Salinas City Council
February 24, 2026

City of Salinas
California

Annual Comprehensive Financial Report
Fiscal Year Ended June 30, 2025

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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

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

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 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

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 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

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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 (City) Annual Comprehensive Financial Report (ACFR) for the fiscal year ending June 30, 2025. Although 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-technica l 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 Management’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 its 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 comprehens ive system of internal controls designed to protect City assets from loss, to identify and re cord transactions accurately, and to compile the information necessary to produce financial statemen ts 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 fo r 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 audi t of the City’s major program expenditures of federal funds for compliance with the requirement s described in the U.S. Office of Management and Budget’s OMB Compliance Supplement, and th e standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States. The report of the Single Audit is publis hed 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 contents, letter of transmittal, listing of elected officials, City administrative pers onnel, and an organization chart delineating organizational structure.

II. The Financial Section includes the Independent Auditors’ 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 w ith additional historic perspective, context, and detail to assist in using the informati on in the financial statements. It provides information in five categories: financial tr ends; revenue 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 operates 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 Mayor 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 and 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 providing all typical City services: Public safety - police and fire, Public Works - maintenance se rvices (streets, lighting, signals, facilities, parks and trees), development and pe rmit services, current and adva nced planning and traffic and facilities engineering, Library, Recreation and Ge neral 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 Finance 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 di stricts, a unified high school dist rict and several private schools at both the primary and secondary le vel operate in the City of Sa linas. Hartnell College, a State Community College, offers two-year degrees a nd occupational certificat e 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 , Middlebury Institute of International Studies and Chapman College are available nearby. Also in the area are Moss Landing Marine Laboratory, ii
Letter of Transmittal
ACFR for Fiscal Year Ended June 30, 2025 | 3
Monterey College of Law, Stanford University ’s Hopkins Marine Station and San Jose State University.

Salinas has extensive health and medical services with 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 adva nced life support are provided by the City's full-service Fire Department. Advanced life support services are provided 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 regional, state and federal agencies.

The City's moderate climate encourages year-roun d use of its 550 plus acres of municipal parks, which include golf courses, tennis courts a nd swimming pools. The Salinas Community Center regularly hosts symphonies, ballets, concerts and conventions. Salinas is host to the annual Steinbeck Festival, the California Rodeo, and the California International Airshow. Salinas has a modern California Sports Comple x and the National Steinbeck Ce nter. Surrounding Salinas are diverse recreational opportunities including beauti ful beaches and the world famed golf courses of the Monterey Bay Peninsula.

As the retail hub of the Central Coast, Salinas enjo ys 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 Plaza 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 lay offs 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, migrati on out-of-state, and individuals choosing to spend their time in nonmarket activities, such as child-raising.

The unemployment rate for the county and Salinas Metropolitan 1 area for June 2025 was 6.3%, which was the same as in May 2025 and higher th an the 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 revenue s (not including transfers in) increased by $9.7 million or 5.4% from the prior year. Sales tax revenues 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 th an the prior year’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 revenues 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 Ci ty benefited from the Fe deral 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 milli on and 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 employ ees to the City’s residents, businesses, and visitors. As a service delivery en terprise, the cost of salaries and benefits are a significant portion of the City’s expenditures. Salaries are largely dictated by regional market forces as evidenced by fierce competition for workforce 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 pension employer costs to continue to be a primary expense in conjunction w ith salaries. The City’s pensio n 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 ec onomic and demographic conditions is the creation of unfunded pension and Other Post-Empl oyment Benefits (OPEB) obligations for the City. According to the 2023 accounting valuati on reports, 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 (O PEB). 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 detailed information about the City OPEB obligations please refer to Note 17 of the Notes to Basic Financial Statements Section.

Despite revenue constraints and increasing co sts associated with unfunded federal and state mandates, the City has managed to maintain high service levels and balanced budgets through prudent fiscal management.

MAJOR CAPITAL PROJECT INITIATIVES
The City maintains a multi-year forecasting mod el for 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 presented to the City Council during the budget process for the next fiscal year.

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

Approximately $13.6 million in City infrastruct ure and other capital asset improvements and contributions were invested in FY 24-25, incl uding $1.9 million in improvements -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, build ing 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 schedu led in accordance with the City’s approved Capital Improvement Plan and w ill continue into future years. All of these improvements are funded either through grants, appropriations car ried 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 ensure compliance with applicable laws and regulations relating to these award programs. Interna l 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 effectiveness 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 accr ual 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 means 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 and interest on general long-term debt, which is not recognized by debt service funds until it is due.

Internal accounting procedures have been devel oped 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 a ccounting system. Expenditures for City operations and other purposes identified in the annual budget cannot legally exceed the budgeted amounts approved by the City Council.

An annual operating budge t, five-year budget forecast, 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 during 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 a ddition, 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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viii
City of Salinas
Organization Chart

ix
City of Salinas
List of Principal Officials

Jose Luis Barajas Gloria De La Rosa
Councilmember C ouncilmember
District 1 District 4
Tony Barrera Andrew Sandoval
Councilmember C ouncilmember
District 2 District 5
M argare t D'Arrigo Aure lio Salazar
Councilmember C ouncilmember
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
Ma yor
Rene Mendez Christopher A. Callihan
City Manager City Attorney

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FINANCIAL SECTION

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6 Hutton Centre Drive, Suite 1200
Santa Ana, California 92707

INDEPENDENT AUDITOR’S REPORT

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

Report on the Audit of the Financial Statements

Opinions

We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Salinas, California (the “City”), as of and for the year ended June 30, 2025, and the related notes to the basic financial statements , which collectively comprise the City’s basic financial statements as listed in the table of contents.

In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2025, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting prin ciples generally accepted in the United States of America.

Basis for Opinions

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

Responsibilities of Management for the Financial Statements

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

In preparing the financial statements, management is required to evaluate wh ether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.

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 about whet her the financial statements as a whole are free from material misstatement, whether due to fraud or error, a nd to issue an auditor’s report that includes our opinions.

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

In performing an audit in accordance with GAAS and Government Auditing Standards, we  exercise professional judgment and maintain professional skepticism throughout the audit.  identify and a
ssess 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, evi
dence regarding the amounts and disclosures in the financial statements.  obtain
an understanding of internal control relevant to the audit in order to design audit procedures that ar e appropriate in the circums
tances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates
made by management, as well as evaluate the overall presentation of the financial statements.  conclude whether, in our judgment, there are conditions or events, considered in the aggr egate, that raise 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 governa nce regarding, among other matters, the planned scope
and timing of the audit, significant audit findings, and certain internal control-re lated 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 Sc hedules, Schedules of Changes in Net Pension Liability a nd Related 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 information is the responsibility of mana gement and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the b asic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the inform ation and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not expr ess an opinion or provide any assurance on the information because the limited procedures do not provide us with su fficient evidence to express an opinion or provide any assurance.

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

3 Supplementary Information
Our audit wa
s conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying Comb ining and Individual Fund Statements and Schedules are presented for purposes of additional analysis and are not a re quired part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The informa tion has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information direc tly to the underlying accounting and othe r records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Combining and 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 othe r information included in the annual report. The other information comprises 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 basi c financial statements, our responsibility is to read the other information and consider whether a material inconsistenc y exists between the other information and the basic financial statements, or the other information otherwise appears to be materially mi sstated. If, based on the work performed, we 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 repor t dated January 27, 2026, on our consideration of the City’s internal control over financia l reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreemen ts and other matters. The purpose of that report is solely to describe the scope of our testing of internal control ove r financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s in ternal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

Santa Ana, California
January 27, 2
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Management’s Discussion and Analysis (Unaudited)

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This section of the City of Salinas (City) Annual Comprehensive Financial Report provides an overview of the City’s financial activities for th e fiscal year ended June 30, 2025. Readers are encouraged to consider the information presen ted here in conjunction with the accompanying letter of transmittal, the basic financial statemen ts, and the accompanying notes to the financial statements.

A. FINANCIAL HIGHLIGHTS
 On June 30, 2025, the City’s net position (excess of assets and deferred outflows of resources over liabilities and deferred inflows of re sources) 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.
 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.
 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.  During the fiscal year the General Fund, Meas ure E, and Measure G fund balance increased by $5.3 million to $99.7 million of which $75.9 million is either nonspendable, restricted, committed, or assigned fund balance. Unassign ed General Fund, Measure E & Measure G fund balance was $23.9 million. The primary re ason for the General Fund balance increase was due to stronger than anticipated revenues.
 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 introduction to the City’s basic financial statements, which is comprised of three components: 1) Government-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 g overnment is financially accountable.

This report also contains other supplementary information in addition to the basic financial statements for further information and analysis.

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

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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 activities 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 interfund 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 position. Over time, changes in net position may serve as a useful indicator of whether the fi nancial position of the City is improving or deteriorating.

The Statement of Activities presents information showing how the City’s net position changed during the year. All changes in net position are re ported as soon as the underlying 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 this category, including general government, public safety, community development, public works, recreation, and library. Property taxes, sales ta xes, 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 property damage) are accounted for in internal service funds but are reported as part of governmental activities since these programs are used primarily for governmental activities.

Business-Type Activities—The City charges a fee to customers to cover all or most of the costs of certain services it provides. The Ci ty’s Industrial Wastewater System, Airport, Sanitary Sewer, Permit Service, and Parking District are reported as business-type activities.

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

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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 governmental funds are prepared using the current financial resources measurement focus and modified accrual basis of acc ounting. The proprietary funds are prepared using the economic resources measurement 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 esse ntially the same functions reported as governme ntal activities in the Governme nt-Wide Financial Statements.

However, unlike the Government -Wide Financial Stat ements, 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 Genera l Fund, American Resc ue 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 func tions presented as business-type activities in the Government-Wide Financial Statements. The City uses enterprise funds to account for its Airport, Industrial Wastewater System, Sanitary Sewer, Permit Services and Parking activities. Internal service funds are an accoun ting device used to accumulate and allocate costs internally among the City’s various functions. The City uses internal service funds to account for its general city insurance operations. Because these services pred ominantly benefit the governmental rather than business- type activities, they have been included within governmental activities in the Government-Wide Financial Statements.

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

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Fiduciary Funds - The City is the trustee, or fiduciary, for certain funds held on behalf of external parties. The City’s fiduciary act ivities are reported in separate Statements of Fiduciary Net Position. These activities are excluded from the C ity’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 essential 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 progre ss in funding its obligation to pr ovide 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. Du ring this 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 City 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 de bt. Debt service payments are funded from other resources available to the City.

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

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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
Con densed Statem ents of Net Position
June 30, 2025 and 2024
Governmental Activities Business-type Activities Total

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

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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 Total
City of Salinas
Condensed Statem ent 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 anal ysis is provided within the governmental and business-type activities sections.

