options to extend audit services through Fiscal Year ending June 30, 2026. 218
Page | 2
Historically, the City has only produced the required basic financial statements. This year the City produced an ACFR which includes a statistical section in addition to the introductory and financial sections. This is a significant improvement from what was done in the past because the City is now producing the standard document similar to most other municipalities. Th e additional section s allow the City to apply for the Certificate of Excellence in Financial Reporting Award (COA) for the first time.

The ACFR is prepared by the Accounting Division of the Finance Department and represents the culmination of a concerted team effort by the Finance Department staff along with significant involvement of other City Departments. The ACFR is submitted to the City Council for consideration and acceptance, and provides the residents of Salinas, creditors, investors, taxpayers, and other interested parties an overview of the relevant financial information contained in the ACFR.

On February 3, 2026, the City’s external auditor in coordination with staff presented the ACFR to the Finance Committee. The presentation included audit responsibilities, an overview of financial statements, and audit results. The presentation is included as Attachment B.

Independent Auditor’s Report

The auditor has given the City’s financial statements a “clean” audit opinion for the year ended June 30, 202 5, giving reasonable assurance that the financial statements are “free of material misstatement”.

Management’s Discussion and Analysis (MD&A)

The MD&A section of the report summari zes for the City on an entity-wide basis and fund type basis. Information is provided in this section with a year -to-year view, explaining how fund balances have changed between fiscal years ending June 30, 2024, and June 30, 2025. Information is also presented on the adopted General Fund budget to actuals and any significant budg et adjustments made during FY 2024-25.

Statement of Net Position

The Statement of Net Position serves as a useful indicator of a government’s financial position.

The City had net assets of $269.1 million at fiscal year-end as compared to $241.7 million the prior year, an overall increase of $27.4 million over the prior fiscal year. The increase was a result of a variety of factors, including a decrease in total liabilities. The largest portion of the net assets, $264.1 million, represents the City’s investment in its capital assets and infrastructure. Restricted assets of $123.7 million are resources that are subject to external restrictions on how they may be used. As of June 30, 2025, unrestricted net position is ($118.8) million compared to ($115.4) million the prior year. This means that future revenues will be needed to make up past revenue shortfalls.

219
Page | 3
Basic Financial Statements

This section contains basic financial statements, including the “entity -wide” Statement of Net Position for Governmental Funds (such as the General Fund), Proprietary Funds, and the Private Purpose Trust Funds (Fiduciary Funds). The footnotes section provides details on significant items such as the City’s cash and in vestments (Note 3), its long -term obligations (Certificat es of Participation) related to bonded debt (Note 12), the net pension liability for both the City’s miscellaneous and safety pension plans (Note 16), and a discussion of the City’s other post - employment benefit plan (Note 17).

Required Supplementary Information

The Schedules of Pension Plan Contributions are provided in this section.

Supplementary Information

This section provides budget to actual information for “major” and “non -major’’ Governmental Funds.

Statistical Section

The statistical section is designed to assist users in evaluating the economic condition of a City by presenting detailed information, often in ten-year trends. It includes the following:

 Financial Trends Information: This helps users understand the financial status over time.  Revenue Capacity Information: This provides insights into the City’s ability to generate revenue.
 Debt Capacity Information: This assesses the City’s ability to incur debt.  Demographic and Economic Information: This includes data about the population and economic conditions.
 Operating information: This provides details on the City’s operations and services.

Conclusion

As noted in the auditor’s opinion, the ACFR fairly presents the fiscal year ending June 30, 2025 financial activity for the City of Salinas.

CEQA CONSIDERATION:

Not a Project . The City of Salinas has determined that the proposed action is not a project as defined by the California Environmental Quality Act (CEQA) (CEQA Guidelines Section 15378).

CALIFORNIA GOVERNMENT CODE §84308 APPLIES:

No.

220
Page | 4
STRATEGIC PLAN INITIATIVE:

The ACFR achieves the City Council 2025 Strategic Goal of City Services ensuring fiscal responsibility and financial management.

DEPARTMENTAL COORDINATION:

This staff report was coordinated with the City Attorney’s Office and Administration.

FISCAL AND SUSTAINABILITY IMPACT:

There is no direct fiscal impact associated with receiving the report.

Fund

Appropriation

Appropriation
Name
Total
Appropriation
Amount for
recommendation
FY 24-25
Operating
Budget Page
Last Budget
Action (Date,
Resolution)
n/a n/a n/a n/a n/a n/a n/a

ATTACHMENTS:

Resolution
Attachment A – 2025 ACFR
Attachment B – 2025 ACFR Finance Committee Presentation 221
Page | 1

RESOLUTION NO. (N.C.S.)

A RESOLUTION ACCEPTING THE AUDITED 2025 ANNUAL COMPREHENSIVE

FINANCIAL REPORT

WHEREAS, the City contracted with The Pun Group, LLP , a firm of Certified Public Accountants licensed to practice in the State of California, to perform the City’s annual independent audit for the Fiscal Years ended June 30, 20 22, June 30, 20 23, and June 30, 20 24, with two one-year options to extend audit services through Fiscal Year ending June 30, 2026; and

WHEREAS, the FY 202 4-25 audit was performed by Pun Group, LLP, an experienced firm that specializes in audit services for California public agencies; and

WHEREAS, after an extensive audit process, the auditor has given the City’s financial statements a “clean” audit opinion for the year ended June 30, 2025, giving reasonable assurance that the financial statements are “free of material misstatement”.

NOW, THEREFORE, BE IT RESOLVED that the Salinas City Council accepts the Annual Comprehensive Financial Report conducted by The Pun Group, LLP for fiscal year ended June 30, 2025.

PASSED AND APPROVED this 24th day of February 2026, by the following vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

APPROVED:

_______________________
Dennis Donohue, Mayor

ATTEST:

_________________________
Patricia M. Soratos, City Clerk
222

City of Salinas
California

Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2025

223

This page is intentionally left blank.

224

Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2025

PREPARED BY

THE FINANCE DEPARTMENT

Selina Andrews
Finance Director

AUDITORS

The Pun Group, LLP
Accountants & Advisors
6 Hutton Centre Drive, Suite 1200
Santa Ana, CA 92707

225

226
City of Salinas
Basic Financial Statements
For the Year Ended June 30, 2025

Table of Contents

Page

INTRODUCTORY SECTION

Letter of Transmittal ................................................................................................................................................... i Organizational Chart ............................................................................................................................................... viii List of City Officials ................................................................................................................................................. ix

FINANCIAL SECTION

Independent Auditor’s Report ................................................................................................................................ 1

Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ....................... 5

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of Net Position .......................................................................................................................... 20 Statement of Activities .............................................................................................................................. 22

Fund Financial Statements:

Governmental Funds:

Balance Sheet ...................................................................................................................................... 28 Reconciliation of the Governmental Funds Balance Sheet to the Government- Wide Statement of Net Position ................................................................................................... 31 Statement of Revenues, Expenditures, and Changes in Fund Balances .............................................. 32 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities and Changes in Net Position ........................................................................................ 34

Proprietary Funds:

Statement of Net Position ................................................................................................................... 36 Statement of Revenues, Expenses, and Changes in Fund Net Position .............................................. 38 Statement of Cash Flows .................................................................................................................... 40

Fiduciary Funds:

Statement of Fiduciary Net Position ................................................................................................... 47 Statement of Changes in Fiduciary Net Position ................................................................................ 48

Notes to the Basic Financial Statements ............................................................................................................... 55

227
City of Salinas
Basic Financial Statements
For the Year Ended June 30, 2025

Table of Contents (Continued)

Page
FINANCIAL SECTION (Continued)

Required Supplementary Information (Unaudited):

Budgetary Information ................................................................................................................................... 137 Budgetary Comparison Schedules
General Fund ........................................................................................................................................... 140 ARPA Fund Special Revenue Fund ........................................................................................................ 141 HUD Fund Special Revenue Fund .......................................................................................................... 142 Development Fees Special Revenue Fund .............................................................................................. 143 Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plans ........................... 144 Schedule of Pension Plan Contributions – Miscellaneous Plan ..................................................................... 146 Schedule of Changes in Net Pension Liability and Related Ratios – City Police Plans ................................ 148 Schedule of Pension Plan Contributions – City Police Plans ........................................................................ 150 Schedule of Changes in Net Pension Liability and Related Ratios – City Fire Plans .................................... 152 Schedule of Pension Plan Contributions – City Fire Plans ............................................................................ 154 Schedule of Changes in Net Pension Liability and Related Ratios – Single Employer Plan......................... 156 Schedule of Pension Plan Contributions – Single Employer Plan ................................................................. 158 Schedule of Changes in the City’s Net OPEB Liability ................................................................................ 160 Schedule of OPEB Contributions .................................................................................................................. 162

Supplementary Information:

Combining and Individual Fund Statements and Schedules:

Budgetary Comparison Schedules
Capital Projects Fund .............................................................................................................................. 167 2019 Special Tax Bond ........................................................................................................................... 168

Nonmajor Governmental Funds:

Combining Balance Sheet Nonmajor Governmental Funds ............................................................. 169 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds .......................................................................... 170

Nonmajor Special Revenue Funds:

Combining Balance Sheet Nonmajor Special Revenue Funds ......................................................... 173 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds ...................................................................... 177

Budgetary Comparison Schedule
Lighting, Landscape, and Maintenance – District Special Revenue Fund .................................. 181 Local Public Safety ..................................................................................................................... 182 Gas Tax ....................................................................................................................................... 183 Emergency Medical Services ...................................................................................................... 184 Asset Seizure ............................................................................................................................... 185 Traffic Safety .............................................................................................................................. 186 228
City of Salinas
Basic Financial Statements
For the Year Ended June 30, 2025

Table of Contents (Continued)

Page

FINANCIAL SECTION (Continued)

Supplementary Information (Continued):

Combining and Individual Fund Statements and Schedules (Continued):

Nonmajor Special Revenue Funds (Continued):

Budgetary Comparison Schedule (Continued)
Vehicle Abatement ...................................................................................................................... 187 Cable ........................................................................................................................................... 188 Contributions & Donations ......................................................................................................... 189 KDF Los Padres Dev Social Services ......................................................................................... 190 Measure X Transport Safety & Inv Plan ..................................................................................... 191 SB1 Road Maintenance & Rehab ................................................................................................ 192 SB1 Traffic Congestion Relief .................................................................................................... 193 SRA Public Improvement Grant ................................................................................................. 194 Affordable Housing ..................................................................................................................... 195 Grants .......................................................................................................................................... 196 Rent Stabilization ........................................................................................................................ 197 Local Housing Trust .................................................................................................................... 198

Nonmajor Debt Service Funds:

Combining Balance Sheet Nonmajor Debt Service Funds ............................................................... 200 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Debt Service Funds ............................................................................ 203

Budgetary Comparison Schedule
Assessment District ..................................................................................................................... 206 COP 1999 & 2004 Consolidation (2014) .................................................................................... 207 2018 Lease-PS Building Police ................................................................................................... 208 2018B T.R.I.P. Total Road Improvement ................................................................................... 209 2018 Lease El Gabilan Library ................................................................................................... 210 2020A Refunding Energy............................................................................................................ 211 2020A Refunding SVSWA ......................................................................................................... 212 Assessment District Administration ............................................................................................ 213 Assessment District Reserve ....................................................................................................... 214 2024 Energy Efficiency ............................................................................................................... 215

Nonmajor Capital Projects Funds:

Combining Balance Sheet Nonmajor Capital Projects Funds .......................................................... 219 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Capital Projects Funds ........................................................................ 220

229
City of Salinas
Basic Financial Statements
For the Year Ended June 30, 2025

Table of Contents (Continued)

Page

Supplementary Information (Continued):

Combining and Individual Fund Statements and Schedules (Continued):

Nonmajor Capital Projects Funds (Continued):

Budgetary Comparison Schedule
Special Construction Assistance ................................................................................................. 221 Special Aviation .......................................................................................................................... 222 Assessment District Project ......................................................................................................... 223 2019 Special Tax Bond Monte Bella .......................................................................................... 224

All Internal Service Funds:

Description of Internal Service Funds ..................................................................................................... 225 Combining Statement of Net Position All Internal Service Funds .......................................................... 227 Combining Statement of Revenues, Expenses, and Changes in Net Position All Internal Service Funds.............................................................................................. 229 Combining Statement of Cash Flows All Internal Service Funds ........................................................... 230

Fiduciary Funds:

Description of Fiduciary Funds ................................................................................................................ 233 Private Purpose Trust Funds:

Combining Statement of Fiduciary Net Position .............................................................................. 235 Combining Statement of Changes in Fiduciary Net Position ........................................................... 236

Custodial Funds:

Description of Custodial Funds ................................................................................................................ 237 Combining Statement of Fiduciary Net Position ..................................................................................... 239 Combining Statement of Changes of Fiduciary Net Position .................................................................. 240

General Fund:

Combining Balance Sheet General, Measure E, & Measure G Funds ..................................................... 241 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances General, Measure E, & Measure G Funds ....................................................................... 242 Budgetary Comparison Schedule – Measure E ........................................................................................ 243 Budgetary Comparison Schedule – Measure G ....................................................................................... 244

Other Information (Unaudited):

Claims Development – Internal Service Funds – General Liability Insurance ........................................ 246 Claims Development – Internal Service Funds – Workers Compensation Insurance ............................. 248 230
City of Salinas
Basic Financial Statements
For the Year Ended June 30, 2025

Table of Contents (Continued)

Page

STATISTICAL SECTION (Unaudited)

Net Position by Component ..................................................................................................................... 252 Changes in Net Position ........................................................................................................................... 254 Fund Balances of Governmental Funds ................................................................................................... 256 Changes in Fund Balances of Governmental Funds ................................................................................ 258 Assessed Value and Actual Value of Taxable Property........................................................................... 260 Direct and Overlapping Property Tax Rates ............................................................................................ 261 Principal Property Tax Payers ................................................................................................................. 262 Property Tax Levis and Collections ......................................................................................................... 263 Ratios of Outstanding Debt by Type........................................................................................................ 264 Ratios of Outstanding General Bonded Debt ........................................................................................... 265 Direct and Overlapping Governmental Activities Bonded Debt ............................................................. 267 Legal Debt Margin Information ............................................................................................................... 268 Demographic and Economic Statistics ................................................................................................... 270 Construction Permits Issued and Estimated Value .................................................................................. 271 Principal Employers ................................................................................................................................. 273 Full-time Equivalent Employees by Function ......................................................................................... 274 Operating Indicators by Function ............................................................................................................ 276 Capital Asset Statistics by Function/Program .......................................................................................... 278 231

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DEPARTMENT OF FINANCE • 200 Lincoln Ave • Salinas, California 93901 (831) 758-7211 (P) • (831) 758-7937 (F) • cityofsalinas.gov January 27, 2026
Honorable Mayor and Members of the City Council
City of Salinas, California
We are pleased to present the City of Salinas’s (Ci ty) Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2025. Al though formally submitted to the Mayor and City Council (Council), the ACFR is also intended to provide relevant financial information to the residents of Salinas, taxpayers, creditors, investors, and other interested parties.

This letter of transmittal provides a non-technical summary of City finances, services, achievements, and economic prospects. We ask that readers who wish a more detailed discussion of the City’s financial results refer to the Manage ment’s Discussion & Analysis (MD&A) contained in the Financial Section of the ACFR.

City Administration is responsible for the accuracy of the information contained in this report, the adequacy of its disclosures, and the fairness of it s presentation. We believe this ACFR to be complete and reliable in all material respects. To provide a reasonable basis for making this representation, we have established a comprehensive system of internal controls designed to protect City assets from loss, to identify and reco rd transactions accurately, and to compile the information necessary to produce financial statement s in conformity with generally accepted accounting principles.

The City contracted with The Pun Group, LLP, a firm of Certified Public Accountants licensed to practice in the State of California, to perform the annual independent audit. The auditors expressed an opinion that the City’s financial statements for Fiscal Year 2024-2025 (FY 24-25) are fairly stated in conformity with accounting principles generally accepted in the United States. This is the most favorable conclusion and is commonly known as an “unmodified” or “clean” opinion. The independent auditors’ report is included in the Financial Section of this report.

In addition, The Pun Group LLP performs an audit of t he City’s major program expenditures of federal funds for compliance with the requirements described in the U.S. Office of Management and Budget’s OMB Compliance Supplement, and the standards applicable to financial a udits contained in Government Auditing Standards issued b y the Comptroller General of the United States. The report of the Single Audit is published separately from this ACFR and, when completed, can be obtained from the City of Salinas ’ website at https://www.cityofsalinas.org/Your-Government/Departments/Finance/Annual-Comprehensive- Financial-Reports-ACFR.
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Letter of Transmittal
ACFR for Fiscal Year Ended June 30, 2025 | 2
This ACFR is organized into three sections:

I. The Introductory Section includes the table of co ntents, letter of transmittal, listing of elected officials, City administrative personnel, a nd an organization chart delineating organizational structure.

II. The Financial Section includes the Independent A uditors’ opinion, the MD&A, the basic financial statements, notes to the financial statements, combining statements of non-major funds, and required supplemental information.

III. The Statistical Section provides the reader wit h additional historic perspective, context, and detail to assist in using the information in th e financial statements. It provides information in five categories: financial trends; r evenue capacity; debt capacity; demographic and economic information; and operating indicators.

The Reporting Entity and Its Services
In defining the reporting entity, there are no other governmental units over which the City Council has financial accountability. Under new state law, the Salinas Redevelopment Agency, which was a component unit of the City, ceased to exist as of February 1, 2012, and therefore the assets and activities of the dissolved redevelopment agency are reported in a Fiduciary Fund (private purpose trust fund) in the financial statements of the City.

The City was incorporated as a charter City on March 4, 1874 and ope rates under the Council- Manager form of government. The City is governed by a six-member Council elected by districts for four-year alternating terms and a May or elected at large for a two-year term. The Council appoints the City Attorney and the City Manager, who is responsible for day- to-day administration of the City under the policy direction of the Council.

The City is the “county seat” of Monterey County an d is located in the Central Coast region of California, 17 miles inland from the Monterey Bay, 325 miles north of Los Angeles and 106 miles south of San Francisco. Salinas is a charter City p roviding all typical City services: Public safety - police and fire, Public Works - maintenance servic es (streets, lighting, signals, facilities, parks and trees), development and permit services, current and advanced planning a nd traffic and facilities engineering, Library, Recreation and Gen eral administrative services. Business-type City services include a Municipal Airport, Industrial Waste system, Sanitary Sewer, Water Utility and a Parking District. The State Department of Fin ance reports the City’s population at 160,645 as of January 1, 2025. The City FY 2024-25 budget includes 650.00 positions authorized on a full- time equivalent basis.

Three elementary school districts, a unified high sc hool district and several private schools at both the primary and secondary level operate in the City of Salinas. Hartnell College, a State Community College, offers two-year degrees and occu pational certificate programs. California State University, Monterey Bay is located less than 15 miles away on the former Fort Ord site.

Graduate studies through Golden Gate University, Middle bury Institute of International Studies and Chapman College are available nearby. Also in the area are Moss Landing Marine Laboratory, ii
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Letter of Transmittal
ACFR for Fiscal Year Ended June 30, 2025 | 3
Monterey College of Law, Stanford University’s Hopk ins Marine Station and San Jose State University.

Salinas has extensive health and medical services w ith two of Monterey County's four hospitals located within the City. The City also offers skilled nursing and convalescent homes and residential retirement facilities for seniors, as well as over 220 practicing physicians.

Fire protection and basic and advanced life support are provided by the City's full-service Fire Department. Advanced life support services are prov ided by the Fire Department’s paramedic program. The City of Salinas has a Police Department and receives additional support, as required, from the Monterey County Sheriff's Office and other reg ional, state and federal agencies.

The City's moderate climate encourages year-round u se of its 550 plus acres of municipal parks, which include golf courses, tennis courts and swimmin g pools. The Salinas Community Center regularly hosts symphonies, ballets, concerts and con ventions. Salinas is host to the annual Steinbeck Festival, the California Rodeo, and the California International Airshow. Salinas has a modern California Sports Complex and the National S teinbeck Center. Surrounding Salinas are diverse recreational opportunities including beautif ul beaches and the world famed golf courses of the Monterey Bay Peninsula.

As the retail hub of the Central Coast, Salinas enj oys a wide selection and diversity in its stores.

Northridge Shopping Center contains over 120 specialty shops and three major department stores – Macy’s, Best Buy and J.C. Penney. Harden Ranch Pla za includes Wal-Mart, Target, Safeway, specialty stores, restaurants, and banking institutions. The Westridge Shopping Center is home to Costco, Wal-Mart, Office Max, Dick’s Sporting Goods and a variety of national chain restaurants.

The Salinas Auto Center houses nine local dealers and its retail area hosts Home Depot, Beverages and More (BevMo), Kohl’s, and other specialty stores. Additionally, Salinas' location allows quick access to the Monterey Peninsula, as well as the San Jose area.

The City utilizes various Boards and Commissions in the conduct of its affairs. Commissions and Committees established by City Ordinance are:
x Airport Commission
x Library and Community Services Commission
x Traffic and Transportation Commission
x Planning Commission
x Public Art Commission
x Measure G Oversight Committee
x Measure E Oversight Committee
Boards and Committees established by Resolution of the City Council are:
x Police Community Advisory Committee
x Grievance Advisory Board
x Historical Resources Board
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Letter of Transmittal
ACFR for Fiscal Year Ended June 30, 2025 | 4
Subcommittees of Council are:
x Housing & Land Use Committee
x Finance Committee

ECONOMIC CONDITIONS AND FISCAL OUTLOOK
While Salinas Valley continues to show overall positive economic performance, several potential indicators of a future economic weakening have begun. These economic indicators include a slow- down in the local real estate market and unemployment rates. Unemployment rates in the area are expected to continue to increase as corporate layof fs continue to occur. In addition, a tight labor market can also push the unemployment rate up. According to the Anderson forecast, “labor force decline is attributable to retirements, migration o ut-of-state, and individuals choosing to spend their time in nonmarket activities, such as child-raising.

The unemployment rate for the county and Salinas Me tropolitan1 area for June 2025 was 6.3%, which was the same as in May 2025 and higher than t he prior year unemployment rate of 6.0%.

However, the June 2025 Salinas Metropolitan Statistical Area unemployment rate continued to be higher than the unadjusted unemployment rate for the State (5.8%) and the nation (4.1%)2.

The City closed FY 24-25 with a net $5.3 million General Fund surplus due to a variety of factors discussed in the MD&A. General Fund revenues (not i ncluding transfers in) increased by $9.7 million or 5.4% from the prior year. Sales tax reve nues remain the largest and most consistent source of support for General Fund operations, comprising approximately 51.6% or $94.6 million of General Fund revenues of $183.2 million in FY 24-25. For FY 24-25, sales tax receipts of $94.6 million were $3.3 million higher than the prior yea r’s collection. The City’s Measures E and G Sales and Use Tax continued to perform well as the economy rebounds from the effects of COVID-

19. The City also relies heavily on property tax revenu es to support General Fund operations, comprising approximately 22.2% or $40.6 million of General Fund revenues of $183.2 million in FY 24-25. For FY 24-25, property tax receipts of $40.6 million were $1.5 million higher than the prior year’s collection. Property tax revenues were supported by the continued desirability of the City, its environment, and culture.

In addition to the City’s revenue sources, the City benefited from the Federal American Rescue Plan Act (ARPA). The Act allocated $51,567,313 to the City over a two-year period. The City has received both payments and expended $46.9 million a nd encumbered $4.7 million at June 30, 2025.
1 State of California, Employment Development Department, Labor Market Information Division 2 Monthly EDD Press Release
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Letter of Transmittal
ACFR for Fiscal Year Ended June 30, 2025 | 5
As with most municipalities, services are provided directly by employees to the City’s residents, businesses, and visitors. As a service delivery ente rprise, the cost of salaries and benefits are a significant portion of the City’s expenditures. Sal aries are largely dictated by regional market forces as evidenced by fierce competition for workfor ce in the San Francisco Bay Area, and inflationary pressures nationwide. During FY 24-25, the City successfully completed negotiations with seven labor groups. While important for consis tent delivery of high-quality services for the City, these actions further contribute to the structural deficit between revenues and expenditures.

The City also continues to adjust and prepare for pens ion employer costs to continue to be a primary expense in conjunction with salaries. The C ity’s pension plans over the past several decades, like all other CalPERS participants, have experienced changes in actuarial assumptions, demographic changes, and volatile investment returns which have outweighed any positive plan experiences. The outcome of these unfavorable econom ic and demographic conditions is the creation of unfunded pension and Other Post-Employment Benefits (OPEB) obligations for the City. According to the 2023 accounting valuation repor ts, the net pension liability was $230.8 million and the net OPEB liability was $13.4 million as of June 30, 2025.

To address the escalation in OPEB costs, current and previous Councils have worked to curb cost escalation in Other Post-Employment Benefits (OPEB) . In 2020, the City initiated prefunding of retiree healthcare benefits.

For detailed information about the City employees’ retirement plan, please refer to Note 16 of the Notes to Basic Financial Statements Section. For de tailed information about the City OPEB obligations please refer to Note 17 of the Notes to Basic Financial Statements Section.

Despite revenue constraints and increasing costs as sociated with unfunded federal and state mandates, the City has managed to maintain high service levels and balanced budgets t hrough prudent fiscal management.

MAJOR CAPITAL PROJECT INITIATIVES
The City maintains a multi-year forecasting model f or operating revenues and expenditures and also produces a six-year capital plan. The multi-year forecast is regularly updated to reflect current revenue and expenditure assumptions and is presente d to the City Council during the budget process for the next fiscal year.

Major capital asset and infrastructure initiatives were once again the priority for the fiscal year.

Approximately $13.6 million in City infrastructure and other capital asset improvements a nd contributions were invested in FY 24-25, including $1.9 million in impr ovements -other than buildings and $2.6 million in equipment. In addition, $9.1 million was invested in construction in progress including, roads, storm drains, park, buil ding improvements, fire apparatus equipment, and City revitalization efforts.
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Letter of Transmittal
ACFR for Fiscal Year Ended June 30, 2025 | 6
Additional infrastructure improvements are schedule d in accordance with the City’s approved Capital Improvement Plan and will continue into fut ure years. All of these improvements are funded either through grants, appropriations carried over from prior years, and/or new appropriations during the budget development process as approved by City Council policy Single Audit
As a recipient of federal, state and county funding, the City is responsible for providing assurance that adequate internal controls are in place to ens ure compliance with applicable laws and regulations relating to these award programs. Inter nal controls are subject to periodic evaluation by management and the City’s external independent auditors.

As part of the City’s single audit procedures, tests are performed to assess the effectiven ess of its internal controls over major federal award programs and the City’s compliance with applicable laws and regulations related to these award programs.

Accounting System and Budgetary Control
All governmental fund types use the modified accrua l basis of accounting. This means that revenues are recorded when measurable and available rather than when received. Measurable means the amount can be determined and available me ans the cash is received within sixty days after the end of the fiscal year. Expenditures are recorded when the liability is incurred, rather than when paid. An exception to this rule is principal a nd interest on general long-term debt, which is not recognized by debt service funds until it is due.

Internal accounting procedures have been developed to provide reasonable assurance regarding the safeguarding of assets and the reliability of financial records for preparing financial statements and maintaining asset accountability.

The City maintains budgetary controls through City Council adoption of an annual appropriation ordinance and by maintaining an encumbrance account ing system. Expenditures for City operations and other purposes identified in the ann ual budget cannot legally exceed the budgeted amounts approved by the City Council.

An annual operating budget, five-year budget foreca st, and six-year capital improvement plan is adopted by the City Council consistent with generally accepted accounting principles. All budget appropriations must be approved by City Council dur ing the fiscal year. The City Manager is authorized to transfer appropriations within the same funding source. Appropriations are valid for each fiscal year and lapse at year-end.

Acknowledgements
The preparation of this report would not have been possible without the skill, effort, and dedication of the entire Finance Department staff. In addition , staff in all City departments should be recognized for responding so positively to the requests for detailed information that accompanies each annual audit.
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City of Salinas
Organization Chart

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City of Salinas
List of Principal Officials

Jose Luis Barajas Gloria De La Rosa
Councilmember Councilmember
District 1 District 4
Tony Barrera Andrew Sandoval
Councilmember Councilmember
District 2 District 5
Margaret D'Arrigo Aurelio Salazar
Councilmember Councilmember
District 3 District 6
Lisa Murphy David Jacobs
Assistant City Manager Public Works Director
Kristan Lundquist Lisa Brinton
Library and Community Community
Services Director Development Director
Carlos Acosta Sam Klemek
Chief of Police Fire Chief
Selina Andrews Marina Horta-Gallegos
Finance Director Human Resources
Director
Dennis Donohue
Mayor
Rene Mendez Christopher A. Callihan
City Manager City Attorney

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FINANCIAL SECTION
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To the Honorable Mayor and Members
of the City Council of the City of Salinas
Salinas, California

2 Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance a bout whether the financial statements as a whole ar e free from material misstatement, whether due to fraud or erro r, and to issue an auditor’s report that includes o ur 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 accept ed auditing standards and Government Auditing Standards will always detect a material misstatement when it exist s. The risk of not detecting a material misstatemen t resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentiona l omissions, misrepresentations, or the override of internal con trol. Misstatements are considered material if ther e is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasona ble user based on the financial statements.

In performing an audit in accordance with GAAS and Government Auditing Standards, we x exercise professional judgment and maintain professional skepticism throughout the audit. x identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. x obtain an understanding of internal control relevan t to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the p urpose of expressing an opinion on the effectivenes s of the City’s internal control. Accordingly, no such opinion is expressed. x evaluate the appropriateness of accounting policies used and the reasonableness of significant account ing estimates made by management, as well as evaluate the overall presentation of the financial statements. x conclude whether, in our judgment, there are condit ions or events, considered in the aggregate, that r aise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

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 ac cepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Comparison Schedules, Sched ules of Changes in Net Pension Liability and Relate d Ratios, Schedules of Proportionate Share of the Net Pension Liability and Related Ratios, Schedules of Pension Contributions, Schedule of Changes in Net OPEB Liability and Related Ratios, and Schedule of OPEB Contributions be presented to supplement the basic financial statements. Such inf ormation is the responsibility of management and, a lthough 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 pla cing the basic financial statements in an appropria te 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 in formation and comparing the information for consist ency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtain ed 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 wi th sufficient evidence to express an opinion or pro vide any assurance.
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To the Honorable Mayor and Members
of the City Council of the City of Salinas
Salinas, California

3 Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Combining and Individual Fund Statements and Sched ules are presented for purposes of additional analysis and a re not a required part of the basic financial state ments. 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 financi al statements. The information has been subjected t o the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the un derlying accounting and other records used to prepa re 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 Combining a nd Individual Fund Statements and Schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included i n the annual report. The other information comprise s the Introductory Section and the Claims Development for Internal Service Funds Schedules but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the othe r information and consider whether a material inconsistency exists be tween the other information and the basic financial statements, or the other information otherwise appears to be mater ially misstated. If, based on the work performed, w e conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards , we have also issued our report dated January 27, 2026, on our consideration of the City’s internal control over f inancial reporting and on our tests of its complian ce with certain provisions of laws, regulations, contracts, and gra nt agreements and other matters. The purpose of tha t report is solely to describe the scope of our testing of internal co ntrol over financial reporting and compliance and t he results of that testing, and not to provide an opinion on the effec tiveness of the City’s internal control over financ ial reporting or on compliance. That report is an integral part of an a udit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
January 27, 2026
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Management’s Discussion and Analysis (Unaudited)

ACFR for Fiscal Year Ended June 30, 2025 | 5
This section of the City of Salinas (City) Annual C omprehensive Financial Report provides an overview of the City’s financial activities for the fiscal ye ar ended June 30, 2025. Readers are encouraged to consider the information presented he re in conjunction with the accompanying letter of transmittal, the basic financial statemen ts, and the accompanying notes to the financial statements.

A. FINANCIAL HIGHLIGHTS
x On June 30, 2025, the City’s net position (excess of assets and deferred outflows of resources over liabilities and deferred inflows of resources) was $269.1 million. Of this amount, $264.1 million is invested in capital assets and restricted assets, which is offset by a deficit of $118.8 million of unrestricted assets.
x During the fiscal year ended June 30, 2025, the City ’s total net position increased by $27.4 million from $241.7 million to $269.1 million.
x During the fiscal year, fund balances i n creased $38 .6 million to $221 million for governmental funds, of which $198.5 million is either nonspendable, restricted, committed, or assigned, leaving a $22.6 million as unassigned. The City increased restricted fund balance by $23.7 million for 122.1 million. Additionally, the City has released $45.3 million and $23.8 million from committed and assigned fund balances, respectively, to unassigned fund balance. x During the fiscal year the General Fund, Measure E, and Measure G fund balance increased by $5.3 million to $99.7 million of which $75.9 mil lion is either nonspendable, restricted, committed, or assigned fund balance. Unassigned Gen eral Fund, Measure E & Measure G fund balance was $23.9 million. The primary reason for the General Fund ba lance increase was due to stronger than anticipated revenues.
x The City’s total net capital assets decreased $8.8 million from $401.0 million to $392.2 million primarily due to an increase in accumulated depreciation and amortization.

B. OVERVIEW OF FINANCIAL STATEMENTS

This discussion and analysis are intended to serve as an int roduction to the City’s basic financial statements, which is comprised of three components: 1) Govern ment-Wide Financial Statements, 2) Fund Financial Statements and 3) Notes to the Basic Financial Statements.

The basic financial statements include the City (primary government) and all legally separate entities (component units) for which the government is financially accountable.

This report also contains other supplementary inform ation in addition to the basic financial statements for further information and analysis.
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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 6
Government-Wide Financial Statements

The Government-Wide Financial Statements present the financial picture of the City and provide readers with a broad view of the City’s finances, using the economic resources measurement focus and accrual basis of accounting, in a manner similar to private-sector businesses. These statements present governmental activities and business-type activit ies separately and include all assets of the City (including infrastructure) as well as all liabilities (including long-term debt). Additionally, certain interfund receivables, payables and other i nterfund activity have been eliminated as prescribed by GASB Statement No. 34.

The Statement of Net Position presents information on all of the City’s assets and liabilities, with the difference between the two reported as net posit ion. Over time, changes in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net posit ion changed during the year. All changes in net position are reported as soon as the underly ing event giving rise to the change occurs, regardless of timing of related cash flows.

In the Statement of Net Position and the Statement of Activities, we separate the City activities as follows:

Governmental Activities—All of the City’s basic services are reported in thi s category, including general government, public safety, community development, public works, recreation, and library. Property taxes, sales taxe s, user fees, interest income, franchise fees, state grants and federal grants finance these activities. The City’s insurance programs (health, worker’s compensation, liability and propert y damage) are accounted for in internal service funds but are reported as part of go vernmental activities since these programs are used primarily for governmental activities.

Business-Type Activities—The City charges a fee to customers to cover all or m ost of the costs of certain services it provides. The City’s In dustrial Wastewater System, Airport, Sanitary Sewer, Permit Service, and Parking District are reported as business-type activities.
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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 7
Fund Financial Statements
A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance(related legal requirements.

The Fund Financial Statements include statements for each of the three categories of activities – governmental, proprietary and fiduciary. The govern mental funds are prepared using the current financial resources measurement focus and modified accrual basis of accounting. The proprietary funds are prepared using the economic resources mea surement focus and the accrual basis of accounting. The fiduciary funds are agency funds, pension trust funds and private purpose trust funds, which only report assets and liabilities and do not have a measurement focus.

Governmental Funds - The Governmental Funds are used to account for e ssentially the same functions reported as governmental activities in th e Government-Wide Financial Statements.

However, unlike the Government-Wide Financial State ments, Governmental Funds Financial Statements focus on current financial resources, which emphasize near-term inflows and outflows of expendable resources as well as balances of expendable resources at the end of the fiscal year. This information is essential in evaluating the City’s near-term financial requirements.

In order to better understand the City’s long-term and short-term requirements, it is useful to compare the City’s Governmental Funds Statements with the governmental activities in the Government-Wide Financial Statements. A reconciliation is provided for the Governmental Fund Balance Sheet and the Statement of Revenues, Expenditures and Changes in Fund Balances to facilitate this comparison.

The major governmental funds include the General Fu nd, American Rescue Plan Act (ARPA), Housing and Urban Development (HUD) Grant, Development Fees, Special Revenue Funds, Capital Projects Fund, and 2019 Special Tax Bond Monte Bella Debt Service Fund, which are reported in detail in the Governmental Fund Financial Statements. All other funds are shown in the aggregate as other non-major governmental funds. Individual fund data for each of other non-major governmental funds is provided in the form of combining statements located under the Supplementary Information section in the report.

Proprietary Funds - The City maintains two types of proprietary funds, enterprise funds and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the Government-Wide Financial Statements. The City uses enterprise funds to account for its Airport, Industrial Wastewater System, Sani tary Sewer, Permit Services and Parking activities. Internal service funds are an accounting device used to accumulate and allocat e costs internally among the City’s various functions. The City uses internal service funds to account for its general city insurance operations. Because thes e services predominantly benefit the governmental rather than business-type activities, they have been included withi n governmental activities in the Government-Wide Financial Statements.

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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 8
Fiduciary Funds - The City is the trustee, or fiduciary, for certain funds held on behalf of external parties. The City’s fiduciary activities are report ed in separate Statements of Fiduciary Net Position. These activities are excluded from the Ci ty’s other financial statements because the resources of these funds are not available to support the City’s own programs.

Notes to the Basic Financial Statements

The notes provide additional information that is es sential to a full understanding of the data provided in the Government-Wide and Fund Financial Statements.

Other Information

In addition to the basic financial statements, this report also presents certain Required Supplementary Information including the City’s budgetary comparison schedules for the General Fund, American Rescue Plan Act (ARPA) Special Revenue Funds, Housing and Urban Development (HUD) Grant Special Revenue Funds, and Development Fees Special Revenue Fund, and information concerning the progress in funding its obligation to provide pension benefits to its employees.