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

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Governmental Activities
Governmental activities resour ces total $268.7 million. The City’s governmental activities increased net position by $28.5 million. The followi ng charts highlight the sources of revenues and purpose of expenses:

Total expenses for governmental activities, ex cluding transfers and co ntributions, 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
Management’s Discussion and Analysis (Unaudited) (Continued)

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The below table represents the total cost of each of 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 was 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 expense for th e 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 operati ng revenues for business-type ac tivities 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
Management’s Discussion and Analysis (Unaudited) (Continued)

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D. FUND FINANCIAL STATEMENT ANALYSIS

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

Governmental Funds

The focus of the City’s governmental funds is to provide 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 reported combined ending fund balances of $221 million. Of the total fund balance, $ 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 to tal 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 million 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 th e 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 assigned fund balanc e. 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 BUDGE TARY HIGHLIGHTS

The final amended General, Measure E, and Measure G Fund revenue budget, including transfers in, totaled $179.7 million and the expenditure budget totaled $235.1 million including transfers out. Transfers out are budgeted mo stly for capital projects and th e funds are alre ady on-hand.

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

Significant Appropriations Increases/Decreases

Appropriations during the year were adjust ed 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.

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

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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 $ G overnmental Activities Business-type Activities Totals

Capital assets, including infrastructure assets of the City, are those assets which are used in the performance of the City’s functi ons. At June 30, 2025, net capital assets of the Governmental Activities totaled $330.1 million and the net capital assets of the Business-type Activities totaled $62.1 million.

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

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

Further details on the City of Salinas’ capital a ssets can be found in Note 10 to the financial statements.

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

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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 Assessm ent District
Bonds 6,910,000 7,110,000 - - 6,910,000 7,110,000 Unam ortized Bond
Premium 5,009,329 5,679,241 - - 5,009,329 5,679,241 Unam ortized 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$ G overnmental Activities Business-type Activities Totals City of Salinas' Long Term Liab ilities

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 liabilities 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 economic trends and forecasts specific to the local economy. These estimates, informed by data from the County of Mont erey and the City’s consultants such as Hinderliter, de Llamas & Associates help forecast the most impactful revenue sources, such as taxes. Expenditures are care fully 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 interest rate fluctuations, liability payments (including pension costs), and operational and capital expenditures. Additionally, accounting standards do not account for future capital cost s beyond depreciation, mean ing deferred capital needs could substantially impact future financial performance. Controlling the main cost drivers of wages, pension, health insurance, and work ers’ compensation contin ues to be the key to managing this projected problem. Rising costs in key City operations and contracted services also pose challenges that could outpace revenue growth.

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 work on the Salin as 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 r ecommended initiatives. 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 City appropriated $25.6 million in Ameri can 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 issues. 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 finances and to demonstrate the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, c ontact the City of Salinas Financ e Department, 200 Lincoln Avenue, Salinas, California 93901.

BASIC FINANCIAL STATEMENTS
17 This page intentionally left blank.
18 GOVERNMENT-WIDE FINANCIAL STATEMENTS
19 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 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 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 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 This page intentionally left blank.
24 FUND FINANCIAL STATEMENTS
25 This page intentionally left blank.
26 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 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 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 This page intentionally left blank.
30 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 Sheet
To the Government-Wide Statement of Net Position
June 30, 2025
See accompanying Notes to the Basic Financial Statements. 31 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 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 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 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 Downtown
Industrial Sanitar y Parkin g
Airport Waste Sewer District
ASSETS
Current assets:

Cash and cash equivalents 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 Governmental
Non-Major Activities
Permit Internal
Services Total Service Funds
ASSETS
Current assets:

Cash and cash equivalents 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 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 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 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 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 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 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 This page intentionally left blank.
44 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 This page intentionally left blank.
46 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 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 49

NOTES TO THE BASIC FINANCIAL STATEMENTS

50 This page intentionally left blank.

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 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 an
d Fund Balances .............................................................................................................. 128

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

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

54 This page intentionally left blank.

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 Am erica (GAAP) as applied to governmental entities. The Governmental Accounting Standards Board (GASB) is the accepted standard setting body for establishing governmental accounting and financial reporting principles. The most significant of the City’s accounting policies are described below:

A. Financial Reporting Entity

The City was incorporated as a chapter City on March 4, 1874. The City operates under a Council Manager form of government and proves the following services as authori zed: 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 below is included in the City’s reporting entity because of the significance of their operational or financial relationship 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 discrete ly 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 primary government, the City , and its component unit. Component units are legally separate entities for which the elected officials of the primary government are financially accountable. In addition, component units can be other organizations for which the primary government is accountable and their exclusion would cause the reporting en tity’s financial statements to be misleading 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 component units, on the other hand, are reported in a separate column in the combined financial statements to emphasize 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 substan tially the same as the City’s and there is a financial benefit or burden relationshi p between the City and the component unit; management of the City has operational responsibilities for the component units; and/or the component units provide services entirely, or almost entirely, to the City or otherwise exclusively, or almost exclus ively, benefits the City, even though it does not 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 the City and the City of Salinas Redevelopment Agency, which is now the Salinas Successor Agency to the former Redevelopment Agency. It was established to refund Central City Revitalization Project tax allocation bonds. The Authority’s pur pose is to assist with financing 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 performs 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.

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 f unds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by pr oviding a separate set of self-balancing accounts 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 include a Statement of Net Position and a Statement of Activities and Changes in Net Position. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. Fiduc iary activities of the City are not included 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 and liabilities, including capital asset s, as well as infrastructure assets, and long-term liabilities, are included in the acco mpanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accr ual basis of accounting, revenues are recognized 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, expe nses, gains, losses, assets, deferred outflows of resources, liabilities and deferred inflows of resources resulting from non-exchange transactions are recognized in accordance with the requirements of GAAP.

Program revenues include charges for ser vices, special assessments, and payments made by parties outside of the reporting government's citizenry if that money is restricted 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:

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

Certain eliminations have been made to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated exce pt those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activiti es and Changes in Net Position, internal service 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:

 Due to/from other funds
 Advances to/from other funds
 Transfers in/out
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 net position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria.

All governmental funds are accounted for on a spending 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, Expenditures 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, revenues are recognized in the accounting period in which they become both measurable and available to finance expend itures of the current period. Measurable means that the amounts can be estimated, or otherwise determined. Available means that the amounts were collected during the reporting period or soon enough thereafter to be availa ble 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 six-month availability period.

Sales taxes, property taxes, franchise taxes, gas taxes, motor vehicle in-lieu, transient occupancy taxes, grants and interest associated with the current fiscal period are all c onsidered to be susceptible to accrual and so have been recognized as revenues of the current fiscal period to the extent normally collected with in the availability 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 and av ailable criteria for the governmental funds in the fund financial statements. Exchange transactions are recognized 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 recognized as revenues in the period in which the underlying exchange transaction upon which they are based takes place.

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-exchange 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:

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

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)

 Housing and Urban Developmen t Grant Special Revenue Fund accounts for the use of Community Development Block Grant funds received from the fede ral government. Other revenues in this fund include repayments of commercial and residential loans and re ntal income from City prope rty. 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 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.

 2019 Special Tax Bond Monte Bella Debt Service Fund is used to accumulate m onies 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 Commun ity 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.

 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 Fede ral, State, and other cons truction grants and 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 the accrua l basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred.

Proprietary funds distinguish opera ting revenues and expenses from nonopera ting items. Operating revenues and expenses generally result from providing services and pr oducing and delivering goods in connection with a proprietary fund’s principal ongoing operations. The principal operating revenues of the proprietary funds are charges to customers for sales and services. Operating expenses for the proprietary funds include the costs of sales and services, administrative expenses and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as nonoperating revenues and expenses.

A separate column representing internal service funds is also presented in these statem ents. 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:

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

 Industrial Waste Fund is used to account for the enterprise ope rations of the City-operated Industrial Wastewater Treatment Facility.

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)

 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.

 Downtown Parking District Fund is used 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.

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, general in surance, workers’ compensation, general liability, and fleet maintenance. The Internal Service Funds account 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 Statement of Net Position and a Statement of Changes in Fiduciary Net Position. The City’s fiduciary funds represent privat e purpose trust funds, pension trust funds, and 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 type u sed to account for resources held and administrated under trust or similar arrangement for the benefits of individua ls, private organizations, or other governments. The City reports the following private purpose trust funds:

 Successor Agency Redevelopment Obligation Retirement Fund was created to serve as a custodian for the assets and to wind down the affairs of the RDA on Februa ry 1, 2012, pursuant to Assembly Bill x1 26. Its purpose is to expeditiously wind down the affairs of the dissolved Community Development Commission of the City of Rohnert Park (Commission) subject to the direction of a seven-member Oversight Board. This fund accounts for the receipt of property tax revenues pursuant to the Redevelopment Dissolution Act and the assets transferred from the Commission. The Succes sor 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.

 Successor Agency Administration – This fund accounts for the administrative activities of the Successor Agency to the former Salinas Rede velopment Agency which was dissolved on February 1, 2012 in accordance with AB 1x26 (enacted June 28, 2011).

 Other Private Purpose Trust Funds – These funds are used to account for other trust arrangements not properly reported in a pension trust fund under whic h principal and income benefit individuals, private organizations, or other governments. The City acco unts 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, Mont erey County Tourism Improvement District, Leadership Salinas, and miscellaneous.

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 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 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 repor ted in pension trust funds, investment trust funds, or private-purpose trust funds.

C. Cash, Cash Equivalents, and Investments

Cash and Cash Equivalents - Cash and cash equivalents 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 time and also effectively withdraw cash at any time without prior noti ce or penalty. Cash and cash equivalents also include restricted cash and money market funds held by fiscal agents. For purposes of cash flow s, the City considers all liquid market investments with maturities of one year or less at time of purchase to be cash equivalents. All other investments are stated at fair value. Market value is used as fair valu e for those securities for which market quotations are readily available.

The City pools cash resources from all funds in order to facilitate and maximize the management of cash. The balance in the pooled cash account is available to meet cu rrent operating requirements. Cash in excess of current requirements is invested in various interest-bearing 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 noted below. Fair value is the amount at which a financial 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 negotiabl e certificates of deposit and repurchase agreements) that have a remaining maturity at the time of purchase of one year or less, are reported at amortized cost, which approximates fair value.

For purposes of the statement of cash fl ows, amounts reported as cash and cas h equivalents, include amounts on deposit in the City pool and any short-term, highly liqui d investments that are both readily convertible to known amounts of cash or so near their maturity that they present insignificant risk of changes in value because of changes in interest rates.

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 - The 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 securiti es. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these inv estments. In addition, these structured notes and asset- backed securities are subject to market risk as a result of changes in interest rates.

LAIF determines fair value on its investments portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities 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 LAIF 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 va lue. 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 deeds 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 fair value and establishes disclosures about fair value 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, quot ed 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 liability through corroboration with market data at the measurement date.

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

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, services pr ovided, reimbursements and/or transfers. Loans 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 bala nces outstanding between the governmental activities 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 near market rates and are treated as revenues and expenditures/expenses. Reimbursements are defined as wh en one fund incurs a cost, charges the appropriate benefiting fund and reduces its related cost as a reimbursement. All other interfund transactions are treated as transfers. Transfers between governmental or proprietary funds are netted as part of the reconciliation to the government-wide presentation.

G. Receivables

All receivables are reported at their gross value and, wh ere 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 recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable.

At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Subsequently, the lease rece ivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic 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.

 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.

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

 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.

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 liability and a right ‐to‐use subscription asset (SBITA asset) in our financial statements with an initial, individual value of $5 ,000 or more with a subscription term greater than one year.

At the commencement of a subscription, when the subscription asset is placed into service, the SBITA liability is measured at the present value of payments expected to be made during the subscription term. Future subscription payments are discounted using the City 's incremental borrowing rate and the City recognizes amortization 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 capita lizable 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 re lated to SBITAs include how the City de termines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.

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

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

 Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option years th at the City is reasonably certain to exercise. The City monitors changes in circumstances that would require a reme asurement 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 when they become a lie n on property. Special assessments not considered available are recorded as receivables and offset by unearned reve nues. 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.

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 fiduciary fund financial statements, long-term debt and other long- term obligations are reported as liabilities in the app licable 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 reported net of the applicable bond premium or discount. Original issue premiums are amortized using the straight-line method over the life of the bonds. Gains or losses from refunding of debt are reported as deferred inflows or out flows of resources and amortized over the shorter of the life of the refunded debt or new refunding debt. Amortiza tion of these balances are recorded as a component 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 w ithheld from the actual debt 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 business-type activity columns in the government-wide financial statements, the proprietary funds' statement of net position, and the private-purpose trust fund. Capital assets are defined as assets with an initial individual cost of 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 purchased or constructed. Donated capital assets are recorded 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 government- wide financial statements to the extent the City's capitalization threshold is met. Amortization of assets ac quired 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 and equi pment, and furniture and fixtures are depreciated 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
M achinery 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 f und balance due to externally imposed grantor restrictions.

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 incurred 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, accumulate for use in future periods, and are more likely 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, comp ensated 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 propr ietary fund types in the Fund Financial Statements, long-term debt and other obligations are reported as liabilities in the applicab le governmental activities, business- type activities, or proprietary fund statement of net positions. Bond premiums and discounts are deferred and amortized over the life of the bonds using effective interest methods. Bonds payable are reported net of the applicable bond premium or discount. In the governmental 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 present long-term debt but are show n in the Reconciliation of the Governmental Funds Balance Sheet to the Governme nt-Wide Statement of Net Position. Governmental fund 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 debt issuances are reported as other financing sources 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.

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 – Governmental Funds reports separate sections for Deferred Outflows of Resources, and Deferred In flows of Resources, 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 (revenue) 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 capital 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 im provement of those assets. If there are significant unspent related debt proceeds at yea r-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 asse ts reduced by liabilities and deferred inflows of resources related to those assets. Enabling legislation auth orizes the City to assess, levy, charge, or 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 restricted and unrestricted net position are available.

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 fund bala nce in classifications based primarily on the extent to which the City is bound to honor constraints on th e specific purposes for which amounts in the funds 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, fo r example: prepaid items and long-term loans and notes receivable.

Restricted Fund Balance – includes amounts with constraints placed on their use that are either (a) externally imposed by creditors, grantors, contributors, or laws or regulations of other governm ents; or (b) imposed 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-making aut hority. 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 the sam e formal actions that imposed the original constraint 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 balance, which includes all amounts not reported as nonspendable, restricted, committed, or assigne d. The General Fund may report either a positive or negative unassigned fund balance. Unassigned amounts are av ailable 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.

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 remitted to the City by the County of Monterey (the “County”). The amount of property tax levies is restricted by Article 13 A of the California State Constitution (commonly referred to as Proposition 13). The County assesses property values, le vies, bills, and collects the related property 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 levy rate or the amount of property taxes remitted by the County because these are governed by State law.

The City has not elected to participate in the “Teeter Plan” offered by the County whereby cities receive 100% of secured property and supplemental propert y taxes levied in exchange for foregoing any interest and penalties collected on the related delinquent taxes. The City retain s the right to any interest and penalties collected on the related delinquent taxes. Accordingly, property tax revenues are recognized in the fiscal period for which they are levied and collected, adjusted for any amounts deemed unco llectible and amounts expected to be collected 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 of the property or on 1% of the sales price of the property on sales tran sactions and construction that occur after the fiscal year 1976 valuation. Assessed values on properties (exclusive of increases related to sales and construction) 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, information about the fiducia ry net position of the plans and additions to/deductions from the plans’ fiduciary net position have been determined on the same basis as they are 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
M easurement perio
d September 1, 2023 to August 31, 2024
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 pension liab ility and fiduciary net position are recognized in pension expense systematically over time. The first amortized am ounts are recognized in pension expense for the 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 r ecognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-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, inactiv e, and retired) as of the beginning of the measurement period.

W. Other Postemployment Benefits (“OPEB”)

For the purpose of measuring the net OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB, and OPEB expense, informati on 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 the 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. Investment s 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 liab ility and fiduciary net position are recognized in OPEB expense systematically over time. The first amortized amounts are recognized in OPEB expense for the year 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 depending on the sources of gain or loss. The difference between project ed and actual earnings is amortized on a straight-line basis over 5 years. All other amounts are amortized on a st raight-line basis over the av erage expected remaining service lives of all members that are provided with benefits (active, inactive, and retir ed) at the beginning of the measurement period.

X. Encumbrances

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 formal budgetary integration in the General, Spec ial Revenue, and Capital Projects Funds. Encumbrances outstanding at year-end are reported as reservations of fund balance since they do not constitute expenditures or liabilities.

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 a ssumptions affect 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, ge neral, 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 claims. 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 historical cl aims experience. Additionally, the City contracts 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 n eeds of financial statement users by updating the recognition and measurement guidance for compensat ed absences. That objective is achie ved by aligning the recognition and measurement guidance under a unified model and by amending 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 cer tain concentrations or constraints which may limit a government's ability to acquire resources or control spe nding. Application of this statement did not have 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 ke y components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. Application of this statemen t is effective for the City’s fiscal year ending June 30, 2026.

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 asset s to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets re cognized in accordance with Statement No. 87, Leases , and intangible right-to-use assets recognized in accordance 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. Subscripti on assets recognized in accordan ce with Statement 96, Subscription-Based Information Technology Arrangements , also should be separately disclosed. In addition, this Statement required intangible assets ot her than those 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 reporting requirements for subse quent events by enhancing consistency in the application of requi rements, clarifying the different typ es of subsequent events, determining 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 adopt ed by City Council. Formal budgetary integration was 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 program s and accounts within their individual departments and divisions, but only the Council by resolution may appropriate funds from reserves or fund balances.

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

Reserves for future lease commitments have been established for accounting purposes and the fund balance is reserved for the total lease commitment consistent with budget policies.

Budget policy excludes taxes, interest, and accounts receiva ble assets, which are not currently available resources for budget purposes, and condemnation deposits which are returned upon right of way acquisition.

Expenditures may not legally exceed bu dgeted appropriations at the governme nt 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 appropriati ons are carried forward until project completion. Grant funds are carried forward until the grant expires.

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 unperformed 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 applic able appropriation, is employed as an extension of formal budgetary integration in the governmental funds. Encumbrances outstanding at year-end are recorded as reservations of fund balance and do not constitute e xpenditures or liabilities becau se 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 yp e 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$ Gov ernment-W ide 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 inv estments 269,627,066
Total cash and inv estments 278,327,340$

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 we re $8,665,444 at June 30, 2025. Bank balances were $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 requir es California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as co llateral. This Code states that colla teral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is consider ed to be held in the City's name.

The market value of pledged securities must equal at least 110% of the City's cash de posits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The C ity 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 indentures. In terest income earned on pooled cash and investments 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 restrictive). The table also identifies certain provisions of the California Government Code that address interest rate risk, and concentration of credit risk. This table 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:

Ma x i m um Ma x i m um
Ma x i m um 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 None 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.

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 resolu tion to invest in deeds of trust secured by real or personal property.

In accordance with Section 53651 of the California Governme nt 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 that are authorized investments under Section 53601 of the California Government Code. A five-year maximum matu rity for each investment is allowed unless approved by the City Council.

Investment income from cash and invest ments held by fiscal agents are credit ed directly to the related funds.

California Local Agency Investment Fund (LAIF) – The City is a participant in LAIF, which is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. 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 where ma rket quotations are readily available and based 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 losses 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 presented 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 Ov er 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 that, in the event of the failure of a depository financial institution, the City will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. For an i nvestment, custodial credit risk is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer), the City will no t be able to recover the value of its investments or collateral securities that are in the possession of an outside party.

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 Int erest Rate Risk (Continued)

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 Corpor ation (“FDIC”) up to $250,00 0 or collateralized with pledge securities held in the trust department of the financial institution in the City’s name.

Disclosures Relating to Concentration of Credit Risk

The City places no limit on the amount the City may invest in any one issu er. However, the City’s investment policy calls for portfoli o diversification by avoiding over concentrat ion in a specific maturi ty sector 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 AAAm 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 within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuati on inputs used to measure the fair value of the asset.

The hierarchy gives the highest priority to unadjusted quoted prices in active market s for identical assets 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 the fair value measurement. Valuation techniques used, need to maximize the use of observable inputs and minimize the use of unobservable inputs. The determination of what constitutes observable requires judgment by the City’s management. City management consider s observable data to be that market data, which is readily available, regularly distributed or updated, reliable, and verifi able, not proprietary, and pr ovided 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 observab ility of the inputs to its fair value measurement and does not necessarily correspond to City management’s perceived risk of that investment.

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 ar e categorized based on the lowest level input that is significant to the valuation. The City’s assessment of the significance of particular inputs to these fair value measurements requires judgment and considers factors specific to each asset or liability.