Combining statements for the other non-major governmental funds, Internal Service Funds, Fiduciary Funds and General, Measure E and Measure G Funds are presented immediately following the Required Supplementary Information as supplementary information.

C. GOVERNMENT-WIDE FINANCIAL ANALYSIS
The Management Discussion and Analysis (MD&A) includes comparative data for analysis.

Statement of Net Position

Net position is a good indicator of the City’s financial position. During thi s fiscal year, the net position of the City increased $27.5 million or 11.4% over the prior year’s from $241.6 to $269.1 million.

At June 30, 2025, the largest portion of net position consists of the City’s net investment in capital assets. This component is the total amount of funds required to acquire those assets less any related outstanding debt used for such acquisition. The Ci ty uses these capital assets to provide services to residents. The capital assets of the City are not sources of income for repayment of debt as most assets are not revenue generating and generally are not liquidated to repay debt. Debt service payments are funded from other resources available to the City. 252
Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 9
The following table is the condensed statement of net position as of June 30, 2025 and 2024

2025 2024 2025 2024 2025 2024
Assets:

Current assets 272,673,631$ 269,809,855 $ 16,717,688 $ 16,750,781 $ 289,391,319 $ 286,560,636 $ Other assets 14,679,130 5,818,489 4,228,343 4,502,468 18,907,473 10,320,957 Capital assets, net 330,166,241 335,763,944 62,072,885 65,238,853 392,239,126 401,002,797 Total assets 617,519,002 611,392,288 83,018,916 86,492,102 700,537,918 697,884,390 Deferred outflows of resources
Related to pension and OPEB 55,311,018 69,327,178 1,472,339 2,179,156 56,783,357 71,506,334 Loss on refunding of debt 432,594 459,631 77,290 85,877 509,884 545,508 Total deferred outflows of resources 55,743,612 69,786,809 1,549,629 2,265,033 57,293,241 72,051,842 Liabilities:

Current liabilities 10,718,381 17,863,112 734,849 1,060,528 11,453,230 18,923,640 Other liabilities 18,136,961 41,756,548 - - 18,136,961 41,756,548 LTD - due in one year 10,708,076 19,145,030 1,349,295 1,729,000 12,057,371 20,874,030 Long-term liabilities 394,677,707 394,195,005 24,038,297 26,140,774 418,716,004 420,335,779 Total liabilities 434,241,125 472,959,695 26,122,441 28,930,302 460,363,566 501,889,997 Deferred inflows of resources
Related to pension, OPEB and leases 17,420,386 21,006,643 4,819,172 5,378,532 22,239,558 26,385,175 Total deferred inflows of resources 17,420,386 21,006,643 4,819,172 5,378,532 22,239,558 26,385,175 Net Position:

Net investment in Capital Assets 221,270,561 223,199,988 42,828,175 44,273,730 264,098,736 267,473,718 Restricted 123,726,335 89,559,884 - - 123,726,335 89,559,884 Unrestricted (Deficit) (129,249,480) (125,547,113) 10,485,064 10,174,571 (118,764,416) (115,372,542) Total Net Position 215,747,416$ 187,212,759 $ 53,313,239 $ 54,448,301 $ 269,060,655 $ 241,661,060 $ City of Salinas
Condensed Statements of Net Position
June 30, 2025 and 2024
Governmental Activities Business-type Activities Tota l

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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 10

Below is a table of the current and prior fiscal year recap of the changes in net position. The entire Statement of Activities can be reviewed on pages 24-25. 2025 2024 2025 2024 2025 2024
Revenues
Program Revenues:

Charges for Services 28,598,610 $ 9,951,057 $ 17,174,847 $ 14,078,424 $ 45,773,457 $ 24,029,481 $ Operating Grants & Contributions 46,428,658 39,160,212 - - 46,428,658 39,160,212 Capital Grants & Contributions 14,021,584 11,642,670 - - 14,021,584 11,642,670 General Revenues:

Taxes 171,198,180 164,923,983 - - 171,198,180 164,923,983 Unrestricted Investment Earnings 11,638,579 11,203,141 1,032,269 925,646 12,670,848 12,128,787 Gain (Loss) on Disposal of Assets (3,653,255) 5,690 - (12,058) (3,653,255) (6,368) Payment from Fiduciary Fund - - 946,093 950,640 946,093 950,640 Miscellaneous 418,622 991,325 2,214,084 2,143,902 2,632,706 3,135,227 Total Revenues 268,650,978 237,878,078 21,367,293 18,086,554 290,018,271 255,964,632 Expenses
General Government 59,730,637 48,105,622 5,303,658 3,690,327 65,034,295 51,795,949 Public Safety 103,419,143 126,945,455 - 103,419,143 126,945,455 Public Works 54,169,233 45,984,671 13,203,603 11,110,167 67,372,836 57,094,838 Recreation 15,504,576 12,661,489 - 15,504,576 12,661,489 Library 6,781,702 6,781,311 - 6,781,702 6,781,311 Interest on Long-Term Debt 3,921,907 4,063,122 584,217 629,735 4,506,124 4,692,857 Total Expenses 243,527,198 244,541,670 19,091,478 15,430,229 262,618,676 259,971,899 Increase (decrease) in Net Position
before Transfers 25,123,780 (6,663,592) 2,275,815 2,656,325 27,399,595 (4,007,267) Transfers 3,410,877 644 ,120 (3,410,877) (644,120) - - Increase (decrease) in Net Position 28,534,657 (6,019,472) (1,135,062) 2,012,205 27,399,595 (4,007,267) Net Position - Beginning of Year 187,212,759 193,232,231 54,448,301 52,436,096 241,661,060 245,668,327 Net Position - Ending 215,747,416$ 187,212,759 $ 53,313,239 $ 54,448,301 $ 269,060,655 $ 241,661,060 $ Governmental Activities Business-type Activities Tota l City of Salinas
Condensed Statement of Activities and Changes in Net Position For the Fiscal Years Ended June 30, 2025 and 2024

Total revenues increased from the prior year by $34.1 million, or 12% and total expenses increased by $2.5 million from prior year, or 1%. Further ana lysis is provided within the governmental and business-type activities sections.

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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 11

Governmental Activities
Governmental activities resources total $268.7 mill ion. The City’s governmental activities increased net position by $28.5 million. The following charts highlight the sources of revenues and purpose of expenses:

Total expenses for governmental activities, excludi ng transfers and contributions, were $243.4 million including interest on long-term debt of $3.9 million.

Taxes
64%
Charges for
Services
11%
Operating Grants
and Contributions
17%
Capital Grants and
Contributions
5%Investment
Income
4%
Other
-1%
Governmental Activities
Revenues by Source
Year Ended June 30, 2025
Public Works
22%
Public Safety
42%
General
Government
25%
Recreation
6%
Library
3%
Interest
2%
Governmental Activities
Expenses by Function/Program
Year Ended June 30, 2025
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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 12

The below table represents the total cost of each o f the City’s governmental activities as well as each activity’s net cost (total cost less fees generated by the activities and intergovernmental aid).

The net cost shows the financial commitment that wa s placed on the City’s taxpayers by each of these functions.

Total Cost of
Services Percent
Net Cost of
Services Percentage
General government 59,730,637$ 24.5 % 13,769,549$ 8.9 % Public safety 103,419,143 42.5 % 95,488,218 61.8 % Public works 54,169,233 22.2 % 21,371,086 13.8 % Recreation 15,504,576 6.4 % 13,532,105 8.8 % Library 6,781,702 2.8 % 6,395,481 4.1 % Interest 3,921,907 1.6 % 3,921,907 2.5 % Total 243,527,198 $ 100 % 154,478,346$ 100 % Public safety continues to be the single highest ex pense for the City followed by public works.

Net cost of services, after subtracting fees and grant revenues, total $154.5 million.

Business-Type Activities

The City’s business-type activities net position was $53.3 million, a decrease of $1.1 million for the fiscal year. Total operating revenues for busin ess-type activities were $17.2 million. Total operating expenses for the business-type activities were $18.5 million during FY 2024-25.

Airport Industrial
Waste
Sanitary
Sewer
Downtown
Parking
Permit
Services
Revenue $2.13 $4.03 $3.70 $0.47 $6.85
Expense $2.97 $3.28 $4.65 $2.30 $5.30
$0.0$0.5$1.0$1.5$2.0$2.5$3.0$3.5$4.0$4.5$5.0$5.5$6.0$6.5$7.0$7.5 Business -Type Activities
Revenues, Expenses (in millions)
June 30, 2025
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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 13

D. FUND FINANCIAL STATEMENT ANALYSIS

The City uses fund accounting to ensure and demonst rate compliance with finance-related legal requirements.

Governmental Funds

The focus of the City’s governmental funds is to pr ovide information on short-term inflows, outflows and balances of spendable resources. Such information is useful in assessing the City’s financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government’s net resources available for spending at the end of the fiscal year.

As of the end of the current fiscal year, the City’s governmental funds re ported combined ending fund balances of $221 million. Of the total fund b alance, $6.1 million was nonspendable which indicates the resources are nonspendable loans, notes, land and property held for resale and are not anticipated to be liquidated in the near-term. Of the total fund balance, $122.1 million was restricted fund balance, the use of which is constrained by external parties, resource providers, or enabling legislations. Fund balance of $45.4 millio n was committed by City Council for specific purposes. The remainder of the restrictions are listed in the Fund Balance footnote.

The General Fund is the chief operating fund of the City. The General, Measure E and Measure G fund balance increased by $5.3 million in FY 2024-25 to $99.7 million, of which $75.9 million is either nonspendable, restricted, committed, or a ssigned fund balance. The remaining fund balance of $24.8 million is unassigned.

Proprietary Funds

The City’s proprietary funds provide the same type of information found in the government-wide financial statements but in more detail. Factors concerning these funds have been addressed in the discussion of Government-Wide Financial Analysis.

E. GENERAL FUND BUDGETARY HIGHLIGHTS

The final amended General, Measure E, and Measure G Fund revenue budget, including transfers in, totaled $179.7 million and the expenditure budg et totaled $235.1 million including transfers out. Transfers out are budgeted mostly for capital projects and the funds are already on-hand.

Transfers out to the Capital Projects Fund will occur over multiple years.

Significant Appropriations Increases/Decreases

Appropriations during the year were adjusted upward by $49.5 million, of which $46.6 million were related to transfers for capital projects and $2.9 million in operational changes. There was no change in estimated revenues.

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Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 14

F. CAPITAL ASSETS AND LONG-TERM OBLIGATIONS
Capital Assets Including Infrastructure
The following is a summary of the City’s capital assets as of June 30, 2025 and 2024:
2025 2024 2025 2024 2025 2024
Land 37,953,126 $ 37,953,126 $ 3,630,695 $ 3,630,695 $ 41,583,821 $ 41,583,821 $ Buildings 134,749,588 134,749,588 25,888,821 25,888,821 160,638,409 160,638,409 Improvements 52,846,129 50,903,966 15,970,700 15,970,700 68,816,829 66,874,666 Equipment 52,278,836 50,518,200 7,935,427 7,871,497 60,214,263 58,389,697 Infrastructure 434,605,116 434,605,116 102,709,198 102,709,198 537,314,314 537,314,314 Right-to-use assets 862,885 960,749 - - 862,885 960,749 Construction in Progress 30,743,077 25,235,279 2,323,395 2,291,239 33,066,472 27,526,518 744,038,757 734,926,024 158,458,236 158,362,150 902,496,993 893,288,174 Accumulated
Depreciation/
Amortization (413,872,516) (399,162,080) (96,385,351) (93,123,297) (510,257,867) (492,285,377) 330,166,241$ 335,763,944 $ 62,072,885 $ 65,238,853 $ 392,239,126 $ 401,002,797 $ Governmental Activities Business-type Activities Tota ls

Capital assets, including infrastructure assets of the City, are those assets which are used in the performance of the City’s functions. At June 30, 2 025, net capital assets of the Governmental Activities totaled $330.1 million and the net capit al assets of the Business-type Activities totaled $62.1 million.

Major capital assets events during the current fiscal year included the following:

x $9.1 million added to construction in progress for roads, storm drains, park, building improvements, fire apparatus equipment, and City revitalization efforts. x $1.8 million added for vehicles and other City maintenance equipment.

Further details on the City of Salinas’ capital ass ets can be found in Note 10 to the financial statements.
258
Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 15

Long-Term Obligations

The following is a summary of the City’s long-term debt as of June 30, 2025 and 2024:
2025 2024 2025 2024 2025 2024
Annual Leave 12,624,134 $ 12,035,252 $ 551,476 $ 552,230 $ 13,175,610$ 12,587,482 $ Insurance Claims 44,760,003 37,242,708 - - 44,760,003 37,242,708 Capital Leases 47,011,937 46,818,865 7,142,000 7,788,000 54,153,937 54,606,865 Loans and Notes - - - 518,000 - 518,000 Revenue Bonds - - 12,180,000 12,745,000 12,180,000 12,745,000 Certificates of
Participation 50,675,000 53,720,000 - - 50,675,000 53,720,000 Assessment District
Bonds 6,910,000 7,110,000 - - 6,910,000 7,110,000 Unamortized Bond
Premium 5,009,329 5,679,241 - - 5,009,329 5,679,241 Unamortized Bond
Discount (291,279) (304,519) - - (291,279) (304,519) Subtotal 166,699,124 162,301,547 19,873,476 21,603,230 186,572,600 183,904,777 Net OPEB Liability 12,610,349 12,171,211 815,342 786,950 13,425,691 12,958,161 Net Pension Liability 226,076,310 238,867,277 4,698,774 5,479,594 230,775,084 244,346,871 Total outstanding debt 405,385,783$ 413,340,035 $ 25,387,592 $ 27,869,774 $ 430,773,375 $ 441,209,809 $ Governmental Activities Business-type Activities Tota ls City of Salinas' Long Term Liabilities

As of June 30, 2025, the City had $430.8 million in long term debt.

During the current year the City entered into a new capital lease agreement for energy efficiency and backup generator projects in the amount of $4.7 million.

Further details on the City of Salinas’ long-term l iabilities can be found in Notes 12, 13, 14, 16 and 17 to the financial statements.

G. ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The FY 2025-26 Budget projections were based on eco nomic trends and forecasts specific to the local economy. These estimates, informed by data from the County of Monterey and the City’s consultants such as Hinderliter, de Llamas & Associates help forecast the most impactful revenue sources, such as taxes. Expenditures are carefully reviewed by Finance Department and are incorporated into the budget with a vacancy savings factor of 5%, reflecting the City’s historical trend of not fully expending predicted salaries and benefit costs.

The City continues to work towards a structurally balanced budget. However, increasing the City’s net position is significantly influenced by market i nterest rate fluctuations, liability payments (including pension costs), and operational and capi tal expenditures. Additionally, accounting standards do not account for future capital costs b eyond depreciation, meaning deferred capital needs could substantially impact future financial p erformance. Controlling the main cost drivers of wages, pension, health insurance, and workers’ compensation continues to be the key t o managing this projected problem. Rising costs in key City operations and contracted services also pose challenges that could outpace revenue growth.
259
Management’s Discussion and Analysis (Unaudited) (Continued)

ACFR for Fiscal Year Ended June 30, 2025 | 16

Despite the City balancing its budget in the coming years, maintaining this stability will require fiscal prudence and foresight to address future challenges.

Additionally, the position of the nation, state and local economy, and any recessionary factors, will influence future budgets. The City continues to wor k on the Salinas Plan and hopes to achieve savings in those recommendations that have been implemented or are in progress.

The Salinas Plan and Fiscal Sustainability

The Salinas Plan is a Ten-Year Plan designed to provide the City with a path toward maintaining a long-term balanced budget while preserving City services and addressing the affordable housing crisis. The plan provides 32 recommended initiativ es. The 32 recommended initiatives are now in various stages of progress and are described in more detail in the Salinas Plan.

Major Projects and Funding

Amid challenges, the City continues deploying funds for various projects City-wide. The Ci ty appropriated $25.6 million in American Rescue Plan Act (ARPA) funds for 20 projects in the following four areas: public facility improvements, public infrastructure, investments in water and sewer, and to address homelessness and housing issu es. At June 30, 2025, the City received and expended $20.9 million, leaves no fund balance at the end of the fiscal year.

H. REQUEST FOR INFORMATION
This financial report is designed to provide our residents, taxpayers, customers, and investors and creditors with a general overview of the City’s fin ances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the City of Salinas Finance Department, 200 Lincoln Avenue, Salinas, California 93901.

260

BASIC FINANCIAL STATEMENTS
17 261
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18 262

GOVERNMENT-WIDE FINANCIAL STATEMENTS
19 263
Governmental Business-Type
Activities Activities Total
ASSETS
Current assets:

Cash and investments 230,890,045$ 19,987,712 $ 250,877,757 $ Receivables, net of allowance:

Accounts receivable, net 1,513,477 1,037,268 2,550,745 Taxes receivable 20,691,686 - 20,691,686 Assessments receivable 6,910,000 - 6,910,000 Due from other agencies 5,142,786 - 5,142,786 Leases receivable 437,562 274,125 711,687 Interest receivable 2,235,640 271,018 2,506,658 Internal balances:

Due from (to) other funds 2,067,435 (2,067,435) - Advances to (from) other funds 2,785,000 (2,785,000) - Total current assets 272,673,631 16,717,688 289,391,319 Noncurrent assets:

Restricted cash and investments 7,434,253 - 7,434,253 Receivables, net of allowance:

Loans receivable 1,923,696 - 1,923,696 Leases receivable 3,941,181 4,228,343 8,169,524 Land and properties held for resale 1,380,000 - 1,380,000 Capital assets:

Non-depreciable/amortizable 68,696,203 5,954,090 74,650,293 Depreciable/amortizable, net 261,470,038 56,118,795 317,588,833 Total capital assets 330,166,241 62,072,885 392,239,126 Total noncurrent assets 344,845,371 66,301,228 411,146,599 Total assets 617,519,002 83,018,916 700,537,918

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 52,183,194 1,270,104 53,453,298 Related to OPEB 3,127,824 202,235 3,330,059 Loss on refunding of debt 432,594 77,290 509,884 Total deferred outflows of resources 55,743,612 1,549,629 57,293,241

June 30, 2025
Statement of Net Position
City of Salinas
Primary Government
See accompanying Notes to the Basic Financial Statements. 20 264
Governmental Business-Type
Activities Activities Total

LIABILITIES
Current liabilities:

Accounts payable 10,149,306 477,680 10,626,986 Accrued liabilities 5,853,687 313,693 6,167,380 Interest payable 516,273 214,211 730,484 Deposits payable 52,802 42,958 95,760 Unearned revenue 18,136,961 - 18,136,961 Long-term debt - due within one year 8,183,251 1,239,000 9,422,251 Compensated absences - due within one year 2,524,825 110,295 2,635,120 Insurance claims payable - due within one year 9,910,671 - 9,910,671 Total current liabilities 55,327,776 2,397,837 57,725,613 Noncurrent liabilities:

Long-term debt - due in more than one year 101,131,736 18,083,000 119,214,736 Compensated absences - due in more than one year 10,099,309 441,181 10,540,490 Insurance claims payable - due in more than one year 34,849,332 - 34,849,332 Net pension liability 226,076,310 4,698,774 230,775,084 Net OPEB liability 12,610,349 815,342 13,425,691 Total noncurrent liabilities 384,767,036 24,038,297 408,805,333 Total liabilities 440,094,812 26,436,134 466,530,946

DEFERRED INFLOWS OF RESOURCES
Related to pensions 3,303,460 71,197 3,374,657 Related to OPEB 10,140,366 655,641 10,796,007 Related to leases 3,976,560 4,092,334 8,068,894 Total deferred inflows of resources 17,420,386 4,819,172 22,239,558

NET POSITION
Net investment in capital assets 221,270,561 42,828,175 264,098,736 Restricted for:

Housing 12,623,629 - 12,623,629 Capital projects 10,741,386 - 10,741,386 Public safety 3,504,290 - 3,504,290 Highways and streets 37,443,299 - 37,443,299 Debt service 8,871,727 - 8,871,727 Special programs 50,542,004 - 50,542,004 Total restricted 123,726,335 - 123,726,335 Unrestricted (deficit) (129,249,480) 10,485,064 (118,764,416) 215,747,416$ 53,313,239 $ 269,060,655 $ Total net position Primary Government
City of Salinas
Statement of Net Position (Continued)
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 21 265
Operating Capital
Charges for Grants an d Grants and
Functions/Programs Expenses Services Contributions Contributions Total Primary government:

Governmental activities:

General government 59,730,637$ 7,781,243 $ 33,784,383 $ 4,395,462 $ 45,961,088 $ Public safety 103,419,143 2,006,615 5,626,486 297,824 7,930,925 Public works 54,169,233 16,920,080 6,683,885 9,194,183 32,798,147 Recreation 15,504,576 1,838,356 - 134,115 1,972,471 Library 6,781,702 52,316 333,905 - 386,221 Interest on long-term debt 3,921,907 - - - - Total governmental activities 243,527,198 28,598,610 46,428,658 14,021,584 89,048,852 Business-type activities:

Airport 2,974,787 2,133,233 - - 2,133,233 Industrial Waste 3,279,094 4,027,016 - - 4,027,016 Sanitary Sewer 4,647,529 3,695,305 - - 3,695,305 Downtown Parking District 2,302,193 470,672 - - 470,672 Permit Services 5,303,658 6,848,621 - - 6,848,621 Total business-type activities 18,507,261 17,174,847 - - 17,174,847 Total primary government 262,034,459$ 45,773,457 $ 46,428,658 $ 14,021,584 $ 106,223,699 $

City of Salinas
Statement of Activities
For the Year Ended June 30, 2025
Program Revenues
See accompanying Notes to the Basic Financial Statements. 22 266
Governmental Business-Type
Functions/Programs Activities Activities Total
Primary government:

Governmental activities:

General government (13,769,549)$ - $ (13,769,549)$ Public safety (95,488,218) - (95,488,218) Public works (21,371,086) - (21,371,086) Recreation (13,532,105) - (13,532,105) Library (6,395,481) - (6,395,481) Interest on long-term debt (3,921,907) (584,217) (4,506,124) Total governmental activities (154,478,346) (584,217) (155,062,563) Business-type activities:

Airport - (841,554) (841,554) Industrial Waste - 747,922 747,922 Sanitary Sewer - (952,224) (952,224) Downtown Parking District - (1,831,521) (1,831,521) Permit Services - 1,544,963 1,544,963 Total business-type activities - (1,332,414) (1,332,414) Total primary government (154,478,346) (1,916,631) (156,394,977) General Revenues and Transfers:

General revenues:

Taxes:

Sales taxes 94,640,604 - 94,640,604 Property taxes 40,561,028 - 40,561,028 Motor vehicle in lieu 255,485 - 255,485 Utility user tax 15,758,261 - 15,758,261 Franchise tax 10,423,060 - 10,423,060 Business tax 6,724,871 - 6,724,871 Transient occupancy tax 2,828,874 - 2,828,874 Other taxes 5,997 - 5,997 Total taxes 171,198,180 - 171,198,180 Revenue from Fiduciary Funds - 946,093 946,093 Investment earnings 11,638,579 1,032,269 12,670,848 Gain (loss) on sale of capital assets (3,653,255) - (3,653,255) Miscellaneous revenue 418,622 2,214,084 2,632,706 Transfers 3,410,877 (3,410,877) -
Total general revenues and transfers 183,013,003 781,569 183,794,572 Change in net position 28,534,657 (1,135,062) 27,399,595 Net Position:

Beginning of year 187,212,759 54,448,301 241,661,060 End of year 215,747,416$ 53,313,239 $ 269,060,655 $ For the Year Ended June 30, 2025
Statement of Activities (Continued)
City of Salinas
Net (Expense) Revenue
and Changes in Net Position
See accompanying Notes to the Basic Financial Statements. 23 267
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24 268

FUND FINANCIAL STATEMENTS
25 269
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26 270

GOVERNMENTAL FUNDS FINANCIAL STATEMENTS
General Fund - This fund accounts for all financial resources necessary to carry out basic governmental activities of the City that are not accounted for in another fund. This fund supports essential City services such as police and fire protection, street maintenance, libraries, parks, and open space maintenance.

SPECIAL REVENUE FUNDS
Special revenue funds are used to account for specific revenues that are legally restricted to expenditures for specified purposes. The following funds have been classified as major special revenue funds:

American Rescue Plan Act (ARPA) Special Revenue Fund - On March 11, 2021, President Biden signed the American Rescue Plan Act, which will provide the City with approximately $51 million in relief funds. This fund accounts for the revenues and expenditures of ARPA proceeds.

Housing and Urban Development Grant Special Revenue Fund - This fund accounts for the use of Community Development Block Grant funds received from the federal government. Other revenues in this fund include repayments of commercial and residential loans and rental income from City property. Funds are used for programs or projects that increase affordable housing and benefit people with special needs such as senior and handicapped citizens.

Development Fees Special Revenue Fund - This fund accounts for the fees that subdividers and developers of property are required to pay, by Resolution 3823 (N.C.S.), covering traffic impact, annexation, use of existing or new sewers, storm draings, park facilities, library facilities, and street trees.

CAPITAL PROJECTS FUNDS
Capital Projects Fund - This fund accounts for all capital project expenditures. Funds are transferred in from various other funds after expenditures are made. This revolving fund was established with $2,000,000 and is used to advance capital project expenditures prior to reimbursement of Federal, State, and other construction grants and bond financing.

DEBT SERVICE FUNDS
2019 Special Tax Bond Monte Bella - This fund is used to accumulate monies for the principal and interest payments for the 2019 Special Tax Bonds to finance the acquisition and/or construction of certain public facilities and improvements within the Community Facilities District No. 2016-1 (Monte Bella) Area No. 1-3. The annual levy of special taxes on that area would be used to pay for principal and interest payments on the bonds. 27 271
American Housing 2019 Special
Rescue Plan Act and Urban Development Tax Bond
(ARPA) Development Grant Fees Monte Bella
General Special Revenue Special Revenue Special Revenue Debt Service Fund Fund Fund Fund Fund
ASSETS
Cash and investments 90,220,079 $ 7,253,581 $ 8,629,142 $ 35,860,613 $ 418,438 $ Receivables, net:

Accounts 917,236 - - - - Taxes 20,662,326 - - - - Interest 451,609 - 13,325 113,764 - Due from other agencies 98,864 - 547,976 - - Assessments - - - - 6,865,000 Leases 1,052,262 - - - - Due from other funds 11,784,054 - - - - Advances to other funds 2,785,000 - - - - Restricted cash and investments - - - - 568,596 Loans and notes receivable, net of allowance - - 1,872,125 - - Land and properties held for resale - - - - - Total assets 127,971,430$ 7,253,581 $ 11,062,568 $ 35,974,377 $ 7,852,034 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 3,330,257 $ 2,549,746 $ 374,670 $ - $ - $ Accrued liabilities 5,360,429 - 136,018 - - Due to other funds 18,523,584 - 1,830,280 62,787 - Deposits payable 52,802 - - - - Unearned revenues - 4,703,835 5,592,257 - 6,865,000 Total liabilities 27,267,072 7,253,581 7,933,225 62,787 6,865,000

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - - Lease-related deferred inflows 995,273 - - - - Total deferred inflows of resources 995,273 - - - -

Fund Balances (Deficit):

Nonspendable 2,785,000 - 1,872,125 - - Restricted 10,000,000 - 1,257,218 35,911,590 987,034 Committed 38,242,179 - - - - Assigned 24,825,000 - - - - Unassigned (deficit) 23,856,906 - - - - Total fund balances (deficit) 99,709,085 - 3,129,343 35,911,590 987,034 Total liabilities, deferred inflows of
resources, and fund balances 127,971,430$ 7,253,581 $ 11,062,568 $ 35,974,377 $ 7,852,034 $ Major Funds
City of Salinas
Balance Sheet
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 28 272
Major Funds
Capital Nonmajor Total
Projects Governmental Governmental
Fund Funds Funds
ASSETS
Cash and investments 7,155,829$ 70,666,964 $ 220,204,646 $ Receivables, net:

Accounts - 596,241 1,513,477 Taxes - 29,360 20,691,686 Interest - 1,627,931 2,206,629 Due from other agencies - 4,495,946 5,142,786 Assessments - 45,000 6,910,000 Leases - 3,326,481 4,378,743 Due from other funds 3,543,969 - 15,328,023 Advances to other funds - - 2,785,000 Restricted cash and investments - 6,351,597 6,920,193 Loans and notes receivable, net of allowance - 51,571 1,923,696 Land and properties held for resale - 1,380,000 1,380,000 Total assets 10,699,798$ 88,571,091 $ 289,384,879 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 3,504,284$ 231,587 $ 9,990,544 $ Accrued liabilities 42,045 205,235 5,743,727 Due to other funds - 9,371,567 29,788,218 Deposits payable - - 52,802 Unearned revenues - 975,869 18,136,961 Total liabilities 3,546,329 10,784,258 63,712,252

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - 654,039 654,039 Lease-related deferred inflows - 2,981,287 3,976,560 Total deferred inflows of resources - 3,635,326 4,630,599

Fund Balances (Deficit):

Nonspendable - 1,431,571 6,088,696 Restricted - 73,988,920 122,144,762 Committed 7,153,469 - 45,395,648 Assigned - - 24,825,000 Unassigned (deficit) - (1,268,984) 22,587,922 Total fund balances (deficit) 7,153,469 74,151,507 221,042,028 Total liabilities, deferred inflows of
resources, and fund balances 10,699,798$ 88,571,091 $ 289,384,879 $ City of Salinas
Balance Sheet (Continued)
Governmental Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 29 273
This page intentionally left blank.
30 274
Total Fund Balances - Total Governmental Funds 221,042,028$ Capital assets used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.

Non-depreciable/amortizable 68,696,203
Depreciable/amortizable, net 261,470,038
Total capital assets 330,166,241
Deferred inflows resulting from revenues that are not available to pay for current period expenditures are reported as unavailable in the Governmental Funds Balance Sheet. 654,039 Long-ter
m liabilities are not due and payable in the current period and therefore were not reported in the Governmental Funds Balance Sheet.

Compensated absences - due within one year, net of $42,617 reported in the Internal Service Funds (2,482,208) Compensated absences - due in more than one year, net of $170,470 reported in the Internal Service Funds (9,928,839) Insurance claims payable - due in more than one year, net of $43,313,336 reported in the Internal Service Funds (1,446,667) Long-term debt - due within one year (8,183,251)
Long-term debt - due in more than one year (101,131,736) Total long-term liabilities (123,172,701)
Governmental funds report the effect s of debt refundings and simila r items when debt is firs t issued, whereas these amounts are deferred and amortized in the Statement of Activities for the following:

Deferred loss on refunding of debt 432,594
Total 432,594
Interest payable on long-term debt did not require current financial resources. Therefore, interest payable was not reported as a liability in the governmental funds. (516,273)

Net pension liability and total OPEB liability used in the governmental activities were not financial resources and therefore were not reported in the Governmental Funds Balance Sheet.

Net pension liability, net of $1,454,383 reported in the Internal Service Funds (224,621,927) Net OPEB liability, net of $276,166 reported in the Internal Service Funds (12,334,183) Total net pension liability and net OPEB liability (236,956,110) Deferre
d outflows of resources related to OPEB and pensions are not available fo r current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.

Deferred outflows of resources related to pensions, net of $393,131reported in the Internal Service Funds 51,790,063 Deferred outflows of resources related to OPEB, net of $68,499 reported in the Internal Service Funds 3,059,325 Total deferred outflows of resources 54,849,388
Deferred inflows of resources related to OPEB and pensions are not available for current period and, therefore, are deferred in the governmental funds or not recorded in the governmental funds.

Deferred inflows of resources related to pensions, net of $22,037 reported in the Internal Service Funds (3,281,423) Deferred inflows of resources related to OPEB, net of $222,074 reported in the Internal Service Funds (9,918,292) Total deferred inflows of resources (13,199,715)
Internal service funds are used by management to charge the cost of information technology, vehicle replacement, fleet management and infrastructure to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the statement of net position. (17,552,075) Net Position of Governmental Activities 215,747,416$
Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Salinas
Reconciliation of the Governmental Funds Balance Shee
t
To the Government-Wide Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 31 275
American Housing 2019 Special
Rescue Plan Act and Urban Development Tax Bond
(ARPA) Development Gran t Fees Monte Bella
General Special Revenue Special Revenue Special Revenue Debt Service Fund Fund Fund Fund Fund
REVENUES:

Taxes 159,755,172$ - $ - $ - $ - $ Taxes - special assessments - - - - 501,200 Licenses and permits 10,919,325 - - - - Intergovernmental 1,428,928 20,862,978 15,047,496 - - Charges for services 9,305,281 - - 14,000,440 - Investment income (loss) 5,470,058 - 147,690 1,385,115 16,391 Rental income 406,138 - - - - Fines and forfeitures 198,664 - - - - Miscellaneous 1,018,083 - 409,167 - - Total revenues 188,501,649 20,862,978 15,604,353 15,385,555 517,591

EXPENDITURES:

Current:

General government 30,168,986 2,111,974 9,977,132 - 7,126 Public safety 89,123,418 2,151,759 100 - - Public works 16,986,137 4,558,006 3,413 - - Recreation 8,858,018 159,249 - - - Library 6,095,902 - - - - Capital outlay 406,690 11,881,990 1,327,949 - - Debt service:

Principal 1,148,865 - - - 155,000 Interest and fiscal charges 163,990 - - - 301,684 Bond issuance costs - - - - - Total expenditures 152,952,006 20,862,978 11,308,594 - 463,810

REVENUES OVER (UNDER) EXPENDITURES 35,549,643 - 4,295,759 15,385,555 53,781 OTHER FINANCING SOURCES (USES):

Proceeds from issuance of subscriptions 239,641 - - - - Proceeds from issuance of leases - - - - - Transfers in 2,465,000 - 65,578 - - Transfers out (32,906,888) - (1,175,219) (582,340) - Total other financing sources (uses) (30,202,247) - (1,109,641) (582,340) - NET CHANGE IN FUND BALANCES 5,347,396 - 3,186,118 14,803,215 53,781 FUND BALANCES (DEFICIT):

Beginning of year, as previously presented as of
June 30
, 2024 94,361,689 - (56,775) - 933,253 Change within financial reporting entity:
(nonmajor to major) - - - 21,108,375 - Beginning of year, as restated (Note 22) 94,361,689 - (56,775) 21,108,375 933,253 End of year 99,709,085$ - $ 3,129,343$ 35,911,590 $ 987,034 $ Major Funds
City of Salinas
Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 32 276
Major Funds
Capital Nonmajor Total
Projects Governmental Governmental
Fund Funds Funds
REVENUES:

Taxes -$ 648,806$ 160,403,978$ Taxes - special assessments - - 501,200 Licenses and permits - 97,006 11,016,331 Intergovernmental - 25,406,988 62,746,390 Charges for services - 1,663,395 24,969,116 Investment income (loss) - 3,235,743 10,254,997 Rental income - 310,989 717,127 Fines and forfeitures - 258,136 456,800 Miscellaneous - 2,159,234 3,586,484 Total revenues - 33,780,297 274,652,423

EXPENDITURES:

Current:

General government 2,520,742 2,179,357 46,965,317 Public safety 152,852 4,646,283 96,074,412 Public works 5,359,159 1,569,492 28,476,207 Recreation 1,130,531 959,621 11,107,419 Library - 318,877 6,414,779 Capital outlay 19,484,166 252,510 33,353,305 Debt service:

Principal 533,705 6,189,000 8,026,570 Interest and fiscal charges 25,921 4,023,938 4,515,533 Bond issuance costs - 63,684 63,684 Total expenditures 29,207,076 20,202,762 234,997,226

REVENUES OVER (UNDER) EXPENDITURES (29,207,076) 13,577,535 39,655,197 OTHER FINANCING SOURCES (USES):

Proceeds from issuance of subscriptions - - 239,641 Proceeds from issuance of leases - 4,735,000 4,735,000 Transfers in 27,870,450 15,310,229 45,711,257 Transfers out - (17,085,933) (51,750,380) Total other financing sources (uses) 27,870,450 2,959,296 (1,064,482) NET CHANGE IN FUND BALANCES (1,336,626) 16,536,831 38,590,715 FUND BALANCES (DEFICIT):

Beginning of year, as previously presented as of
June 30
, 2024 8,490,095 78,723,051 182,451,313
Change within financial reporting entity:
(nonmajor to major) - (21,108,375) - Beginning of year, as restated (Note 22) 8,490,095 57,614,676 182,451,313 End of year 7,153,469$ 74,151,507 $ 221,042,028 $ City of Salinas
Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Governmental Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 33 277
Net Change in Fund Balances - Total Governmental Funds 38,590,715$ Governmental funds reported capital outla y as expenditures. However, in the Government-Wid e Statement of Activities and Changes in Net Position the cost of those assets was allocated over their estimated useful lives as depreciation and amortization expense. This is the amount of capital assets recorded in the current period. 13,684,421 Depreciation and amortization expense on capital assets was reported in the Government-Wide Statement of Activities and Changes in Net Position, but they did not require the use of current financial resources. Therefore, depreciation and amortization expense was not reported as expenditures in the Governmental Funds. (15,628,869) Retirement of capital assets created a loss on the Government-Wide Statement of Activities and Changes in Net Position. (3,653,255) Issuance of long-term liabilities provides current financial resources to governmental funds, but the issuance increased long-term liabilities in the Government-Wide Statement of Net Position.

Subscriptions (239,641)
Leases (4,735,000)
Repayment of long-term liabilities was an expenditures in governmental funds, but the repayment reduced long-term liabilities in the Government-Wide Statement of Net Position.

Principal payment of long-term debt 8,026,570
Amortization of bond premium/discount 656,671
Amortization of deferred amount on refunding was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. (27,037) Interest expense on long-term debt was reported in the Government-Wide Statement of Activities, but it did not require the use of current financial resources. This amount represented the changes in accrued interest from prior year. 27,676 Compensated absences expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds (net of $37,564 reported in internal service funds). (551,318)
Claims payable expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds. (181,592) Revenues in the Government-Wide Statement of Activities that do not provide current financial resources and are not reported as revenue in the governmental funds. (2,742,128) Certain pension credits reported in the Government-Wide Statement of Activities do not provide current financial resources and therefore, are not reported as expenditures in governmental funds. 113,692 Certain OPEB expenses reported in the Government-Wide Statement of Activities do not require the use of current financial resources and therefore, are not reported as expenditures in governmental funds. 1,008,080 The internal service funds are used by management to charge the costs of fleet maintenance, facilities maintenance, and technology to individual funds. The net revenue of certain activities of internal service funds is reported with governmental activities. (5,814,328)
Chan
ge in Net Position of Governmental Activities 28,534,657$ Amounts reported for Governmental Activities in the Statement of Net Position were different because:

City of Salinas
Reconciliation of the Governmental Funds Statement of Revenues, Statement of Activities and Changes in Net Position
For the Year Ended June 30, 2025
Expenditures, and Changes in Fund Balances to the Government-Wide See accompanying Notes to the Basic Financial Statements. 34 278

PROPRIETARY FUNDS FINANCIAL STATEMENTS
Proprietary Funds are used to account for a government’s business-type activities (activities supported, at least in part, by fees or charges). Proprietary funds are segregated into Enterprise Funds and Internal Service Funds. Enterprise Funds are used to report business-type activities for which a fee is charged to external users for goods or services. Internal Service Funds on the other hand, are used primarily for services provided to internal users.

The City reports the following enterprise funds:

Airport Fund - This fund is used to account for the enterprise operations of the City-owned airport.

Industrial Waste Fund - This fund is used to account for the enterprise operations of the City-operated Industrial Wastewater Treatment Facility.

Sanitary Sewer Fund - This fund is used to account for the maintenance of the City's sanitary sewer collection system, which is funded by user fees and by the Monterey Regional Water Pollution Control Agency sewer user fees.

Downtown Parking District Fund - This fund was established to account for revenues, operating expenses and debt service associated with the City’s parking facilities. The City’s paid parking facilities include the Monterey Street Parking Structure, the Salinas Street Garage and four parking lots.

Permit Services Fund - This fund is used to account for the revenues and expenditures associated with providing permitting services to the community.

Internal Service Funds are used to account for the financing of goods or services provided by one department or agency to other departments or agencies of the government and to other government units, on a cost reimbursement basis.
35 279
Downtown
Industrial Sanitar y Parkin g
Airport Waste Sewe r District
ASSETS
Current assets:

Cash and cash e
quivalents 2,863,793$ 7,718,218 $ 700,382 $ 396,930 $ Receivables, net:

Accounts 213,521 713,951 17,897 91,899 Accrued interest 216,370 25,300 1,771 - Excess insurance receivable - - - - Leases receivable 274,125 - - - Due from other funds - - - - Total current assets 3,567,809 8,457,469 720,050 488,829 Noncurrent assets:

Restricted cash and investments - - - - Leases receivable, long term 4,228,343 - - - Capital assets:

Non-depreciable 2,298,175 2,689,880 959,335 6,700 Depreciable, net 11,969,969 11,969,702 26,525,995 5,565,997 Total capital assets 14,268,144 14,659,582 27,485,330 5,572,697 Total noncurrent assets 18,496,487 14,659,582 27,485,330 5,572,697 Total assets 22,064,296 23,117,051 28,205,380 6,061,526

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 181,442 151,205 423,368 - Related to OPEB 25,608 25,908 68,866 2,098 Loss on refunding of debt - - - 77,290 Total deferred outflows of resources 207,050 177,113 492,234 79,388

LIABILITIES
Current liabilities:

Accounts payable 23,874 170 ,751 22 ,658 71 ,667 Accrued liabilities 50,843 32 ,787 97 ,077 4 ,308 Interest payable - - 119 ,809 94 ,402 Due to other funds 111,019 - 239 ,829 1 ,677,465 Deposits payable 42,958 - - - Compensated absences - due within one year 15,306 16 ,835 30 ,307 3 ,223 Long-term debt - due within one year - - 565 ,000 674 ,000 Total current liabilities 244,000 220,373 1,074,680 2,525,065 Noncurrent liabilities:

Advances from other funds - - - 2 ,785,000 Compensated absences - due in more than one year 61 ,223 67 ,339 121 ,229 12 ,894 Long term debt - due in more than one year - - 11 ,615,000 6 ,468,000 Insurance claims payable - due in more than one year - - - - Net pension liability 671,253 559 ,378 1 ,566,258 - Net OPEB liability 103,244 104 ,452 277 ,643 8 ,458 Total noncurrent liabilities 835,720 731,169 13,580,130 9,274,352 Total liabilities 1,079,720 951,542 14,654,810 11,799,417

DEFERRED INFLOWS OF RESOURCES
Related to pensions 10,171 8,476 23,732 - Related to OPEB 83,021 83,993 223,261 6,802 Related to leases 4,092,334 - - - Total deferred inflows of resources 4,185,526 92,469 246,993 6,802

NET POSITION (DEFICIT)
Net investment in capital assets 14,268,144 14,659,582 15,305,330 (1,492,013) Unrestricted (deficit) 2,737,956 7,590,571 (1,509,519) (4,173,292) Total net position (deficit) 17,006,100$ 22,250,153 $ 13,795,811 $ (5,665,305)$ Major Enterprise Funds
City of Salinas
Statement of Net Position
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 36 280
Governmental
Non-Major Activities
Permit Internal
Services Total Service Funds
ASSETS
Current assets:

Cash and cash e
quivalents 8,308,389$ 19,987,712 $ 10,685,399 $ Receivables, net:

Accounts - 1,037,268 -
Accrued interest 27,577 271,018 29,011 Excess insurance receivable - - - Leases receivable - 274,125 - Due from other funds - - 16,831,462 Total current assets 8,335,966 21,570,123 27,545,872 Noncurrent assets:

Restricted cash and investments - - 514,060 Leases receivable, long term - 4,228,343 - Capital assets:

Non-depreciable - 5,954,090 - Depreciable, net 87,132 56,118,795 -
Total capital assets 87,132 62,072,885 - Total noncurrent assets 87,132 66,301,228 514,060 Total assets 8,423,098 87,871,351 28,059,932

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 514,089 1,270,104 393,131 Related to OPEB 79,755 202,235 68,499 Loss on refunding of debt - 77,290 - Total deferred outflows of resources 593,844 1,549,629 461,630

LIABILITIES
Current liabilities:

Accounts payable 188,730 477 ,680 158 ,762 Accrued liabilities 128,678 313 ,693 109 ,960 Interest payable - 214 ,211 - Due to other funds 39,122 2 ,067,435 303 ,832 Deposits payable - 42 ,958 - Compensated absences - due within one year 44,624 110 ,295 42 ,617 Long-term debt - due within one year - 1 ,239,000 - Total current liabilities 401,154 4,465,272 10,525,842 Noncurrent liabilities:

Advances from other funds - 2 ,785,000 - Compensated absences - due in more than one year 178,496 441 ,181 170 ,470 Long term debt - due in more than one year - 18 ,083,000 - Insurance claims payable - due in more than one year - - 33 ,402,665 Net pension liability 1,901,885 4 ,698,774 1 ,454,383 Net OPEB liability 321,545 815 ,342 276 ,166 Total noncurrent liabilities 2,401,926 26,823,297 35,303,684 Total liabilities 2,803,080 31,288,569 45,829,526

DEFERRED INFLOWS OF RESOURCES
Related to pensions 28,818 71,197 22,037 Related to OPEB 258,564 655,641 222,074 Related to leases - 4,092,334 - Total deferred inflows of resources 287,382 4,819,172 244,111

NET POSITION (DEFICIT)
Net investment in capital assets 87,132 42,828,175 - Unrestricted (deficit) 5,839,348 10,485,064 (17,552,075) Total net position (deficit) 5,926,480$ 53,313,239 $ (17,552,075)$ City of Salinas
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 37 281
Downtown
Industrial Sanitary Parking
Airport Waste Sewer District
OPERATING REVENUES:

Fees 216,533$ 4,027,016 $ 3,695,305 $ - $ Licenses and permits - - - 470,672 Rental income 1,916,700 - - - Total operating revenues 2,133,233 4,027,016 3,695,305 470,672 OPERATING EXPENSES:

Personnel services 967,488 870,524 2,172,564 93,422 Administration 392,360 525,431 590,069 280,561 Contractual services 457,666 1,206,527 364,171 1,323,224 Supplies 151,860 101,426 184,513 13,435 Insurance 24,429 41,520 60,965 11,126 Insurance claims - - - - Depreciation 958,162 491,560 1,252,738 542,897 Other 22,822 42,106 22,509 37,528 Total operating expenses 2,974,787 3,279,094 4,647,529 2,302,193

OPERATING INCOME (841,554) 747,922 (952,224) (1,831,521) NONOPERATING REVENUES (EXPENSES):

Investment income (loss) 238,454 419,307 6,681 - Interest expense - (1,298) (291,365) (291,554) Other nonoperating revenues (expenses) 114,446 523,998 (2,624) 955,640 Total nonoperating revenues (expenses) 352,900 942,007 (287,308) 664,086 INCOME (LOSS) BEFORE TRANSFERS (488,654) 1,689,929 (1,239,532) (1,167,435) TRANSFERS:

Transfers in - - - - Transfers out (350,574) (2,405,360) (286,217) (36,692) Transfers from fiduciary funds - - - 946,093 Total transfers (350,574) (2,405,360) (286,217) 909,401 Changes in net position (839,228) (715,431) (1,525,749) (258,034) NET POSITION (DEFICIT):

Beginning of year, as originally reported 17,845,328 22,965,584 15,321,560 (5,407,271) Restatement (Note 23) - - - - Beginning of year, as restated 17,845,328 22,965,584 15,321,560 (5,407,271) End of year 17,006,100$ 22,250,153 $ 13,795,811 $ (5,665,305) $ Major Funds
City of Salinas
Statement of Revenues, Expenses, and Changes in Fund Net Position Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 38 282
Governmental
Non-Major Activities
Permit Internal
Services Total Service Funds
OPERATING REVENUES:

Fees 2,067,821$ 10,006,675 $ 7,537,141 $
Licenses and permits 4,780,800 5,251,472 - Rental income - 1,916,700 - Total operating revenues 6,848,621 17,174,847 7,537,141 OPERATING EXPENSES:

Personnel services 2,553,118 6,657,116 2,532,065 Administration 966,628 2,755,049 -
Contractual services 1,512,396 4,863,984 237,815 Supplies 25,806 477,040 849,878
Insurance 202,570 340,610 6,429,520 Insurance claims - - 12,700,495 Depreciation 37,382 3,282,739 -
Other 5,758 130,723 169,345
Total operating expenses 5,303,658 18,507,261 22,919,118

OPERATING INCOME 1,544,963 (1,332,414) (15,381,977) NONOPERATING REVENUES (EXPENSES):

Investment income (loss) 367,827 1,032,269 393,938 Interest expense - (584,217) - Other nonoperating revenues (expenses) 622,624 2,214,084 (276,289) Total nonoperating revenues (expenses) 990,451 2,662,136 117,649 INCOME (LOSS) BEFORE TRANSFERS 2,535,414 1,329,722 (15,264,328) TRANSFERS:

Transfers in - - 10,100,000 Transfers out (332,034) (3,410,877) (650,000) Transfers from fiduciary funds - 946,093 - Total transfers (332,034) (2,464,784) 9,450,000 Changes in net position 2,203,380 (1,135,062) (5,814,328) NET POSITION (DEFICIT):

Beginning of year, as originally reported 3,723,100 54,448,301 (11,737,747) Restatement (Note 23) - - - Beginning of year, as restated 3,723,100 54,448,301 (11,737,747) End of year 5,926,480$ 53,313,239 $ (17,552,075) $ City of Salinas
Statement of Revenues, Expenses, and Changes in Fund Net Position (Continued) Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 39 283
Downtown
Industrial Sanitary Parking
Airport Waste Sewer District
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users 2,203,517$ 3,313,065 $ 4,296,757 $ 544,046 $ Payments to suppliers (1,032,802) (1,867,088) (1,208,450) (1,675,228) Payments to employees for services (985,229) (901,048) (2,176,937) (90,879) Payments to claimants - - - - Other (22,822) (42,106) (22,509) (37,528) Net cash provided (used) by operating activities 162,664 502,823 888,861 (1,259,589)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Borrowing from other funds - - 194,458 - Repayment to other funds 111,019 (84,772) - 165,218 Other 114,446 523,998 (2,624) 955,640 Transfers from other funds - - - 946,093 Transfers to other funds (350,574) (2,405,360) (286,217) (36,692) Net cash provided by (used in) noncapital financing activities (125,109) (1,966,134) (94,383) 2,030,259

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (82,120) (6,998) - 11,137 Proceeds from the sale of assets - - - - Proceeds from issuance of debt - - - - Payment on capital debt and loans payable - (518,000) (565,000) (646,000) Interest paid on capital debt and borrowings - (7,382) (293,504) (291,507) Capital contributions from developers and others - - - - Net cash (used in) capital and related financing activities (82,120) (532,380) (858,504) (926,370) CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) 223,830 425,415 7,153 - Proceeds from sales of investments - - - - Activity from leases (82,339) - - - Purchases of investments - - - - Net cash provided by investing activities 141,491 425,415 7,153 - Net change in cash and cash equivalents 96,926 (1,570,276) (56,873) (155,700) CASH AND CASH EQUIVALENTS:

Beginning of year 2,766,867 9,288,494 757,255 552,630 End of year 2,863,793$ 7,718,218 $ 700,382 $ 396,930 $

RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO STATEMENT OF NET POSITION:

Cash and cash investments 2,863,793$ 7,718,218 $ 700,382 $ 396,930 $ Restricted cash and investments - - - - Total cash and cash equivalents 2,863,793$ 7,718,218 $ 700,382 $ 396,930 $ City of Salinas
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
Major Funds
See accompanying Notes to the Basic Financial Statements. 40 284
Governmental
Non-Major Activities
Permit Internal
Services Total Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers and users 6,848,621$ 17,206,006 $ 7,537,141 $ Payments to suppliers (2,643,081) (8,426,649) (3,206,861) Payments to employees for services (2,752,283) (6,906,376) (2,550,977) Payments to claimants - - (9,971,758) Other (5,758) (130,723) (169,345) Net cash provided (used) by operating activities 1,447,499 1,742,258 (8,361,800)

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES:

Borrowing from other funds - 194,458 303,832 Repayment to other funds 37,199 228,664 - Other 622,624 2,214,084 (276,289)
Transfers from other funds - 946,093 10,100,000 Transfers to other funds (332,034) (3,410,877) (650,000) Net cash provided by (used in) noncapital financing activities 327,789 172,422 9,477,543

CASH FLOWS FROM CAPITAL AND
RELATED FINANCING ACTIVITIES:

Acquisition of capital assets (38,791) (116,772) - Proceeds from the sale of assets - - - Proceeds from issuance of debt - - - Payment on capital debt and loans payable - (1,729,000) - Interest paid on capital debt and borrowings - (592,393) - Capital contributions from developers and others - - - Net cash (used in) capital and related financing activities (38,791) (2,438,165) - CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income (loss) 356,134 1,012,532 392,476 Proceeds from sales of investments - - - Activity from leases - (82,339) - Purchases of investments - - - Net cash provided by investing activities 356,134 930,193 392,476 Net change in cash and cash equivalents 2,092,631 406,708 1,508,219 CASH AND CASH EQUIVALENTS:

Beginning of year 6,215,758 19,581,004 9,691,240 End of year 8,308,389$ 19,987,712 $ 11,199,459 $

RECONCILIATION OF CASH AND CASH
EQUIVALENTS TO STATEMENT OF NET POSITION:

Cash and cash investments 8,308,389$ 19,987,712 $ 10,685,399 $ Restricted cash and investments - - 514,060 Total cash and cash equivalents 8,308,389$ 19,987,712 $ 11,199,459 $ City of Salinas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 41 285
Downtown
Industrial Sanitary Parking
Airport Waste Sewer District

RECONCILIATION OF OPERATING INCOME TO

NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating income (841,554)$ 747,922 $ (952,224) $ (1,831,521) $ Adjustments to reconcile operating income to net
cash provided by (used in) operating activities:

Depreciation/amortization 958,162 491,560 1,252,738 542,897 Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net 75,542 (713,951) 601,452 73,374 Notes receivable - - - - Prepaid items and other assets - - - - Deferred outflows - related to pensions 94,693 78,835 174,851 - Deferred outflows - related to OPEB 5,606 5,671 15,074 459 Accounts payable (57,330) (24,971) (105,809) (51,190) Accrued liabilities 50,843 32,787 97,077 4,308 Deposits payable (5,258) - - - Unearned revenue - - - - Insurance claims payable - - - - Compensated absences 16,755 (408) (8,684) 3,235 Net pension liability (111,664) (92,847) (129,856) - Net OPEB liability 3,596 3,638 9,668 294 Deferred inflows - related to pensions (9,088) (7,568) (17,991) - Deferred inflows - related to OPEB (17,639) (17,845) (47,435) (1,445) Total adjustments 1,004,218 (245,099) 1,841,085 571,932 Net cash provided by (used in) operating activities 162,664$ 502,823 $ 888,861 $ (1,259,589) $ Major Funds
City of Salinas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 42 286
Governmental
Non-Major Activities
Permit Internal
Services Total Service Funds

RECONCILIATION OF OPERATING INCOME TO

NET CASH PROVIDED BY (USED IN)
OPERATING ACTIVITIES:

Operating income 1,544,963$ (1,332,414) $ (15,381,977) $ Adjustments to reconcile operating income to net
cash provided by (used in) operating activities:

Depreciation/amortization 37,382 3,282,739 - Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Accounts receivable, net - 36,417 - Notes receivable - - - Prepaid items and other assets - - - Deferred outflows - related to pensions 314,170 662,549 251,038 Deferred outflows - related to OPEB 17,458 44,268 14,994 Accounts payable (64,359) (303,659) (296,614) Accrued liabilities 128,678 313,693 109,960 Deposits payable - (5,258) - Unearned revenue - - - Insurance claims payable - - 7,335,703 Compensated absences (11,652) (754) 37,564 Net pension liability (446,454) (780,821) (372,012) Net OPEB liability 11,197 28,393 9,617 Deferred inflows - related to pensions (28,949) (63,596) (22,890) Deferred inflows - related to OPEB (54,935) (139,299) (47,183) Total adjustments (97,464) 3,074,672 7,020,177 Net cash provided by (used in) operating activities 1,447,499$ 1,742,258 $ (8,361,800) $ City of Salinas
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 43 287
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44 288
Fiduciary Funds Financial Statements
Fiduciary Funds are used to account for assets held in a trustee or agency capacity for others and therefore cannot be used to support the government’s own programs. The City maintains the following Fiduciary Funds:

PRIVATE PURPOSE TRUST FUNDS
These funds are used to account for any trust arrangement not properly reported in a pension trust fund under which principal and income benefit individuals, private organizations, or other governments. This fund also accounts for the Successor Agency of the former Redevelopment Agency which was dissolved on January 31, 2012 pursuant to state law.

PENSION TRUST FUNDS
These funds are used to account for resources that are required to be held in trust for the members and beneficiaries of defined benefit pension plans, defined contribution plans, or other employee benefit plans. The City’s only pension trust fund is the Deferred Compensation Fund; which allows City employees to invest in trust deeds that are managed by the City with the oversight of an investment committee that is made up of representatives from each of the bargaining units.

CUSTODIAL FUNDS
These funds are used to account for assets held in an agent capacity by the City for individuals, private organizations, other governments and/or other funds that are not required to be reported in pension trust funds, investment trust funds, or private-purpose trust funds.
45 289
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46 290
Fiduciary
Private Purpose Pension Trust Custodial Funds
Trust Funds Fund Funds Total
ASSETS
Cash and investments 3,684,327$ 16,249,127 $ 81,876 $ 20,015,330$ Receivables, net:

Accounts 7,618 - - 7,618 Interest 7,758 8,180 - 15,938 Loans and notes receivable 163,900 - - 163,900 Total assets 3,863,603 16,257,307 81,876 20,202,786

LIABILITIES
Accounts payable 191,824 1,281 172,977 366,082 Deposits payable 169,744 - - 169,744 Unearned revenue 827,554 - - 827,554 Long-term debt:

Due in more than one year 157,500 - - 157,500 Total liabilities 1,346,622 1,281 172,977 1,520,880

NET POSITION
Restricted for:

Pensions - 16,256,026 - 16,256,026 Individuals and organizations 2,516,981 - (91,101) 2,425,880 Total net position (deficit) 2,516,981$ 16,256,026 $ (91,101) $ 18,681,906 $ City of Salinas
Statement of Fiduciary Net Position
Fiduciary Funds
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 47 291
Total
Private Purpose Pension Custodial Fiduciary
Trust Funds Trust Fund Funds Funds
ADDITIONS:

Taxes 4,256,550$ - $ 505,983$ 4,762,533 $ Miscellaneous 449,032 259,833 - 708,865 Contributions:

Plan members - - 365,659 365,659 Employer - 2,226,959 - 2,226,959 Private donations 6,306,404 - - 6,306,404 Investment earnings (loss) 109,183 727,144 - 836,327 Total additions 11,121,169 3,213,936 871,642 15,206,747 DEDUCTIONS:

Expenses 239,570 - 352,368 591,938 Benefit payments - 1,141,793 136,722 1,278,515 Payments on behalf of trustees 6,110,704 - - 6,110,704 Contributions to other agencies 3,192,836 - - 3,192,836 Payments to City 946,093 - - 946,093 Assessments disbursed to other governments - - 505,983 505,983 Total deductions 10,489,203 1,141,793 995,073 12,626,069 Change in net position 631,966 2,072,143 (123,431) 2,580,678 NET POSITION (DEFICIT):

Beginning of year 1,885,015 14,183,883 32,330 16,101,228 End of year 2,516,981$ 16,256,026 $ (91,101) $ 18,681,906 $ City of Salinas
Statement of Change in Fiduciary Net Position
Fiduciary Funds
For the Year Ended June 30, 2025
See accompanying Notes to the Basic Financial Statements. 48 292

49 NOTES TO THE BASIC FINANCIAL STATEMENTS
293

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294
City of Salinas
Index to the Notes of the Basic Financial Statements
For the Year Ended June 30, 2025

51 Note 1 – Summary of Significant Accounting Policies ............................................................................................. 55

A. Financial Reporting Entity ......................................................................................................................... 55 B. Basis of Presentation, Accounting and Measurement Focus ..................................................................... 56 C. Cash, Cash Equivalents, and Investments .................................................................................................. 60 D. Restricted Cash and Investments ............................................................................................................... 61 E. Fair Value Measurement ............................................................................................................................ 61 F. Interfund Transactions ............................................................................................................................... 62 G. Receivables ................................................................................................................................................ 62 H. Leases ......................................................................................................................................................... 62 I. Subscription-Based Information Technology Arrangements (SBITAs) .................................................... 63 J. Special Assessment Districts ..................................................................................................................... 63 K. Prepaid Bond Insurance, Original Issue Discounts and Premiums, Gain/Loss on Refunding ................... 64 L. Capital Assets ............................................................................................................................................. 64 M. Land and Properties Held for Resale ......................................................................................................... 64 N. Restricted Assets ........................................................................................................................................ 65 O. Claims Payable ........................................................................................................................................... 65 P. Compensated Absences .............................................................................................................................. 65 Q. Long-Term Debt and Other Long-Term Obligations ................................................................................. 65 R. Unearned Revenue ..................................................................................................................................... 66 S. Deferred Outflows and Inflows of Resources ............................................................................................ 66 T. Net Position and Fund Balance .................................................................................................................. 66 U. Property Taxes ........................................................................................................................................... 68 V. Pensions ..................................................................................................................................................... 68 W. Other Postemployment Benefits (OPEB) .................................................................................................. 69 X. Encumbrances ............................................................................................................................................ 69 Y. Use of Accounting Estimates ..................................................................................................................... 70 Z. Self-Insurance ............................................................................................................................................ 70 AA. Implementation of New GASB Pronouncements For the Year Ended June 30, 2025 ............................. 70 BB. Upcoming GASB Pronouncements ........................................................................................................... 70

Note 2 – Stewardship, Compliance, and Accountability .......................................................................................... 71

A. Budgeting ................................................................................................................................................... 71 B. Debt Compliance........................................................................................................................................ 72

Note 3 – Cash and Investments .................................................................................................................................. 72

A. Demand Deposits ....................................................................................................................................... 73 B. Investments ................................................................................................................................................ 73 C. Risk Disclosures ......................................................................................................................................... 74 D. Fair Value Measurement ............................................................................................................................ 75 E. Restricted Assets ........................................................................................................................................ 77

Note 4 – Taxes Receivable ........................................................................................................................................... 77

Note 5 – Assessments Receivable ................................................................................................................................ 77

Note 6 – Due from Other Agencies ............................................................................................................................. 78 295
City of Salinas
Index to the Notes of the Basic Financial Statements (Continued) For the Year Ended June 30, 2025

52 Note 7 – Leases Receivable ......................................................................................................................................... 78

Note 8 – Loans and Notes Receivable ........................................................................................................................ 79

Note 9 – Interfund Receivables, Payables, and Transfers ........................................................................................ 81

A. Due From and To Other Funds .................................................................................................................. 81 B. Long-Term Advances ................................................................................................................................ 81 C. Transfers .................................................................................................................................................... 82

Note 10 – Capital Assets .............................................................................................................................................. 83

A. Governmental Activities ............................................................................................................................ 83 B. Business-Type Activities ........................................................................................................................... 84

Note 11 – Land and Properties Held for Resale ........................................................................................................ 84

Note 12 – Long-Term Debt ......................................................................................................................................... 85

A. Governmental Activities ............................................................................................................................ 85 B. Business-Type Activities ........................................................................................................................... 99 C. Conduit Debt ............................................................................................................................................ 101 D. Fiduciary Activities .................................................................................................................................. 101

Note 13 – Compensated Absences ............................................................................................................................ 102

Note 14 – Risk Management ..................................................................................................................................... 103

Note 15 – Unearned Revenue and Deferred Inflows of Resources ........................................................................ 104

Note 16 – Retirement Programs ............................................................................................................................... 105

A. Summary .................................................................................................................................................. 105 B. California Public Employees Retirement System Agent Multiple-Employer Plans ................................ 106 C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan ...................... 112 D. New York Life Single Employer Retirement Plan .................................................................................. 117 E. ICMA Retirement Corporation Defined Contribution Plan ..................................................................... 121 F. Deferred Compensation Plans .................................................................................................................. 122

Note 17 – Other Postemployment Benefits .............................................................................................................. 123

A. General Information about the OPEB Plan .............................................................................................. 123 B. Net OPEB Liability, OPEB Expense, and Deferred Outflows/Inflows of Resources Related to OPEB ....................................................................................................... 126

Note 18 – Net Position and Fund Balances .............................................................................................................. 128

A. Government-Wide Financial Statements ................................................................................................. 128 B. Fund Financial Statements ....................................................................................................................... 129 C. Encumbrances .......................................................................................................................................... 129

296
City of Salinas
Index to the Notes of the Basic Financial Statements (Continued) For the Year Ended June 30, 2025

53 Note 19 – Other Required Disclosures ..................................................................................................................... 130

A. Expenditures Exceeding Appropriations .................................................................................................. 130 B. Net Position Deficit and Restrictions ....................................................................................................... 130

Note 20 – Joint Venture – Salinas Valley Solid Waste Authority ......................................................................... 131

Note 21 – Commitments and Contingencies ............................................................................................................ 132

Note 22 – Changes to or within the Financial Reporting Entity ........................................................................... 132

Note 23 – Subsequent Events .................................................................................................................................... 133

297

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City of Salinas
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025

55 Note 1 – Summary of Significant Accounting Policies

The basic financial statements of the City of Salinas, California (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP) as applied to governmental entiti es. The Governmental Accounting Standards Board (GASB) is t he accepted standard setting body for establishing governmental accounting and financial reporting pri nciples. The most significant of the City’s account ing policies are described below:

A. Financial Reporting Entity

The City was incorporated as a chapter City on Marc h 4, 1874. The City operates under a Council Manage r form of government and proves the following services as authorized: Public Safety, Public Works, Recreation Parks, Library and General Government Administrative Services. The City also operates as Airport, a Downtown Parking District, a Sanitary Sewer System, a Water Utility, a Storm Sewer System, and an Industrial Waste Facility.

The basic financial statements of the City, include the financial activities of the City (the primary government) and its component unit. The component unit discussed be low is included in the City’s reporting entity beca use of the significance of their operational or financial rela tionship with the City. The blended component unit, although a legally separate entity, is, in substance, part of the City’s operations and so data from this unit is combined with data of the primary government. The City has no dis cretely presented component units. The City and its blended component unit have June 30 year ends.

Blended Component Unit

The financial reporting entity consists of the prim ary government, the City, and its component unit. C omponent units are legally separate entities for which the e lected officials of the primary government are fina ncially accountable. In addition, component units can be ot her organizations for which the primary government is accountable and their exclusion would cause the rep orting entity’s financial statements to be misleadi ng or incomplete.

Blended component units, although legally separate entities, are, in substance part of the government’ s operation and so data from these units are combined with data of the primary government. Discretely presented co mponent units, on the other hand, are reported in a separat e column in the combined financial statements to em phasize that they are legally separate from the government.

Although the following are legally separate from the City, they have been “blended” as though they are part of the City because the component unit’s governing body is substantially the same as the City’s and there is a financial benefit or burden relationship between the City and the component unit; management of the City has ope rational responsibilities for the component units; and/or th e component units provide services entirely, or alm ost entirely, to the City or otherwise exclusively, or almost exc lusively, benefits the City, even though it does no t provide services directly to it.

The Salinas Public Financing Authority (Authority) – The Authority was established October 6, 1992 pursuant to a Joint Exercise of Powers Agreement by and between t he City and the City of Salinas Redevelopment Agenc y, which is now the Salinas Successor Agency to the fo rmer Redevelopment Agency. It was established to re fund Central City Revitalization Project tax allocation bonds. The Authority’s purpose is to assist with fi nancing or refinancing of certain public capital facilities within the City.

The Authority is controlled by the City and has the same governing body as the City, which also perfor ms all accounting and administrative functions for the Authority. The financial activities of the Authority are included in the City’s Debt Service and Enterprise Funds. A financial report is not issued by the Authority. 299
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

56 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Presentation, Accounting and Measurement Focus

The accounts of the City are organized on the basis of funds, each of which is considered a separate a ccounting entity. The operations of each fund are accounted f or by providing a separate set of self-balancing ac counts that comprise its assets, deferred outflows of resources, liabilities, deferred inflows of resources, fund equity, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions.

The minimum number of funds is maintained in accordance with legal and managerial requirements.

Government-Wide Financial Statements

The City’s Government-Wide Financial Statements inc lude a Statement of Net Position and a Statement of Activities and Changes in Net Position. These state ments present summaries of governmental and busines s-type activities for the City accompanied by a total colu mn. Fiduciary activities of the City are not includ ed in these statements.

These financial statements are presented on an “ economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets a nd liabilities, including capital assets, as well a s infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Sta tement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recog nized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Under the accrual basis of accounting, revenues, expenses, gains, losses, assets, deferred outflows of resources, liabilities, and deferred inflows of resources resulting from exchange and exchange-like transactions are recognized when the exchange takes place. Revenues, expenses, gains, lo sses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-ex change transactions are recognized in accordance wi th the requirements of GAAP.

Program revenues include charges for services, spec ial assessments, and payments made by parties outsi de of the reporting government's citizenry if that money is r estricted to a particular program. Program revenues are netted with program expenses in the statement of activities to present the net cost of each program. Program revenues for the City are classified in three categories:

¾ Charges for services
¾ Operating grants and contributions
¾ Capital grants and contributions

Certain eliminations have been made to interfund ac tivities, payables and receivables. All internal ba lances in the Statement of Net Position have been eliminated exce pt those representing balances between the governme ntal activities and the business-type activities, which are presented as internal balances and eliminated i n the total primary government column. In the Statement of Acti vities and Changes in Net Position, internal servic e fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. The following interfund activities have been eliminated:

¾ Due to/from other funds
¾ Advances to/from other funds
¾ Transfers in/out
300
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

57 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Presentation, Accounting and Measurement Focus (Continued)

Governmental Fund Financial Statements

Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances. An accompanying schedule is presented to reconcile and explain the differences in Net Position as presented in these statements to the ne t position presented in the Government-Wide Financi al Statements. The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spend ing or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditu res and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets.

Under the modified accrual basis of accounting, rev enues are recognized in the accounting period in wh ich they become both measurable and available to finance exp enditures of the current period. Measurable means t hat the amounts can be estimated, or otherwise determined. Available means that the amounts were collected dur ing the reporting period or soon enough thereafter to be av ailable to finance the expenditures accrued for the reporting period. The City uses an availability period of 60 days for all revenues except grants, which use a si x-month availability period.

Sales taxes, property taxes, franchise taxes, gas t axes, motor vehicle in-lieu, transient occupancy ta xes, grants and interest associated with the current fiscal period are all considered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected within the availa bility period.

Other revenue items are considered to be measurable and available when cash is received by the government.

Revenue recognition is subject to the measurable an d available criteria for the governmental funds in the fund financial statements. Exchange transactions are rec ognized as revenues in the period in which they are earned (i.e., the related goods or services are provided). Locally imposed derived tax revenues are recognize d as revenues in the period in which the underlying exch ange transaction upon which they are based takes pl ace.

Imposed non-exchange transactions are recognized as revenues in the period for which they were imposed. If the period of use is not specified, they are recognized as revenues when an enforceable legal claim to the revenues arises or when they are received, whichever occurs first. Government-mandated and voluntary non-exchan ge transactions have been recognized as revenues when all applicable eligibility requirements have been met.

The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34.

The City reports the following major governmental funds:

x General Fund is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in any other funds.

x American Rescue Plan Act (ARPA)Special Revenue Fund On March 11, 2021, President Biden signed the American Rescue Plan Act, which will provide the Ci ty with approximately $51 million in relief funds. This fund accounts for the revenues and expenditures of ARPA proceeds. 301
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

58 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Presentation, Accounting and Measurement Focus (Continued)

Governmental Fund Financial Statements (Continued)

x Housing and Urban Development Grant Special Revenue Fund accounts for the use of Community Development Block Grant funds received from the fed eral government. Other revenues in this fund includ e repayments of commercial and residential loans and rental income from City property. Funds are used fo r programs or projects that increase affordable housing and benefit people with special needs such as senior and handicapped citizens.

x Development Fees Special Revenue Fund accounts for the fees that subdividers and developers of property are required to pay, by Resolution 3823 (N.C.S.), covering traffic impact, annexation, use of existing or new sewers, storm drains, park facilities, library facilities, and street trees.

x 2019 Special Tax Bond Monte Bella Debt Service Fund is used to accumulate monies for the principal and interest payments for the 2019 Special Tax Bonds to finance the acquisition and/or construction of cer tain public facilities and improvements within the Commu nity Facilities District No. 2016-1 (Monte Bella) A rea No. 1-3. The annual levy of special taxes on that area would be used to pay for principal and interest payments on the bonds.

x Capital Projects Fund accounts for all capital project expenditures. Funds are transferred in from various other funds after expenditures are made. This revolving fund was established with $2,000,000 and is used to advance capital project expenditures prior to reimbursement of Federal, State, and other construction grants a nd bond financing.

Proprietary Fund Financial Statements

Proprietary funds are accounted for using the “ economic resources” measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under t he accrual basis of accounting, revenues are recogn ized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Proprietary funds distinguish operating revenues an d expenses from nonoperating items. Operating reven ues and expenses generally result from providing services a nd producing and delivering goods in connection wit h a proprietary fund’s principal ongoing operations. Th e principal operating revenues of the proprietary f unds are charges to customers for sales and services. Operating expenses for the proprietary funds include the costs of sales and services, administrative expenses and depreciat ion on capital assets. All revenues and expenses no t meeting this definition are reported as nonoperating revenues and expenses.

A separate column representing internal service fun ds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities and business-type activities in the Government-Wide Financial Statements.

The City reports the following major enterprise funds:

x Airport Fund is used to account for the enterprise operations of the City-owned airport.

x Industrial Waste Fund is used to account for the enterprise operations o f the City-operated Industrial Wastewater Treatment Facility.
302
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

59 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Presentation, Accounting and Measurement Focus (Continued)

Proprietary Fund Financial Statements (Continued)

x Sanitary Sewer Fund is used to account for the maintenance of the City's sanitary sewer collection system, which is funded by user fees and by the Monterey Regional Water Pollution Control Agency sewer user fees.

x Downtown Parking District Fund is used to account for revenues, operating expense s and debt service associated with the City’s parking facilities. The City’s paid parking facilities include the Monterey Street Parking Structure, the Salinas Street Garage and four parking lots.

The City’s internal service funds include five individual funds which provide services directly to other City funds.

These areas of service include risk management, gen eral insurance, workers’ compensation, general liab ility, and fleet maintenance. The Internal Service Funds accou nt for financing of goods and services provided by one department to other departments of the City on a cost-reimbursement basis.

Fiduciary Fund Financial Statements

Fiduciary fund financial statements include a State ment of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent private purpose trust funds, pension trust funds, a nd custodial funds. These funds are accounted for on the full accrual basis of accounting.

Fiduciary fund types are accounted for according to the nature of the fund.