Deposits and withdrawals in governmental investment pool s, such as LAIF, are made on the basis of $1 and not fair value. Accordingly, the City’s measured fair value of its proportionate share in these types of investments is based on uncategorized inputs not defined as a Level 1, Le vel 2, or Level 3 input. N on-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:

Inv estments measured by fair v alue lev el: 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 inv estments by fair v alue lev el 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 hierarchy 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 va lue hierarchy are valued using quoted prices in active markets when available.

• The City held one type of investment that is me asured 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 secured by pr operty taken back in foreclosure and held for resale, are valued by independent real estate profes sionals (market approach), and trust deed notes are valued at their present value (income approach). 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 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.

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 assumptions 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 determine the fair value of certain financial instruments 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 S ervice 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 Service Fund and Assessment District Debt Service Fund in the amounts of $6,865,000 and $45,000, respectively, at June 30, 2025, will be collected from property owners to retire outsta nding 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.

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 Rev enue 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 third parties for the “right-to-use” the underlying assets owned by the City. The remaining terms of the agreements range from 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, th e City recognized $990,183 in lease reve nue 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 year 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 $

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 re ported as deferred 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 Affordabl e 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$

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 qualif ied developers, individuals, and famili es 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. Generally, th ese loans are to be repaid th rough 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 greater risk of variability in the timing of payments 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.

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 27,506 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 Fund 145,591 Cash Overdraft General Fund COP 2018B T.R.I.P. Total Road Improvement Debt Service Fund 163,401 Cash Overdraft General Fund Assessment District Debt Service Debt Service Fund 709,969 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 303,832 Cash Overdraft 11,784,054
Capital Projects Capital Projects Fund General Fund 1,692,123 Capital projects Capital Projects Capital Projects Fund Development Fees Special Revenue Fund 62,518 Capital projects Capital Projects Capital Projects Fund Gas Tax Special Revenue Fund 45,187 Capital projects Capital Projects Capital Projects Fund Measure X Special Revenue Fund 27,809 Capital projects Capital Projects Capital Projects Fund SB1 Road Maintenance & Rehab Special Revenue Fund 41,475 Capital projects Capital Projects Capital Projects Fund Special Aviation Capital Projects Fund 7,777 Capital projects Capital Projects Capital Projects Fund Special Construction Assistance Capital Projects Fund 1,477,402 Capital projects Capital Projects Capital Projects Fund Municipal Airport Enterprise Fund 111,019 Capital projects Capital Projects Capital Projects Fund Sanitary Sewer Enterprise Fund 39,537 Capital projects Capital Projects Capital Projects Fund Permit Services Enterprise Fund 39,122 Capital projects 3,543,969
Workers Compensation Internal Service Fund General Fund 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:

Adv ances Due To
Governmental
Activities
General Fund
Adv ances 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 Do wntown Parking 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 Do wntown Parking District becomes fully self-sufficient, a plan will be established to pay back the advance from the General Fund over time.

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 Landscape and Maintenance Special Revenue Fund 62,618 Capital projects Capital Projects Capital Projects Fund Development Fees Special Revenue Fund 582,340 Capital projects Capital Projects Capital Projects Fund Gas Tax Special 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 Maintenance & Rehab Special Revenue Fund 1,765,029 Capital projects Capital Projects Capital Projects Fund Housing and Urban Development Grant Special Revenue Fund 1,175,219 Capital projects Capital Projects Capital Projects Fund Special Aviation Capital Projects Fund 41,215 Capital projects Capital Projects Capital Projects Fund Special Construction Assistance Capital Projects Fund 6,439,355 Capital projects Capital Projects Capital Projects Fund Airport Enterprise Fund 268,969 Capital projects Capital Projects Capital Projects Fund Industrial Waste Enterprise Fund 2,328,970 Capital projects Capital Projects Capital Projects Fund Sanitary Sewer Enterprise Fund 184,412 Capital projects Capital Projects Capital Projects Fund Downtown Parking Enterprise Fund 2,157 Capital projects Capital Projects Capital Projects Fund Permit Services Enterprise Fund 332,034 Capital projects Subtotal Capital Projects Capital Projects Fund 27,870,450 Housing and Urban Development Grant Special Revenue Fund General Fund 65,578 Operating subsidy Emergency Medical Services Special Revenue Fund General 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 Fund 1,296,960 Debt service 2020A Refunding Energy Debt Service Fund Airport Enterprise 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 Sewer Enterprise Fund 101,805 Debt service 2020A Refunding Energy Debt Service Fund Downtown Parking 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' Comp 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$

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, 2025 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 M achinery and equipment 50,518,200 2,479,201 (718,564) - 52,278,837 Infrastructure 434,605,116 - - - 434,605,116 Rig ht-to-use assets - leases 550,536 - (337,505) - 213,031 Rig ht-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) M achinery 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 272,575,539 (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 to the functions/programs of the governmental activities as follows:

Gove rnme ntal Acti vi ti e s:

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$

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, 2025 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 M achinery 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) M achinery 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 activities 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$
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 year 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 - 2 10,467 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$
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 financing, 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 was issued by the Sali nas Facilities Financing Authority 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 annual 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 outstanding amounts. However, there shall be no right under any circumstance to accelerate the lease payments or otherwi se declare any lease payments not then in default 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$
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 ra ise funds for the construction of a new Public Safety Building (Police Department) within City limits. The City started making semi-a nnual payments beginning on December 1, 2018 and ending December 1, 2034 at an aver age interest rate of 3.375%. Maximum annual debt 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 declar e 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 contrary notwithstanding, shall also be due and payable 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 making semi-annual payments beginni ng on December 1, 2018 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 declar e 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 contrary notwithstanding, shall also be due and payable immediately, and interest on the bonds shall cease to accrue on the date of such declaration.

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 works equipment lease was issued by Banc of America Public Capital Corporation in the amount of $3,500,000 on August 17, 2018. This equipment replaces old manufactured 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 title and physical position of the equipment shall pass 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 w ill make six annual payments of $279, 747, beginning on December 17, 2021 and ending December 17, 2026 at 1.68% interest. Debt payable of $545,704 is recorded as Governmental Activities at June 30, 2025.

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 agrees to pay, the lessor may require the lessee to pay all amounts currently due and all remaining rent payments due during th e fiscal year in effect when the default occurs with interest at the highest lawful rate from the date of th e lessor’s demand for such payment. Also included in this scenario are additional out-of-pocket expenses incurred by the lessor including a ttorney fees, repossession, 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 Amer ica Public Capital Corp to lease and acquire photovoltaic & generator equi pment for $4,375,000. The lease cons ists of 19 payments, beginning on June 1, 2026 and ending on June 1, 2044 at interest rate of 4.255%. Debt payable of $4,735,000 is recorded 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 equipmen t such as copiers, etc. that were subject to GASB 87 Leases implementation in fiscal year 2022. They were paid off in full as of June 30, 2025.

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 Communities Development Authority Transportation Revenue issued City of Salinas Certificates of Participation, Series 2018B totaling $37,500,000 at various interest rates 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 $2,264,3 45 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$

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 Authority issued City of Salinas Certificates of Participation (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 agreement with the Monterey Peninsula Foundation and its related foundation, Future Citizen s Foundation, dba the First 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 Refunding 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. Refunding Certificates Series 2005A we re issued for 24 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 Creeks golf course by First Tee of Monterey County. Annual debt ser vice 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 Count y, on December 6, 2011, the City approved a sublease payment reduction from $575,000 to $125,000 (an annual re duction of $450,000). This request was the result 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 most co st-effective alternative, the City Council approved the General Fund support through fiscal year 2015-16 to offset the reduced amount of the sublease to the First Tee of Monterey County.

On September 1, 2015, the City issued Refunding Cer tificates of Participation Series 2015, in the amount of $11,440,000 at a 2.53% interest rate, to refund the outstanding portion of the 2005A Certificates of Participation (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 Authority issued City of Salinas Certif icates of Participation, Series 2020A totaling $2,715,000. The Advance Refunding Certificates were issued to refund the 2015A Twin 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 reduced total debt service payments over the next 6 years 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. De bt 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.

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 refund the outstanding portion of the 1999 Certificate pertaining 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 Participa tion Series 2008, the 1999 Certificates, attributed to the animal shelter, will remain outstanding.

On August 19, 2020, the Salinas Public Financing Authority issued City of Salinas Certif icates of Participation, Series 2020B totaling $4,040,000. The Advance Refunding Ce rtificates were issued to refund the 2008 COP Fairways Golf Project. Bond started November 1, 2020 and will end after 18 years on November 1, 2038. The advance refunding of the 2008 COP Fairways Golf Project reduced total debt service payments over the next 18 years by $1,311,557. This results is an economic loss (difference between th e present values of the debt service payments on the old and new debt) of $222,581. Debt paya ble of $3,465,000 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.

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 Service 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 Authority issued City of Salinas Certif icates of Participation, Series 2020A totaling $16,190,000. The Advance Refunding Certificates were issued to refund the 2014 Energy Improvement Lease. Bond started Novemb er 1, 2020 and will end after 12 years on November 1, 2032. The advanced refunding of the 2014 Energy Lease reduced tota l debt service payments over the next 12 years by $1,513,227. This results is an econom ic gain (difference between the presen t values of the debt service payments on the old and new debt) of $1,425,483. Debt payable of $11,765,000 is recorded as 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.

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 Authority issued City of Salinas Certificates of Participation (Certificates) Series A-1997 totaling $11,960,000. The purpo se of this financing was to raise money for capital improvement projects and to refund the Authority’s Variab le Rate Lease Revenue Bonds , which were issued to purchase the 65 W. Alisal Building. The Variable Ra te Lease Revenue Bonds Series A-1997 and Series B-1997 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 Certificates of Participation Series 2005B (1997 Capital Improvement Projects). The Refunding Certificates were issued to refund Series A-1997 Certificates. Series 2005B Refunding Certificat es were issued in the amount of $11,705,000 for 24 years at 4.22%. The Refunding Certificates were secure d 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 amount of $11,440,000 at a 2.53% interest rate, to refund the outstanding portion of the 2005A Certificates of Participation (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 Authority issued City of Salinas Certif icates of Participation, Series 2020A totaling $4,440,000. The Advance Refunding Ce rtificates were issued to refund the 2015B Salinas Valley Solid Waste Authority Bonds. Bond started N ovember 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 payments on the old and new debt) of $244,664. Debt payable of $1,640,000 is recorded as Governmental Activities at June 30, 2025.

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 Bonds 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 pledge of the net revenue of the Assessment District and may not be u sed 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:

 1998 AD 98-1 – Bella Vista III Refunding ($2,665,000)  2000 AD 96-2 – Acacia Park Refunding ($340,000)
 2002 RADA – Bella Vista Refunding ($1,365,000)
 2002 RADB – Bella Vista Refunding ($185,000)

The refunding of the assessment districts debt reduced total debt service payments over 9 years by $937,889. This resulted in an economic gain (difference between the pr esent values of the debt service payments on the 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.