Private Purpose Trust Funds are a fiduciary fund ty pe used to account for resources held and administr ated under trust or similar arrangement for the benefits of in dividuals, private organizations, or other governme nts. The City reports the following private purpose trust funds:

x Successor Agency Redevelopment Obligation Retiremen t Fund was created to serve as a custodian for the assets and to wind down the affairs of the RDA on F ebruary 1, 2012, pursuant to Assembly Bill x1 26. I ts purpose is to expeditiously wind down the affairs of the dissolved Community Development Commission of the City of Rohnert Park (Commission) subject to th e direction of a seven-member Oversight Board. This fund accounts for the receipt of property tax reven ues pursuant to the Redevelopment Dissolution Act a nd the assets transferred from the Commission. The Suc cessor Agency’s assets can only be used to pay enforceable obligations in existence at the date of dissolution pursuant to the Recognized Obligation Payment Schedules approved by the California Department of Finance (DOF) under the Redevelopment Dissolution Act.

x Successor Agency Administration – This fund accounts for the administrative activiti es of the Successor Agency to the former Salinas Redevelopment Agency which was dissolved on Febru ary 1, 2012 in accordance with AB 1x26 (enacted June 28, 2011).

x Other Private Purpose Trust Funds – These funds are used to account for other trust ar rangements not properly reported in a pension trust fund under whi ch principal and income benefit individuals, privat e organizations, or other governments. The City accou nts for the following trust funds: Community Center , Monterey Regional Water Pollution Control Agency (MRWPCA) Fees, Sales Tax, Payroll Taxes, Developer Deposits, Evidence Room, Construction Bonds, Monter ey County Tourism Improvement District, Leadership Salinas, and miscellaneous.
303
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

60 Note 1 – Summary of Significant Accounting Policies (Continued)

B. Basis of Presentation, Accounting and Measurement Focus (Continued)

Fiduciary Fund Financial Statements (Continued)

Pension Trust Fund is used to account for resources that are required to be held in trust for the memb ers and beneficiaries of defined benefit pension plans, def ined contribution plans, or other employee benefit plans. The City’s only pension trust fund is the Deferred Comp ensation Fund; which allows City employees to invest in trust deeds that are managed by the City with the oversight of an investment committee that is made up of representatives from each of the bargaining units.

Custodial Funds are used to account for assets held in an agent capacity by the City for individuals, private organizations, other governments and/or other funds that are not required to be reported in pension tr ust funds, investment trust funds, or private-purpose trust funds.

C. Cash, Cash Equivalents, and Investments

Cash and Cash Equivalents - Cash and cash equivalen ts are considered to be amounts in demand deposits, and short-term investments with original, maturity of three months or less from the date of acquisition. For purposes of both the balance sheet and statements of cash flows, cash and cash equivalents include not only currency on hand, but deposits in the City’s cash and investment pool . These deposits have the same characteristics for the participating funds as demand deposit accounts, in that the funds may deposit additional cash at any t ime and also effectively withdraw cash at any time without prior notice or penalty. Cash and cash equivalents also include restricted cash and money market funds held by fiscal agents. For purposes of cash flows, the City considers all liquid market investments with maturities of one ye ar or less at time of purchase to be cash equivalen ts. All other investments are stated at fair value. Market value is used as fair value for those securities for whic h market quotations are readily available.

The City pools cash resources from all funds in ord er to facilitate and maximize the management of cas h. The balance in the pooled cash account is available to meet current operating requirements. Cash in excess of current requirements is invested in various interest-bearin g accounts and other fixed income investments with varying terms. Interest earned on investments is allocated to all funds based on average cash and investment balances.

Investments are presented at fair value except as n oted below. Fair value is the amount at which a fin ancial instrument could be exchanged in a current transaction between willing parties, other than in a forced or liquidation sale. Money market investments (such as short–term, highly liquid debt instruments including bankers’ acceptances) and securities (notes, bills, and obligations of the U.S. government and its agencies), and participating interest-earning investment contracts (such as nego tiable certificates of deposit and repurchase agree ments) that have a remaining maturity at the time of purchase o f one year or less, are reported at amortized cost, which approximates fair value.

For purposes of the statement of cash flows, amount s reported as cash and cash equivalents, include am ounts on deposit in the City pool and any short-term, highly liquid investments that are both readily convertib le to known amounts of cash or so near their maturity that they present insignificant risk of changes in value bec ause of changes in interest rates.
304
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

61 Note 1 – Summary of Significant Accounting Policies (Continued)

C. Cash, Cash Equivalents, and Investments (Continued)

Investment held in Local Agency Investment Fund - T he City participates in the Local Agency Investment Fund (“LAIF”), an investment pool managed by the State of California. LAIF has invested portions of the pool funds in structured notes and asset-backed securities. LAIF’ s investments are subject to credit risk with the f ull faith and credit of the State of California collateralizing t hese investments. In addition, these structured not es and asset- backed securities are subject to market risk as a result of changes in interest rates.

LAIF determines fair value on its investments portf olio based on market quotations for those securitie s where market quotations are readily available and based o n amortized cost or best estimate for those securit ies where market value is not readily available.

The City valued its investments in LAIF as of June 30, 2025, by multiplying its account balance with L AIF times a fair value factor determined by LAIF for all LAIF participants by total aggregate amortized cost.

Other Investments - Investments in nonparticipating interest earning contracts (certificate of deposits) are reported at cost, and all other investments are reported at fair value. Fair value is defined as the amount the City could reasonably expect to receive for an investment in a current sale between a willing buyer and seller and is generally measured by quoted market prices.

Deferred Compensation - The Deferred Compensation Plan is invested in deeds of trust secured by real or personal property and in real estate holdings. The trust dee ds are considered nonparticipating interest earning investments and are reported at fair market value.

D. Restricted Cash and Investments

Certain restricted cash and investments are held by fiscal agents or the City for the redemption of bonded debt and for acquisition and construction of certain capital projects.

E. Fair Value Measurement

U.S. GAAP establishes a framework for measuring fai r value and establishes disclosures about fair valu e measurement. Investments, unless otherwise specified, recorded at fair value in the Statements of Net Position, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows:

Level 1 – Inputs are unadjusted, quoted prices for identical the asset or liability in active markets at the measurement date.

Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the asset or l iability through corroboration with market data at the measurement date.

Level 3 – Unobservable inputs that reflect manageme nt’s best estimate of what market participants woul d use in pricing the asset or liability at the measurement date.

305
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

62 Note 1 – Summary of Significant Accounting Policies (Continued)

F. Interfund Transactions

Interfund transactions are reflected as loans, serv ices provided, reimbursements and/or transfers. Loa ns and balances related to unsettled service transactions are reported as receivables and payables as appropriate, are subject to elimination upon consolidation of similar fund types, and are referred to as either “due to/from other funds,” i.e., the current portion of interfund loans and unsettled service transactions, or “advances to/from other funds,” i.e., the noncurrent portion of interfund loans. Any residual balances outstanding between the governmental acti vities and the business-type activities are reported in the government-wide financial statements as “internal balances.”

Services provided are deemed to be at market or nea r market rates and are treated as revenues and expenditures/expenses. Reimbursements are defined a s when one fund incurs a cost, charges the appropri ate benefiting fund and reduces its related cost as a r eimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or propri etary funds are netted as part of the reconciliatio n to the government-wide presentation.

G. Receivables

All receivables are reported at their gross value a nd, where appropriate, are reduced by the estimated portion that is expected to be uncollectible. Invoices that remain unpaid after 90 days may be referred to collections. An invoice sent to collection is written off.

H. Leases

The City is a lessor for leases of land and recogni zes leases receivable and deferred inflows of resou rces in the financial statements. Variable payments based on fu ture performance or usage of the underlying asset a re not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the pres ent value of payments expected to be received during the lease term. Subsequently, the l ease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resource s are initially measured as the initial amount of t he lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequentl y, the deferred inflows of resources are recognized as rev enue over the life of the lease term in a systemati c and rational method.

Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.

x The City uses the average of the LAIF rate and the incremental borrowing rate (IBR) provided by the City’s financial institution at the current rate at the time a new lease is executed.

x The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.

x Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable.
306
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

63 Note 1 – Summary of Significant Accounting Policies (Continued)

I. Subscription-Based Information Technology Arrangements (SBITAs)

The City has a policy to recognize a SBITA liabilit y and a right (to(use subscription asset (SBITA asset) in our financial statements with an initial, individual va lue of $5,000 or more with a subscription term grea ter than one year.

At the commencement of a subscription, when the sub scription asset is placed into service, the SBITA l iability is measured at the present value of payments expected to be made during the subscription term. Future sub scription payments are discounted using the City's incrementa l borrowing rate and the City recognizes amortizati on of the discount on the subscription liability as interest expense in subsequent financial reporting periods.

SBITA assets are measured as the sum of the initial subscription liability, payments made to the SBITA vendor before the commencement of the lease term, and capi talizable implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. Subscription assets are amortized using the straight-line method over the subscription term.

Key estimates and judgments related to SBITAs inclu de how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.

x The City uses the interest rate charged by the SBIT A vendor as the discount rate. When the interest ra te charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITAs.

x The subscription term includes the period during wh ich the City has a noncancelable right to use the underlying IT asset. The subscription term also inc ludes periods covered by an option to extend if it is reasonably certain to be exercised.

x Subscription payments included in the measurement o f the subscription liability are composed of fixed payments and purchase option years that the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a remea surement of a subscription and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.

Right-to-use subscription assets are reported along with other capital assets and subscription liabilities are reported as long-term debt on the statement of net position.

J. Special Assessment Districts

Special assessments are recorded as receivables whe n they become a lien on property. Special assessmen ts not considered available are recorded as receivables an d offset by unearned revenues. In general, special assessments and special tax bonds are fully secured by liens against the privately owned properties benefited by the improvement for which the bonds were issued. There is no reserve for delinquent receivables since priority liens exist against the related properties and hence the City’s management believes value will ultimately be received by the City. 307
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

64 Note 1 – Summary of Significant Accounting Policies (Continued)

K. Prepaid Bond Insurance, Original Issue Discounts and Premiums, Gain/Loss on Refunding

Prepaid bond insurance costs are amortized using the straight-line method over the life of the bonds. Amortization of these balances are recorded as a component of operating expenses.

In the government-wide, proprietary fund and fiduci ary fund financial statements, long-term debt and o ther long- term obligations are reported as liabilities in the applicable governmental activities, business-type activities, proprietary fund and fiduciary fund financial statements. Bond premiums and discounts are deferred and amortized over the life of the bonds. Bonds payable are repor ted net of the applicable bond premium or discount. Original issue premiums are amortized using the straight-lin e method over the life of the bonds. Gains or losse s from refunding of debt are reported as deferred inflows or outflows of resources and amortized over the sho rter of the life of the refunded debt or new refunding debt. Am ortization of these balances are recorded as a comp onent of interest expense.

In the fund financial statements, governmental fund types recognize bond premiums and discounts, as well as bond issuance costs, during the current period. Issuance costs, whether or not withheld from the actual deb t proceeds received, are reported as debt service expenditures.

L. Capital Assets

Capital assets include land, buildings, improvements, vehicles and equipment, infrastructure, and all other tangible and intangible assets that are used in operations and that have initial useful lives in excess of one year. Capital assets are reported in the applicable governmental or busi ness-type activity columns in the government-wide f inancial statements, the proprietary funds' statement of net position, and the private-purpose trust fund. Capi tal assets are defined as assets with an initial individual cost o f more than $10,000 for general capital assets and $100,000 for major infrastructure assets, and an estimated useful life in excess of one year.

Such assets are recorded at historical cost if purc hased or constructed. Donated capital assets are re corded at acquisition value, market based entry price at the time of contribution. Capital outlay is recorded as expenditures of the governmental funds and as assets in the gove rnment-wide financial statements to the extent the City's capitalization threshold is met. Amortization of as sets acquired under capital leases is based on the shorter of the lease term or the estimated useful life of the asset and is included in depreciation and amortization.

Buildings, improvements, infrastructure, vehicles a nd equipment, and furniture and fixtures are deprec iated using the straight-line method (depreciation is calculated starting with the month following the date the asset was placed in service) over the following estimated useful lives:

Asset Type Years
Buildings and improvements 20-50
Other improvements 15-45
Infrastructure 10-50
Machinery and equipment 5-20

M. Land and Properties Held for Resale

Land and properties held for resale is being carried at cost, but no greater than the net realizable value. In the fund financial statements, this amount is recorded as a restricted portion of fund balance due to externall y imposed grantor restrictions.
308
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

65 Note 1 – Summary of Significant Accounting Policies (Continued)

N. Restricted Assets

Assets that are restricted for specific uses by bonded debt requirements, grant provisions or other requirements are classified as restricted because their use is limited by applicable bond covenants or agreements.

O. Claims Payable

Claims and judgments are recognized as expenditures when it is probable that the liability has been in curred and the amount of the loss can be reasonably estimated. This liability is recorded in the internal service fund that accounts for the City’s self-insurance activities.

P. Compensated Absences

The City accounts for compensated absences in accordance with GASB Statement No. 101, Compensated Absences.

Under this standard, a liability is recognized for leave benefits (such as vacation and sick leave) when the benefits are attributable to services already rendered, accu mulate for use in future periods, and are more like ly than not to be used or paid. The liability is measured using the employee’s pay rate in effect at the financial statement date and includes salary-related payments.

Government-Wide Financial Statements

For governmental and business-type activities, compensated absences are recorded as expenses when earned.

Governmental Fund Financial Statements

For governmental funds, compensated absences are recorded as expenditures in the year paid. The General Fund is typically used to liquidate compensated absences. In proprietary funds, compensated absences are expensed to the various funds in the period they are earned, and such fund’s share of the unpaid liability is recorded as a long-term liability of the fund.

Q. Long-Term Debt and Other Long-Term Obligations

Government-Wide Financial Statements and Proprietary Fund Financial Statements

In the Government-Wide Financial Statements and the proprietary fund types in the Fund Financial State ments, long-term debt and other obligations are reported a s liabilities in the applicable governmental activi ties, business- type activities, or proprietary fund statement of n et positions. Bond premiums and discounts are defer red and amortized over the life of the bonds using effectiv e interest methods. Bonds payable are reported net of the applicable bond premium or discount. In the governm ental funds statement of revenue, expenditures and changes in fund balance, issuance of debt is recorded as another financing source (use) in the respective fund. Issuance costs and payment of principal are reported as debt service expenditures.

Governmental Fund Financial Statements

The governmental fund financial statements do not p resent long-term debt but are shown in the Reconcil iation of the Governmental Funds Balance Sheet to the Governm ent-Wide Statement of Net Position. Governmental fu nd types recognize bond premiums and discounts during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on de bt issuances are reported as other financing source s while discounts on debt issuances are reported as other financing uses. Debt issuance costs, whether or not withheld from the actual debt proceeds received, are reported as debt service expenditures. 309
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

66 Note 1 – Summary of Significant Accounting Policies (Continued)

R. Unearned Revenue

Unearned revenues arise when the City receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures or when monies are received before the related services are performed. In subsequent periods, when both revenue recognition criteria are met or when the City has a legal claim to the resources, the liability for unearned revenue is removed from the balance sheet and revenue is recognized.

S. Deferred Outflows and Inflows of Resources

The Statement of Net Position and Balance Sheet – G overnmental Funds reports separate sections for Def erred Outflows of Resources, and Deferred Inflows of Reso urces, when applicable.

Deferred Outflows of Resources – represent a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources ( expense/ expenditure) until then.

Deferred Inflows of Resources – represent an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (r evenue) until that time.

T. Net Position and Fund Balance

Net Position Classifications

In the government-wide financial statements, net position is classified in three categories:

Net Investment in Capital Assets – This category of net position consists of capita l assets, net of accumulated depreciation and amortization and reduced by any debt outstanding and any deferred outflows/inflows of resources related to such borrowings that are attributable to the acquisition, construction or improvement of th ose assets. If there are significant unspent related debt proceeds at year-end, the portion of the debt attributable to the unspent proceeds is not included in the calculation of net investment in capital assets. Rather, that portion of the debt is offset by unspent proceeds.

Restricted Net Position – This category consists of restricted assets redu ced by liabilities and deferred inflows of resources related to those assets. Enabling legisla tion authorizes the City to assess, levy, charge, o r otherwise mandate payment of resources and includes a legally enforceable requirement that those resources be used only for the specific purposes stipulated in the legislation.

Unrestricted Net Position – This category represents net position of the City that is not restricted for any project or purpose and does not meet the criteria for “net investment in capital assets.”

The City first applies restricted resources when an expense is incurred for purposes for which both re stricted and unrestricted net position are available.
310
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

67 Note 1 – Summary of Significant Accounting Policies (Continued)

T. Net Position and Fund Balance (Continued)

Fund Balances Classifications

As prescribed by GAAP, governmental funds report fu nd balance in classifications based primarily on th e extent to which the City is bound to honor constraints on the specific purposes for which amounts in the fund s can be spent. Fund balances for governmental funds are made up of the following:

Nonspendable Fund Balance – includes amounts that cannot be spent because they are either (a) not in a spendable form, or (b) legally or contractually required to be maintained intact. The “not in spendable form” criterion includes items that are not expected to be converted to cash , for example: prepaid items and long-term loans an d notes receivable.

Restricted Fund Balance – includes amounts with constraints placed on thei r use that are either (a) externally imposed by creditors, grantors, contributors, or la ws or regulations of other governments; or (b) impo sed by law through constitutional provisions or enabling legislation. Restrictions may effectively be changed or lifted only with the consent of resource providers.

Committed Fund Balance – includes amounts that can only be used for the specific purposes determined by a formal action of the City’s highest level of decision-maki ng authority. The City Council is the highest level of decision- making authority for the City that can, by adoption of an ordinance, commit fund balances. Commitments may be changed or lifted only by the City Council taking t he same formal actions that imposed the original co nstraint occurring no later than the close of the reporting period.

Assigned Fund Balance – includes amounts intended to be used by the City for specific purposes through budgetary actions or delegation of authority by the City Council. Intent is expressed by the City Council or an official to whom the City Council has delegated the authority (generally, the City Manager) to assign amounts to be used for specific purposes. This is also the classification for residual funds in the governmental funds other than General Fund.

Unassigned Fund Balance – includes the residual classification for fund ba lance, which includes all amounts not reported as nonspendable, restricted, committed, or assigned. The General Fund may report either a pos itive or negative unassigned fund balance. Unassigned amount s are available for any purpose. Other governmental funds may report only negative unassigned fund balances if expenditures incurred for specific purposes exceeded amounts restricted, committed or assigned for those purposes. Other governmental funds may not report positive unassigned fund balances.

In circumstances when an expenditure is made for a purpose for which amounts are available in multiple fund balance categories, fund balance is depleted in the order of restricted, committed, assigned, and unassigned. 311
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

68 Note 1 – Summary of Significant Accounting Policies (Continued)

U. Property Taxes

Property taxes are collected on behalf of and remit ted to the City by the County of Monterey (the “Cou nty”). The amount of property tax levies is restricted by Arti cle 13A of the California State Constitution (commo nly referred to as Proposition 13). The County assesses property values, levies, bills, and collects the related pr operty taxes as follows:

Secured Unsecured
Lien Dates January 1 January 1
Levy Dates January 1 January 1
Due Dates 50% on November 1 July 1
50% on February 1
Delinquent after December 10 (for November) August 31
April 10 (for February)

The City does not have the ability to control the l evy rate or the amount of property taxes remitted b y the County because these are governed by State law.

The City has not elected to participate in the “Tee ter Plan” offered by the County whereby cities rece ive 100% of secured property and supplemental property taxes le vied in exchange for foregoing any interest and pen alties collected on the related delinquent taxes. The City retains the right to any interest and penalties co llected on the related delinquent taxes. Accordingly, property tax revenues are recognized in the fiscal period for w hich they are levied and collected, adjusted for any amounts deem ed uncollectible and amounts expected to be collect ed more than 60 days after the fiscal year.

General property taxes are based on either a flat 1 % rate applied to the fiscal year 1976 full value o f the property or on 1% of the sales price of the property on sale s transactions and construction that occur after th e fiscal year 1976 valuation. Assessed values on properties (excl usive of increases related to sales and constructio n) can rise at a maximum of 2% per year depending on increases in the consumer price index.

V. Pensions

For purposes of measuring the net pension liability, deferred outflows of resources and deferred inflows of resources related to pensions, and pension expense, informati on about the fiduciary net position of the plans an d additions to/deductions from the plans’ fiduciary net positio n have been determined on the same basis as they ar e reported by the plans. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with benefit terms. Investments are reported at fair value.

The following timeframes are used for pension reporting:

CalPERS Pension Plans
Valuation date June 30, 2023
Measurement date June 30, 2024
Measurement period July 1, 2023 to June 30, 2024

NY Life Pension Plan
Valuation date September 1, 2024
Measurement date August 31, 2024
Measurement perio
d September 1, 2023 to August 31, 2024
312
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

69 Note 1 – Summary of Significant Accounting Policies (Continued)

V. Pensions (Continued)

Gains and losses related to changes in total pensio n liability and fiduciary net position are recogniz ed in pension expense systematically over time. The first amortiz ed amounts are recognized in pension expense for th e year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in fut ure pension expense. The amortization period differ s depending on the source of the gain or loss. The difference b etween projected and actual earnings is amortized s traight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, in active, and retired) as of the beginning of the mea surement period.

W. Other Postemployment Benefits (“OPEB”)

For the purpose of measuring the net OPEB liability , deferred outflows of resources and deferred inflo ws of resources related to OPEB, and OPEB expense, inform ation about the fiduciary net position of the City’ s OPEB Plan and additions to/deductions from the OPEB Plan ’s fiduciary net position have been determined on t he same basis as they are reported by the Plan. For this purpose, the OPEB Plan recognizes benefit payments when due and payable in accordance with the benefit terms. Inves tments are reported at fair value, except for money market investments, which are reported at amortized cost.

The following timeframes are reported OPEB reporting:

OPEB
Valuation date June 30, 2024
Measurement date June 30, 2024
Measurement period July 1, 2023 to June 30, 2024

Gains and losses related to changes in total OPEB l iability and fiduciary net position are recognized in OPEB expense systematically over time. The first amortiz ed amounts are recognized in OPEB expense for the y ear the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to OPEB and are to be recognized in future OPEB expense. The amortization period differs depen ding on the sources of gain or loss. The difference between projected and actual earnings is amortized on a st raight-line basis over 5 years. All other amounts are amortized on a straight-line basis over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) at the be ginning of the measurement period.

X. Encumbrances

Encumbrance accounting, under which purchase orders , contracts, and other commitments for the expendit ure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of formal budgetary integration in the General, Specia l Revenue, and Capital Projects Funds. Encumbrances outstanding at year-end are reported as reservation s of fund balance since they do not constitute expe nditures or liabilities.

313
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

70 Note 1 – Summary of Significant Accounting Policies (Continued)

Y. Use of Accounting Estimates

The preparation of the basic financial statements in conformity with GAAP requires management to make estimates and assumptions. These estimates and assumptions af fect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of revenues and expenses. Actual results could differ from these estimates and assumptions.

Z. Self-Insurance

The City is self-insured for workers’ compensation, general, automobile, and public liability claims. The City’s estimated liability for claims as of June 30, 2025 is based on the claim manager ’s estimate of probable losses plus an amount estimated for incurred but not reported c laims. An Internal Service Fund is used to account for the collection of premiums from various City departments related to workers’ compensation claims and general claims liabilities. Premiums are established based on hist orical claims experience. Additionally, the City co ntracts with third party administrators for claims management.

AA. Implementation of New GASB Pronouncements For the Year Ended June 30, 2025

During fiscal year ended June 30, 2025, the City implemented the following new GASB Pronouncements:

GASB Statement No. 101 – In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognit ion and measurement guidance under a unified model and by a mending certain previously required disclosures.

Implementation of this Statement didn’t have an effect on the City’s beginning net position.

GASB Statement No. 102 – In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government's vulnerabilities due to certain concentrations or constraints which may limit a government's ability to acquire resources or contro l spending. Application of this statement did not h ave a significant effect on the City’s financial reporting for the fiscal year ended June 30, 2025.

BB. Upcoming GASB Pronouncements

In the next two years, the City will implement the following GASB Pronouncements:

GASB Statement No. 103 – In April 2024, GASB issued Statement No. 103, Financial Reporting Model Improvements. The objective of this Statement is to improve key c omponents of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. Application of this st atement is effective for the City’s fiscal year end ing June 30, 2026.

314
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

71 Note 1 – Summary of Significant Accounting Policies (Continued)

BB. Upcoming GASB Pronouncements (Continued)

GASB Statement No. 104 – In September 2024, GASB issued Statement No. 104, Disclosure of Certain Capital Assets. This Statement requires certain types of capital assets to be disclosed separately in the capital as sets note disclosures required by Statement 34. Lease assets recognized in accordance with Statement No. 87, Leases, and intangible right-to-use assets recognized in accord ance with Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements, should be disclosed separately by major class of underlying asset in the capital assets note disclosures. Subsc ription assets recognized in accordance with Statem ent 96, Subscription-Based Information Technology Arrangeme nts, also should be separately disclosed. In addition, this Statement required intangible assets other than tho se three types to be disclosed separately by major class.

Application of this statement is effective for the City’s fiscal year ending June 30, 2026.

GASB Statement No. 105 – In December 2025, GASB issued Statement No. 105, Subsequent Events . This Statement is designed to improve the financial repo rting requirements for subsequent events by enhanci ng consistency in the application of requirements, cla rifying the different types of subsequent events, d etermining when note disclosures are required, and detailing the information that should be included in those note disclosures.

Application of this Statement is effective for the City’s fiscal year ending June 30, 2027.

Note 2 – Stewardship, Compliance, and Accountability

A. Budgeting

The Budget is prepared by the City Manager and adop ted by City Council. Formal budgetary integration w as employed as a management control device during the fiscal year for the General Fund, Special Revenue Funds, and Capital Projects Funds. The City Manager may transfer budget appropriations between departments and Department Directors may transfer appropriations between progr ams and accounts within their individual department s and divisions, but only the Council by resolution may appropriate funds from reserves or fund balances.

Budgets for General, Special Revenue and Capital Pr ojects Funds are adopted on a basis consistent with GAAP.

Reserves for future lease commitments have been est ablished for accounting purposes and the fund balan ce is reserved for the total lease commitment consistent with budget policies.

Budget policy excludes taxes, interest, and account s receivable assets, which are not currently availa ble resources for budget purposes, and condemnation deposits which are returned upon right of way acquisition.

Expenditures may not legally exceed budgeted approp riations at the government level. Budgeted amounts shown are as originally adopted or as amended by the City Council during the year. Additional supplementary appropriations were adopted during the mid-year review.

Appropriations lapse at fiscal year end and then are re-budgeted for the coming year. Project-length financial plans are adopted for all capital projects funds and appr opriations are carried forward until project comple tion. Grant funds are carried forward until the grant expires.

315
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

72 Note 2 – Stewardship, Compliance, and Accountability (Continued)

A. Budgeting (Continued)

Encumbrances represent commitments related to unper formed contracts for goods or services. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monie s are recorded in order to reserve that portion of the ap plicable appropriation, is employed as an extension of formal budgetary integration in the governmental funds. En cumbrances outstanding at year-end are recorded as reservations of fund balance and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year.

For additional information on budgetary policy and control see Required Supplementary Information.

B. Debt Compliance

There are a number of limitations and restrictions contained in the various bond indentures. The City believes it is in compliance with all significant limitations and restrictions.

Note 3 – Cash and Investments

Cash and investments are presented in the accompanying financial statements at June 30, 2025 as follows:

Fiduciary Funds
Governmental Business-T ype Statement of
Activities Activities Total Net Position Total
Cash and investments 230,890,045 $ 19,987,712 $ 250,877,757 $ 20,015,330 $ 270,893,087 $ Restricted cash and investments 7,434,253 - 7,434,253 - 7,434,253 Total cash and investments 238,324,298$ 19,987,712 $ 258,312,010 $ 20,015,330 $ 278,327,340 $ Government-Wide Statement of Net Position

Cash and investments at June 30, 2025, consisted of the following:

Cash and Cash Equivalents:

Cash on hand 34,830$
Demand accounts at banks 8,665,444
Total cash and cash equivalents 8,700,274
Investments:

Money market 5,841,749
Deposits held in trust by fiscal agent 11,610,799
Money market held in trust by fiscal agent 514,060
Local Agency Investment Fund 100,475,458
Investments held by fiscal agent 149,622,300
Deferred compensation 1,562,700
Total investments 269,627,066
Total cash and investments 278,327,340$

316
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

73 Note 3 – Cash and Investments (Continued)

A. Demand Deposits

The carrying amounts of the City’s demand deposits were $8,665,444 at June 30, 2025. Bank balances wer e $14,537,251 at that date. The total amount of which was collateralized or insured with securities held by the pledging financial institutions in the City’s name is discussed below.

The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this m anner shall have the effect of perfecting a security interest i n such collateral superior to those of a general cr editor. Thus, collateral for cash deposits is considered to be he ld in the City's name.

The market value of pledged securities must equal a t least 110% of the City's cash deposits. Californi a law also allows institutions to secure City deposits by pled ging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits; however, the City has not waived the collateralization requirements.

The City follows the practice of pooling cash and investments of all funds, except for funds required to be held by fiscal agents under the provisions of bond indentur es. Interest income earned on pooled cash and inves tments is allocated on an accounting period basis to the various funds based on the period-end cash and investment balances.

Interest income from cash and investments with fiscal agents is credited directly to the related fund.

B. Investments

The table below identifies the investment types that are authorized for the City by the California Government Code (or the City’s investment policy, where more restri ctive). The table also identifies certain provision s of the California Government Code that address interest ra te risk, and concentration of credit risk. This tab le does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provision of the California Government Code or the City’s investment policy:

Maximum Maximum
Maximum Percentage Investment in
Authorized Investment Types Maturity of Portfolio One Issuer* Certificates of deposit 5 years Non e None
Repurchase agreements 5 years Non e None
Bankers' acceptances 5 years Non e None
Guaranteed investment contracts 5 years Non e None
U.S. Treasury bills and notes 5 years Non e None
State of California Local Agency Investment Fund N/A Non e None Government agency securities 5 years Non e None
Passbook savings accounts 5 years Non e None
Mutual funds 5 years Non e None
Interest bearing checking accounts N/A Non e None
Commercial paper 5 years Non e None
* Based on state law requirements or City investment policy requirements, whichever is more restrictive. 317
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

74 Note 3 – Cash and Investments (Continued)

B. Investments (Continued)

The Deferred Compensation Plan is permitted by City resolution to invest in deeds of trust secured by real or personal property.

In accordance with Section 53651 of the California Government Code, the City cannot invest in inverse floaters, range notes, or interest-only strips that are derived from a pool of mortgages, or in any security that could result in zero interest accrual if held to maturity. The limitation does not apply to investments in shares of beneficial interest issued under the Investment Company Act of 1940 tha t are authorized investments under Section 53601 of the California Government Code. A five-year maximum mat urity for each investment is allowed unless approve d by the City Council.

Investment income from cash and investments held by fiscal agents are credited directly to the related funds.

California Local Agency Investment Fund (LAIF) – The City is a participant in LAIF, which is regul ated by California Government Code Section 16429 under the oversight of the Treasurer of the State of Californ ia. As of June 30, 2025, the City had $100,475,458 invested in LAIF. LAIF determines fair value on its investment portfolio based on market quotations for those securities whe re market quotations are readily available and base d on amortized cost or best estimate for those securities where market value is not readily available. LAIF is reported at amortized cost, which approximates fair value.

C. Risk Disclosures

Disclosures Relating to Interest Rate Risk

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

As a means of limiting exposure to fair value losse s from rising interest rates, the City’s investment policy limits the maturity of investments in accordance with Government Code Sections 53601(a)-(n) and 53636(a)-(m). It is the City’s policy to ladder investments so that there are always investments coming due to meet cash flow requirements.

Because the Local Agency Investment Fund as of June 30, 2025 had an average life of 290 days, it was p resented as a cash equivalent with a maturity of 0-12 months . However, LAIF allows the City to make withdrawals of any amount within 24 hours.

At June 30, 2025, the City had the following investment maturities:

Investment Type Total 1 year or fewer 1 to 5 years Over 5 years Money market 5,841,749$ 5,841,749 $ - $ - $ Deposits held in trust by fiscal agent 11,610,799 11,610,799 - - Money market held in trust by fiscal agent 514,060 514,060 - - Local Agency Investment Fund 100,475,458 100,475,458 - - Investment agreements - BNY 138,425,744 48,090,024 90,335,720 - New York Life Pension 11,196,556 11,196,556 - - Trust deeds - deferred compensation 1,562,700 1,562,700 - - Total investments 269,627,066$ 179,291,346 $ 90,335,720 $ - $ Investment Maturities

For deposits, custodial credit risk is the risk tha t, in the event of the failure of a depository fina ncial institution, the City will not be able to recover its deposits o r will not be able to recover collateral securities that are in the possession of an outside party. For an investment, custodial credit risk is the risk that, in the even t of the failure of the counterparty (e.g., broker-dealer), the City will not be able to recover the value of its inves tments or collateral securities that are in the possession of an outside party.

318
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

75 Note 3 – Cash and Investments (Continued)

C. Risk Disclosures (Continued)

Disclosures Relating to Interest Rate Risk (Continu ed)

The City’s investment policy limits safekeeping of investments to third-party custody. All of the City’s deposits are either insured by the Federal Depository Insurance Corporation (“FDIC”) up to $250,000 or collateraliz ed with pledge securities held in the trust department of the financial institution in the City’s name.

Disclosures Relating to Concentration of Credit Ris k

The City places no limit on the amount the City may invest in any one issuer. However, the City’s inve stment policy calls for portfolio diversification by avoid ing over concentration in a specific maturity secto r or specific investments. The City’s portfolio is detailed below :

Investment Type Value S&P Moody's % of Total
Investment agreements:

US Treasuries 55,206,349$ A Aaa 20.48%
FHLB 17,294,461 AA+ Aaa 6.41%
FHLMC 983,260 AA+ Aaa 0.36%
FNMA 1,590,192 AA+ Aaa 0.59%
FFCB 7,626,242 AA+ Aaa 2.83%
Corporate bonds 26,545,699 AA+ to A- Aaa to A1 9.85% Trust deeds - deferred compensation 1,562,700 NR NR 0.58% Money market funds:

Investment agreements 26,688,545 AAA m Aaa-mf 9.90% Wilmington Trust, NA 2,490,996 A- A2 0.92%
New York Life Fixed Dollar Account 11,196,556 NR NR 4.15% Money market 5,841,749 NR NR 2.17%
Deposits held in trust by fiscal agent 11,610,799 NR NR 4.31% Money market held in trust by fiscal agent 514,060 NR NR 0.19% Local Agency Investment Fund 100,475,458 NR NR 37.26% Total investments 269,627,066$ 100.00%

D. Fair Value Measurement

The City categorizes its fair value measurements wi thin the fair value hierarchy established by genera lly accepted accounting principles. The hierarchy is based on th e valuation inputs used to measure the fair value of the asset.

The hierarchy gives the highest priority to unadjus ted quoted prices in active markets for identical a ssets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements).

The asset’s level within the hierarchy is based on the lowest level of input that is significant to th e fair value measurement. Valuation techniques used, need to max imize the use of observable inputs and minimize the use of unobservable inputs. The determination of what cons titutes observable requires judgment by the City’s management. City management considers observable da ta to be that market data, which is readily availab le, regularly distributed or updated, reliable, and ver ifiable, not proprietary, and provided by multiple independent sources that are actively involved in the relevant market. The categorization of an investment within the hierarchy is based upon the relative observability of the inp uts to its fair value measurement and does not nece ssarily correspond to City management’s perceived risk of that investment.

319
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

76 Note 3 – Cash and Investments (Continued)

D. Fair Value Measurement (Continued)

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 categorize d based on the lowest level input that is significa nt to the valuation. The City’s assessment of the significanc e of particular inputs to these fair value measurem ents requires judgment and considers factors specific to each asset or liability.

Deposits and withdrawals in governmental investment pools, such as LAIF, are made on the basis of $1 a nd not fair value. Accordingly, the City’s measured fair v alue of its proportionate share in these types of i nvestments is based on uncategorized inputs not defined as a Leve l 1, Level 2, or Level 3 input. Non-negotiable FDIC -insured bank certificates of deposit are priced at par.

The City had the following recurring fair value measurements as of June 30, 2025:

Investments measured by fair value level: June 30, 2025 Level 1 Level 2 Level 3 Investment agreements:

US Treasuries 55,206,349$ 55,206,349 $ - $ - $ FHLB 17,294,461 17,294,461 - - FHLMC 983,260 983,260 - - FNMA 1,590,192 1,590,192 - - FFCB 7,626,242 7,626,242 - - Corporate bonds 26,545,699 26,545,699 - - Trust deeds - deferred compensation 1,562,700 - - 1,562,700 Total investments by fair value level 110,808,903 109,246,203 $ - $ 1,562,700$ Investments not subject to the fair value hierarchy :

Money market funds:

Fidelity Investment MM Gov 26,688,545
Wilmington Trust, NA 2,490,996
New York Life Fixed Dollar Account 11,196,556
Money market 5,841,749
Deposits held in trust by fiscal agent 11,610,799
Money market held in trust by fiscal agent 514,060
Local Agency Investment Fund 100,475,458
Total investments not subject to the fair value hie rarchy 158,818,163 Total investments 269,627,066$

The following is a description of the valuation methods and assumptions used by the City to estimate the fair value of its investments:

• Investments classified within Level 1 of the fair v alue hierarchy are valued using quoted prices in ac tive markets when available.

• The City held one type of investment that is measur ed using Level 3 inputs, Trust Deeds. The City administers a Trust Deposit Fund that includes a De ferred Compensation Plan funded solely by the voluntary salary reductions. Trust Deed notes secur ed by property taken back in foreclosure and held f or resale, are valued by independent real estate profe ssionals (market approach), and trust deed notes ar e valued at their present value (income approach). Th e valuations are considered Level 3. The value of properties held for resale are reduced for cost of sales. The notes (loans) are valued based on amount s investors would likely pay for notes with interest rates ranging from 6% to 11% discounted to provide loan to values ranging from 50% to 70% depending on property type and condition, borrowers payment history, and term remaining on note.
320
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

77 Note 3 – Cash and Investments (Continued)

D. Fair Value Measurement (Continued)

There have been no changes in the methods and assum ptions used at June 30, 2025. The methods described may produce a fair value calculation that may not be indicative of net realizable value or reflective of future fair values.

City management believes its valuation methods are appropriate and consistent with other market participants. The use of different methodologies or assumptions to de termine the fair value of certain financial instrum ents could result in a different fair value measurement at the reporting date.

E. Restricted Assets

Certain cash and investments are reported as restricted assets at June 30, 2025 as follows:

Governmental Funds:
2019 Special Tax Bond Monte Bella Debt Service Fund 568,596 $ Assessment District Debt Service Fund - restricted for debt service 143,413 COP 2018B Total Road Improvement Debt Service Fund 2,490,996 2024 Energy Efficiency Debt service Fund 3,703,901
2019 Special Tax Bond Monte Bella Capital Project Fund 13,287 Internal Service Funds:

Workers Compensation Internal Service Fund 278,435
General Liability Internal Service Fund 235,625
Total restricted assets 7,434,253$

Note 4 – Taxes Receivable

Taxes receivable recorded in the General Fund and Cable Special Revenue Fund of $20,691,686 represent amounts due for the quarter ended June 30, 2025 for the following taxes:

Sales tax 7,595,799$
Measure E transaction and use tax 3,499,433
Measure G transaction and use tax 7,035,175
Utility users tax 1,478,609
Transient occupancy tax 804,888
Cannabis tax 56,215
Property transfer tax 44,894
Bingo tax 510
Franchise fees tax 176,163
20,691,686$

Note 5 – Assessments Receivable

Debt Service Funds – Assessments receivable recorded in the 2019 Special Tax Bond Monte Bella Debt Ser vice Fund and Assessment District Debt Service Fund in the am ounts of $6,865,000 and $45,000, respectively, at June 30, 2025, will be collected from property owners to retire ou tstanding bond principal issued for improvements in special assessment districts.

Assessment receivables in the amount of $6,865,000 are not expected to be collected within the subsequent year. 321
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

78 Note 6 – Due From Other Agencies

At June 30, 2025, amounts due from other agencies consisted of the following:

Federal State Other Total
Governmental Activities:

General Fund:

County of Monterey -$ - $ 98,864$ 98,864 $ Special Revenue Funds:

Association of Monterey Bay Area Govts. - 245,188 - 245,188 CA Highway Users Tax - 456,977 - 456,977 CDBG Improvement Program $243,682 - - 243,682 County of Monterey - - 275,262 275,262 Emergency Shelter Grant 21,473 - - 21,473 FEMA - Assistance to Firefighters Grant 16,585 - - 16,585 HOME Investment Program 21,048 - - 21,048 SB1 Road Maintenance & Rehab - 370,598 - 370,598 Transportation Agency for Monterey County - - 1,429,839 1,429,839 U.S. Department of Justice 863,936 - - 863,936 Capital Projects Funds:

CA Dept. of Transportation 1,049,218 - - 1,049,218 Federal Aviation Administration 50,116 - - 50,116 Primary government total 2,266,058$ 1,072,763 $ 1,803,965 $ 5,142,786 $

Note 7 – Leases Receivable

The City leases land and easements to third parties . Leases receivable consist of agreements with thir d parties for the “right-to-use” the underlying assets owned by the C ity. The remaining terms of the agreements range fr om one to 28 years. The calculated interest rates used match the City’s incremental borrowing rate at July 1, 2021.

For fiscal year ended June 30, 2025, the City recog nized $990,183 in lease revenue and $334,209 in interest revenue, and the outstanding receivable amount at June 30, 2025 is $8,881,211.

A summary of changes in the leases receivable for the fiscal year ended June 30, 2025 is as follows:

Amounts Amounts
Balance Balance due within due in more
July 1, 2024 Additions Reductions June 30, 2025 one yea r than one year Governmental activities 4,918,303$ - $ (539,560)$ 4,378,743 $ 437,562 $ 3,941,181 $ Business-type activities 4,776,593 - (274,125) 4,502,468 274,125 4,228,343 Total 9,694,896 $ - $ (813,685)$ 8,881,211 $ 711,687 $ 8,169,524 $

322
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

79 Note 7 – Leases Receivable (Continued)

Future lease payments are as follows as of June 30, 2025:

Year Ending Lease
June 30 Receivable Interest Total
2026 711,687 $ 307,723 $ 1,019,410 $ 2027 587,282 284,785 872,067 2028 609,890 263,951 873,841 2029 529,203 243,760 772,963 2030 515,874 225,588 741,462 2031-2035 3,032,759 833,073 3,865,832 2036-2040 1,972,164 318,990 2,291,154 2041-2045 580,076 106,376 686,452 2046-2050 342,276 87,806 430,082 Total 8,881,211 $ 2,672,052 $ 11,553,263 $

As of June 30, 2025, the amounts reported as deferr ed inflows of resources will be recognized as lease revenue as follows:

Year Ending
June 30 Total
2026 842,795 $
2027 728,387
2028 699,114
2029 587,216
2030 544,395
2031-2035 2,622,366
2036-2040 1,395,613
2041-2045 417,464
2046-2050 231,544
Total 8,068,894$

Note 8 – Loans and Notes Receivable

At June 30, 2025, loans and notes receivable of the City's major individual funds and nonmajor funds taken in aggregate, including the applicable allowance for uncollectible accounts are as follows:

Housing and
Urban Affordable Total
Development Housing Governmental Fiduciary
Fund Fund Activities Funds
Loans funded by federal grants: 23,503,881$ - $ 23,503,881$ - $ Economic development real estate
developer and other loans - 10,385,107 10,385,107 163,900 Less: allowance for uncollectibles (21,631,756) (10,333,536) (31,965,292) - Total loans, net 1,872,125$ 51,571 $ 1,923,696 $ 163,900 $

323
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

80 Note 8 – Loans and Notes Receivable (Continued)

The City uses funds generated from the former Agency Housing Loans as well as other state and federal funding sources to offer financial assistance to qualified develope rs, individuals, and families by providing loans at “below market” interest rates.

Typical loans and related terms are summarized as follows:

Loan Type Interest Rates Due
Affordable housing 0 - 4% up to 55 years
Multi-unit rental rehabilitation 3% 5 or more years
First time home buyer 3% 7 to 40 years
Home improvement 3 - 6% 1 to 30 years

Loans are secured by first or second in lien-property deeds of trust except for first time homebuyer loans, which are all secured by second deeds of trust. Interest and principal are typically due in installments, except for first time homebuyer, which do not require payments until their maturity dates.

The City has also invested in multi-family rental housing projects serving low to moderate income individuals through subordinate loans with terms of up to 55 years. Gen erally, these loans are to be repaid through fixed payments or net cash flow payments from project operations and the term and potential risk of each loan varies. Because of the net cash flow feature of these subordinate loans, there is g reater risk of variability in the timing of payment s and, potentially, a lower probability of eventual repayment on these subordinate loans than on other loan types.

Accordingly, for financial statement purposes, the City has established an allowance account for these loans receivable due to the contingent nature of the repayment schedules of these loans.

324
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

81 Note 9 – Interfund Receivables, Payable, and Transfers

A. Due From and To Other Funds

At June 30, 2025, the balances of due from and to other funds were as follows:

Receivable Fund Payable Fund Amount Purpose
General Fund Lighting, Landscape and Maintenance Dist Special Revenue Fund 53,127$ Cash Overdraft General Fund Development Fees Special Revenue Fund 269 Cash Overdraft General Fund Emergency Medical Services Special Revenue Fund 27,5 06 Cash Overdraft General Fund Traffic Safety Special Revenue Fund 59,575 Cash Overdraft General Fund Housing and Urban Development Special Revenue Fund 1 ,830,280 Cash Overdraft General Fund Grants Special Revenue Fund 2,484,820 Cash Overdraft General Fund Assessment District Administration Debt Service Fun d 145,591 Cash Overdraft General Fund COP 2018B T.R.I.P. Total Road Improvement Debt Serv ice Fund 163,401 Cash Overdraft General Fund Assessment District Debt Service Debt Service Fund 7 09,969 Cash Overdraft General Fund Special Construction Assistance Capital Projects Fund 4,127,927 Cash Overdraft General Fund Sanitary Sewer Enterprise Fund 200,292 Admin Fees General Fund Downtown Parking District Enterprise Fund 1,677,465 Cash Overdraft General Fund Internal Services Insurances Internal Service Fund 3 03,832 Cash Overdraft 11,784,054
Capital Projects Capital Projects Fund General Fund 1,692,123 Capital projects Capital Projects Capital Projects Fund Development F ees Special Revenue Fund 62,518 Capital projects Capital Projects Capital Projects Fund Gas Tax Speci al Revenue Fund 45,187 Capital projects Capital Projects Capital Projects Fund Measure X Spe cial Revenue Fund 27,809 Capital projects Capital Projects Capital Projects Fund SB1 Road Main tenance & Rehab Special Revenue Fund 41,475 Capital projects Capital Projects Capital Projects Fund Special Aviat ion Capital Projects Fund 7,777 Capital projects Capital Projects Capital Projects Fund Special Const ruction Assistance Capital Projects Fund 1,477,402 Capital projects Capital Projects Capital Projects Fund Municipal Air port Enterprise Fund 111,019 Capital projects Capital Projects Capital Projects Fund Sanitary Sewe r Enterprise Fund 39,537 Capital projects Capital Projects Capital Projects Fund Permit Servic es Enterprise Fund 39,122 Capital projects 3,543,969
Workers Compensation Internal Service Fund General F und 16,831,462 Claims Total 32,159,485$

B. Long-Term Advances

At June 30, 2025, the balances of long-term advances were as follows:

Advances Due To
Governmental
Activities
General Fund
Advances Due From
Business-Type Activities:

Downtown Parking 2,785,000$
Total business-type activities 2,785,000
Total primary government 2,785,000$

Advances from the General Fund to the Downtown Park ing District Fund total $2,785,000 at June 30, 2025 . The advances helped subsidize operations in the Downtown Parking District Fund as program needs, including sources and uses, were established. As the Downtown Parking District becomes fully self-sufficient, a plan wil l be established to pay back the advance from the General Fund over time. 325
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

82 Note 9 – Interfund Receivables, Payable, and Transfers (Continued)

C. Transfers

Interfund transfers during the year ended June 30, 2025, consisted of the following:

Transfers In Transfers Out Amount Purpose
General Fund Gas Tax Special Revenue Fund 2,265,000$ Capital projects/debt service General Fund Traffic Safety Special Revenue Fund 200,000 Capital projects/debt service Subtotal General Fund 2,465,000
Capital Projects Capital Projects Fund General Fund 12,662,949 Capital projects Capital Projects Capital Projects Fund Lighting Land scape and Maintenance Special Revenue Fund 62,618 Capital projects Capital Projects Capital Projects Fund Development F ees Special Revenue Fund 582,340 Capital projects Capital Projects Capital Projects Fund Gas Tax Speci al Revenue Fund 1,171,791 Capital projects Capital Projects Capital Projects Fund MX-Transport Safety & Inv Plan Special Revenue Fund 853,392 Capital projects Capital Projects Capital Projects Fund SB1 Road Main tenance & Rehab Special Revenue Fund 1,765,029 Capital projects Capital Projects Capital Projects Fund Housing and U rban Development Grant Special Revenue Fund 1,175,21 9 Capital projects Capital Projects Capital Projects Fund Special Aviat ion Capital Projects Fund 41,215 Capital projects Capital Projects Capital Projects Fund Special Const ruction Assistance Capital Projects Fund 6,439,355 Capital projects Capital Projects Capital Projects Fund Airport Enter prise Fund 268,969 Capital projects Capital Projects Capital Projects Fund Industrial Wa ste Enterprise Fund 2,328,970 Capital projects Capital Projects Capital Projects Fund Sanitary Sewe r Enterprise Fund 184,412 Capital projects Capital Projects Capital Projects Fund Downtown Park ing Enterprise Fund 2,157 Capital projects Capital Projects Capital Projects Fund Permit Servic es Enterprise Fund 332,034 Capital projects Subtotal Capital Projects Capital Projects Fund 27,8 70,450 Housing and Urban Development Grant Special Revenue Fund General Fund 65,578 Operating subsidy Emergency Medical Services Special Revenue Fund Gene ral Fund 1,600,000 Operating subsidy Grants Special Revenue Fund General Fund 59 Operating subsidy Rent Stabliziation Special Revenue Fund General Fund 205,203 Operating subsidy Local Housing Trust General Fund 1,500,000 Operating subsidy 2014 COP Consolidation General Fund 228,064 Debt service 2018 Lease-PS Building-Police General Fund 4,457,230 Debt service COP 2018B T.R.I.P. Total Rd Impv MX-Transport Safety & Inv Plan Special Revenue Fund 4,287,533 Debt service 2018 Lease-El Gabilan Library General Fund 777,515 Debt service 2020A Refunding Energy Debt Service Fund General Fun d 1,296,960 Debt service 2020A Refunding Energy Debt Service Fund Airport Ent erprise Fund 81,605 Debt service 2020A Refunding Energy Debt Service Fund Industrial Waste Enterprise Fund 76,390 Debt service 2020A Refunding Energy Debt Service Fund Sanitary Se wer Enterprise Fund 101,805 Debt service 2020A Refunding Energy Debt Service Fund Downtown Pa rking District Enterprise Fund 34,535 Debt service Subtotal 2020A Refunding Energy Debt Service Fund 1, 591,295 2020A Refunding SVSWA Debt Service Fund General Fund 663,330 Debt service General Insurance Internal Service Fund General Fund 1,450,000 Operating subsidy General Liabiilty Internal Service Fund General Fund 6,000,000 Operating subsidy General Liabiilty Internal Service Fund Workers' Com p Self Insurance Internal Service Fund 650,000 Operating subsidy Fleet Maintenance Internal Service Fund General Fund 2,000,000 Operating subsidy Total 55,811,257$

326
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

83 Note 10 – Capital Assets

A. Governmental Activities

The summary of changes in governmental activities capital assets for the year ended June 30, 2025, is as follows:

Balance Adjustments/ Balance
Governmental Activities: July 1, 2024 Additions Retirements Transfers June 30, 2 025 Non-depreciable/amortizable assets:

Land 37,953,126$ - $ - $ - $ 37,953,126$ Construction in progress 25,235,279 9,023,417 (3,515,619) - 30,743,077 Total non-depreciable/amortizable assets 63,188,405 9,023,417 (3,515,619) - 68,696,203 Depreciable/amortizable assets
Buildings and improvements 134,749,588 - - - 134,749,588 Improvements other than buildings 50,903,966 1,942,162 - - 52,846,128 Machinery and equipment 50,518,200 2,479,201 (718,564) - 52,278,837 Infrastructure 434,605,116 - - - 434,605,116 Right-to-use assets - leases 550,536 - (337,505) - 213,031 Right-to-use assets - subscriptions 410,213 239,641 - - 649,854 Total depreciable/amortizable assets 671,737,619 4,661,004 (1,056,069) - 675,342,554 Accumulated depreciation/amortization
Buildings and improvements (29,071,009) (2,655,404) - - (31,726,413) Improvements other than buildings (26,648,008) (1,598,186) - - (28,246,194) Machinery and equipment (39,774,594) (2,674,639) 580,928 - (41,868,305) Infrastructure (303,079,335) (8,461,985) - - (311,541,320) Right-to-use assets - leases (425,188) (101,994) 337,505 - (189,677) Right-to-use assets - subscriptions (163,946) (136,661) - - (300,607) Total accumulated depreciation/amortization (399,162 ,080) (15,628,869) 918,433 - (413,872,516) Total depreciable/amortizable assets, net 272,575,53 9 (10,967,865) (137,636) - 261,470,038 Governmental activities
capital assets, net 335,763,944$ (1,944,448) $ (3,653,255) $ - $ 330,166,241$

Depreciation and amortization expense was charged t o the functions/programs of the governmental activi ties as follows:

Governmental Activities:

General government 294,428$
Police 2,356,645
Fire 708,421
Public works, including infrastructure 11,380,224
Recreation and parks 704,369
Library 184,782
Total depreciation/amortization expense - governmental activities 15,628,869$

327
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

84 Note 10 – Capital Assets (Continued)

B. Business-Type Activities

The summary of changes in business-type activities capital assets for the year ended June 30, 2025, is as follows:

Balance Balance
Business-Type Activities: July 1, 2024 Additions Retirements Transfers June 30, 2 025 Nondepreciable assets:

Land 3,630,695$ - $ - $ - $ 3,630,695$ Construction in progress 2,291,239 32,156 - - 2,323,395 Total nondepreciable assets 5,921,934 32,156 - - 5,954,090 Depreciable assets
Buildings and improvements 25,888,821 - - - 25,888,821 Improvements other than buildings 15,970,700 - - - 15,970,700 Machinery and equipment 7,871,497 95,753 (31,823) - 7,935,427 Infrastructure 102,709,198 - - - 102,709,198 Total depreciable assets 152,440,216 95,753 (31,823) - 152,504,146 Accumulated depreciation:

Buildings and improvements (17,280,738) (669,508) - - (17,950,246) Improvements other than buildings (7,410,735) (759,470) - - (8,170,205) Machinery and equipment (5,786,586) (326,110) 20,685 - (6,092,011) Infrastructure (62,645,238) (1,527,651) - - (64,172,889) Total accumulated depreciation (93,123,297) (3,282,739) 20,685 - (96,385,351) Total depreciable assets, net 59,316,919 (3,186,986) (11,138) - 56,118,795 Business-type activities
capital assets, net 65,238,853$ (3,154,830) $ (11,138) $ - $ 62,072,885$

Depreciation expense was charged to the functions/programs of the business-type activities as follows:

Business-type Activities:

Airport 958,162$
Industrial Waste 491,560
Sanitary Sewer 1,252,738
Downtown Parking 542,897
Permit Services 37,382
Total depreciation expense - business-type activiti es 3,282,739 $

Note 11 – Land and Properties Held For Resale

Land and properties held for resale at June 30, 2025 consisted of the following:

SRA Public Improvement Grant Special Revenue Fund
137, 145, & 151 Division Street 584,419$
Affordable Housing Fund - Sunset Avenue Merged Housing
115 Division Street 230,981
123 Division Street 206,265
923 E. Market Street 358,335
795,581
Total land and properties held for resale 1,380,000 $
328
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

85 Note 12 – Long-Term Debt

A. Governmental Activities

A summary of changes in long-term debt for governmental activities for the year ended June 30, 2025 is as follows:

Amount due Amount due in
Balance Balance within one more than one
July 1, 2024 Additions Retirements June 30, 2025 year y ear Governmental Activities
Direct borrowings - leases 46,586,821 $ 4,735,000 $ (4,547,875) $ 46,773,946 $ 4,685,821 $ 42,088,125 $ Direct borrowings - minor leases 94,968 - (94,968) - - - Direct borrowings - subscriptions 137,076 239,641 (138,727) 237,990 77,430 160,560 total direct borrowings 46,818,865 4,974,641 (4,781,570) 47,011,936 4,763,251 42,248,685 Certificates of Participation:

TRIP 2018B 33,820,000 - (850,000) 32,970,000 890,000 32,080,000 Series 2020A-Twin Creeks 1,230,000 - (395,000) 835,000 410,000 425,000 Series 2020B Fairways 3,600,000 - (135,000) 3,465,000 155,000 3,310,000 Series 2020A-Energy (2014) 12,845,000 - (1,080,000) 11,765,000 1,155,000 10,610,000 Series 2020A-SVSWA (2015B) 2,225,000 - (585,000) 1,640,000 610,000 1,030,000 Bond premium/(discount):

TRIP 2018B 2,552,377 - (288,032) 2,264,345 - 2,264,345 TRIP 2018B (304,519) - 13,240 (291,279) - (291,279) Series 2020A-Twin Creeks 136,042 - (45,347) 90,695 - 90,695 Series 2020A-Energy (2014) 2,236,241 - (248,470) 1,987,771 - 1,987,771 Series 2020A-SVSWA (2015B) 280,622 - (70,155) 210,467 - 210,467 Total Certificates of Participation: 58,620,763 - (3,683,764) 54,936,999 3,220,000 51,716,999 Assessment District Bonds:

Assessment District 2017 Act Bonds 90,000 - (45,000) 45,000 45,000 - CFD Monte Bella-2019 #1 2,465,000 - (55,000) 2,410,000 55,000 2,355,000 CFD Monte Bella-2019 #2 1,965,000 - (45,000) 1,920,000 45,000 1,875,000 CFD Monte Bella-2019 #3 2,590,000 - (55,000) 2,535,000 55,000 2,480,000 Bond premium/(discount):

CFD Monte Bella-2019 #1 64,942 - (2,498) 62,444 - 62,444 CFD Monte Bella-2019 #2 182,824 - (7,032) 175,792 - 175,792 CFD Monte Bella-2019 #3 226,193 - (8,377) 217,816 - 217,816 Total Assessment District Bonds 7,583,959 - (217,907) 7,366,052 200,000 7,166,052 Total governmental activities 113,023,587$ 4,974,641 $ (8,683,241) $ 109,314,987 $ 8,183,251 $ 101,131,736 $

Direct Borrowing – Leases

Annual debt service requirements to maturity for the City’s major leases are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 4,685,821$ 1,889,781 $ 6,575,602 $
2027 4,346,125 1,672,417 6,018,542
2028 4,279,000 1,462,049 5,741,049
2029 4,509,000 1,245,632 5,754,632
2030 4,743,000 1,038,322 5,781,322
2031-2035 11,544,000 3,196,609 14,740,609 2036-2040 4,299,000 2,152,886 6,451,886 2041-2045 5,213,000 1,170,807 6,383,807 2046-2049 3,155,000 254,844 3,409,844 Total 46,773,946$ 14,083,347 $ 60,857,293 $
329
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

86 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Direct Borrowing – Leases (Continued)

Pierce Pumper & Tiller

On March 6, 2015, the City, using lease purchase fi nancing, purchased a Pierce Pumper and Tiller for a total of $1,628,839. The City will make ten annual payments beginning on March 6, 2016 and ending March 6, 2025 at

2.51% interest. The lease was paid off in full as of June 30, 2025.

2014 Lease/Purchase Agreement

The City of Salinas 2014 Lease/Purchase Agreement w as issued by the Salinas Facilities Financing Autho rity on January 29, 2014. The financing was issued to refund the Animal Shelter COP Series A-1999 ($2,812,000) and the Monterey Street Parking Structure COP Series A-2004 ($13,253,000). The Animal Shelter portion of the financing was issued for 19 years (ending September 1, 2032), at an average interest rate of 4.02%. Maximum annu al debt service is $278,646. Debt payable of $1,131,000 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, the trustee may pursue any available remedy by law or pursuant to the lease agreement to enforce payment of the outstandi ng amounts. However, there shall be no right under any circumstance to accelerate the lease payments or ot herwise declare any lease payments not then in defa ult to be immediately due and payable. After the occurrence of an event of default, the City will surrender possession of the property to the financing authority, if requested to do so.

Debt service requirements to maturity for 2014 Lease/Purchase Agreement are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 191,000 $ 41,627 $ 232,627 $
2027 120,000 35,376 155,376
2028 124,000 30,472 154,472
2029 127,000 25,427 152,427
2030 134,000 20,181 154,181
2031-2034 435,000 26,793 461,793 Total 1,131,000 $ 179,875 $ 1,310,875 $
330
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

87 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Direct Borrowing – Leases (Continued)

Public Safety Building 2018A

The City of Salinas 2018A Capital Lease was issued by Salinas Public Facilities, Inc. in the amount of $48,825,000 on June 28, 2018. The purpose of this financing was to raise funds for the construction of a new Publi c Safety Building (Police Department) within City limits. Th e City started making semi-annual payments beginnin g on December 1, 2018 and ending December 1, 2034 at an average interest rate of 3.375%. Maximum annual deb t service is $4,799,181. Debt payable of $26,595,000 is recorded as Governmental Activities at June 30, 2025.

In the event of an event of default, the trustee shall be entitled to declare the principal of all the bonds then outstanding, and the interest accrued thereon, to be due and payable immediately. Upon such declaration, anything in the indenture or in the bonds contained to the c ontrary notwithstanding, shall also be due and paya ble immediately, and interest on the bonds shall cease to accrue on the date of such declaration.

Debt service requirements to maturity for Public Safety Building 2018A are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 3,370,000$ 1,093,694 $ 4,463,694 $
2027 3,540,000 920,944 4,460,944
2028 3,715,000 739,569 4,454,569
2029 3,905,000 549,069 4,454,069
2030 4,100,000 369,444 4,469,444
2031-2034 7,965,000 293,591 8,258,591 Total 26,595,000$ 3,966,310 $ 30,561,310 $

El Gabilan Library 2018B

The City of Salinas 2018B Capital Lease was issued by Salinas Public Facilities, Inc. in the amount of $19,830,000 on June 28, 2018. The purpose of this financing was to raise funds for the construction of a new Public Library (El Gabilan) within City limits. The City started makin g semi-annual payments beginning on December 1, 201 8 and ending December 1, 2048 at an average interest rate of 3.900%. Maximum annual debt service is $1,152,781. Debt payable of $13,220,000 is recorded as Governmental Activities at June 30, 2025.

In the event of an event of default, the trustee shall be entitled to declare the principal of all the bonds then outstanding, and the interest accrued thereon, to be due and payable immediately. Upon such declaration, anything in the indenture or in the bonds contained to the c ontrary notwithstanding, shall also be due and paya ble immediately, and interest on the bonds shall cease to accrue on the date of such declaration.

331
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

88 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Direct Borrowing – Leases (Continued)

El Gabilan Library 2018B (Continued)

Debt service requirements to maturity for El Gabilan Library 2018B are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 255,000 $ 526,744 $ 781,744 $
2027 345,000 512,213 857,213
2028 360,000 495,556 855,556
2029 380,000 478,088 858,088
2030 395,000 459,775 854,775
2031-2035 2,265,000 2,021,225 4,286,225 2036-2040 2,750,000 1,537,953 4,287,953 2041-2045 3,315,000 959,844 4,274,844 2046-2049 3,155,000 254,844 3,409,844 Total 13,220,000$ 7,246,242 $ 20,466,242 $

Police/Fire Radios & PW Equipment

The City of Salinas Motorola radios and public work s equipment lease was issued by Banc of America Pub lic Capital Corporation in the amount of $3,500,000 on August 17, 2018. This equipment replaces old manufa ctured models and will make Police, Fire, and Public Work operations more efficient. The lease consists of 84 payments, beginning on August 17, 2019 and ending on August 17, 2025 at an average interest rate of 3.120%. Debt payable of $547,242 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, legal t itle and physical position of the equipment shall p ass to the Lessor, and the City shall have no further interest therein.

Debt service requirements to maturity for Police/Fire Radios & PW Equipment are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 547,242 $ 17,074 $ 564,316 $
Total 547,242 $ 17,074 $ 564,316 $

2021 Pierce Enforcer Pumpers

In fiscal year 2022, the City, using lease purchase financing, purchased a Pierce Enforcer Pumper fire engine for a total of $1,330,913. The City will make six annual payments of $279,747, beginning on December 17, 202 1 and ending December 17, 2026 at 1.68% interest. Debt pa yable of $545,704 is recorded as Governmental Activ ities at June 30, 2025.
332
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

89 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Direct Borrowing – Leases (Continued)

2021 Pierce Enforcer Pumpers (Continued)

If any event of default occurs, and if the lessee a grees to pay, the lessor may require the lessee to pay all amounts currently due and all remaining rent payments due d uring the fiscal year in effect when the default oc curs with interest at the highest lawful rate from the date o f the lessor’s demand for such payment. Also includ ed in this scenario are additional out-of-pocket expenses incu rred by the lessor including attorney fees, reposse ssion, safekeeping, storage, repair, reconditioning, and disposition costs. Alternatively, the lessor can require the lessee to return all equipment for the purpose of lease, sale, or otherwise disposition by the lessor.

Debt service requirements to maturity for the 2021 Pierce Enforcer Pumper are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 270,579 $ 9,168 $ 279,747 $
2027 275,125 4,622 279,747
Total 545,704 $ 13,790 $ 559,494 $

2024 Energy Efficiency and Backup Generator

On December 19, 2024, the City entered an agreement with Banc of America Public Capital Corp to lease and acquire photovoltaic & generator equipment for $4,3 75,000. The lease consists of 19 payments, beginnin g on June 1, 2026 and ending on June 1, 2044 at interest rate of 4.255%. Debt payable of $4,735,000 is reco rded as Governmental Activities at June 30, 2025.

The annual debt service requirements to maturity for the certificates are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 52,000 $ 201,474 $ 253,474 $
2027 66,000 199,262 265,262
2028 80,000 196,453 276,453
2029 97,000 193,049 290,049
2030 114,000 188,922 302,922
2031-2035 879,000 855,000 1,734,000 2036-2040 1,549,000 614,933 2,163,933 2041-2044 1,898,000 210,963 2,108,963 Total 4,735,000 $ 2,660,056 $ 7,395,056 $

Minor Leases

The City has entered into various minor leases for equipment such as copiers, etc. that were subject t o GASB 87 Leases implementation in fiscal year 2022. They were paid off in full as of June 30, 2025.

333
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

90 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Certificates of Participation Bonds

Series 2018B – TRIP

On July 18, 2108, the California Statewide Communit ies Development Authority Transportation Revenue is sued City of Salinas Certificates of Participation, Seri es 2018B totaling $37,500,000 at various interest r ates plus premium and discounts. The purpose of this financing was to provide expedited funding for the design, acquisition, and construction of local roadway and street improvement projects within the jurisdiction of the City. Debt payable of $32,970,000 plus premiums and discounts of $2,26 4,345 and ($291,279), respectively, are recorded as Governmental Activities at June 30, 2025.

In the event of an event of default, the trustee shall be entitled to exercise the remedies provided under the agreement to collect the outstanding payments in full, with no grace period permitted.

The annual debt service requirements to maturity for the certificates are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 890,000 $ 1,442,525 $ 2,332,525 $
2027 925,000 1,406,225 2,331,225
2028 950,000 1,363,975 2,313,975
2029 1,010,000 1,314,975 2,324,975
2030 1,060,000 1,263,225 2,323,225
2031-2035 6,095,000 5,500,700 11,595,700 2036-2040 7,765,000 3,782,750 11,547,750 2041-2045 9,815,000 1,723,188 11,538,188 2046-2049 4,460,000 157,500 4,617,500 Total 32,970,000$ 17,955,063 $ 50,925,063 $

334
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

91 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Certificates of Participation Bonds (Continued)

Series 2020A Twin Creeks

On March 16, 1999, the Salinas Public Financing Aut hority issued City of Salinas Certificates of Parti cipation (Certificates) Series A-1999 totaling $14,315,000. A portion of the Certificates was allocated for the construction of an animal shelter, $1,250,338, and the balance of the Certificates, $13,064,662 was allocated for construction of the new Twin Creeks (9-hole) Golf Course. On August 24, 2004, the City entered into a sublease agreeme nt with the Monterey Peninsula Foundation and its related f oundation, Future Citizens Foundation, dba the Firs t Tee of Monterey County providing for the lease of Twin Creeks golf course to Future Citizens Foundation. As a condition of the lease, the City repaid the portion of the 1999 Certificates attributable to the Twin Creeks golf course facility (about 57.5% of the lease payments of $575,000) and refinanced that golf course portion with a new Ref unding issue of Certificate of Participation. On September 14, 2005, the Salinas Public Financing Authority issued City of Salinas Refunding Certificates of Participation Series 2005A, in the amount of $8,005,000, to refund the portion of the 1999 Certificates attributed to Twin Creeks. Re funding Certificates Series 2005A were issued for 2 4 years at

4.22% and were secured by a lien on Twin Creeks golf course. The net value expense of the funding was $117,298.

The refunding was completed to issue qualified 501 (c) 3 bonds to provide for the operation of Twin Cr eeks golf course by First Tee of Monterey County. Annual debt service for the 2005A Certificates ($572,308) was paid by the annual lease payments ($575,000) from Future Citizens Foundation and guaranteed by the Monterey Peninsula Foundation. At the request of First Tee of Monterey County, on December 6, 2011, the City approved a s ublease payment reduction from $575,000 to $125,000 (an ann ual reduction of $450,000). This request was the re sult of First Tee’s significant golf course operating losses. With the goal of maintaining a quality of level of service to the thousands of golf youth participants and as the mos t cost-effective alternative, the City Council appr oved the General Fund support through fiscal year 2015-16 to offset the reduced amount of the sublease to the F irst Tee of Monterey County.

On September 1, 2015, the City issued Refunding Cer tificates of Participation Series 2015, in the amou nt of $11,440,000 at a 2.53% interest rate, to refund the outstanding portion of the 2005A Certificates of P articipation (Twin Creeks) and the 2005B Certificates of Participation (Capital Improvements). Bond started September 1, 2015 and will end after 12 years on September 1, 2027.

On August 19, 2020, the Salinas Public Financing Au thority issued City of Salinas Certificates of Part icipation, Series 2020A totaling $2,715,000. The Advance Refun ding Certificates were issued to refund the 2015A T win Creeks Golf Project. Bond started November 1, 2020 and will end after 6 years on November 1, 2026. The advance refunding of the 2015A Twin Creeks Golf Project red uced total debt service payments over the next 6 ye ars by $134,501. This results is an economic gain (difference between the present values of the debt service payments on the old and new debt) of $222,408. Debt payable of $835,000 is recorded in the governmental activities at June 30, 2025.

In the event of an event of default, the Trustee may and, at the direction of the owners of not less than a majority of the aggregate principal amount of bonds then outstanding, and upon being indemnified to its reasonable satisfaction therefore, shall, upon notice in writing to the City and the Salinas Financing Authority, exercise any of the remedies granted to the Salinas Financing Authority under the lease agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the owners, either at law or in equity bankruptcy or otherwise, whether for specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right.
335
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

92 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Certificates of Participation Bonds (Continued)

Series 2020A Twin Creeks (Continued)

The annual debt service requirements to maturity for the certificates are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 410,000 $ 25,200 $ 435,200 $
2027 425,000 8,500 433,500
Total 835,000 $ 33,700 $ 868,700 $

Series 2020B Fairways

On August 2008, the City of Salinas was issued Refunding Certificates of Participation Series 2008, in the amount of $4,660,000 at a variable interest rate, to refun d the outstanding portion of the 1999 Certificate p ertaining to the Fairways Golf Project. Bond started September 1, 2008 and will end after 30 years on September 1, 2038. Following the execution and delivery of the Certificates of P articipation Series 2008, the 1999 Certificates, at tributed to the animal shelter, will remain outstanding.

On August 19, 2020, the Salinas Public Financing Au thority issued City of Salinas Certificates of Part icipation, Series 2020B totaling $4,040,000. The Advance Refun ding Certificates were issued to refund the 2008 CO P Fairways Golf Project. Bond started November 1, 202 0 and will end after 18 years on November 1, 2038. The advance refunding of the 2008 COP Fairways Golf Pro ject reduced total debt service payments over the n ext 18 years by $1,311,557. This results is an economic lo ss (difference between the present values of the de bt service payments on the old and new debt) of $222,581. Debt payable of $3,465,000 is recorded in the governmen tal activities at June 30, 2025.

In the event of an event of default, the Trustee may and, at the direction of the owners of not less than a majority of the aggregate principal amount of bonds then outstanding, and upon being indemnified to its reasonable satisfaction therefore, shall, upon notice in writing to the City and the Salinas Financing Authority, exercise any of the remedies granted to the Salinas Financing Authority under the lease agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the owners, either at law or in equity bankruptcy or otherwise, whether for specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right.
336
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

93 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Certificates of Participation Bonds (Continued)

Series 2020B Fairways (Continued)

The annual debt service requirements to maturity for the certificates are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 155,000 $ 90,619 $ 245,619 $
2027 165,000 88,184 253,184
2028 185,000 85,126 270,126
2029 200,000 81,354 281,354
2030 220,000 76,901 296,901
2031-2035 1,265,000 289,033 1,554,033 2036-2039 1,275,000 78,975 1,353,975 Total 3,465,000 $ 790,192 $ 4,255,192 $

Series 2020A Energy (2014)

On November 1, 2014, the City entered into a lease agreement funded through private placement in the amount of $21,908,000. The project will install LED lighting on streetlights and parking lots in addition to building solar PV installations at the Hitchcock Road Animal Shelter, the Industrial Waste Treatment Plant, the Salinas Municipal Airport, the Permit Center, Sherwood Hall, and the Sewer Lift Station site off Work Street. The Debt S ervice repayment were set to be over a 17-year period at 3 .03% interest beginning May 1, 2016 and ending November 1, 2032. Maximum annual debt service was $2,005,124.

On August 19, 2020, the Salinas Public Financing Au thority issued City of Salinas Certificates of Part icipation, Series 2020A totaling $16,190,000. The Advance Refu nding Certificates were issued to refund the 2014 E nergy Improvement Lease. Bond started November 1, 2020 an d will end after 12 years on November 1, 2032. The advanced refunding of the 2014 Energy Lease reduced total debt service payments over the next 12 years by $1,513,227. This results is an economic gain (difference between the present v alues of the debt service payments on the old and new debt) of $1,425,483. Debt payabl e of $11,765,000 is recorded as Governmental Activi ties at June 30, 2025.

In the event of an event of default, the Trustee may and, at the direction of the owners of not less than a majority of the aggregate principal amount of bonds then outstanding, and upon being indemnified to its reasonable satisfaction therefore, shall, upon notice in writing to the City and the Salinas Financing Authority, exercise any of the remedies granted to the Salinas Financing Authority under the lease agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the owners, either at law or in equity bankruptcy or otherwise, whether for specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right.
337
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

94 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Certificates of Participation Bonds (Continued)

Series 2020A Energy (2014) (Continued)

The annual debt service requirements to maturity for the certificates are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 1,155,000$ 464,550 $ 1,619,550 $
2027 1,235,000 416,750 1,651,750
2028 1,320,000 365,650 1,685,650
2029 1,410,000 311,050 1,721,050
2030 1,505,000 252,750 1,757,750
2031-2033 5,140,000 342,975 5,482,975 Total 11,765,000$ 2,153,725 $ 13,918,725 $

Series 2020A SVSWA (2015B)

On October 24, 1997, the Salinas Public Financing A uthority issued City of Salinas Certificates of Par ticipation (Certificates) Series A-1997 totaling $11,960,000. The purpose of this financing was to raise money fo r capital improvement projects and to refund the Authority’s Variable Rate Lease Revenue Bonds, which were issue d to purchase the 65 W. Alisal Building. The Variable Ra te Lease Revenue Bonds Series A-1997 and Series B-1 997 were fully retired on November 20, 1997. The outstanding Certificates were secured by liens on City owned assets that included City Hall; Public Safety Building; Steinbeck Library, and 65 W. Alisal Building.