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 perfo rm and carry out their duties under the 1913 Act, the 1915 Act, or 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 District No . 2016-1 (Monte Bella) of the City of Salinas 2019 Special Tax Bonds (Improvement Area No. 1)

On February 21, 2019, the Bond Purchase Agreement was si gned in the amount of $2,675,000 at various interest rates to finance the acquisition and/or construction of certain public facilities and improvements within Community Facilities District (CFD) No. 2016-1 Improvement Area No. 1 of the district. Debt payable net of premiums of $2,410,000 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, the trust ee may pursue any available remedy by law to enforce 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$
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 District No. 2016-1 (Monte Bella) of the City of Salinas 2019 Special Tax Bonds (Improvement Area No. 2)

On December 1, 2019, the Bond Purchase Agreement was si gned in the amount of $2,090,000 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 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 trust ee may pursue any available remedy by law to enforce 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 District No. 2016-1 (Monte Bella) of the City of Salinas 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 Area 3 of the District. Debt payable net of premiums of $2,535,000 is recorded as Governmental Activities at June 30, 2025.

Upon the occurrence of an event of default, the trust ee may pursue any available remedy by law to enforce the payment of principal, premium and interest on the outstanding bonds.

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 District No. 2016-1 (Monte Bella) of the City of Salinas 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 “rig ht-to-use” certain subscription-based in formation technology software 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 current fiscal year was $349,247. Subscriptions payable outstanding 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$

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 year 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 Shelte r 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 the financing was issued for 20 years (ending September 1, 203 3), at an average interest rate of 4.02%. Maximum annual debt service is $963,518. Debt payable of $7,142,000 is recorded in the Downtown Parking District 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 outstanding amounts. However, there shall be no right under any circumstance to accelerate the lease payments or otherwi se declare any lease payments not then in default 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$
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 fo r Loan Guarantee Assistance with the Housing and Urban Development Department (HUD), pursuant to which the City will derive funds fo r 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 Project) in the principal amount of $4,000,000. The City 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 refunding 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 for 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 Refunding Certificates were issued to refund the 2012 Sewer Bonds. Bond started August 1, 2021 a nd will end after 21 years on August 1, 2042. The advance refunding of the 2012 Sewer Bonds reduced total debt se rvice payments over the next 21 years by $3,764,601. This resulted is an economic gain (difference between the present values of th e debt service payments on the old and new debt) 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 out standing, in each case, upon written notice to the City, declare the principal of all the bonds then outstanding, and the interest accr ued thereon, to be due and payable immediately.

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 Multifam ily Housing Revenue Bonds, Series 1999A ($5,310,000 tax- exempt) and 1999A-T ($390,000 taxable) for the constr uction of a 132-unit senior apartment project. Twenty percent (20%) of the project is designated to be affordable 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 County of Monterey Department of Social Services. The project intends to provide monthly rental at below the market value rates to the County of Monterey, a one-million-dollar premise improvement allowance to the Department of So cial Services to renovate and upgrade its space in the building and to generate charitable support for the County’s residents. The debt was refinanced in 2016 as series 2016A and 2016B. As of June 30, 2025, total conduit debt outstanding related to the Economic Development Revenue Bonds is $9,520,000.

Pursuant to the bond purchase agreements, the City of Sa linas has no obligation related to the repayment 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 year Fiduciary Activities
Direct borrowings and placements:

Homeless Shelter loan pay able 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$

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 – Ce ntral Agency Revitalization Project entered into 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 28-32 Sole dad Street, to establish a homeless center/shelter. The Agency agreed that the property woul d be used solely for a homeless center/shelter for a period not less 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 of 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-Wid e Statements for Governmental Activities and Business- 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.

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 cove rage up to a maximum of $15,000,000 after the self-insured retention of $1,000,000 per occurrence met. Safety National Casualty Corporation provides Worker’s Compensation excess coverage with st atutory coverage (pursuant to California Worker’s Compensation Act) after the self-insurance retention of $1,000,000 for Public Safety and $750,000 for non-Public Safety is met.

Liabilities for estimated claims payable for the self-insurance programs represent settled claims, claims 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 through June 30, 2025 is dependent on fu ture developments, City management has determined the desired reserve level for each self-insurance program as follows and believes the estimates are adequate to cover such losses.

The Worker’s Compensation insurance liability of $40,790,000 includes $27,294,152 for claims incurred but not paid and $13,495,848 for claims incurred but not reported which is based on expected claims and past claims history. At June 30, 2025, Worker’s Compensation Insurance liability is reported on the st atement of net position. The Worker’s Compensation Fund was established as an Internal Serv ice Fund on July 1, 1991. The portion of the worker’s compensation insurance liability since July 1, 1991, at June 30, 2025 is $ 39,343,333 and is repor ted in 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 cl aims 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 fundi ng of all past claims history. The City’s self-insured retention is $1,000,000 at June 30, 2025.

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 S ervice 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:

Worke r's Ge ne ral
Compensation L iability 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 re venues in connection with funds recei ved, in advance for which assets recognition criteria have been met, but for which revenue recognition criteria have not been met. Receivables for revenues not considered available to liquidate liabilities of the current period are considered unavailable revenues and reported as deferred inflows of resources on the governmental funds. Unearned revenues are stated at $18,136,961 in the Government-Wide Statements. Governmental funds report $18,136,961 of unearned revenues and $654,039 of unavailable revenues as deferred inflows of resources that are not available resources.

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:

Gove rnme ntal Acti vi ti e s:

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 agent 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 - M iscellaneous 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 $

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 - M iscellaneous 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 Total CalPERS pension plans:

Agent multiple-employer - M iscellaneous 500,069$ 71,197 $ 571,266 $ Agent multiple-employer - Safety Police 1,048,123 - 1,048,123 Cost sharing multiple-employer - Safety Fire 1,177,873 - 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 - M iscellaneous 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 administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and Local Government resolution. CalPERS i ssues 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.

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 receiving benefits 306 125 Active employees 331 137
Total 879 554

Benefits Provided

CalPERS provides service retirement and disability benefits, a nnual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment.

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 of 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 of 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
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 employe rs 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 valuation was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

Valuation Date
M easurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Morta l i ty Ra te Ta bl e
Post Retirement Benefit Increase
June 30, 2023
June 30, 2024
Entry Ag e 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 generational 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 CalPERS-specific da ta. The rates incorporate Generational Mortality to capture o ngoing mortality improvement using 80% of Scale MP 2020 published by the Soc iety of Actuaries. For more details, please refer to the 2 021 experience study report that can be found on the CalPERS website

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

In determining the long-term expected rate of return , CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of 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 expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long -term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

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%
M ortgage-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 the total pension liability was 6. 90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, 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 current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

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 systematically 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 deferred inflows of resources related to pensions and are to be recognized in future pension expense.

The amortization period differs depending on the source of the gain or loss:

Difference between projected and actual earnings on pension plan investments:

 5 years straight-line amortization

All other amounts:

Straight-line amortization over the average expected re maining service lives (EARLS) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period.

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 Expected 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 dividing 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 tables 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 (53,982) - (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 (1,298,281) - (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
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 information 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 th e 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 calculated using a discount rate that is 1 percentage-point 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 L iability/(Asset)

Pension Expense and Deferred Outflows and Deferred Inflows of Resour ces 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 related 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 831,567 (1,048,123) Total 20,829,358$ (1,048,123) $ Safety - Police
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 outflows of resources to contributions subsequent to the measurement date for the miscellaneous and safety police pl ans, 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$ 1,482,303$ 2027 3,617,264 5,852,433 2028 (379,831) (1,059,806) 2029 (667,333) (1,347,201) 2030 - - Thereafter - - 3,815,729$ 4,927,729$ 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 probationary employees are eligible to participate in the City’s separate Safety risk pool (Fire Tier 1 & Tier 2), cost -sharing multiple-employer defined benefit pension plans administered by CalPERS, which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans ar e established by State statute and Local Government 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 (measurement date), the follo wing employees were covered by the 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 public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment.

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* January 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 of service 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Monthly 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 all public employers be 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 the CalPERS annual actuarial valua tion 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 employe r is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.

The City’s contribution for the safety fire plan were as follows:

Empl oyer 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 L iability Position L iability/(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 pe nsion liability used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 20 23 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.

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 L iability/(Asset)

For the year ended June 30, 2025 (measurement date June 30, 2024), the C ity recognized a pension expense of $13,453,286 for the Safety Plan (Fire).

As of June 30, 2025 the City reports deferred outflows and deferred inflows of resources related to pensions 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 resources 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$

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 valuation was rolled forward to determine the June 30, 2024 total pension liability, based on the following actuarial methods and assumptions:

Valuation Date
M easurement Date
Actuarial Cost Method
Actuarial Assumptions:

Discount Rate
Inflation
Salary Increases
Morta l i ty Ra te Ta bl e
June 30, 2023
June 30, 2024
Entry Ag e Actuarial Cost Method

6.90%

2.30%
Varies by category, entry age, and service
Derived using CalPERS’ M embership 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 the total pension liability for Public Employees’ Retirement Fund C (PERF C) was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, 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 current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.

Long-term Expected Rate of Return – The long-term exp ected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.

In determining the long-term expected rate of return , CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of 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 expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses.

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 Inflow s of Resources – The Net Difference Between Projected 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 Pe nsion Plan Investments is amortized over the remaining amortization periods. The Net Difference Between Projected and Actual Investment Earnings on Pension Plan Investments in the Schedule of Collective Pension Amounts 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 th rough 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 years of 630,177 (the sum of remaining service lifetimes of the active employees) by 166,163 (the total num ber of participants: active, inactiv e, and retired) in PERF C. Inactive employees and retirees have remaining service lifetimes equal to 0. Total future service is based on the 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 per cent) 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%)
95,840,033$ 65,283,627$ 40,292,782$ Plan's Aggregate Net Pension L iability/(Asset)

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 plan is a closed single-employer defined benefit pension 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 has been amended and restated from time to time since that date. Prior Plan amendments eliminated the six-month service requirement for entry into the plan and credited participants with up to six-months of service from hire to plan entry prior to time change. The Plan was amended and restated effective September 1, 1996 to bring the Plan into compliance with the Internal Revenue Code and Regulations promulgated there by to provide for the City’s pick-up of em ployee eligible participants equal 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-month period, replacing the old formul a that used an average 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 Mainstay 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 the tota l pension liability, and are not reported in the City’s financial statements.

Employees Covered – As of September 1, 2024 (valuation date), the followi ng 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 receiving 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 termination, or for a reduced amount if an election is made to have payments 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 to an annual retirement benefit payable monthly, as a straight line annu ity, 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.

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, participants were required to make specified levels of contributions to the plan in order to accrue benefits under the Pl an. For the period commencing January 1, 1979 through December 31, 1993, there were no participants’ contributions under this Plan. Since January 1, 1994, participants are required to contribute 4.5% of their compensation to the Plan. Since September 1, 1996, participant contributions are made by the City under the employee pretax pick-up provision for government-sponsored plans allowed under the Internal Revenue Code. As establishe d in their Memorandum of Understanding document for personnel of the SEIU Blue Collar bargaining group, the C ity will contribute four and one-half percent of the employee retirement contribution.

Pension Liabilities, Pension Expense and Deferred Outflows /Inflows of Resources Relate d 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 Pension
L iability Position L iability/(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
L iability
Plan Fiduciary
Net Position
Net Pension
L iability
Balance at 6/30/2024 (8/31/23 measurement date) 9,962,372 $ 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
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 calculated using a discount rate that is 1 percentage-point 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$ Sensitiv ity of Net Pension L iability/(Asset)

As of June 30, 2025, the City reports deferred outflows and deferred inflows of resources related to pensions 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 inve stments - (577,395) Total 2,175,537 $ (577,395) $
New York Life Plan

$2,175,537 reported as deferred outflows of resources 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 (169,932)$
2027 (35,801)
2028 (172,579)
2029 (199,083)
2030 -
Thereafter -
(577,395)$
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 pension liability was determined by using the following actuarial assumptions, applied to all periods included in the measurement:

Valuation date
M easurement 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
Morta l i ty
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 return on investments, and (2) Bond Buyer 20- Bond GO Index as of the M easurement 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 th e 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 contribution rates and the employee rate.

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 information about the pensi on plan’s fiduciary net position as of August 31, 2024 is as follows:

New York
Li fe
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 Retirement 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 contribution 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 restriction, 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. The program requires employee-matching contributions for every dollar contributed by the City. At June 30, 2025, there were four participants receiving a total of $42,271 in this form of benefit.

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 Internal Revenue Code Section 457 are protected and used exclusively for the benefit of Plan participants and/or their beneficiaries. According to these laws the 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 Financial Group, and Central Coast Credit Union. In 1998, the City Council adopted a Resolution amending the City administered deferred compensation plans to conform to the new law protecting the plan participant assets from any claim against the City. Under the Trust arrangement, individual accounts maintained by the record-keeper used for receiving contributions and paying di stributions must be subject to the Tr ust. The existence of the Trust does little to change the Plan structure excep t to add a layer of protection for money set aside for the employee against claims of the Employer’s creditors. The law also allows an increase in the amount a participant may contribute 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 Mission 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 Program until June 19, 1995 when a qualified 401(a) retirement 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 includes 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 administer ed within the City of Salinas by the City’s appointed administrator of the Deferred Compen sation Plan. Loans are based on equity after obtaining a fee appraisal. All property is physically inspected and the loan package is reviewed and appr oved/disapproved by a Deferred Compensation Committee. All employees are eligible to participate. The Plan had 208 participants and a balance of $4,987,340 in net position at Ju ne 30, 2025. The balance in these plan s is available to employees only upon termination, retirement, death or unforeseen emergenc y. While the Employer Trust established by the City on December 15, 1998 protects these funds from creditors of the City, because the City ad ministers the plan assets, they are included in the City’s financial statements at June 30, 2025.

The Trust Deed Program is managed on a cash basis with interest posted when received and expenditures posted when paid. Interest and expenditures are allocated to pa rticipants based on month end cash balances. Trust 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 for eclosure is less than the note secured by that property, the note is written-down to current market value (less forecl osure and sales expenses) of the property. Gains are recognized only when properties are sold. Gains or losses ar e allocated to plan participants based on month end cash balances.

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 GAS B 72, properties held for resale were valued by independent real estate professionals (market approach) and trust deed notes were valued at their present value (income approach). The valuations are considered Level 3. Th e value of properties held for resale are reduced for cost of sales. The notes (loans) are valued based on amounts investors would likel y pay for notes with interest rates ranging from 6% for all current loans discounted to provide loan to valu es ranging from 70% to 50% depending on property type 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 established in September 2000. This retirement savings plan enables employees to defer a portion of their current compensation for payment at later date, generally retirement. 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 vehicles 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 employees are eligible to participate through voluntary salary 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 about the fiduciary net position of the City’s plan (OPEB 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 that th e reported results must pertain to liability and 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

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 Employees' Medical & Hospital Care Act (PEMHCA) in 2000 for 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 la bor agreements. Fire employees receiv e healthcare benefits for active 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 Gove rnor, one public representative appointed jointly by the Speaker of the Assembly and Senate Rules Committee, and four ex-officio members: State Treasurer, State 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 a nd 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 retiree 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 receiving benefits 293 Active employees 528
Total 975

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 the Trust the actuarially determined contribution (“ADC”) 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 premium payments made on behalf of retirees, implied subsidy 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 City cont ributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, 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 beneficiaries.

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 expected ra te of return on OPEB plan investments was determined using a building block method in which expected future 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 r eal rates of return by the target asset allocation percentage and by adding expected inflation. Th e target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:

Asset Class
Target Allocation
CERBT-Strategy
1 Expe cte d Re al
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, rounded 6.25%
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 M easurement 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 schedul e 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 u sed (5.28%) in measuring 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).

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 reported 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 $825,623 related to contributions subsequent to the measurement 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 fiduciary net position are recognized over nine and half years.

Amounts are first recognized in OPEB expense for the year 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.

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 annually 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 CalPERS 2000-2019 experience study Mortality improvement Mortality projected fully generational with Scale MP-2021 Salary increases Aggregate - 2.75% annually; merit - CalPERS 2000-2019 Experience Study M edical trend
PEM HCA 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$

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 circumstances occur where revenues are insufficient to cover expenditures. The minimum reserve of the General Fund is 5% of the next year’s General Fund annual budgeted 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 Revenue 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 commitments for the year and to enhance cash management.

Encumbrances represent commitments related to contract s 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. Encumb rances 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$

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 fund s had excess expenditures over appropriations, which are expected to be covered with existing fund balance or had sufficient available revenue:

Exce ss Expe ndi ture s
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 an d OPEB obligations reported under GASB Statements 68 and 75, including a net pension liability of approximately $226.1 million and a total OPEB liability of approximately $12.6 million.

At June 30, 2025, the following funds had a deficit fund balance or deficit net position:

Fund Type Fund Deficit
Governmental Emergency Medical Services (95,989)$
Governmental Traffic Safety (59,575)
Governmental Grants (401,273)
Governmental Assessment District Debt Service (709,969) 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 funds Emergency Medical Services f und of $95,989 is due 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 revenue fund of $401,273 is due to temporary cash shortfalls experienced while waiting for grant reimbursement. Th ese deficits will decline as claims are submitted for reimbursement to state and federal agencies and unavailable funds become available. The deficit fund balance in the Debt Service Funds Assessment District debt service fund of $709.969 is due to amounts owed to the General Fund. The deficit fund balance in the Assessment District Administration debt service fund of $2,178 is due to amounts owed to the General Fund.

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 District 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 ot her 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 deficit is expected to be made up through future member 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 “Authority Ag reement) 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 participating juri sdiction contractually agreed to its responsibilities. In addition, the Authority adopted waste delivery agreements with each Member of the Authority. Each member has committed to deliver waste generated w ithin its boundaries 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 terms of withdrawal, which includes a majority vote of the City Council, repayment of all outstanding debt and funding of closure, post closure and site remediation costs upon withdrawal from or termination of the Authority. The member s 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 Aut hority and does not receive a share of operating results. The Authority is currently funding the closur e, post closure and site remediation co sts based on estimates of these future costs. The Annual Financial Report of the Salinas Valley Solid Waste Authority is published and available from the Authority Treasurer at the Authority’s Finance Department located at 128 Sun Street, Suite 101, Salinas, CA 93901.

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 inte ntion to withdraw from the Jo int 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 Authority merely served as notice to the Authority and its remaining members. The one-year term has passed without any further action from the City or the Authority. However, the City and Authority representatives are working on finding a resolution to the notice.

The City understands and acknowledges its obligation to c ontinue paying its share of the 2014 Bonds as regularly scheduled and agrees to continue paying its share of the obligation after withdrawal from the Authority, 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 costs as fu rther described in Section 19(a) of the Agreement. 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 various su its relating principally to claims arising from 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 litigation, not c overed by insurance, would not materially affect the basic financial statements of the City. As a result, no liability has been accrued by the City relating to these matters as of June 30, 2025.

Note 22 – Changes to or within the Financial Reporting Entity

As of June 30, 2025, changes to or w ithin the financial reporting entity restat ement of beginning fund 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$

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 Street 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 Golden St ate Fire Apparatus, Inc. The total authorized purchase amount was $5,404,476.31, with an add itional 5 percent contingency of $270, 223.82, excluding financing costs. The City also approved the use of proceeds from the sale of the City’s surplus properties at 342 Front Street and 323 California Street to fund a portion of the fire apparatus acquisitions.

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135

REQUIRED SUPPLEMENTARY INFORMATION

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City of Salinas
Budgetary Information
For the Year Ended June 30, 2025

137
Budgetary Information

The budget is prepared by the City Manager and adopted by the City Council. The City Council approves operating appropriations at the department and fund level prior to July 1, each year and may amend the budget during the fiscal year. Budgetary control is maintained at the program level. Formal budgetary integration was employed as a management control device during the fiscal year for the Ge neral Fund, Special Revenue Funds, Debt Service 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 transfer 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 purposes. Condemnation deposits, are also excluded because 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 Council dur ing 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 extent th ey have not been expended. New budget appropriations 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 unperfo rmed 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 th e applicable appropriation, is employed as an extens ion of formal budgetary integration in the governmental funds. Encumbrances outsta nding 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.

On November 8, 2005, the voters of Salinas approved Measure V, a 0.50% transactions and use tax. Measure V is a general tax and is reported as part of the General Fund. The tax was effective April 1, 2005 and had an original sunset of ten (10) years. Measure V was revised by the voters on November 6, 2012 eliminati ng a termination date 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 Measure 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 include the review of the auditor’s report of the specific uses of Measure G funds and to issue a public report to the City Co uncil regarding the use of re venue and such other matters as the City Council may assign.

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 revenues availa ble to finance the operating plan; and (3) the estimated spending requirements of the operating plan. The City’s goals and objectives identified by the City Council 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 Governmental Funds , Internal Service, Enterprise Operations, Assessment 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 budget at an appropriation level by fund, w ith detail expenditure by departments and programs included in the budget document.