On September 14, 2005, the Salinas Public Financing Authority issued City of Salinas Refunding Certifi cates of Participation Series 2005B (1997 Capital Improvement Projects). The Refunding Certificates were issued to refund Series A-1997 Certificates. Series 2005B Refunding Certificates were issued in the amount of $11,705,0 00 for 24 years at 4.22%. The Refunding Certificates were sec ured by a lien on the Salinas Community Center with an appraised value of $13,415,000. With these refunding, liens were removed from the City’s Public Safety Building, 65 West Alisal Building and Steinbeck Library.

On September 1, 2015, the City issued Refunding Cer tificates of Participation Series 2015, in the amou nt of $11,440,000 at a 2.53% interest rate, to refund the outstanding portion of the 2005A Certificates of P articipation (Twin Creeks) and the 2005B Certificates of Participation (Capital Improvements). Bond started September 1, 2015 and will end after 12 years on September 1, 2027.

On August 19, 2020, the Salinas Public Financing Au thority issued City of Salinas Certificates of Part icipation, Series 2020A totaling $4,440,000. The Advance Refun ding Certificates were issued to refund the 2015B S alinas Valley Solid Waste Authority Bonds. Bond started No vember 1, 2020 and will end after 7 years on November 1, 2027. The advance refunding of the 2015B Salinas Valley Solid Waste Authority advance refunding reduced total debt service payments over the next 7 years by $241,953. This results is an economic gain (difference between the present values of the debt service paym ents on the old and new debt) of $244,664. Debt pay able of $1,640,000 is recorded as Governmental Activities at June 30, 2025. 338
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

95 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Certificates of Participation Bonds (Continued)

Series 2020A SVSWA (2015B) (Continued)

In the event of an event of default, the Trustee may and, at the direction of the owners of not less than a majority of the aggregate principal amount of bonds then outstanding, and upon being indemnified to its reasonable satisfaction therefore, shall, upon notice in writing to the City and the Salinas Financing Authority, exercise any of the remedies granted to the Salinas Financing Authority under the lease agreement and, in addition, take whatever action at law or in equity may appear necessary or desirable to enforce its rights as assignee pursuant to the Assignment Agreement or to protect and enforce any of the rights vested in the Trustee or the owners, either at law or in equity bankruptcy or otherwise, whether for specific enforcement of any covenant or agreement or for the enforcement of any other legal or equitable right.

The annual debt service requirements to maturity for the certificates are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 610,000 $ 53,400 $ 663,400 $
2027 630,000 28,600 658,600
2028 400,000 8,000 408,000
Total 1,640,000 $ 90,000 $ 1,730,000 $

Assessment District Bonds

At June 30, 2025, outstanding Assessment District B onds totaled $6,910,000 plus bond premiums of $456, 052.

Bonds issued for improvements in special assessment districts are liabilities of the property owners and are secured by liens against the assessed property. In the case of default, the City has the authority to advance bonds payments from the special reserve fund and to foreclosure on delinquent property. The bonds are secured by a pl edge of the net revenue of the Assessment District and may not be used for any other purpose. The total Assessment District Reserve Fund balance was $2,049,072 at June 30, 2025.

Assessment District 2017 Act Bonds

On July 28, 2017, the City issued $4,555,000 in bonds to refinance the following special assessment district debt:

x 1998 AD 98-1 – Bella Vista III Refunding ($2,665,000) x 2000 AD 96-2 – Acacia Park Refunding ($340,000)
x 2002 RADA – Bella Vista Refunding ($1,365,000)
x 2002 RADB – Bella Vista Refunding ($185,000)

The refunding of the assessment districts debt reduced total debt service payments over 9 years by $93 7,889. This resulted in an economic gain (difference between th e present values of the debt service payments on th e old and new debt) of $318,303. Maximum debt service is $882 ,065, including interest ranging from 2.3% to 2.7% for 9 years. Debt payable of $45,000 is recorded in governmental activities at June 30, 2025. 339
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

96 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Assessment District Bonds (Continued)

Assessment District 2017 Act Bonds (Continued)

Upon the occurrence of an event of default, the trustee shall be entitled to exercise the remedies provided under the agreement to compel the City to perform and carry o ut their duties under the 1913 Act, the 1915 Act, o r the 1984 Act and their agreements with the owners provided in the Bond agreement.

Annual debt service requirements to maturity for Assessment District 2017 Act Bonds are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 45,000 $ 608 $ 45,608 $ Total 45,000 $ 608 $ 45,608 $

CFD Monte Bella-2019 – Community Facilities Distric t No. 2016-1 (Monte Bella) of the City of Salinas 2 019 Special Tax Bonds (Improvement Area No. 1)

On February 21, 2019, the Bond Purchase Agreement w as signed in the amount of $2,675,000 at various in terest rates to finance the acquisition and/or construction of certain public facilities and improvements within Community Facilities District (CFD) No. 2016-1 Improvement Ar ea No. 1 of the district. Debt payable net of premi ums of $2,410,000 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, the tru stee may pursue any available remedy by law to enfo rce the payment of principal, premium and interest on the outstanding bonds.

Annual debt service requirements to maturity CFD Monte Bella-2019 #1 bonds are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 55,000 $ 100,575 $ 155,575 $
2027 60,000 97,700 157,700
2028 60,000 94,700 154,700
2029 65,000 91,575 156,575
2030 70,000 88,200 158,200
2031-2035 380,000 397,656 777,656 2036-2040 460,000 323,881 783,881 2041-2045 560,000 213,250 773,250 2046-2050 700,000 72,000 772,000 Total 2,410,000 $ 1,479,538 $ 3,889,538 $
340
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

97 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Assessment District Bonds (Continued)

CFD Monte Bella-2019 #2 – Community Facilities Dist rict No. 2016-1 (Monte Bella) of the City of Salina s 2019 Special Tax Bonds (Improvement Area No. 2)

On December 1, 2019, the Bond Purchase Agreement wa s signed in the amount of $2,090,000 at various int erest rates to finance the acquisition and/or construction of certain public facilities and improvements within Community Facilities District (CFD) No. 2016- Improvement Area 2 of the district. Debt payable net of premiums of $1,920,000 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, the tru stee may pursue any available remedy by law to enfo rce the payment of principal, premium and interest on the outstanding bonds.

Annual debt service requirements to maturity CFD Monte Bella-2019 #2 bonds are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 45,000 $ 82,250 $ 127,250 $
2027 50,000 80,350 130,350
2028 50,000 78,350 128,350
2029 50,000 76,350 126,350
2030 55,000 74,250 129,250
2031-2035 305,000 336,250 641,250 2036-2040 365,000 277,825 642,825 2041-2045 440,000 196,750 636,750 2046-2050 560,000 73,250 633,250 Total 1,920,000 $ 1,275,625 $ 3,195,625 $

CFD Monte Bella-2019 #3 – Community Facilities Dist rict No. 2016-1 (Monte Bella) of the City of Salina s 2019 Special Tax Bonds (Improvement Area No. 3)

On December 20, 2020, the Bond Purchase Agreement was signed in the amount of $2,695,000 at various interest rates to finance the acquisition and/or construction of certain public facilities and improvements within Community Facilities District (CFD) No. 2016- Improvement Are a 3 of the District. Debt payable net of premiums o f $2,535,000 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, the tru stee may pursue any available remedy by law to enfo rce the payment of principal, premium and interest on the outstanding bonds. 341 City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

98 Note 12 – Long-Term Debt (Continued)

A. Governmental Activities (Continued)

Assessment District Bonds (Continued)

CFD Monte Bella-2019 #3 – Community Facilities Dist rict No. 2016-1 (Monte Bella) of the City of Salina s 2019 Special Tax Bonds (Improvement Area No. 3) (Continued)

Annual debt service requirements to maturity CFD Monte Bella-2019 #3 bonds are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 55,000 $ 100,300 $ 155,300 $
2027 60,000 98,000 158,000
2028 60,000 95,600 155,600
2029 65,000 93,100 158,100
2030 65,000 90,500 155,500
2031-2035 380,000 409,000 789,000 2036-2040 460,000 325,400 785,400 2041-2045 560,000 223,400 783,400 2046-2050 675,000 100,500 775,500 2051 155,000 3,100 158,100
Total 2,535,000 $ 1,538,900 $ 4,073,900 $

Subscription-Based Information Technology Arrangements – SBITAs

The City has contracted for the “right-to-use” cert ain subscription-based information technology softw are in the governmental activities. The arrangements have interest rates between 2.75% and 3.5%. The value of the right-to- use subscription assets as of the end of the curren t fiscal year was $349,247. Subscriptions payable o utstanding at June 30, 2025 were $237,990.

Annual debt service requirements to maturity on subscription liabilities are as follows:

Fiscal Year Principal Interest Total
2026 77,430 $ 5,957 $ 83,387 $
2027 79,368 4,019 83,387
2028 81,192 2,032 83,224
Total 237,990 $ 12,008 $ 249,998 $

342
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

99 Note 12 – Long-Term Debt (Continued)

B. Business-Type Activities

A summary of changes in long-term debt for business-type activities for the year ended June 30, 2025 is as follows:

Amount due Amount due in
Balance Balance within one more than one
July 1, 2024 Additions Retirements June 30, 2025 year y ear Business-type Activities
Direct borrowings and placements:

Monterey Parking Garage 2014 lease 7,788,000 $ - $ (646,000)$ 7,142,000 $ 674,000 $ 6,468,000 $ HUD Section 108 loan 518,000 - (518,000) - - - Total direct borrowings and placements 8,306,000 - (1,164,000) 7,142,000 674,000 6,468,000 Revenue Bonds:

Wastewater 2020A 12,745,000 - (565,000) 12,180,000 565,000 11,615,000 Total Revenue Bonds 12,745,000 - (565,000) 12,180,000 565,000 11,615,000 Total business-type activities 21,051,000$ - $ (1,729,000)$ 19,322,000 $ 1,239,000 $ 18,083,000 $

2014 Lease/Purchase Agreement

The 2014 Lease/Purchase Agreement was issued by the Salinas Facilities Financing Authority on January 29, 2014.

The financing was issued to refund the Animal Shelt er COP Series A-1999 ($2,812,000) and the Monterey Street Parking Structure COP Series A-2004 ($13,253,000). The Monterey Street Parking Structure portion of th e financing was issued for 20 years (ending September 1, 2033), at an average interest rate of 4.02%. Ma ximum annual debt service is $963,518. Debt payable of $7 ,142,000 is recorded in the Downtown Parking Distri ct Enterprise Fund at June 30, 2025 and reported is reported as business-type activities.

Upon the occurrence of an event of default, the trustee may pursue any available remedy by law or pursuant to the lease agreement to enforce payment of the outstandi ng amounts. However, there shall be no right under any circumstance to accelerate the lease payments or ot herwise declare any lease payments not then in defa ult to be immediately due and payable. After the occurrence of an event of default, the City will surrender possession of the property to the financing authority, if requested to do so.

Debt service requirements to maturity is as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 674,000 $ 273,561 $ 947,561 $
2027 700,000 245,944 945,944
2028 731,000 217,181 948,181
2029 756,000 187,292 943,292
2030 790,000 156,217 946,217
2031-2034 3,491,000 287,571 3,778,571 Total 7,142,000 $ 1,367,766 $ 8,509,766 $
343
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

100
Note 12 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

Direct Placement Debt

HUD Section 108 Loan

On March 28, 2015, the City entered into a contract for Loan Guarantee Assistance with the Housing and Urban Development Department (HUD), pursuant to which the City will derive funds for the purposes permitted under the agreement, and executed one or more City Notes in the maximum aggregate principal amount of up to $9,390,000. The City executed a note numbered as B- 12-MC-06-0005 (Community and Economic Development Fund – Industrial Wastewater Conveyance System Proj ect) in the principal amount of $4,000,000. The Cit y has pledged current and future Community Development Block Grant (CDBG) funds as principal security for the loan.

The loan carries a variable interest rate of 20 points (0.2%) above the applicable LIBOR rate. This loan is paid full in full as of June 30, 2025.

2020A Wastewater Revenue Refunding Bonds – Series 2020A

On February 8, 2012, the City of Salinas issued Sanitary Sewer System Revenue Bonds, Series 2012 in the amount of $17,995,000 to provide funds for the current ref unding of the City’s Sanitary Sewer System Revenue Bonds, Series 1998 and to finance capital replacement of existing sewer mains and other sewer related capital replacement.

Maximum annual debt service is $1,022,406, including interest ranging from 1.0% to 4.4% for 30 years. The City is authorized under Chapter 36, Article II, Division 5 of the Salinas City Code, to levy a sewer fee f or the purpose of paying sanitary sewer related expenses of the City. On January 10, 2012, the City Council approved adjustments to wastewater collection fees effective February 1, 2012 to reflect the cost of wastewater conveyance through the Enterprise and an amount to cover debt service. The fee is billed by the Monterey Regional Water Pollution Control Agency.

On December 20, 2020, the Salinas Public Financing Authority issued City of Salinas Certificates of Participation, Series 2020A totaling $14,425,000. The Advance Refu nding Certificates were issued to refund the 2012 S ewer Bonds. Bond started August 1, 2021 and will end aft er 21 years on August 1, 2042. The advance refundin g of the 2012 Sewer Bonds reduced total debt service payment s over the next 21 years by $3,764,601. This result ed is an economic gain (difference between the present value s of the debt service payments on the old and new d ebt) of $1,346,741. Debt payable of $12,180,000 is recorded as Business-type Activities at June 30, 2025.

In the event of an event of default, the trustee shall, at written direction of the owners of not less than a majority in aggregate principal amount of the bonds at the time outstanding, in each case, upon written notice to the City, declare the principal of all the bonds then outstan ding, and the interest accrued thereon, to be due a nd payable immediately.

344
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

101
Note 12 – Long-Term Debt (Continued)

B. Business-Type Activities (Continued)

Direct Placement Debt

2020A Wastewater Revenue Refunding Bonds – Series 2020A (Continued)

Debt service requirements and maturity are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 565,000 $ 288,233 $ 853,233 $
2027 580,000 281,693 861,693
2028 585,000 273,693 858,693
2029 590,000 264,021 854,021
2030 605,000 252,856 857,856
2031-2035 3,205,000 1,066,346 4,271,346 2036-2040 3,620,000 628,141 4,248,141 2041-2043 2,430,000 108,670 2,538,670 Total 12,180,000$ 3,163,653 $ 15,343,653 $

C. Conduit Debt

In June of 1999, the City of Salinas issued Multifa mily Housing Revenue Bonds, Series 1999A ($5,310,00 0 tax- exempt) and 1999A-T ($390,000 taxable) for the cons truction of a 132-unit senior apartment project. Tw enty percent (20%) of the project is designated to be af fordable to seniors. As of June 30, 2025, the total conduit debt outstanding related to these bonds is $2,320,000.

On June of 2007, the City of Salinas issued Economics Development Revenue Bonds, Series 2007A ($18,655,000 tax-exempt) and 2007B ($1,570,000 taxable) for the acquisition of a building located at 1000 Main Street in Salinas.

The building is currently leased in part to the Cou nty of Monterey Department of Social Services. The project intends to provide monthly rental at below the mark et value rates to the County of Monterey, a one-mil lion-dollar premise improvement allowance to the Department of Social Services to renovate and upgrade its space i n the building and to generate charitable support for the County’s residents. The debt was refinanced in 201 6 as series 2016A and 2016B. As of June 30, 2025, total condui t debt outstanding related to the Economic Developm ent Revenue Bonds is $9,520,000.

Pursuant to the bond purchase agreements, the City of Salinas has no obligation related to the repayme nt of these bonds. Accordingly, the bonds are not reported as liabilities in the City’s financial statements.

D. Fiduciary Activities

A summary of changes in long-term debt for fiduciary activities for the year ended June 30, 2025 is as follows:

Amount due Amount due in
Balance Balance within one more than one
July 1, 2024 Additions Retirements June 30, 2025 year y ear Fiduciary Activities
Direct borrowings and placements:

Homeless Shelter loan payable 157,500 $ - $ - $ 157,500$ - $ 157,500$ Total direct borrowings and placements 157,500 - - 157,500 - 157,500 Total fiduciary activities 157,500$ - $ - $ 157,500$ - $ 157,500$

345
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

102
Note 12 – Long-Term Debt (Continued)

D. Fiduciary Activities (Continued)

Loans and Notes Payable

Homeless Shelter Loan – Green Gold Inn

On March 7, 1995, the Salinas Redevelopment Agency – Central Agency Revitalization Project entered int o a funding agreement and received a loan from the City of Salinas Community Development Block Grant Fund for the acquisition of property, Green Gold Inn at 28-3 2 Soledad Street, to establish a homeless center/sh elter. The Agency agreed that the property would be used solel y for a homeless center/shelter for a period not le ss than ten years. If the Agency or the organization holding title to the property disposes of the property or alters the use of the property prior to expiration of the ten year period, the Agency will reimburse the City the full amount of the current fair market value less improvement costs.

Upon completion of the ten-year period, one half of the debt, $157,500, was forgiven. Upon cessation o f the homeless center/shelter operations, the City will be reimbursed the fair market value of the property less the portion of the loan paid and improvement costs.

Debt service requirements for Green Gold Inn homeless center/shelter no interest loan are as follows:

Fiscal Year
Ending June 30: Principal Interest Total
2026 - $ - $ - $ 2027 - - - 2028 - - - 2029 - - - 2030 - - - 2031-2035 - - - 2036-2040 - - - 2041-2043 157,500 - 157,500 Total 157,500 $ - $ 157,500$

Note 13 – Compensated Absences

Compensated absences are reported on the Government -Wide Statements for Governmental Activities and Bu siness- type Activities in Long-Term Debt. At June 30, 2025 the liability for all compensated absences totaled $13,175,610.

The City implemented GASB Statement No. 101, Compensated Absences , during the fiscal year; however, no restatement of beginning net position was required as the effect of implementation was determined to be immaterial.

346
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

103
Note 13 – Compensated Absences (Continued)

Compensated absences are reported on the financial statements in the following funds:

Balance Increases / Balance Due within Due in more than July 1, 2024 Decreases June 30, 2025 one year one year
Governmental activities:

General Fund 8,994,708 $ 298,293 $ 9,293,001 $ 1,858,600 $ 7,434,401 $ Measure E 782,624 68,665 851,289 170,257 681,032 Measure G 1,648,281 95,676 1,743,957 348,791 1,395,166 Other governmental funds 434,116 88,684 522,800 104,560 418,240 Internal service funds 175,523 37,564 213,087 42,617 170,470 Total governmental activities 12,035,252 588,882 12,624,134 2,524,825 10,099,309 Business-type activities
Enterprise funds 552,230 (754) 551,476 110,295 441,181 Total business-type activities 552,230 (754) 551,476 110,295 441,181 Total primary government 12,587,482$ 588,128 $ 13,175,610 $ 2,635,120 $ 10,540,490 $

Note 14 – Risk Management

The City has a self-insurance program and carries excess insurance for catastrophic losses. National Casualty Company combined with Berkley National Insurance Company pr ovides General Liability coverage up to a maximum o f $15,000,000 after the self-insured retention of $1, 000,000 per occurrence met. Safety National Casualt y Corporation provides Worker’s Compensation excess coverage with statutory coverage (pursuant to California Worker’ s Compensation Act) after the self-insurance retentio n of $1,000,000 for Public Safety and $750,000 for non-Public Safety is met.

Liabilities for estimated claims payable for the se lf-insurance programs represent settled claims, cla ims incurred but not paid and claims incurred but not reported based upon past experience, modified for current trends and information.

While the ultimate amount of losses incurred throug h June 30, 2025 is dependent on future developments , City management has determined the desired reserve level for each self-insurance program as follows and bel ieves the estimates are adequate to cover such losses.

The Worker’s Compensation insurance liability of $4 0,790,000 includes $27,294,152 for claims incurred but not paid and $13,495,848 for claims incurred but not reporte d which is based on expected claims and past claims history. At June 30, 2025, Worker’s Compensation Insurance liab ility is reported on the statement of net position. The Worker’s Compensation Fund was established as an Internal Se rvice Fund on July 1, 1991. The portion of the work er’s compensation insurance liability since July 1, 1991 , at June 30, 2025 is $39,343,333 and is reported i n the Worker’s Compensation internal service fund and $1,446,667 is treated as general long-term debt.

General liability insurance liability at June 30, 2025 of $3,970,003 that is reported in the Internal Service Fund includes $1,891,749 for claims incurred but not paid and $2, 078,254, for claims incurred but not reported which is based on expected claims and past claims history. A deficit of $750,036 is reported at June 30, 2025 and is short the City’s goal of reserving three times the self-insured retention plus full funding of all past claims history. The City’s self-insured retention is $1,000,000 at June 30, 2025.
347
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

104
Note 14 – Risk Management (Continued)

At June 30, 2025, the City’s insurance claims liability is recorded as follows:

Internal Service General
Funds Long-term Debt Total
Worker's compensation 39,343,333 $ 1,446,667 $ 40,790,000 $ General liability 3,970,003 - 3,970,003 Total 43,313,336$ 1,446,667 $ 44,760,003 $

Changes to the claims liability for fiscal year ended June 30, 2025 are as follows:

Worker's General
Compensation Liability Total
Beginning balance of claims liability 33,494,000$ 3,748,708 $ 37,242,708 $ Less beginning provisions for incurred
but not reported claims (7,339,166) (1,241,119) (8,580,285) Beginning provisions for incurred but
not paid claims 26,154,834 2,507,589 28,662,423 Increase (decrease) in claims incurred
and reported 7,984,195 391,620 8,375,815 Claims expenses paid (6,844,877) (1,007,460) (7,852,337) Ending balance provision for incurred
but not paid claims 27,294,152 1,891,749 29,185,901 Provisions for incurred but not
reported claims 13,495,848 2,078,254 15,574,102 Ending balance of claims liability 40,790,000$ 3,970,003 $ 44,760,003 $ Amount due within one year 7,103,000 $ 2,807,671 $ 9,910,671 $ Amount due in more than one year 33,687,000 1,162,332 34,849,332 Total 40,790,000$ 3,970,003 $ 44,760,003 $

Note 15 – Unearned Revenues and Deferred Inflows of Resources

Governmental funds report unearned revenues in conn ection with funds received, in advance for which as sets recognition criteria have been met, but for which r evenue recognition criteria have not been met. Rece ivables for revenues not considered available to liquidate liab ilities of the current period are considered unavai lable revenues and reported as deferred inflows of resources on the go vernmental funds. Unearned revenues are stated at $ 18,136,961 in the Government-Wide Statements. Governmental funds report $18,136,961 of unearned revenues and $654,03 9 of unavailable revenues as deferred inflows of resources that are not available resources. 348
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

105
Note 15 – Unearned Revenues and Deferred Inflows of Resources (Continued)

Unearned revenues of the governmental activities at June 30, 2025 consist of the following:

Governmental Activities:

Major funds:

American Rescue Plan Act (ARPA) Fund 4,703,835 $
Housing and Urban Development Grant Fund 5,592,257
2019 Special Tax Montebella 6,865,000
Nonmajor funds:

Special revenue funds:

Affordable Housing Fund 930,869
Debt service funds:

Assessment District Debt Service 45,000
Total governmental activities 18,136,961 $

Unavailable revenues of the governmental activities at June 30, 2025 consist of the following:

Governmental Activities: Type
Special revenue funds:

Grants Fund 654,039$ Unavailable grants receivable Total governmental activities 654,039 $

Note 16 – Retirement Programs

A. Summary

The City of Salinas provides defined benefit retirement program benefits through the California Public Employees’ Retirement System (“CalPERS”) and New York Life. As of June 30, 2025, the City was contributing to age nt multiple-employer defined benefit pension plans and cost-sharing multiple-employer defined benefit pension plans through CalPERS, and was also contributing to a single-employer defined benefit pension plan through New York Life.

Net pension liabilities are reported in the financial statements as follows:

Governmental Business-Type
Net Pension Liability Activities Activities Total
CalPERS pension plans:

Agent multiple-employer - Miscellaneous 33,003,289$ 4,698,774 $ 37,702,063 $ Agent multiple-employer - Safety Police 127,123,346 - 127,123,346 Cost sharing multiple-employer - Safety Fire 65,283, 627 - 65,283,627 New York Life - single employer 666,048 - 666,048 Total net pension liability 226,076,310 $ 4,698,774 $ 230,775,084 $

349
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

106
Note 16 – Retirement Programs (Continued)

A. Summary (Continued)

Deferred outflows of resources related to pensions are reported in the financial statements as follows:

Governmental Business-Type
Deferred Outflows of Resources Activities Activities Total CalPERS pension plans:

Agent multiple-employer - Miscellaneous 8,920,969$ 1,270,104 $ 10,191,073 $ Agent multiple-employer - Safety Police 20,829,358 - 20,829,358 Cost sharing multiple-employer - Safety Fire 20,257, 330 - 20,257,330 New York Life - single employer $2,175,537 - 2,175,537 Total deferred outflows of resources 52,183,194$ 1,270,104 $ 53,453,298 $

Deferred inflows of resources related to pensions are reported in the financial statements as follows:

Governmental Business-Type
Deferred Inflows of Resources Activities Activities T otal CalPERS pension plans:

Agent multiple-employer - Miscellaneous 500,069$ 71,197 $ 571,266 $ Agent multiple-employer - Safety Police 1,048,123 - 1,048,123 Cost sharing multiple-employer - Safety Fire 1,177,8 73 - 1,177,873 New York Life - single employer 577,395 - 577,395 Total deferred inflows of resources 3,303,460 $ 71,197 $ 3,374,657 $

Pension expense (credit) reported in the financial statements as follows:

Governmental Business-Type
Pension Expense Activities Activities Total
CalPERS pension plans:

Agent multiple-employer - Miscellaneous 6,860,966$ 1,085,763 $ 7,946,729 $ Agent multiple-employer - Safety Police 17,589,236 - 17,589,236 Cost sharing multiple-employer - Safety Fire 13,453, 286 - 13,453,286 New York Life - single employer (82,264) - (82,264) Total pension expense 37,821,224 $ 1,085,763 $ 38,906,987 $

B. California Public Employees Retirement System Agent Multiple-Employer Plans

Plan Description

All qualified permanent and probationary employees are eligible to participate in the City of Salinas’ separate Safety (police) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans ad ministered by the California Public Employees’ Retirement Syst em (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution. CalP ERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

350
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

107
Note 16 – Retirement Programs (Continued)

B. California Public Employees Retirement System Agent Multiple-Employer Plans (Continued)

Employees Covered

At June 30, 2024, the measurement date, the following employees were covered by the benefit terms for the Plan:

Miscellaneous Safety - Police
Inactive employees or beneficiaries currently receiving benefits 242 292 Inactive employees entitled to, but not yet receivi ng benefits 306 125 Active employees 331 137
Total 879 554

Benefits Provided

CalPERS provides service retirement and disability benefits, annual cost of living adjustments and dea th 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.

The City’s provisions and benefits in effect at June 30, 2025 are summarized as follows:

Prior to On or After
January 1, 2013* January 1, 2013
Benefit formula 2.0% @ 55 2.0% @ 62
Benefit vesting schedule 5 years of service 5 years o f service Benefit payments Monthly for life Monthly for life
Retirement age 50-55 52-67
Monthly benefits, as a % of eligible
compensation 2.0% to 2.45% 1.0% to 2.5%
Required employee contribution rates 7.00% 7.50%
Required employer contribution rates 9.51% 9.51%
Miscellaneous
Hire date

Prior to On or After
January 1, 2013* January 1, 2013
Benefit formula 3.0% @ 50 2.7% @ 57
Benefit vesting schedule 5 years of service 5 years o f service Benefit payments Monthly for life Monthly for life
Retirement age 50 52-57
Monthly benefits, as a % of eligible
compensation 3.00% 2.0% to 2.7%
Required employee contribution rates 9.00% 13.50%
Required employer contribution rates 22.91% 22.91%
Safety - Police
Hire date
351
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

108
Note 16 – Retirement Programs (Continued)

B. California Public Employees Retirement System Agent Multiple-Employer Plans (Continued)

Benefits Provided (Continued)

Contribution Description - Section 20814(c) of the California Public Employees’ Retirement Law (PERL) requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’ annual actuarial valuation process . The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended.

Payments made by the City to satisfy contribution requirements that are identified by the pension plan terms as plan member contribution requirements are classified as plan member contributions.

The contributions made by the City were as follows:

Employer Contributions
Miscellaneous 5,804,078$
Safety - Police 14,853,506

Actuarial Methods and Assumptions used to determine Total Pension Liability - The June 30, 2023 valuat ion was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table
Post Retirement Benefit Increase
June 30, 2023
June 30, 2024
Entry Age Actuarial Cost Method

6.90%

2.30%
Varies by Entry Age and Service
The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. Mortality rates incorporate full gener ational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries.

The probabilities of retirement are based on the 2021 CalPERS Experience Study.

(1) The mortality table was developed based on CalP ERS-specific data. The rates incorporate Generation al Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries . For more details, please refer to the 2021 experience study report that can be found on the CalPERS website

Long-term Expected Rate of Return - The long-term e xpected rate of return on pension plan investments was determined using a building-block method in which e xpected future real rates of return (expected retur ns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of retur n, CalPERS took into account both short-term and lo ng-term market return expectations as well as the expected pension fund cash flows. Using historical returns o f all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short- term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expect ed return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long -term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. 352
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

109
Note 16 – Retirement Programs (Continued)

B. California Public Employees Retirement System Agent Multiple-Employer Plans (Continued)

Benefits Provided (Continued)

The expected rates of return by asset class are as follows:

Asset Class Assumed Asset Allocation Real Return Years 1 - 10 1,2
Global equity - cap-weighted 30.00% 4.45%
Global equity non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021 Asset Liability Management study.

Discount Rate - The discount rate used to measure t he total pension liability was 6.90%. The projectio n of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions fr om employers will be made at statutorily required r ates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of cu rrent plan members. Therefore, the long-term expect ed rate of return on plan investments was applied to all perio ds of projected benefit payments to determine the t otal pension liability.

Amortization of Deferred Outflows and Deferred Inflows of Resources - Under GASB 68, gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense sys tematically over time.

The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and de ferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Difference between projected and actual earnings on pension plan investments:

x 5 years straight-line amortization

All other amounts:

Straight-line amortization over the average expecte d remaining service lives (EARLS) of all members th at are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. 353
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

110
Note 16 – Retirement Programs (Continued)

B. California Public Employees Retirement System Agent Multiple-Employer Plans (Continued)

Benefits Provided (Continued)

Deferred outflows of resources and deferred inflows of resources relating to Differences between Expec ted and Actual Experience, Changes of Assumptions and employer-specific amounts should be amortized over the EARSL of members provided with pensions through the Plan. The EARSL for the miscellaneous and safety (police ) plans for the June 30, 2024 measurement date are 4.4 and 3.0 years, respectively, which was obtained by divi ding the total service years by the total number of participants (active, inactive, and retired) in the Plan. Inactive employees and retirees have remaining service lifetimes equal to zero. Total future service is based on the members' probability of decrementing due to an event other than receiving a cash refund.

Changes in Net Pension Liability - The following ta bles show the changes in the net pension liability for each of the City’s agent multiple-employer defined benefit pension plans recognized over the measurement period:

Total Pension Liability
Plan Fiduciary Net
Position Net Pension Liability
Balance at June 30, 2023 (Valuation Date) 161,496,279 $ 120,398,293 $ 41,097,986 $ Changes in the year:

Service cost 4,078,307 - 4,078,307 Interest on the total pension liabilities 11,033,877 - 11,033,877 Changes of Benefit Terms - - - Changes in assumptions - - - Differences between expected and actual experience (53,9 82) - (53,982) Benefit payments, including refunds of members contributions (7,140,385) (7,140,385) - Plan to plan resource movement - - - Contributions - employer - 5,034,807 (5,034,807) Contributions - employee - 1,911,248 (1,911,248) Net investment income - 11,606,038 (11,606,038) Administrative expenses - (97,968) 97,968 Net changes 7,917,817 11,313,740 (3,395,923) Balance at June 30, 2024 (Measurement Date) 169,414,096 $ 131,712,033 $ 37,702,063 $ Miscellaneous Plan

Total Pension Liability
Plan Fiduciary Net
Position Net Pension Liability
Balance at June 30, 2023 (Valuation Date) 375,115,843 $ 239,697,612 $ 135,418,231 $ Changes in the year:

Service cost 6,619,453 - 6,619,453 Interest on the total pension liabilities 25,361,824 - 25,361,824 Changes of Benefit Terms - - - Changes in assumptions - - - Differences between expected and actual experience (1,29 8,281) - (1,298,281) Benefit payments, including refunds of members contributions (19,129,246) (19,129,246) - Plan to plan resource movement - - - Contributions - employer - 13,750,190 (13,750,190) Contributions - employee - 2,265,826 (2,265,826) Net investment income - 23,156,908 (23,156,908) Administrative expenses - (195,043) 195,043 Net changes 11,553,750 19,848,635 (8,294,885) Balance at June 30, 2024 (Measurement Date) 386,669,593 $ 259,546,247 $ 127,123,346 $ Safety - Police
354
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

111
Note 16 – Retirement Programs (Continued)

B. California Public Employees Retirement System Agent Multiple-Employer Plans (Continued)

Benefits Provided (Continued)

Pension Plan Fiduciary Net Position - Detailed info rmation about each plan’s fiduciary net position is available in the separately issued CalPERS financial report.

Sensitivity of the Net Pension Liability to Changes in the Discount Rate - The following presents the net pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calcu lated using a discount rate that is 1 percentage-po int lower (5.90 percent) or 1 percentage-point higher (7.90 percent) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1%
(5.90%) Rate (6.90%) (7.90%)
Miscellaneous 61,533,919$ 37,702,063 $ 18,134,230 $ Safety - Police 180,491,002 127,123,346 83,598,304 Plan's Aggregate Net Pension Liability/(Asset)

Pension Expense and Deferred Outflows and Deferred Inflows of Resources Related to Pensions For the measurement period ending June 30, 2024 (the measurement date), the City of Salinas recognized a pension expense of $7,946,729 and $17,589,236 for the miscellaneous and safety (police) plans, respectively.

For the measurement period ending June 30, 2024 (the measurement date), the City of Salinas reports other amounts for the miscellaneous and safety (police) plans as deferred outflow and deferred inflow of resources r elated to pensions as follows:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 5,804,078$ -$ Difference between projected and actual
earning on pension plan investments 1,793,931 - Changes in assumptions 1,454,159 - Differences between expected and actual experience 1 ,138,905 (571,266) Total 10,191,073$ (571,266)$
Miscellaneous

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 14,853,506$ -$ Difference between projected and actual
earning on pension plan investments 3,552,815 - Changes in assumptions 1,591,470 - Differences between expected and actual experience 8 31,567 (1,048,123) Total 20,829,358$ (1,048,123)$ Safety - Police
355
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

112
Note 16 – Retirement Programs (Continued)

B. California Public Employees Retirement System Agent Multiple-Employer Plans (Continued)

$5,804,078 and $14,853,506 reported as deferred out flows of resources to contributions subsequent to t he measurement date for the miscellaneous and safety p olice plans, respectively, will be recognized as a reduction of the net pension liability in the year ending June 30, 2026.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Miscellaneous Safety - Police
Year Ended June 30,
2026 1,245,629$ 1,482,30 3$ 2027 3,617,264 5,852,433 2028 (379,831) (1,059 ,806) 2029 (667,333) (1,347 ,201) 2030 - - Thereafter - - 3,815,729$ 4,927,72 9$ Deferred Outflows/
(Inflows) of Resources
Deferred Outflows/
(Inflows) of Resources

C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan

Plan Description – All qualified permanent and prob ationary employees are eligible to participate in t he City’s separate Safety risk pool (Fire Tier 1 & Tier 2), c ost-sharing multiple-employer defined benefit pensi on plans administered by CalPERS, which acts as a common inv estment and administrative agent for its participat ing member employers. Benefit provisions under the Plan s are established by State statute and Local Govern ment resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.

Employees Covered – As of June 30, 2024 (measuremen t date), the following employees were covered by th e benefit terms for the plan:

Safety - Fire
Inactive employees or beneficiaries currently receiving benefits 185 Inactive employees entitled to, but not yet receiving benefits 55 Active employees 99
Total 339

Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be pub lic employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. 356
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

113
Note 16 – Retirement Programs (Continued)

C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan (Continued)

The City’s plans provisions and benefits in effect at June 30, 2025, are summarized as follows:

Prior to On or After Prior to On or After
January 1, 2013* January 1, 2013 January 1, 2013* Janu ary 1, 2013 Benefit formula 3.0% @ 50 2.7% @ 57 3.0% @ 55 2.5% @ 57 Benefit vesting schedule 5 years of service 5 years o f service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Mon thly for life Monthly for life Retirement age 50 52-57 55 52-57
Monthly benefits, as a % of eligible
compensation 3.00% 2.0% to 2.7% 3.00% 2.0% to 2.7%
Required employee contribution rates 9.00% 13.75% 9.00 % 13.75% Required employer contribution rates 29.30% 14.12% 24. 96% 14.12% Hire date
Safety - Fire
Tier 1 Tier 2

Contribution Description – Section 20814(c) of the California Public Employees’ Retirement Law (“PERL” ) requires that the employer contribution rates for a ll public employers be determined on an annual basi s by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through the CalPERS annual actuarial val uation process. 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. T he employer is required to contribute the differenc e between the actuarially determined rate and the contribution rate of employees.