GENERAL FUND

The General Fund’s fund balance increased $3,756,478 to $39,911,844, of which $2,785,000 is nonspendable, $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 appropriations of $8,134,366 are under the assigned fund balance category.

MEASURE E

Measure E is a general tax (discretionary) and is reported as part of the General Fund. The Measure E fund balance increased $4,019,991 to $26, 302,852, of which $1,320,000 is restrict ed , $3,713,235 is committed for future encumbrances, $7,702,794 is assigned, and $13,566,823 is unassigned.

MEASURE G

Measure G is a general tax (discretionary) and is reporte d as part of the General Fund. The Measure G fund balance increased $2,214,991 to $29,951,993, of wh ich $2,680,000 is restricted, $13, 166,286 is committed for future encumbrances, $8,987,839 is assigned and $5,117,868 is unassigned.

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) basis. The results of operations are presented in the accompanying budget and actual comparison schedules in accordance with the budgetary process (budgetary basis) to provide 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 equivalent of expenditures in the budgetary basis financial statements, while encumbered amounts are not rec ognized as expenditures on the GAAP basis until the equipment, supplies, or services are received.

• Certain loan transactions are recognized as expenditures for the budgetary basis but not for the GAAP basis.

When these loans are made, they are recorded as receivables 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 basis 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.

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 OVE
R (UNDER) EXPENDITURES 15,203,685 12,278,085 35,549,643 3,917,150 OTH E R F I NA NCI NG SOU R CE S (U SE S):

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 y ear 94,361,689
End of year 99,709,085$
Budgeted Amounts

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

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) OTH E R F I NA NCI NG SOU R CE S (U SE S):

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

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 OTH E R F I NA NCI NG SOU R CE S (U SE S):

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

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 L iability
Ser v ice Co st 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 t erms - 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 - - - - 38 3,290 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 M iscellaneous Plans
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
Se r v ic e Co st 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 t erms - - - - - 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

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
Actu arially d etermined
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 contribution rates:

Actu arial cost method
Amortization method/period For details, see June 30, 2021 Funding V aluation Report.

Asset valuation method
Inflation
S alary increases Varies based on entry age and service Payroll grow th
Investment rate of return
Ret irement age
Mortality
Other Information:

The probabilities of retirement are based on the 2021 CalPERS Experience S tudy.

Entry Ag e Actu arial C ost Method
The probabilities of mortality are based on the 2021 CalPERS Experience S tudy. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of S cale MP-2016 published by the S ociety of Actuaries.

For changes to previous years’ information, refer to past GAS B 68 reports.

The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2024 w ere derived fro m the June 30, 2021 funding valuation report.

2.50%

2.75%
Fair V alue of Assets. For details, see June 30, 2021 Funding V aluation

7.00% net of pension plan investment and administrative expenses 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
Actu arially d etermined
contribution 3,857,093$ 3,511,716$ 3,133,731$ 3,231,650$ 2,635,818$ Contributions in relation to
the actu arially d etermined
contribution (7,793,322) (3,511,716) (3,133,731) (3,231,650) (2,635,818) Cont ribut ion 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 contribution rates:

Actuarial cost method
Amortization method/period For details, see June 30, 2021 Funding V aluation Report.

Asset valuation method
Inflation
S alary increases Varies based on entry age and service Payroll grow th
Investment rate of return
Ret irement age
Mortality
Other Information:

The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2024 w ere derived fro m the June 30, 2021 funding valuation report.

Entry Age Actuarial Cost Method
Fair V alue of Assets. For details, see June 30, 2021 Funding V aluation

2.50%

2.75%

7.00% net of pension plan investment and administrative expenses The probabilities of retirement are based on the 2021 CalPERS Experience S tudy.

The probabilities of mortality are based on the 2021 CalPERS Experience S tudy. Pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of S cale MP-2016 published by the S ociety of Actuaries.

For changes to previous years’ information, refer to past G AS B 68 reports.

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
Ser v ice Co st 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 t erms - 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 G overnmental Accounting S tandards Board S tatement (G AS B) No. 75, Accounting and Fina ncial Reporting for Postemployment Benefit Plans Other than Pensions (G AS B 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the S tate of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-tim e expense as a result of the adoption of G AS B 75.

Additionally, CalPERS employees participate in various S tate of California agent pension plans and during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity related to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GAS B 68). 2Includes any beginning of year adjustment.
3 Includes one year’s payroll grow th using 2.80% payroll grow th assumption for fiscal years ended in 2022 through 2024; 2.75% pa yroll grow th assumption for fiscal years ended in 2018 through 2021; 3.00% payroll grow th assumption for fiscal years ended in 2015 through 2017.

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 liab ility 21,051,415 19,772,458 18,658,643 17,933,618 17,475,350 Changes in benefit t erms - - - - - 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 Governmental Accounting Standards Board Statement (GASB) No. 75, Accounting and Fina ncial Reporting for Postemployment Benefit Plans Other than Pensions (GASB 75), CalPERS reported its proportionate share of activity related to postemployment benefits for participation in the State of California’s agent OPEB plan. Accordingly, CalPERS recorded a one-tim e expense as a result of the adoption of G AS B 75.

Additionally, CalPERS employees participate in various S tate of California agent pension plans and during Fiscal Year 2017-18, CalPERS recorded a correction to previously reported financial statements to properly reflect its proportionate share of activity relat ed to pensions in accordance with GASB Statement No. 68, Accounting and Financial Reporting for Pensions (GASB 68). 2Includes any beginning of year adjustment.
3 Includes one year’s payroll grow th using 2.80% payroll grow th assumption for fiscal years ended in 2022 through 2024; 2.75% pa yroll grow th assumption for fiscal years ended in 2018 through 2021; 3.00% payroll grow th assumption for fiscal years ended in 2015 through 2017.

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
Actu arially d etermined
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 contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll grow th
Investment rate of return
Retirement age
Mortality
Other Information:

For changes to previous years’ information, refer to past GAS B 68 reports.

For details, see June 30, 2021 Funding V aluation Report.

Fair V alue of Assets. For details, see June 30, 2021 Funding V aluation Report.

Varies based on entry age and service

6.80% net of pension plan investment and administrative expenses The probabilities of retirement are based on the 2021 CalPERS Experience S tudy and Review of Actu arial Assu mptions.

The probabilities of mortality are based on the 2021 CalPERS Experience S tudy and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of S cale MP-2020 published by the S ociety of Actuaries.

2.30%

2.80%
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2024 were derived fro m the June 30, 2021 funding valuation report.

Entry Ag e Actu arial C ost Method
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
Actu arially d etermined
contribution 10,297,024$ 9,485,870$ 8,260,458$ 7,798,560$ 6,462,584$ Contributions in relation to
the actu arially d etermined
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$ Cont ribut ions as a percent age
of covered payroll 52.06% 49.79% 45.97% 48.10% 41.12%
Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Payroll grow th
Investment rate of return
Retirement age
Mortality
Other Information:

For changes to previous years’ information, refer to past GAS B 68 reports.

The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2024 were derived fro m the June 30, 2021 funding valuation report.

Entry Ag e Actu arial Cost Method
For details, see June 30, 2021 Funding V aluation Report.

Fair V alue of Assets. For details, see June 30, 2021 Funding V aluation Report.

2.30%
Varies based on entry age and service

2.80%

6.80% net of pension plan investment and administrative expenses The probabilities of retirement are based on the 2021 CalPERS Experience S tudy and Review of Actu arial Assu mptions.

The probabilities of mortality are based on the 2021 CalPERS Experience S tudy and Review of Actuarial Assumptions. Mortality rates incorporate full generational mortality improvement using 80% of S cale MP-2020 published by the S ociety of Actuaries.

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% 0.52990% 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% 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% 0.46967% 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%

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
Actu arially d etermined
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 contribution rates:

Actu arial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Mortality
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 w ere derived from the June 30, 2022 funding valuation report.

Entry age normal cost method
V aries 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 Funds. The post-retirement mortality rates include 15 years of projected on-going mortality improvement using 80% of the S ociety of Actuaries’ S cale MP-2020

2.30%
Varies by category, entry age, and service
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contributions
City Fire Plans (Continued)

155
Fiscal Year Ended June 30: 2020 2019 2018 2017 2016
Actuarially determined
contribution 5,058,738$ 4,369,284$ 5,440,481$ 5,132,440$ 4,732,759$ Contributions in relation to
the actu arially d etermined
cont ribut ion (5,058,738) (4,369,284) (16,741,091) (5,132,440) (4,732,759) Contr ibution deficiency
(excess) -$ - $ (11,300,610)$ -$ -$ Covered payroll 11,013,870$ 10,748,465$ 9,763,022$ 9,636,368$ 9,436,668$ Contributions as a percentage
of covered payroll 45.93% 40.65% 171.47% 53.26% 50.15%
Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Inflation
Salary increases
Mortality
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2025 w ere derived fro m the June 30, 2022 funding valuation report.

Entry age normal cost method
Varies by dat e est ablished and source. May be level dollar or level percent of pay and may include direct rate smoothing
Market value of assets

2.30%
Varies by category, entry age, and service
Derived using CalPERS ’ Membership Data for all Funds. The post-retirement mortality rates include 15 years of projected on-going mortality improvement using 80% of the S ociety of Actuaries’ S cale MP-2020
City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios Single Employer Plan

156
2025 2024 2023 2022 2021
Measurement Period, Year Ended June 30: 2024 2023 2022 2021 2020 T otal Pension L iability
Ser v ice Co st 86,971$ 91,735 $ 131,853 $ 345,756 $ 325,385 $ Interest on total pension liability 270,258 274,479 255,632 283,983 506,095 Changes in benefit t erms - - - - - Differences between expected and actual
experience - 398,477 - 1,595,858 - Changes in assumptions - (522,172) (533,090) (37,244) 907,299 Benefit payments, including refunds of
employee contributions (443,530) (338,894) (3,218,471) (2,656,129) (9,123,048) Net change in total pension liability (86,301) (96,375) (3,364,076) (467,776) (7,384,269) T otal pension liability - beginning 9,962,372 10,058,747 13,422,823 13,893,599 21,277,868 T otal pension liability - ending (a) 9,876,071$ 9,962,372$ 10,058,747$ 13,425,823$ 13,893,599$ Plan fiduciary net position
Contributions - employer 192,131$ 2,180,872$ 190,126$ 5,695,926$ 8,030,028$ Contributions - employee 19,213 18,087 19,012 34,635 52,751 Net investment income 1,218,104 46,143 (486,138) 894,536 338,833 Benefit payments, including refunds of
employee contributions (443,530) (338,894) (3,218,471) (2,656,129) (9,123,048) Administrative expense (15,617) (16,305) (17,057) (18, 061) (18,582)
Net change in plan fiduciary net
position 970,301 1,889,903 (3,512,528) 3,950,907 (720,018) Plan fiduciary net position - beginning 8,239,722 6,349,819 9,862,347 5,914,440 6,634,458 Plan fiduciary net position - ending (b) 9,210,023$ 8,239,722$ 6,349,819$ 9,865,347$ 5,914,440$ Net pension liability - ending (a) - (b) 666,048$ 1,722,650$ 3,708,928$ 3,560,476$ 7,979,159$ Plan fiduciary net position as a percentage
of the total pension liability 93.26% 82.71% 63.13% 73.48% 42.57% Covered payroll 428,805$ 402,079$ 437,872$ 768,725$ 1,176,879$ Plan net pension liability as a percentage of
covered payroll 155.33% 428.44% 847.03% 463.17% 677.99%