The City’s contribution for the safety fire plan were as follows:

Employer Contributions
Safety - Fire 7,992,242 $

Pension Liabilities, Pension Expense and Deferred Outflows/Deferred Inflows of Resources Related to Pensions – As of June 30, 2025, the City reported net pension liabilities for its proportionate share of the net pension liability as of June 30, 2025 and 2024 were as follows:

Plan Total Pension Plan Fiduciar y Net Plan Net Pension Liability Position Liabilit y/(Asset)
Balance at: 6/30/23 (Measurement date) 215,981,309 $ 149,873,305 $ 66,108,004 $ Balance at: 6/30/24 (Measurement date) 223,694,150 158,410,523 65,283,627 Net changes during 2023-2024 7,712,841 $ 8,537,218 $ (824,377) $ Increase (Decrease)

The City’s net pension liability is measured as the proportionate share of the net pension liability. The net pension liability is measured as of June 30, 2024, and the total pension liability used to calculate the net p ension liability was determined by an actuarial valuation as of June 30, 2023 rolled forward to June 30, 2024 using the standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long- term share of contributions to the pension plans relative to the projected contributions for all participating employers actuarially determined.
357
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

114
Note 16 – Retirement Programs (Continued)

C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan (Continued)

The City’s proportionate share of the net pension liability as of the June 30, 2024 and 2023 measurement dates were as follows:

Proportion June 30, 2023 0.529910%
Proportion June 30, 2024 0.538310%
Change - Increase (Decrease) 0.008400%
Percentage Share of Net Pension Liability/(Asset)

For the year ended June 30, 2025 (measurement date June 30, 2024), the City recognized a pension expen se of $13,453,286 for the Safety Plan (Fire).

As of June 30, 2025 the City reports deferred outfl ows and deferred inflows of resources related to pe nsions as follows:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 7,992,242$ - $ Difference between projected and actual earning on
pension plan investments 3,155,513 - Adjustment due to differences in proportions 680,506 (471,029) Changes in assumptions 1,608,454 - Difference between actual and expected experience 5, 327,724 (173,227) Difference between employer's actual contributions
and proportionate share of contributions 1,492,891 (533,617) Total 20,257,330$ (1,177,873) $
Safety - Fire

$7,992,242 reported as deferred outflows of resourc es for contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2026.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expenses as follows:

Year Ended June 30,
Deferred Outflows/
(Inflows) of Resources
2026 4,422,941 $
2027 7,648,403
2028 95,545
2029 (1,079,674)
2030 -
Thereafter -
11,087,215$

358
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

115
Note 16 – Retirement Programs (Continued)

C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan (Continued)

Actuarial Methods and Assumptions used to determine Total Pension Liability - The June 30, 2023 valuat ion was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

Valuation Date
Measurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Mortality Rate Table
June 30, 2023
June 30, 2024
Entry Age Actuarial Cost Method

6.90%

2.30%
Varies by category, entry age, and service
Derived using CalPERS’ Membership Data for all Funds. The mortality table was developed based on CalPERS-specific data. The rates incorporate Generational Mortality to capture ongoing mortality improvement using 80% of Scale MP 2020 published by the Society of Actuaries. For more details, please refer to the 2021 experience study report that can be found on the CalPERS website

Discount Rate – The discount rate used to measure t he total pension liability for Public Employees’ Re tirement Fund C (PERF C) was 6.90%. The projection of cash f lows used to determine the discount rate assumed th at contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be availabl e to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all perio ds of projected benefit payments to determine the total pension liability.

Long-term Expected Rate of Return – The long-term e xpected rate of return on pension plan investments was determined using a building-block method in which e xpected future real rates of return (expected retur ns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of retur n, CalPERS took into account both short-term and lo ng-term market return expectations as well as the expected pension fund cash flows. Using historical returns o f all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short- term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expect ed return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

359
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

116
Note 16 – Retirement Programs (Continued)

C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan (Continued)

The expected real rates of return by asset class are as follows:

Asset Class
Assumed
Asset
Allocation
Real Return
Years 1 -
10 1,2
Global equity - cap-weighted 30.00% 4.45%
Global equity non-cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
1 An expected inflation of 2.30% used for this period.
2 Figures are based on the 2021-22 Asset Liability Management study.

Amortization of Deferred Outflows and Deferred Infl ows of Resources – The Net Difference Between Proje cted and Actual Investment Earnings on Pension Plan Investments is amortized over a five-year period on a straight-line basis. One-fifth is recognized in pension expense during the measurement period, and the remaining Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments is amortized over the rem aining amortization periods. The Net Difference Between Pr ojected and Actual Investment Earnings on Pension P lan Investments in the Schedule of Collective Pension A mounts represents the unamortized balance relating to the current measurement period and the prior measurement periods on a net basis.

Deferred Outflows of Resources and Deferred Inflows of Resources relating to Differences Between Expected and Actual Experience and Changes of Assumptions are am ortized over the Expected Average Remaining Service Lifetime (EARSL) of members provided with pensions through the Plan determined as of the beginning of the related measurement period. The EARSL for PERF C for the measurement date ending June 30, 2024 is 3.8 years, which was obtained by dividing the total service ye ars of 630,177 (the sum of remaining service lifeti mes of the active employees) by 166,163 (the total number of p articipants: active, inactive, and retired) in PERF C. Inactive employees and retirees have remaining service lifet imes equal to 0. Total future service is based on t he members’ probability of decrementing due to an event other than receiving a cash refund.

Sensitivity of Proportionate Share of Net Pension Liability (Asset) to Changes in the Discount Rate – The following presents the proportionate share of the net pension liability of the City’s Plan as of the Measurement Date, calculated using the discount rate of 6.90 percent, as well as what the net pension liability would be if it were calculated using a discount rate that is 1 percentage-point lower (5 .90 percent) or 1 percentage-point higher (7.90 per cent) than the current rate:

Discount Rate - 1 % Current Discount Discount Rate + 1% (5.90%) Rate (6.90%) (7.90%)
95,840,033$ 65,283,627 $ 40,292,782 $ Plan's Aggregate Net Pension Liability/(Asset)

360
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

117
Note 16 – Retirement Programs (Continued)

C. California Public Employees Retirement System Cost-Sharing Multiple-Employer Plan (Continued)

Pension Plan Fiduciary Net Position – Detailed information about each plan’s fiduciary net position is available in the separately issued CalPERS financial report.

D. New York Life Single Employer Retirement Plan

Plan Description – The New York Life retirement pla n is a closed single-employer defined benefit pensi on plan that covers Non-Public Safety Employees. The plan’s benefits offers a formula of 2% @ 60 for vested employees.

The Plan was established on September 1, 1954 and h as been amended and restated from time to time sinc e that date. Prior Plan amendments eliminated the six-mont h service requirement for entry into the plan and c redited participants with up to six-months of service from hire to plan entry prior to time change. The Plan w as amended and restated effective September 1, 1996 to bring t he Plan into compliance with the Internal Revenue C ode and Regulations promulgated thereby to provide for the City’s pick-up of employee eligible participants eq ual to the present value of vested accrued benefits. Effective June 1, 2001, the Plan amended its benefit formula to one that uses an average salary computed from the twelve-mon th period, replacing the old formula that used an a verage salary computed from a thirty six month period. As of June 19, 1995, all new regular non-public safety employees are enrolled in CalPERS.

The City has an agreement with New York Life to hold and invest plan assets of the Retirement Plan, which covers employees other than Police and Fire. New York Life holds assets in NYL Fixed Dollar Account, NYL Main stay Total Return Bond Fund, and NYL Guaranteed Annuity Contracts.

New York Life Guaranteed Annuity Contracts in the amount of $9,210,023 are allocated insurance contracts set up to pay benefits and accordingly are excluded from t he total pension liability, and are not reported in the City’s financial statements.

Employees Covered – As of September 1, 2024 (valuat ion date), the following employees were covered by the benefit terms for the single-employer defined benefit pension plan:

NY Life Plan
Inactive employees or beneficiaries currently receiving benefits 37 Inactive employees entitled to, but not yet receivi ng benefits 3 Active employees 5
Total 45

Benefits – Non-Public Safety personnel benefits vest after five years of service. The vested benefit would be in the form of a pension beginning after attaining age 60 equal to the benefits accrued at time of terminatio n, or for a reduced amount if an election is made to have payme nts commence before attaining the normal retirement age of

60. City employees who retire at or after age of 60 with five years of credited service are entitled t o an annual retirement benefit payable monthly, as a straight l ine annuity, as a ten year certain and life annuity , or as a lump sum, in an amount equal to 2% of the average earnings paid to the employee during the twelve consecutive months of service with the City during which their earnings were highest, multiplied by the number of years and completed months of plan participation.

The plan allows early retirement after reaching age 55 and completing five years of plan participation . The plan also provides death and survivor benefits.
361
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

118
Note 16 – Retirement Programs (Continued)

D. New York Life Single Employer Retirement Plan (Continued)

Funding Policy – The contribution requirements of Plan members and the City are established and may be amended by the City Council. Prior to January 1, 1979, part icipants were required to make specified levels of contributions to the plan in order to accrue benefits under the P lan. For the period commencing January 1, 1979 thro ugh December 31, 1993, there were no participants’ cont ributions under this Plan. Since January 1, 1994, p articipants are required to contribute 4.5% of their compensati on to the Plan. Since September 1, 1996, participan t contributions are made by the City under the employ ee pretax pick-up provision for government-sponsore d plans allowed under the Internal Revenue Code. As establi shed in their Memorandum of Understanding document for personnel of the SEIU Blue Collar bargaining group, the City will contribute four and one-half percent of the employee retirement contribution.

Pension Liabilities, Pension Expense and Deferred O utflows/Inflows of Resources Related to Pensions – As of June 30, 2025 (Measurement Date - August 31, 2024) and June 30, 2024, (Measurement Date – August 31, 2023), the City reported net pension liability as follows:

Plan Total Pension Plan Fiduciary Net Plan Net Pensio n Liability Position Liability/(Asset)
Balance at: 8/31/23 (measurement date) 9,962,372$ 8,239,722 $ 1,722,650 $ Balance at: 8/31/24 (measurement date) 9,876,071 9,210,023 666,048 Net changes during 2022-2023 (86,301) $ 970,301 $ (1,056,602) $ Funded Status @ 8/31/24 measurement date 93.26%
Increase (Decrease)

The City’s net pension liability is measured as of August 31, 2024, and the total pension liability used to calculate the net pension liability was determined by an actuarial valuation as of September 1, 2024.

Changes in Net Pension Liability – The following tables show the changes in the net pension liability for the City’s Single-Employer Pension Plan recognized over the measurement period:

Total Pension
Liability
Plan Fiduciary
Net Position
Net Pension
Liability
Balance at 6/30/2024 (8/31/23 measurement date) 9,96 2,372$ 8,239,722 $ 1,722,650 $ Changes in the year:

Service cost 86,971 - 86,971 Interest on the total pension liabilities 270,258 - 270,258 Changes in assumptions - - - Differences between expected and actual experience - - - Benefit payments, including refunds of members contributions (443,530) (443,530) - Plan to plan resource movement - - - Contributions - employer - 192,131 (192,131) Contributions - employee - 19,213 (19,213) Net investment income - 1,218,104 (1,218,104) Administrative expenses - (15,617) 15,617 Net changes (86,301) 970,301 (1,056,602) Balance at June 30, 2025 (8/31/24 measurement date) 9,876,071$ 9,210,023 $ 666,048 $ New York Life Plan
362
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

119
Note 16 – Retirement Programs (Continued)

D. New York Life Single Employer Retirement Plan (Continued)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the Plan as of the Measurement Date, calculated using the discount rate of 2.75 percent, as well as what the net pension liability would be if it were calcu lated using a discount rate that is 1 percentage-po int lower (1.75 percent) or 1 percentage-point higher (3.75 percent) than the current rate:

Discount Rate - 1% Current Discount Discount Rate + 1 % (1.75%) Rate (2.75%) (3.75%)
1,414,679$ 666,048 $ 67,570 $ Sensitivity of Net Pension Liability/(Asset)

As of June 30, 2025, the City reports deferred outf lows and deferred inflows of resources related to p ensions as follows:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions made subsequent
to measurement date 2,175,537$ - $
Difference between projected and actual earning on pension plan investments - (577,395) Total 2,175,537$ (577,395) $
New York Life Plan

$2,175,537 reported as deferred outflows of resourc es for contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ending June 30, 2026.

Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expenses as follows:

Year Ended June 30,
Deferred O utflows/
(Inflows) of Resources
2026 (169,932) $
2027 (35,801)
2028 (172,579)
2029 (199,083)
2030 -
Thereafter -
(577,395)$
363
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

120
Note 16 – Retirement Programs (Continued)

D. New York Life Single Employer Retirement Plan (Continued)

Actuarial Methods and Assumptions used to Determine Total Pension Liability – For the measurement period ended August 31, 2024 (measurement date), the total pensi on liability was determined by using the following actuarial assumptions, applied to all periods included in the measurement:

Valuation date
Measurement date
Contribution policy
Actuarial cost method
Actuarial assumptions:

Discount rate
Long-term expected rate of return on
assets
Municipal Bond Rate (Bond Buyer 20-
Bond Index)
General Inflation
Cost of Living Increases
Mortality
Mortality improvement
Salary Increases
Retirement
Disability, termination
Benefit form for current actives
NY Life guaranteed annuity contract Value of payments expected to be made under contract excluded from TPL (contract assets not included in FNP)
September 1, 2024
Individual Aggregate Cost Method
- 2.75% at August 31, 2024
- 2.75% at August 31, 2023
- Discount rate lower of (1) expected long-term rate of retur n on investments, and (2) Bond Buyer 20- Bond GO Index as of the Measurement Date

2.00% annually
Aggregate - 2.5% annually; merit - CalPERS 2000-2019 Experience Study 100% retire once the retirement benefit reaches 70% of the average monthly compensation
None
City contributes full ADC
CalPERS 2000-2019 Experience Study
Mortality projected fully generational with Scale MP-2021 - Disability - n/a
- Service retirement - Lump sum for all participants, valued using UP-1984 Mortality Table with 2% interest rate without COLA

2.25% annually
- 2.75% at August 31, 2024
- 2.75% at August 31, 2023
- 3.87% at August 31, 2024
- 3.81% at August 31, 2023
September 1, 2023

Changes Since Prior Measurement Date – The following changes were applied since the prior measurement date of August 31, 2024:

Changes of assumptions – discount rate was updated based on municipal bond rate as of the measurement date.

Changes of benefit terms – none

Discount Rate – The discount rate used to measure the total pension liability was 2.75%. The discount rate is based on the expected rate of return which is lower than the 20-year municipal bond rate. The projection of cash flows used to determine the discount rate assumed that employee contributions will be made at current contribution rates and City contributions will be made at rates equal to the difference between actuarially determined co ntribution rates and the employee rate.
364
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

121
Note 16 – Retirement Programs (Continued)

D. New York Life Single Employer Retirement Plan (Continued)

Based on those assumptions, the pension plan’s fiduciary net position was not projected to be available to make all projected future benefit payments of current active and inactive employees. The City’s annual contributions will be adjusted to keep the plan solvent.

E. ICMA Retirement Corporation Defined Contribution Plan

Investments are with New York Life. Expected rate of return is as follows:

Target Expected Rate
Asset Class Allocation of Return
Fixed income 100.00% 0.78%
Assumed long-term rate of inflation 2.25%
Expected long-term rate of return, rounded 2.75%

Pension Plan Fiduciary Net Position – Detailed info rmation about the pension plan’s fiduciary net posi tion as of August 31, 2024 is as follows:

New York
Life
Assets:

Investments:

New York Life Mainstay Total Return Bond Fund 9,210, 023$ Total investments 9,210,023
Fiduciary net position 9,210,023$

Plan Description – On June 19, 1995, the City established a qualified retirement program in accordance with Internal Revenue Code Section 401(a). This defined contribution 401(a) Money Purchase Retirement Plan was established with International City Managers Association Retire ment Corporation (ICMA). Non-Public Safety Mid- Management employees that were participating in the ICMA 457 non-qualified deferred compensation plan in-lieu of participation in the New York Life Retirement Program, were required to transfer to one of the other City’s three qualified retirement plans. The City’s annual contr ibution to this plan is determined by the employer required contribution to the New York Life Plan Retirement Plan in accordance with Internal Revenue contribution limits.

Significant Accounting Policies

Basis of Accounting – Financial statements are prepared using the cash basis of accounting. Employer contributions are recognized in the period that the contributions are made.

Method Used to Value Investments – Participants direct their investments, without re striction, among various investments options available under the ICMA 401(a) Plan. Retirement Buyback Program During Fiscal Year 1995- 96, the City established a deferred compensation retirement buyback program for Department Directors where the City contributes a flat dollar amount based on tenure with the City. The 401(a) Money Purchase Retirement Plan is administered by the ICMA Retirement Corporation. Th e program requires employee-matching contributions for every dollar contributed by the City. At June 30, 2 025, there were four participants receiving a total of $42,271 in this form of benefit.
365
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

122
Note 16 – Retirement Programs (Continued)

F. Deferred Compensation Plans

The City has four deferred compensation plans created in accordance with Internal Revenue Code Section 457. The Small Business Job Protection Act of 1996 requires the establishment of a trust or similar vehicle to ensure that the assets of Deferred Compensation Plans under the Int ernal Revenue Code Section 457 are protected and us ed exclusively for the benefit of Plan participants an d/or their beneficiaries. According to these laws t he City established Employer Trust arrangements for each of the Plans before January 1, 1999.

The City has established Employer Trust agreements with ICMA Retirement Corporation, Mass Mutual Finan cial Group, and Central Coast Credit Union. In 1998, the City Council adopted a Resolution amending the Cit y administered deferred compensation plans to conform to the new law protecting the plan participant ass ets from any claim against the City. Under the Trust arrangement, individual accounts maintained by the record-keeper used for receiving contributions and paying distribution s must be subject to the Trust. The existence of th e Trust does little to change the Plan structure except to add a layer of protection for money se t aside for the employee against claims of the Employer’s creditors. The law also al lows an increase in the amount a participant may co ntribute to differ each year, based on changes in the consumer price index.

International City Manager’s Association (ICMA) Retirement Corporation

As of June 2021, the International City Manager’s A ssociation Retirement, Inc., (ICMA-RC), is now Miss ion Square Retirement and the Plan had 435 participants and a balance of $76,849,838 at June 30, 2025. All employees are eligible to participate through voluntary salary deduction. Some management employees participated in lieu of participation in the New York Life Retirement Progr am until June 19, 1995 when a qualified 401(a) reti rement program was established. These assets are not reported on the City’s financial statements at June 30, 2025 pursuant to the Employer Trust established by the City with ICMA Retirement Corporation during November 1997.

Trust Deed Program

The City administers a Trust Deposit Fund that incl udes a deferred compensation plan funded solely by the voluntary salary reductions. The goal of the Trust Deed program is to invest participants’ funds in short-term deeds of trust (notes). This investment option is adminis tered within the City of Salinas by the City’s appo inted administrator of the Deferred Compensation Plan. Lo ans are based on equity after obtaining a fee appra isal. All property is physically inspected and the loan packa ge is reviewed and approved/disapproved by a Deferr ed Compensation Committee. All employees are eligible to participate. The Plan had 208 participants and a balance of $4,987,340 in net position at June 30, 2025. The balance in these plans is available to employees o nly upon termination, retirement, death or unforeseen emerge ncy. While the Employer Trust established by the Ci ty on December 15, 1998 protects these funds from credito rs of the City, because the City administers the pl an assets, they are included in the City’s financial statements at June 30, 2025.

The Trust Deed Program is managed on a cash basis w ith interest posted when received and expenditures posted when paid. Interest and expenditures are allocated to participants based on month end cash balances. T rust deed notes secured by property taken back in foreclosure , are reevaluated based on the current market value of the property. When the value of property taken back in foreclosure is less than the note secured by that p roperty, the note is written-down to current market value (less foreclosure and sales expenses) of the property. Ga ins are recognized only when properties are sold. Gains or losses are allocated to plan participants based on month end cash balances.
366
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

123
Note 16 – Retirement Programs (Continued)

F. Deferred Compensation Plans (Continued)

Trust Deed Program (Continued)

As of June 30, 2025, pursuant to GASB 72, propertie s held for resale were valued by independent real e state professionals (market approach) and trust deed note s were valued at their present value (income approa ch). The valuations are considered Level 3. The value of properties held for resale are reduced for cost of sales. The notes (loans) are valued based on amounts investors would likely pay for notes with interest rates ranging f rom 6% for all current loans discounted to provide loan to val ues ranging from 70% to 50% depending on property t ype and condition, borrowers payment history and term remaining on note. The change in net realizable values are reflected in the Statement of Changes in Fiduciary Net Assets.

Mass Mutual Financial Group (Empower Retirement)

The fourth Deferred Compensation plan was establish ed in September 2000. This retirement savings plan enables employees to defer a portion of their current compe nsation for payment at later date, generally retire ment. Salary deferrals (or contributions) are voluntary and are made through the ease of payroll deduction. Empower Retirement former Mass Mutual offers a variety of investment v ehicles that vary in risks, term and return to the investment.

These investment options are offered through a group variable annuity contract. There were 37 participants with a balance of $2,442,629 at June 30, 2025. All employe es are eligible to participate through voluntary sa lary deductions. The assets for this plan are not reported on the City’s financial statements.

Note 17 – Other Postemployment Benefits

Items related to other postemployment benefits are recorded in the financial statements as follows:

Governmental Business-Type
Activities Activities Total
Net OPEB Liability 12,610,349 $ 815,342 $ 13,425,691 $ Deferred outflows of resources 3,127,824 202,235 3,330,059 Deferred inflows of resources 10,140,366 655,641 10,796,007 OPEB expense (credit) (266,368) (5,301) (271,669)

A. General Information About the OPEB Plan

For purposes of measuring the net OPEB liability, deferred outflows of resources, and deferred inflows of resources related to OPEB, and OPEB expense, information abou t the fiduciary net position of the City’s plan (OP EB Plan) and additions to/deductions from the OPEB Plan’s fiduciary net position have been determined on the same basis.

Generally accepted accounting principles require th at the reported results must pertain to liability a nd asset information within certain defined timeframes.

For this report, the following timeframes are used:

Valuation date June 30, 2023
Measurement date June 30, 2024
Measurement period July 1, 2023 to June 30, 2024
Fiscal year end June 30, 2025

367
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

124
Note 17 – Other Postemployment Benefits (Continued)

A. General Information About the OPEB Plan (Continued)

Plan Description: The City joined the Public Employ ees' Medical & Hospital Care Act (PEMHCA) in 2000 f or Police and Miscellaneous employees, offered through the California Public Employees’ Retirement System (CalPERS). It is an agent multiple-employer plan administered by California Public Employees’ Retirement System (CalPERS). The healthcare plan which provides medical insurance benefits to active and eligible retirees and their families in accordance with various labor agreement s. Fire employees receive healthcare benefits for a ctive and retiree members from a union sponsored plan.

OPEB Trust: The City joined The California Employer s’ Retiree Benefit Trust (CERBT) in 2011 to prefund it’s OPEB liability. CERBT is an agent multiple employer defined plan for other postemployment benefits administered by CalPERS. The Plan includes participating employers of the State of California and public agencies. CalPERS is governed by a 13-member Board of Administration (the Board); two elected by CalPERS members, one elected by retired members of CalPERS, two appointed by the Go vernor, one public representative appointed jointly by the Speaker of the Assembly and Senate Rules Committee, and four ex-officio members: State Treasurer, Stat e Controller, Director of California Department of Human Resources, and Designee of the State Personal Board. The Board is responsible for the management and control of CalPERS, including the exclusive control of the administration and investments of the Plan.

The plan information is as follows:

Fiscal year end June 30, 2025
Plan type Agent multiple-employer
OPEB trust Yes
Special funding situations No
Nonemployer contributing entities No

Post-Employment Benefits Eligibility: The City provides post-retirement healthcare benefits to eligible employees who retire directly from the City after the age of 50 years (Age 52 for Miscellaneous PEPRA employees) and with five years of service or disability retirement. For Police and Fire Supervisors, the City pays 25% of retiree and spouse health insurance premium up to $100 per month plus PEMHCA AB2544 “unequal method” monthly benefit to retirees ($158 per month in 2025). The payment is made until Medicare eligibility, but no more than 10 years for non-supervisory Police retirees. For Miscellaneous employees, the City pays the PEMHCA “unequal method ” monthly benefit to retirees ($158 per month in 2025 ). For IAFF (Fire employee), the City pays 25% of r etiree and spouse health insurance premium up to $100 per month. The payment is made until Medicare eligibility.

Employees Covered: As of the June 30, 2024 actuarial valuation, the following current and former employees were covered by the benefit terms under the PEMHCA and Union Sponsor Plans:

Number of
Covered
Participants
Inactive employees currently receiving benefits 154
Inactive employees entitled to, but not yet receivi ng benefits 293 Active employees 528
Total 975

368
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

125
Note 17 – Other Postemployment Benefits (Continued)

A. General Information About the OPEB Plan (Continued)

Contributions: The City intends to contribute to th e Trust the actuarially determined contribution (“A DC”) net of the pay-as-you-go benefits paid annually directly from employer resources. For the fiscal year ended June 30, 2025, the City’s cash contributions were $333,818 in prem ium payments made on behalf of retirees, implied su bsidy payments of $486,287, and administrative expenses of $5,518, resulting in total payments of $825,623.

Discount Rate: The discount rate used to measure the total OPEB liability was 5.28%. The projection of cash flows used to determine the discount rate assumed that Ci ty contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assum ptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and bene ficiaries.

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.

Expected Long Rate of Return: The long-term expecte d rate of return on OPEB plan investments was deter mined using a building block method in which expected fut ure real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the tar get asset allocation percentage and by adding expected inflat ion. The target allocation and best estimates of ar ithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class
Target Allocation
CERBT-Strategy
1 Expected Real
Rate of Return
Global equity 49.00% 4.56%
Fixed income 23.00% 1.56%
TIPS 5.00% -0.08%
Commodities 3.00% 1.22%
REITs 20.00% 4.06%
100.00%
Assumed long-term rate of inflation 2.50%
Expected long-term rate of return, rounde
d 6.25%
369
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

126
Note 17 – Other Postemployment Benefits (Continued)

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

Changes in the OPEB Liability: The changes in the net OPEB liability for the City Plan are as follows:

Total Plan Net
OPEB Fiduciary OPEB
Liability Net Position Liability
Balance at June 30, 2024 17,308,909 $ 4,350,748 $ 12,958,161 $ Changes Recognized for the Measurement Period:

Service Cost 774,430 - 774,430 Interest on the total OPEB liability 926,135 - 926,135 Changes in benefit terms - - - Difference between expected and actual experience - - - Changes in assumptions (142,193) - (142,193) Contribution from the employer - 621,272 (621,272) Net investment income - 477,784 (477,784) Administrative expenses - (8,214) 8,214 Benefit payments (614,476) (614,476) - Net changes during July 1, 2024 to June 30, 2025 943 ,896 476,366 467,530 Balance at June 30, 2025 18,252,805 $ 4,827,114 $ 13,425,691 $

Discount Rate Sensitivity Analysis: The following s chedule shows the impact of the Net OPEB Liability if the discount rate used was 1% less than and 1% greater than the discount rate that was used (5.28%) in mea suring the Net OPEB Liability.

Discount Rate -1% Current Discount Rate Discount Rate +1% (4.28%) (5.28%) (6.28%)
15,638,041$ 13,425,691 $ 11,572,015 $ Plan's Total OPEB Liabiltiy

Healthcare Trend Sensitivity Analysis: The following presents the net OPEB liability of the City if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher than the current rate, for measurement period ended June 30, 2024:

Healthcare Cost
-1% Trend Rat e +1%
11,161,916$ 13,425,691 $ 16,237,722 $ Plan's Total OPEB Liabiltiy

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB:

For the fiscal year ended June 30, 2025, the City recognized OPEB expense/(credit) of $(271,669). 370
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

127
Note 17 – Other Postemployment Benefits (Continued)

B. Net OPEB Liability, OPEB Expense, and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB (Continued):

As of fiscal year ended June 30, 2025, the City rep orted deferred outflows of resources and inflows of resources related to OPEB from the following sources:

Deferred Deferred
Outflows of Inflows of
Resources Resources
Contributions made after measurement date 825,623 $ - $ Differences between expected and actual experience - (5,137,628) Changes in assumptions 2,449,632 (5,658,379)
Net difference between projected and actual
earnings of OPEB Plan investments 54,804 - 3,330,059$ (10,796,007) $

Deferred outflows of resources in the amount of $82 5,623 related to contributions subsequent to the me asurement date and will be recognized as a reduction of the net OPEB liability during the fiscal year ending June 30, 2026.

Other amounts reported as deferred inflows of resources related to OPEB will be recognized as OPEB expenses as follows:

Year Ending
June 30 Amount
2026 (1,727,816)$
2027 (1,497,789)
2028 (1,549,851)
2029 (1,440,764)
2030 (1,233,203)
Thereafter (842,148)
Total (8,291,571)$

Recognition of Deferred Outflows and Deferred Inflows of Resources: To smooth market volatility, gains and losses related to changes in total OPEB liability and fidu ciary net position are recognized over nine and hal f years.

Amounts are first recognized in OPEB expense for th e year the gain or loss occurs. The remaining amoun ts are categorized as deferred outflows and deferred inflo ws of resources related to OPEB and are to be recog nized in future OPEB expense.
371
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

128
Note 17 – Other Postemployment Benefits (Continued)

B. Net OPEB Liability, OPEB Expense, and Deferred Outflows/Inflows of Resources Related to OPEB (Continued)

Actuarial Methods and Assumptions Used to Determine the OPEB Liability: The City’s net OPEB liability was measured as of June 30, 2024. The total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2023 based on the following significant actuarial methods and assumptions:

Actuarial valuation date June 30, 2023
Contribution policy City contributes $250,000 annual ly and pays benefit outside of trust Discount rate 5.28%
Municipal bond rate 3.93% (Bond Buyer 20-bond Index)s
Expected long-term rate of return on investment 6.25 %
General inflation 2.50%
Mortality, retirement, disability, termination CalPE RS 2000-2019 experience study Mortality improvement Mortality projected fully gene rational with Scale MP-2021 Salary increases Aggregate - 2.75% annually; merit - CalPERS 2000-2019 Experience Study Medical trend
PEMHCA minimum increases 3.50% annually
Cap increases None
Healthcare participation
Non-Medicare - 7.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076
Medicare - 6.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076 100% for Safety $100 benefit
50% for PEMHCA benefit if covered as active
5% for PEMHCA benefit if waived as active

Change of Assumptions

The discount rate was changed from 5.21% to 5.28%.

Note 18 – Net Position and Fund Balances

A. Government-Wide Financial Statements

Net Investment in Capital Assets

The following is the calculation of net investment in capital assets at June 30, 2025:

Governmental Business-type
Activities Activities Total
Capital assets, net of accumulated depreciation
and amortization 330,166,241$ 62,072,885 $ 392,239,126 $ Less: unspent proceeds (13,287) - (13,287) Less: outstanding principal on capital related debt, net (109,314,987) (19,322,000) (128,636,987) Add: loss on refunding of debt 432,594 77,290 509,884 Net investment in capital assets 221,270,561 $ 42,828,175 $ 264,098,736 $

372
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

129
Note 18 – Net Position and Fund Balances (Continued)

B. Fund Financial Statements

Fund Balance Classification

It is the policy of the City to maintain a minimum reserve for a reasonable level of assurance that the City’s day-to- day operations will be able to continue even if cir cumstances occur where revenues are insufficient to cover expenditures. The minimum reserve of the General Fu nd is 5% of the next year’s General Fund annual bud geted operating expenditures, as calculated by the Finance Director. The minimum fund balance is shown as unassigned in the General Fund.

At June 30, 2025, fund balances are classified in the governmental funds as follows:

American Housing and 2019 Special
Rescue Plan Act Urban Development Development Tax Bond
(ARPA) Grant Fees Monte Bella Capital Nonmajor Total
General Special Revenue Special Revenue Special Revenu e Debt Service Projects Governmental Governmental Fund Fund Fund Fund Fund Fund Funds Funds
Nonspendable
Loans and notes receivable - $ - $ 1,872,125$ - $ - $ - $ 51,571$ 1,923,696$ Advances (long-term portion) 2,785,000 - - - - - - 2,785,000 Land held for resale - - - - - - 1,380,000 1,380,000 Total nonspendable 2,785,000 - 1,872,125 - - - 1,431,571 6,088,696 Restricted
Public safety - - - - - - 3,864,071 3,864,071 Future development - - - 35,911,590 - - - 35,911,590 Maintenance districts - - - - - - 10,957,823 10,957,823 Street repairs - - - - - - 37,569,569 37,569,569 Grants/special projects - - - - - - 1,281,839 1,281,839 Low/moderate income housing - - 1,257,218 - - - 8,647,134 9,904,352 115 trust reserve 10,000,000 - - - - - - 10,000,000 Capital projects - - - - - - 3,587,917 3,587,917 Debt service - - - - 987,034 - 8,080,567 9,067,601 Total restricted 10,000,000 - 1,257,218 35,911,590 987,034 - 73,988,920 122,144,762 Committed
Capital projects 11,219,626 - - - - 7,153,469 - 18,373,095 Economic contingency reserve 20,696,553 - - - - - - 20,696,553 Infrastructure maintenance reserve 4,260,000 - - - - - - 4,260,000 OPEB reserve 1,000,000 - - - - - - 1,000,000 Facilities maintenance reserve 1,066,000 - - - - - - 1,066,000 Total committed 38,242,179 - - - - 7,153,469 - 45,395,648 Assigned
Carryover appropriations 24,825,000 - - - - - - 24,825,000 Total assigned 24,825,000 - - - - - - 24,825,000 Unassigned (deficit) 23,856,906 - - - - - (1,268,984) 22,587,922 Total fund balances 99,709,085$ - $ 3,129,343$ 35,911,590 $ 987,034 $ 7,153,469 $ 74,151,507 $ 221,042,028 $

C. Encumbrances

The City uses encumbrances to control expenditure c ommitments for the year and to enhance cash managem ent.

Encumbrances represent commitments related to contr acts not yet performed and purchase orders not yet filled (executor contracts; and open purchase orders). Commitments for such expenditures of monies are encumbered to reserve a portion of applicable appropriations. Enc umbrances still open at year end are not accounted for as expenditures and liabilities but, rather, as restricted, committed, or assigned governmental fund balance.

As of June 30, 2025, total governmental fund encumbrance balances for the City are as follows:

General Fund 73,067,179$
Nonmajor governmental funds 66,488,170
Total encumbrances 139,555,349 $

373
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

130
Note 19 – Other Required Disclosures

A. Expenditures Exceeding Appropriations

For the year ended June 30, 2025, the following fun ds had excess expenditures over appropriations, whi ch are expected to be covered with existing fund balance or had sufficient available revenue:

Excess Expenditures
Fund Function over Appropriations
General Fund Capital outlay (952,824) $
Measure G Public safety (610,626)
Lighting, Landscape, and Maintenance
District Special Revenue Fund Recreation (7,057)
KDF Los Padres Dev Social Services
Special Revenue Fund Recreation (17,175)
Grants Special Revenue Fund Public works (5,643)

B. Net Position Deficit and Restrictions

At June 30, 2025, the governmental activities had an unrestricted net position deficit of $(129,249,480). This deficit is primarily attributable to the long-term pension and OPEB obligations reported under GASB Statements 68 and 75, including a net pension liability of approximat ely $226.1 million and a total OPEB liability of ap proximately $12.6 million.

At June 30, 2025, the following funds had a deficit fund balance or deficit net position:

Fund Type Fun d Deficit
Governmental Emergency Medical Services (95,989) $
Governmental Traffic Safety (59,575)
Governmental Grants (401,273)
Governmental Assessment District Debt Service (709,96 9) Governmental Assessment District Administration (2,178) Enterprise Downtown Parking District Fund (5,665,305)
Internal Service Fund General Insurance (332,585)
Internal Service Fund Workers Compensation (15,518,969) Internal Service Fund General Liability (750,036)
Internal Service Fund Fleet Maintenance (1,144,925)
Custodial Fund Flexible Spending (91,101)

Nonmajor Governmental Funds
The deficit fund balances in the special revenue fu nds Emergency Medical Services fund of $95,989 is d ue to increased expenditures in emergency equipment and supplies. The deficit fund balance in the Traffic Safety special revenue fund of $59,575 is a result of increased services in vehicle code violations provided by Monterey County.

The deficit fund balance in the Grants special reve nue fund of $401,273 is due to temporary cash short falls experienced while waiting for grant reimbursement. These deficits will decline as claims are submitted for reimbursement to state and federal agencies and una vailable funds become available. The deficit fund b alance in the Debt Service Funds Assessment District debt ser vice fund of $709.969 is due to amounts owed to the General Fund. The deficit fund balance in the Assessment Di strict Administration debt service fund of $2,178 i s due to amounts owed to the General Fund.

374
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

131
Note 19 – Other Required Disclosures (Continued)

B. Net Position Deficit and Restrictions (Continued )

Enterprise Funds – Downtown Parking District Fund
The deficit net position in the Downtown Parking Di strict Fund of $5,665,305 is a result of historical operating costs in excess of operating revenue. This deficit will continue to decline over time as revenues outpace expenses.

Internal Service Funds
The deficit net position in the General Insurance, General Liability, and Worker's Compensation fund of $332,585, 750,036, and 15,518,969, respectively, are the result of insurance costs exceeding charges for services in the funds.

The City is reevaluating their internal service fund allocations in order to ensure that charges for services in internal service funds are sufficient to cover the costs of providing services moving forward. The deficit net position in the Fleet Maintenance internal service fund is due to l ong-term net pension and other postemployment (OPEB ) liabilities, with costs recovered through charges to participating departments that management reviews and adjusts during the budget process.

Custodial Funds
The deficit net position in the custodial Flexible Spending fund of $91,101 is the result of expenses exceeding plan member contributions during the fiscal year. The de ficit is expected to be made up through future memb er contributions.

Note 20 – Joint Venture – Salinas Valley Solid Waste Authority

The Salinas Valley Solid Waste Authority (“Authority”) is a joint exercise of powers authority, created pursuant to an agreement dated as of January 1, 1997 (the “Authori ty Agreement) among the County of Monterey, and the cities of Salinas, Gonzales, Greenfield, Soledad, and King City (the “Members”). The Authority was established to acquire and manage the landfill assets of each member, ensure long-term landfill capacity of the Authority service area and provide a unified and coordinated solid waste management for the members.

The Authority is governed by a nine-member governing board, consisting of three members of the Salinas City Council, two members of the Monterey County Board of Supervisors, and one member from each patriating city. Pursuant to the Authority Agreement, while the City does not have unilateral control over the activities of the Authority, the affirmative vote of at least one member of the Authority Board who is a member of the Salinas City Council is required to approve Board actions.

With the formation of the Authority, each participa ting jurisdiction contractually agreed to its respo nsibilities. In addition, the Authority adopted waste delivery agre ements with each Member of the Authority. Each memb er has committed to deliver waste generated within its bou ndaries to the Authority’s solid waste facilities, to direct its franchise/permitted solid waste haulers to dispose of waste at these facilities, and to pay tipping fees set by the Authority to cover all Authority-related costs.

The agreement may be terminated under specific term s of withdrawal, which includes a majority vote of the City Council, repayment of all outstanding debt and fund ing of closure, post closure and site remediation c osts upon withdrawal from or termination of the Authority. Th e members have made no equity contributions or have sold their interest in their assets to the Authority, and there is no explicit, measurable equity interest in this joint venture.

The City had no measurable equity interest in the A uthority and does not receive a share of operating results. The Authority is currently funding the closure, post cl osure and site remediation costs based on estimates of these future costs. The Annual Financial Report of the Salinas V alley Solid Waste Authority is published and availa ble from the Authority Treasurer at the Authority’s Finance Department located at 128 Sun Street, Suite 101, Salinas, CA 93901. 375
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

132
Note 20 – Joint Venture – Salinas Valley Solid Waste Authority (Continued)

On December 6, 2018, the City issued a notice of in tention to withdraw from the Joint Powers Agreement (the “Agreement”) Pursuant to Section 19 of the Joint Powers Agreement, the notice serves as a one-year notice. The City’s notice of intent to withdraw as a member of the Aut hority merely served as notice to the Authority and its remaining members. The one-year term has passed without any f urther action from the City or the Authority. Howev er, the City and Authority representatives are working on finding a resolution to the notice.

The City understands and acknowledges its obligatio n to continue paying its share of the 2014 Bonds as regularly scheduled and agrees to continue paying its share o f the obligation after withdrawal from the Authorit y, should withdrawal occur. In addition, the City understands and acknowledges its obligation to pay its share of financial liability for closure and post-closure and site remediation c osts as further described in Section 19(a) of the A greement. If the City withdraws from the Authority arrangements must be made to meet this obligation.

Note 21 – Commitments and Contingencies

Claims and Litigation

The City is directly and indirectly involved in var ious suits relating principally to claims arising f rom construction contracts, personal injury, and property damage. In the opinion of the City Attorney and City’s management, potential claims against the City resulting from such litigat ion, not covered by insurance, would not materially affect the basic financial statements of the City. As a result, no l iability has been accrued by the City relating to t hese matters as of June 30, 2025.

Note 22 – Changes to or within the Financial Reporting Entity

As of June 30, 2025, changes to or within the finan cial reporting entity restatement of beginning fun d net position is as follows:

June 30, 2024 Change to or within
As Previously the Financial Reporting June 30, 2024
Reported Entity As Restated
Governmental Funds:

Major Funds:

Development Fees Special Revenue Fund - $ 21,108,375$ 21,108,375 $ Nonmajor Funds 78,723,051 (21,108,375) 57,614,676 Total Governmental Funds 78,723,051$ - $ 78,723,051$

376
City of Salinas
Notes to the Basic Financial Statements (Continued)
For the Year Ended June 30, 2025

133
Note 23 – Subsequent Events

On September 23, 2025, the City entered into a Purchase and Sale Agreement for the transfer of City)owned properties located at 342 Front Street and 323 California Stre et to the Monterey County Office of Education (MCOE ) for $2,500,000. The properties had been leased to MCOE since 2003, and the City determined that they were no longer necessary for municipal purposes and qualified as exempt surplus land pursuant to the California Surplus Land Act.

The City Council also authorized the direct purchase and/or lease)financing of two Type 1 fire engines, one tiller ladder truck, and one BME Type 6 wildland engine from Gold en State Fire Apparatus, Inc. The total authorized purchase amount was $5,404,476.31, with an additional 5 perc ent contingency of $270,223.82, excluding financing costs. The City also approved the use of proceeds from the sal e of the City’s surplus properties at 342 Front Str eet and 323 California Street to fund a portion of the fire apparatus acquisitions.

377

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378

135

REQUIRED SUPPLEMENTARY INFORMATION
379

136
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380
City of Salinas
Budgetary Information
For the Year Ended June 30, 2025

137
Budgetary Information

The budget is prepared by the City Manager and adop ted by the City Council. The City Council approves operating appropriations at the department and fund level pri or to July 1, each year and may amend the budget du ring the fiscal year. Budgetary control is maintained at the progra m level. Formal budgetary integration was employed as a management control device during the fiscal year fo r the General Fund, Special Revenue Funds, Debt Ser vice Funds, Capital Projects Funds, Enterprise Funds and Internal Service Funds.

Budgets are legally adopted for all Governmental and Proprietary Fund Types. Fiduciary Funds and Agency Funds have no adopted budgets because the City is only required to make payments to the extent funds are available. Agency Fund budgets that are approved by their respective governing boards are recorded in the City’s accounting system.

The City Manager may transfer budget appropriations between departments and Department Directors may t ransfer appropriations between programs and accounts within their individual departments and divisions, but only the Council may appropriate funds from reserves or fund balances.

Budget policy excludes the use of taxes, accounts receivable, interest receivable assets and long-term advances that are not currently available resources for budget purpos es. Condemnation deposits, are also excluded becaus e they are returned upon right of way acquisition.

Expenditures may not legally exceed budgeted appropriations at the department level. Budgeted amounts shown are as originally adopted and as amended by the City Counc il during the year. During the year, Council amends the budget with the approval of supplemental appropriations and reviews and amends the budget at mid-year and at year-end.

Appropriations lapse at fiscal year end to the exte nt they have not been expended. New budget appropri ations are approved for the coming year. Project-length financial plans are adopted for all capital projects funds and appropriations are carried forward until project completion. Grant funds are carried forward until the grant expires.

Encumbrances represent commitments related to unper formed contracts for goods or services. Encumbrance accounting, under which purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of the applicable appropriation, is employed as an extension of forma l budgetary integration in the governmental funds. Encumbrances outstanding at year-end are recorded as reservatio ns of fund balance and do not constitute expenditures or liabilities because the commitments will be honored during the subsequent year.

On November 8, 2005, the voters of Salinas approved Measure V, a 0.50% transactions and use tax. Measu re V is a general tax and is reported as part of the General Fund. The tax was effective April 1, 2005 and had a n original sunset of ten (10) years. Measure V was revised by the vot ers on November 6, 2012 eliminating a termination d ate on the imposition of the tax through Measure E. The Measure E Oversight Committee is a fundamental provision of the voter- approved tax. The Mayor and City Council each annually appoints one member of the public to serve on the Oversight Committee. The committee is responsible for and overseeing the use of Measure E funds to assure consistency with the voter approved tax and the appropriated use of Measure E funds.

On November 4, 2014, the voters of Salinas approved Measure G (For a Safer Better Salinas), a 1.00% transactions and use tax. Measure G is a general tax and is reported as part of the General Fund. The tax was effective April 1, 2015 and had a sunset date of fifteen (15) years. The Measur e G Oversight Committee is a fundamental provision of the voter- approved tax. The Mayor and City Council each annually appoints one member of the public to serve on the Oversight Committee. The committees’ main responsibilities in clude the review of the auditor’s report of the spe cific uses of Measure G funds and to issue a public report to the City Council regarding the use of revenue and such other matters as the City Council may assign.
381
City of Salinas
Budgetary Information (Continued)
For the Year Ended June 30, 2025

138
The adopted FY 2025 budget represents the financial and organizational plan by which the policies and programs approved by the City Council will be implemented. It includes: (1) the programs, projects, services and activities to be provided during the fiscal year; (2) estimated reve nues available to finance the operating plan; and ( 3) the estimated spending requirements of the operating plan. The Ci ty’s goals and objectives identified by the City Co uncil in the Strategic Plan thru 2025 was approved on March 8, 2022, following a strategic planning session on December 4, 2021 and are as follows:

• Economic Development
• Affordable Housing
• Infrastructure and Environmental Sustainability
• Excellent Infrastructure
• Public Safety
• Youth and Seniors
• Effective and Culturally Responsive Government

On May 25, 2021, the City Council was introduced and reviewed the proposed operating budget for the City of Salinas and Successor Agency. The Salinas City Council adopted FY 2025 Annual Operating Budgets on June 13, 2024. Capital project budget is updated annually.

Annual budgets are prepared for General Governmenta l Funds, Internal Service, Enterprise Operations, A ssessment and maintenance Districts, Block Grant and Home programs, certain Grant and City Agencies, Deferred Compensation and Retirement, Debt Service, Successor Agency and Capital Project Funds.

The annual appropriation resolution adopts the budg et at an appropriation level by fund, with detail e xpenditure by departments and programs included in the budget document.

GENERAL FUND

The General Fund’s fund balance increased $3,756,47 8 to $39,911,844, of which $2,785,000 is nonspendab le, $6,000,000 is restricted, $21,007,693 is committed, $8,134,366 is assigned and $5,172,215 is unassigned.

General Fund reserves have been set-aside by Council for specific purposes. Under the Reserved fund balance category, the General Fund nonspendable fund balance of $2,785,000 includes advances ($2,785,000). Committed funds balance of $21,362,658 are committed for capital projects, reserves, and future encumbrances. Carryover approp riations of $8,134,366 are under the assigned fund balance category.

MEASURE E

Measure E is a general tax (discretionary) and is r eported as part of the General Fund. The Measure E fund balance increased $4,019,991 to $26,302,852, of which $1,32 0,000 is restricted , $3,713,235 is committed for f uture encumbrances, $7,702,794 is assigned, and $13,566,823 is unassigned.

MEASURE G

Measure G is a general tax (discretionary) and is r eported as part of the General Fund. The Measure G fund balance increased $2,214,991 to $29,951,993, of which $2,68 0,000 is restricted, $13,166,286 is committed for f uture encumbrances, $8,987,839 is assigned and $5,117,868 is unassigned.

382
City of Salinas
Budgetary Information (Continued)
For the Year Ended June 30, 2025

139

BUDGETARY RESULTS RECONCILED TO GAAP

The budgetary process is based upon accounting for certain transactions on a basis other than the accounting principles generally accepted in the United States (GAAP) basi s. The results of operations are presented in the a ccompanying budget and actual comparison schedules in accordanc e with the budgetary process (budgetary basis) to p rovide a meaningful comparison with the budget. The major differences between the budgetary basis actual and GAAP basis are as follows:

• Year-end encumbrances are recognized as the equival ent of expenditures in the budgetary basis financia l statements, while encumbered amounts are not recogn ized as expenditures on the GAAP basis until the equipment, supplies, or services are received.

• Certain loan transactions are recognized as expendi tures for the budgetary basis but not for the GAAP basis.

When these loans are made, they are recorded as rec eivables for the GAAP basis and as expenditures for the budgetary basis. When loan repayments are received, they are recorded as reductions to receivables for the GAAP basis, but are recognized as revenues for the budgetary basis.

• Certain accounts such as the change in fair market value of investments included in the City’s GAAP ba sis amounts, for which no formal budgets are prepared, are excluded from the budgetary basis financial statements.

• Certain grant revenues received in advance are recognized on the budgetary basis financial statements, but are deferred and not recognized as revenue on the GAAP basis financial statements. This process normally creates a variance in recognized revenue from the prior year to the current year.

383
City of Salinas
Budgetary Comparison Schedules – General Fund
For the Year Ended June 30, 2025

140
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Taxes 153,008,000$ 153,008,000 $ 159,755,172 $ 6,747,172 $ Licenses and permits 10,381,000 10,381,000 10,919,325 538,325 Intergovernmental 1,139,000 1,139,000 1,428,928 289,928 Charges for services 5,387,150 5,387,150 9,305,281 3,918,131 Investment income (loss) 3,269,800 3,269,800 5,470,058 2,200,258 Rental income 330,000 330,000 406,138 76,138 Fines and forfeitures 275,000 275,000 198,664 (76,336) Miscellaneous 914,000 914,000 1,018,083 104,083 Total revenues 174,703,950 174,703,950 188,501,649 13,797,699 EXPENDITURES:

Current:

General government 34,507,106 35,743,773 30,168,986 5,574,787 Public safety 90,256,244 90,584,264 89,123,418 1,460,846 Public works 18,749,440 19,032,936 16,986,137 2,046,799 Recreation 8,595,947 9,651,940 8,858,018 793,922 Library 6,136,900 6,136,901 6,095,902 40,999 Capital outlay 174,618 196,041 406,690 (952,824) Debt Service:

Principal 915,190 915,190 1,148,865 915,190 Interest and fiscal charges 164,820 164,820 163,990 830 Total expenditures 159,500,265 162,425,865 152,952,006 9,880,549 REVENUES OVER (UNDER) EXPENDITURES 15,203,685 12,278,085 35,549,643 3,917,150 OTHER FINANCING SOURCES (USES):

Transfers in 4,977,200 4,977,200 2,465,000 (2,512,200) Transfers out (26,047,600) (72,650,489) (32,906,888) 39,743,601 Total other financing sources (uses) (21,070,400) (67,673,289) (30,202,247) 37,471,042 Net change in fund balance (5,866,715)$ (55,395,204) $ 5,347,396 60,742,600 $ FUND BALANCE:

Beginning of year 94,361,689
End of year 99,709,085$
Budgeted Amounts

384
City of Salinas
Budgetary Comparison Schedules – ARPA Fund
Special Revenue Fund
For the Year Ended June 30, 2025

141
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental -$ - $ 20,862,978$ 20,862,978 $ Total revenues - - 20,862,978 20,862,978 EXPENDITURES:

Current:

General government - 2,608,650 2,111,974 496,676 Public safety - 2,151,759 2,151,759 - Public works - 5,347,216 4,558,006 789,210 Recreation - 208,908 159,249 49,659 Capital outlay - 15,250,280 11,881,990 15,250,280 Total expenditures - 25,566,813 20,862,978 16,585,825 Net change in fund balance -$ (25,566,813)$ - 25,566,813$ FUND BALANCE:

Beginning of year -
End of year -$
Budgeted Amounts

385
City of Salinas
Budgetary Comparison Schedules – HUD Fund
Special Revenue Fund
For the Year Ended June 30, 2025

142
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental -$ 21,767,741$ 15,047,496 $ (6,720,245) $ Investment income (loss) - 40,000 147,690 107,690 Miscellaneous - 221,676 409,167 187,491 Total revenues - 22,029,417 15,604,353 (6,425,064) EXPENDITURES:

Current:

General government 3,409,380 22,224,899 9,977,132 12,247,767 Public safety - 100 100 - Public works - 13,360 3,413 9,947 Capital outlay - 8,594,600 1,327,949 8,594,600 Total expenditures 3,409,380 30,832,959 11,308,594 20,852,314 REVENUES OVER (UNDER) EXPENDITURES (3,409,380) (8,803,542) 4,295,759 (13,099,301) OTHER FINANCING SOURCES (USES):

Transfers out - (1,517,244) (1,175,219) 342,025 Total other financing sources (uses) - (1,517,244) (1,109,641) 407,603 Net change in fund balance (3,409,380)$ (10,320,786) $ 3,186,118 13,506,904 $ FUND BALANCE (DEFICIT):

Beginning of year (56,775)
End of year 3,129,343$
Budgeted Amounts

386
City of Salinas
Budgetary Comparison Schedules – Development Fees
Special Revenue Fund
For the Year Ended June 30, 2025

143
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 1,455,000$ 1,455,000 $ 14,000,440 $ 12,545,440 $ Investment income (loss) 336,400 336,400 1,385,115 1,048,715 Total revenues 1,791,400 1,791,400 15,385,555 13,594,155 REVENUES OVER (UNDER) EXPENDITURES 1,791,400 1,791,400 15,385,555 13,594,155 OTHER FINANCING SOURCES (USES):

Transfers out (700,000) (16,588,555) (582,340) 16,006,215 Total other financing sources (uses) (700,000) (16,588,555) (582,340) 16,006,215 Net change in fund balance 1,091,400$ (14,797,155) $ 14,803,215 29,600,370 $ FUND BALANCE:

Beginning of year 21,108,375
End of year 35,911,590$
Budgeted Amounts

387
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plan

144
2025 2024 2023 2022 2021
Measurement Period, Year Ended June 30: 2024 2023 2022 2021 2020 T otal Pension Liability
Service Cost 4,078,307$ 3,883,129 $ 3,581,707 $ 3,130,339 $ 3,162,904 $ Interest on total pension liability 11,033,877 10,520,930 9,882,781 9,498,842 8,959,786 Changes in benefit terms - 163,259 - - - Differences between expected and actual
experience (53,982) 2,096,099 (1,973,792) 727,132 588,822 Changes in assumptions - - 5,420,045 - - Benefit payments, including refunds of
employee contributions (7,140,385) (6,886,917) (6,365,156) (5,481,505) (5,107,076) Net change in total pension liability 7,917,817 9,776,500 10,545,585 7,874,808 7,604,436 T otal pension liability - beginning 161,496,279 151,719,779 141,174,194 133,299,386 125,694,950 T otal pension liability - ending (a) 169,414,096$ 161,496,279 $ 151,719,779 $ 141,174,194 $ 133,299,386 $ Plan fiduciary net position
Contributions - employer 5,034,807$ 4,713,873 $ 4,193,288 $ 4,273,977 $ 7,793,322 $ Contributions - employee 1,911,248 1,688,999 1,584,132 1,464,611 1,411,627 Net investment income 11,606,038 7,090,560 (9,339,092) 22,935,564 4,662,415 Benefit payments, including refunds of
employee contributions (7,140,385) (6,886,917) (6,365,156) (5,481,505) (5,107,076) Net plan to plan resource movement - - - - 383,290 Administrative expense (97,968) (83,739) (77,170) (100,678) (129,381) Other miscellaneous income/expense - - - - - Net change in plan fiduciary net
position 11,313,740 6,522,776 (10,003,998) 23,091,969 9,014,197 Plan fiduciary net position - beginning 120,398,293 113,875,517 123,879,515 100,787,546 91,773,349 Plan fiduciary net position - ending (b) 131,712,033$ 120,398,293 $ 113,875,517 $ 123,879,515 $ 100,787,546 $ Net pension liability - ending (a) - (b) 37,702,063$ 41,097,986 $ 37,844,262 $ 17,294,679 $ 32,511,840 $ Plan fiduciary net position as a percentage
of the total pension liability 77.75% 74.55% 75.06% 87.75% 75.61% Covered payroll 25,229,673$ 23,750,027 $ 21,667,920 $ 20,799,596 $ 20,946,385 $ Plan net pension liability as a percentage of
covered payroll 149.44% 173.04% 174.66% 83.15% 155.21%
City Miscellaneous Plans
388
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios – Miscellaneous Plan (Continued)

145
2020 2019 2018 2017 2016
Measurement Period, Year Ended June 30: 2019 2018 2017 2016 2015 T otal Pension Liability
Service Cost 3,157,247$ 3,099,429 $ 2,873,548 $ 2,135,480 $ 2,197,484 $ Interest on total pension liability 8,430,817 7,806,166 7,282,974 6,801,939 6,445,778 Changes in benefit terms - - - - - Differences between expected and actual
experience 2,005,995 1,457,261 489,759 (996,921) (1,789,044) Changes in assumptions - (752,607) 6,388,079 - (1,686,636) Benefit payments, including refunds of
employee contributions (4,456,008) (3,952,236) (3,361,268) (3,116,204) (2,803,130) Net change in total pension liability 9,138,051 7,658,013 13,673,092 4,824,294 2,364,452 T otal pension liability - beginning 116,556,899 108,898,886 95,225,794 90,401,500 88,037,048 T otal pension liability - ending (a) 125,694,950$ 116,556,899 $ 108,898,886 $ 95,225,794 $ 90,401,500 $ Plan fiduciary net position
Contributions - employer 3,511,716$ 3,133,948 $ 3,232,477 $ 2,635,818 $ 2,037,528 $ Contributions - employee 1,501,635 1,403,836 1,331,850 1,339,737 987,786 Net investment income 5,681,706 6,712,207 7,844,830 375,028 1,500,373 Benefit payments, including refunds of
employee contributions (4,456,008) (3,952,236) (3,361,268) (3,116,204) (2,803,130) Net plan to plan resource movement - (199) - 365 - Administrative expense (61,083) (122,563) (102,919) (41,756) (77,059) Other miscellaneous income/expense 199 (232,749) - - - Net change in plan fiduciary net
position 6,178,165 6,942,244 8,944,970 1,192,988 1,645,498 Plan fiduciary net position - beginning 85,595,184 78,652,940 69,707,970 68,514,982 66,869,484 Plan fiduciary net position - ending (b) 91,773,349$ 85,595,184 $ 78,652,940 $ 69,707,970 $ 68,514,982 $ Net pension liability - ending (a) - (b) 33,921,601$ 30,961,715 $ 30,245,946 $ 25,517,824 $ 21,886,518 $ Plan fiduciary net position as a percentage
of the total pension liability 73.01% 73.44% 72.23% 73.20% 75.79% Covered payroll 20,634,254$ 20,051,944 $ 18,618,295 $ 15,300,421 $ 15,513,480 $ Plan net pension liability as a percentage of
covered payroll 164.39% 154.41% 162.45% 166.78% 141.08% City Miscellaneous Plans

389
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contribution –
Miscellaneous Plan

146
Fiscal Year Ended June 30: 2025 2024 2023 2022 2021
Actuarially determined
contribution 5,804,078 $ 5,034,807 $ 4,713,873 $ 4,193,288 $ 4,273,977 $ Contributions in relation to
the actuarially determined
contribution (5,804,078) (5,034,807) (4,713,873) (4,193,288) (4,273,977) Contribution deficiency
(excess) -$ - $ - $ - $ - $ Covered payroll 26,008,064 $ 25,299,673 $ 23,750,027 $ 21,667,920 $ 20,799,596 $ Contributions as a percentage
of covered payroll 22.32% 19.90% 19.85% 19.35% 20.55%
Notes to Schedule:

Methods and assumptions used to determine contribut ion rates:

Actuarial cost method
Amortization method/period For details, see June 30, 2021 Funding Valuation Report.

Asset valuation method
Inflation
Salary increases Varies based on entry age and serv ice Payroll growth
Investment rate of return
Retirement age
Mortality
Other Information:

T he probabilities of retirement are based on the 20 21 CalPERS Experience Study.

Entry Age Actuarial Cost Method
T he probabilities of mortality are based on the 202 1 CalPERS Experience Study. Pre-retirement and post-retirement mortality rates include 15 year s of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Ac tuaries.

For changes to previous years’ information, refer t o past GASB 68 reports.

The actuarial methods and assumption used to set th e actuarially determined contributions for Fiscal Y ear 2024 were derived from the June 30, 2021 funding valuation report.

2.50%

2.75%
Fair Value of Assets. For details, see June 30, 202 1 Funding Valuation

7.00% net of pension plan investment and administra tive expenses 390
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contribution –
Miscellaneous Plan (Continued)

147
Fiscal Year Ended June 30: 2020 2019 2018 2017 2016
Actuarially determined
contribution 3,857,093 $ 3,511,716 $ 3,133,731 $ 3,231,650 $ 2,635,818 $ Contributions in relation to
the actuarially determined
contribution (7,793,322) (3,511,716) (3,133,731) (3,231,650) (2,635,818) Contribution deficiency
(excess) (3,936,229)$ - $ - $ - $ - $ Covered payroll 20,946,385 $ 20,634,254 $ 20,051,944 $ 18,618,295 $ 15,300,421 $ Contributions as a percentage
of covered payroll 37.21% 17.02% 15.63% 17.36% 17.23%
Notes to Schedule:

Methods and assumptions used to determine contribut ion rates:

Actuarial cost method
Amortization method/period For details, see June 30, 2021 Funding Valuation Report.

Asset valuation method
Inflation
Salary increases Varies based on entry age and serv ice Payroll growth
Investment rate of return
Retirement age
Mortality
Other Information:

The actuarial methods and assumption used to set th e actuarially determined contributions for Fiscal Y ear 2024 were derived from the June 30, 2021 funding valuation report.

Entry Age Actuarial Cost Method
Fair Value of Assets. For details, see June 30, 202 1 Funding Valuation

2.50%

2.75%

7.00% net of pension plan investment and administra tive expenses The probabilities of retirement are based on the 20 21 CalPERS Experience Study.

The probabilities of mortality are based on the 202 1 CalPERS Experience Study. Pre-retirement and post-retirement mortality rates include 15 year s of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Ac tuaries.

For changes to previous years’ information, refer t o past GASB 68 reports. 391
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratio – City Police Plan

148
2025 2024 2023 2022 2021
Measurement Period, Year Ended June 30: 2024 2023 2022 2021 2020 T otal Pension Liability
Service Cost 6,619,453$ 6,485,353 $ 6,757,790 $ 6,086,593 $ 6,156,433 $ Interest on total pension liability 25,361,824 24,606,993 23,595,755 22,716,035 22,017,085 Changes in benefit terms - 146,047 - - - Differences between expected and actual
experience (1,298,281) 2,343,505 (1,552,114) (2,364,429) 1,696,481 Changes in assumptions - - 13,527,486 - - Benefit payments, including refunds of
employee contributions (19,129,246) (18,713,828) (17,388,668) (16,317,199) (15,680,099) Net change in total pension liability 11,553,750 14,868,070 24,940,249 10,121,000 14,189,900 T otal pension liability - beginning 375,115,843 360,247,773 335,307,524 325,186,524 310,996,624 T otal pension liability - ending (a) 386,669,593$ 375,115,843 $ 360,247,773 $ 335,307,524 $ 325,186,524 $ Plan fiduciary net position
Contributions - employer 13,750,190$ 13,151,466 $ 12,406,841 $ 11,629,887 $ 10,297,024 $ Contributions - employee 2,265,826 2,176,654 2,127,269 2,305,151 1,946,146 Net investment income 23,156,908 14,237,556 (19,126,756) 46,981,535 9,999,235 Benefit payments, including refunds of
employee contributions (19,129,246) (18,713,828) (17,388,668) (16,317,199) (15,680,099) Net plan to plan resource movement - - - - (383,290) Administrative expense (195,043) (168,406) (156,453) (206,540) (283,165) Other miscellaneous income/expense1 - - - - - Net change in plan fiduciary net
position 19,848,635 10,683,442 (22,137,767) 44,392,834 5,895,851 Plan fiduciary net position - beginning2 239,697,612 229,014,170 251,151,937 206,759,103 200,863,252 Plan fiduciary net position - ending (b) 259,546,247$ 239,697,612 $ 229,014,170 $ 251,151,937 $ 206,759,103 $ Net pension liability - ending (a) - (b) 127,123,346$ 135,418,231 $ 131,233,603 $ 84,155,587 $ 118,427,421 $ Plan fiduciary net position as a percentage
of the total pension liability 67.12% 63.90% 63.57% 74.90% 63.58% Covered payroll
3 20,156,678$ 19,748,334 $ 20,251,095 $ 19,916,863 $ 19,776,528 $ Plan net pension liability as a percentage of
covered payroll 630.68% 685.72% 648.03% 422.53% 598.83% 1During Fiscal Year 2017-18, as a result of Governme ntal Accounting Standards Board Statement (GASB) No . 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other th an Pensions (GASB 75), CalPERS reported its proport ionate share of activity related to postemployment benefits for participation in the St ate of California’s agent OPEB plan. Accordingly, C alPERS recorded a one-time expense as a result of the adoption of GASB 75.

Additionally, CalPERS employees participate in vari ous State of California agent pension plans and dur ing Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financ ial statements to properly reflect its proportionat e share of activity related to pensions in accordance with GASB Statement No. 68, Accounting a nd Financial Reporting for Pensions (GASB 68). 2Includes any beginning of year adjustment.
3 Includes one year’s payroll growth using 2.80% pay roll growth assumption for fiscal years ended in 20 22 through 2024; 2.75% payroll growth assumption for fiscal years ended in 2018 through 2 021; 3.00% payroll growth assumption for fiscal yea rs ended in 2015 through 2017. 392
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratio – City Police Plan (Continued)

149
2020 2019 2018 2017 2016
Measurement Period, Year Ended June 30: 2019 2018 2017 2016 2015 T otal Pension Liability
Service Cost 6,076,786$ 5,603,486 $ 5,171,913 $ 4,462,598 $ 4,440,981 $ Interest on total pension liability 21,051,415 19,772,458 18,658,643 17,933,618 17,475,350 Changes in benefit terms - - - - - Differences between expected and actual
experience 6,664,829 6,096,574 (2,807) (4,299,665) (5,739,808) Changes in assumptions - (1,307,343) 16,117,523 - (4,436,648) Benefit payments, including refunds of
employee contributions (15,037,162) (13,742,608) (12,772,896) (11,890,953) (11,383,179) Net change in total pension liability 18,755,868 16,422,567 27,172,376 6,205,598 356,696 T otal pension liability - beginning 292,240,756 275,818,189 248,645,813 242,440,215 242,083,519 T otal pension liability - ending (a) 310,996,624$ 292,240,756 $ 275,818,189 $ 248,645,813 $ 242,440,215 $ Plan fiduciary net position
Contributions - employer 9,485,870$ 8,260,458 $ 7,798,560 $ 6,462,584 $ 5,540,793 $ Contributions - employee 1,993,713 1,816,971 1,625,541 1,512,655 1,350,215 Net investment income 12,630,434 15,347,329 18,439,075 800,238 3,733,737 Benefit payments, including refunds of
employee contributions (15,037,162) (13,742,608) (12,772,896) (11,890,953) (11,383,179) Net plan to plan resource movement - (447) - 19,216 - Administrative expense (136,963) (282,146) (245,410) (103,251) (190,690) Other miscellaneous income/expense1 444 (535,801) - - - Net change in plan fiduciary net
position 8,936,336 10,863,756 14,844,870 (3,199,511) (949,124) Plan fiduciary net position - beginning2 191,926,916 181,063,160 166,218,290 169,417,801 170,366,925 Plan fiduciary net position - ending (b) 200,863,252$ 191,926,916 $ 181,063,160 $ 166,218,290 $ 169,417,801 $ Net pension liability - ending (a) - (b) 110,133,372$ 100,313,840 $ 94,755,029 $ 82,427,523 $ 73,022,414 $ Plan fiduciary net position as a percentage
of the total pension liability 64.59% 65.67% 65.65% 66.85% 69.88% Covered payroll
3 19,051,278$ 17,967,376 $ 16,214,420 $ 15,715,033 $ 15,494,316 $ Plan net pension liability as a percentage of
covered payroll 578.09% 558.31% 584.39% 524.51% 471.29% 1During Fiscal Year 2017-18, as a result of Governme ntal Accounting Standards Board Statement (GASB) No . 75, Accounting and Financial Reporting for Postemployment Benefit Plans Other th an Pensions (GASB 75), CalPERS reported its proport ionate share of activity related to postemployment benefits for participation in the St ate of California’s agent OPEB plan. Accordingly, C alPERS recorded a one-time expense as a result of the adoption of GASB 75.

Additionally, CalPERS employees participate in vari ous State of California agent pension plans and dur ing Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financ ial statements to properly reflect its proportionat e share of activity related to pensions in accordance with GASB Statement No. 68, Accounting a nd Financial Reporting for Pensions (GASB 68). 2Includes any beginning of year adjustment.
3 Includes one year’s payroll growth using 2.80% pay roll growth assumption for fiscal years ended in 20 22 through 2024; 2.75% payroll growth assumption for fiscal years ended in 2018 through 2 021; 3.00% payroll growth assumption for fiscal yea rs ended in 2015 through 2017.

393
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contributions
City Police Plans

150
Fiscal Year Ended June 30: 2025 2024 2023 2022 2021
Actuarially determined
contribution 14,853,506$ 13,750,190 $ 13,151,466 $ 12,406,841 $ 11,629,887 $ Contributions in relation to
the actuarially determined
contribution (14,853,506) (13,750,190) (13,151,466) (12,406,841) (11,629,887) Contribution deficiency
(excess) -$ - $ - $ - $ - $ Covered payroll 20,721,065 $ 20,156,678 $ 19,748,334 $ 20,251,095 $ 19,916,863 $ Contributions as a percentage
of covered payroll 71.68% 68.22% 66.60% 61.27% 58.39%
Notes to Schedule:

Methods and assumptions used to determine contribut ion rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality
Other Information:

For changes to previous years’ information, refer t o past GASB 68 reports.

For details, see June 30, 2021 Funding Valuation Re port.

Fair Value of Assets. For details, see June 30, 202 1 Funding Valuation Report.

Varies based on entry age and service

6.80% net of pension plan investment and administra tive expenses The probabilities of retirement are based on the 20 21 CalPERS Experience Study and Review of Actuarial Assumptions.

The probabilities of mortality are based on the 202 1 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.

2.30%

2.80%
The actuarial methods and assumption used to set th e actuarially determined contributions for Fiscal Y ear 2024 were derived from the June 30, 2021 funding valuation report.

Entry Age Actuarial Cost Method
394
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contributions
City Police Plans (Continued)

151
Fiscal Year Ended June 30: 2020 2019 2018 2017 2016
Actuarially determined
contribution 10,297,024$ 9,485,870 $ 8,260,458 $ 7,798,560 $ 6,462,584 $ Contributions in relation to
the actuarially determined
contribution (10,296,552) (9,485,870) (8,260,458) (7,798,560) (6,462,584) Contribution deficiency
(excess) 472$ - $ - $ - $ - $ Covered payroll 19,776,528 $ 19,051,278 $ 17,967,376 $ 16,214,420 $ 15,715,033 $ Contributions as a percentage
of covered payroll 52.06% 49.79% 45.97% 48.10% 41.12%
Notes to Schedule:

Methods and assumptions used to determine contribut ion rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll growth
Investment rate of return
Retirement age
Mortality
Other Information:

For changes to previous years’ information, refer t o past GASB 68 reports.

The actuarial methods and assumption used to set th e actuarially determined contributions for Fiscal Y ear 2024 were derived from the June 30, 2021 funding valuation report.

Entry Age Actuarial Cost Method
For details, see June 30, 2021 Funding Valuation Re port.

Fair Value of Assets. For details, see June 30, 202 1 Funding Valuation Report.

2.30%
Varies based on entry age and service

2.80%

6.80% net of pension plan investment and administra tive expenses The probabilities of retirement are based on the 20 21 CalPERS Experience Study and Review of Actuarial Assumptions.

The probabilities of mortality are based on the 202 1 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.

395
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios – City Fire Plans

152
2025 2024 2023 2022 2021
Measurement Period, Year Ended June 30: 2024 2023 2022 2021 2020 Proportion of the net pension liability 0.53831% 0.52 990% 0.53060% 0.61287% 0.48376% Proportionate share of the net pension
liability 65,283,627$ 66,108,004 $ 61,288,496 $ 33,145,570 $ 52,635,552 $ Covered payroll* 13,527,689 $ 12,823,623 $ 11,615,639 $ 11,387,448 $ 11,013,870 $ Proportionate share of the net pension
liability as percentage of covered payroll 482.59% 515.52% 527.64% 291.07% 477.90% Plan's fiduciary net position as percentage
of the total pension liability 78.08% 76.21% 76.68% 88.29% 75.10% 396
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios – City Fire Plans (Continued)

153
2020 2019 2018 2017 2016
Measurement Period, Year Ended June 30: 2019 2018 2017 2016 2015 Proportion of the net pension liability 0.46772% 0.46 967% 0.58010% 0.60039% 0.64362% Proportionate share of the net pension
liability 47,927,704$ 45,259,034 $ 57,529,594 $ 51,951,899 $ 44,177,449 $ Covered payroll* 10,748,465 $ 9,763,022 $ 9,636,368 $ 9,436,688 $ 9,158,594 $ Proportionate share of the net pension
liability as percentage of covered payroll 445.90% 463.58% 597.00% 550.53% 482.36% Plan's fiduciary net position as percentage
of the total pension liability 75.26% 75.26% 73.31% 74.06% 78.40%

397
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contributions
City Fire Plans

154
Fiscal Year Ended June 30: 2025 2024 2023 2022 2021
Actuarially determined
contribution 7,992,242 $ 7,254,285 $ 6,940,599 $ 6,791,444 $ 5,708,093 $ Contributions in relation to
the actuarially determined
contribution (7,992,242) (7,254,285) (6,940,599) (6,791,444) (5,708,093) Contr ibution deficiency
(excess) -$ - $ - $ - $ - $ Covered payroll 13,787,911$ 13,527,689 $ 12,823,623 $ 11,615,639 $ 11,387,448 $ Contributions as a percentage
of covered payroll 57.97% 53.63% 54.12% 58.47% 50.13%
Notes to Schedule:

Methods and assumptions used to determine contribut ion rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Mortality
The actuarial methods and assumption used to set th e actuarially determined contributions for Fiscal Y ear 2025 were derived from the June 30, 2022 funding valuation report.

Entry age normal cost method
Varies by date established and source. May be level dollar or level percent of pay and may include direct rate smoothing
Market value of assets
Derived using CalPERS’ Membership Data for all Fund s. T he post-retirement mortality rates include 15 years of projected on-going mortality im provement using 80% of the Society of Actuaries’ Scale MP-2020