City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in Net Pension Liability and Related Ratios Single Employer Plan (Continued)

157
2020 2019 2018 2017 2016
Measurement Period, Year Ended June 30: 2019 2018 2017 2016 2015 T otal Pension Liability
Ser v ice Co st 232,193$ 302,184 $ 279,000 $ 336,000 $ 436,000 $ Interest on total pension liability 684,730 679,330 537,000 655,000 676,000 Changes in benefit t erms - - - 531,000 - Differences between expected and actual
experience 889,365 - 2,172,000 - - Changes in assumptions 217,496 - (106,000) - - Benefit payments, including refunds of
employee contributions (1,305,661) (199,769) (3,508,000) (87,000) (3,139,000) Net change in total pension liability 718,123 781,745 (626,000) 1,435,000 (2,027,000) T otal pension liability - beginning 20,559,745 19,778,000 20,404,000 18,969,000 20,996,000 T otal pension liability - ending (a) 21,277,868$ 20,559,745 $ 19,778,000 $ 20,404,000 $ 18,969,000 $ Plan fiduciary net position
Contributions - employer 2,919,589$ 1,927,686 $ 1,654,000 $ 1,483,000 $ 1,340,000 $ Contributions - employee 71,806 70,043 69,000 82,000 77,000 Net investment income 503,893 60,254 (506,000) 84,000 (85,000) Benefit payments, including refunds of
employee contributions (1,305,661) (199,769) (3,508,000) (87,000) (3,139,000) Administrative expense (19,188) (54,195) (75,000) (83, 000) (100,000) Net change in plan fiduciary net
position 2,170,439 1,804,019 (2,366,000) 1,479,000 (1,907,000) Plan fiduciary net position - beginning 4,464,019 2,660,000 5,026,000 3,547,000 5,454,000 Plan fiduciary net position - ending (b) 6,634,458$ 4,464,019$ 2,660,000$ 5,026,000$ 3,547,000$ Net pension liability - ending (a) - (b) 14,643,410$ 16,095,726$ 17,118,000$ 15,378,000$ 15,422,000$ Plan fiduciary net position as a percentage
of the total pension liability 31.18% 21.71% 13.45% 24.63% 18.70% Covered payroll 1,628,432$ 1,610,679$ 1,649,359$ 1,461,000$ 1,738,432$ Plan net pension liability as a percentage of
covered payroll 899.23% 999.31% 1037.86% 1052.57% 887.12% City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contributions
Single Employer Plan

158
Fiscal Year Ended June 30: 2025 2024 2023 2022 2021
Actu arially d etermined
contribution 971,000$ 558,000 $ 697,000 $ 2,963,000 $ 4,252,000 $ Contributions in relation to
the actuarially determined
contribution (2,213,909) (2,180,872) (145,965) (208,396) (10,212,240) Contribution deficiency
(excess) (1,242,909)$ (1,622,872) $ 551,035 $ 2,754,604 $ (5,960,240) $ Covered payroll 458,504$ 420,593 $ 401,365 $ 463,101 $ 804,977 $ Contributions as a percentage
of covered payroll 482.85% 518.52% 36.37% 45.00% 1268.64% Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Discount rate
Inflation
Salary increases
Mortality

2.5% annually
The probabilities of mortality are based on the CalPERS Experience S tudy for the period from 2000 to 2019. Pre-retirement and post-retirement mortality rates include 20 years of projected mort alit y improvement using Scale BB published by t he Act uaries. 1Information only presented from the implementation year The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2024 were derived fro m the S eptember 1, 2023 funding valuation report.

Individual aggregate cost method
N/A
Cash value as reported by New York Life Investment Management, LLC

0.0275

0.0225

City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Pension Plan Contributions
Single Employer Plan (Continued)

159
Fiscal Year Ended June 30: 2020 2019 2018 2017 2016
Actu arially d etermined
contribution 4,114,000$ 2,000,000 $ 1,932,000 $ 1,583,000 $ 1,520,000 $ Contributions in relation to
the actu arially d etermined
contribution (5,573,828) (2,135,107) (1,614,000) (1,571,000) (1,107,000) Contribution deficiency
(excess) (1,459,828)$ (135,107) $ 318,000 $ 12,000 $ 413,000 $ Covered payroll 1,273,326$ 1,664,538 $ 1,693,493 $ 1,796,000 $ 1,872,000 $ Cont ribut ions as a percent age
of covered payroll 437.74% 128.27% 95.31% 87.47% 59.13% Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method
Amortization method/period
Asset valuation method
Discount rate
Inflation
Salary increases
Mortality
The actuarial methods and assumption used to set the actuarially determined contributions for Fiscal Year 2024 were derived from the S eptember 1, 2023 funding valuation report.

Individual aggregate cost method
N/A
Cash value as reported by New York Life Investment Management, LLC

0.0275

0.0225

2.5% annually
The probabilities of mortality are based on the CalPERS Experience S tudy for the period from 2000 to 2019. Pre-retirement and post-retirement mortality rates include 20 years of project ed mort alit y improvement using Scale BB published by t he Act uaries. 1Information only presented from the implementation year City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in the City’s Net OPEB Liability

160
2025 2024 2023
For the Measurement Period: 2023-2024 2022-2023 2021-2022 Total OPE B L iability:

Service Cost 774,430$ 825,453$ 1,043,749$ Interest on the total OPEB liability 926,135 982,077 849,992 Chang es in benefit terms - - - Difference between expected and actual experience - (2,049,364) - Changes in assumptions (142,193) (1,094,099) (3,086,884) Benefit payments (614,476) (739,295) (685,206) Net changes in Total OPE B L iability 943,896 (2,075,228) (1,878,349) Beginning of Year 17,308,909 19,384,137 21,262,486 End of Ye ar 18,252,805$ 17,308,909$ 19,384,137$ Plan Fiduciary Net Position:

Employer contribution 621,272$ 996,208$ 940,051$ Employee contributions - - - Net investment income (loss) 477,784 248,010 (599,182) Benefit payments (614,476) (739,295) (685,206) Administrative expenses (8,214) (8,095) (5,965) Net changes in Fiduciary Net Position 476,366 496,828 (350,302) Beginning of Year 4,350,748 3,853,920 4,204,222 End of Ye ar 4,827,114$ 4,350,748$ 3,853,920$ Net OPE B L iability 13,425,691$ 12,958,161$ 15,530,217$ Fiduciary Net Position as a % of Total OPE B L iability 26.45% 25.14% 19.88% Covered Payroll 78,487,319$ 72,990,943$ 69,854,034$ Net OPE B L iability as a % of Payroll 17.11% 17.75% 22.23% Notes to S c
hedule:

Information is only presented from the implementation year.

Change of assumptions: For the measurement period ended June 30, 2024, the discount rate changed from 5.21% to 5.28%

City of Salinas
Required Supplemental Information (Unaudited)
Schedule of Changes in the City’s Net OPEB Liability (Continued)

161
2022 2021 2020 2019 2018
For the Measurement Period: 2020-2021 2019-2020 2018-2019 2017-2018 2016-2017 Total OPE B L iability:

Service Cost 1,639,274$ 1,169,996$ 1,065,470$ 1,085,475$ 1,209,000$ Interest on the total OPEB liability 884,846 974,493 1,143,094 1,064,391 951,000 Changes in benefit terms - - 574,467 - - Difference between expected and actual experience (4,117,866) - (4,138,016) - - Changes in assumptions (4,258,871) 4,678,007 1,474,189 (609,871) (1,765,000) Benefit payments (704,749) (676,514) (945,329) (915,000) (861,000) Net changes in Total OPE B L iability (6,557,366) 6,145,982 (826,125) 624,995 (466,000) Beginning of Year 27,819,852 21,673,870 22,499,995 21,875,000 22,341,000 End of Year 21,262,486$ 27,819,852$ 21,673,870$ 22,499,995$ 21,875,000$ Plan Fiduciary Net Position:

Employer contribution 959,007$ 931,063$ 1,195,329$ 1,165,000$ 1,111,000$ Employee contributions - - - - - Net investment income (loss) 897,217 102,633 152,998 159,215 171,000 Benefit payments (704,749) (676,514) (945,329) (915,000) (861,000) Administrative expenses (5,500) (5,988) (541) (3,619) (1,000) Net changes in Fiduciary Net Position 1,145,975 351,194 402,457 405,596 420,000 Beginning of Year 3,058,247 2,707,053 2,304,596 1,899,000 1,479,000 End of Year 4,204,222$ 3,058,247$ 2,707,053$ 2,304,596$ 1,899,000$ Net OPE B L iability 17,058,264$ 24,761,605$ 18,966,817$ 20,195,399$ 19,976,000$ Fiduciary Net Position as a % of Total OPE B L iability 19.77% 10.99% 12.49% 10.24% 8.68% Covered Payroll 64,469,561$ 64,146,096$ 64,026,542$ 62,965,263$ 48,821,000$ Net OPE B L iability as a % of Payroll 26.46% 38.60% 29.62% 32.07% 40.92% Notes to Schedule:

Information is only presented from the implementation year.

Change of assumptions: For the measurement period ended June 30, 2024, the discount rate changed from 5.21% to 5.28% City of Salinas
Required Supplemental Information (Unaudited)
Schedule of OPEB Contributions

162
2025 2024 2023
Actuarially determined contribution 1,654,796$ 1,603,871$ 1,733,000$ Contributions in relation to the
actuarially determined contributions (825,623) (621,272) (996,208) Contribution deficiency (excess) 829,173$ 982,599$ 736,792$ Covered payroll 78,487,319$ 72,990,943$ 69,854,034$ Contributions as a percentage of
covered payroll 1.05% 0.85% 1.43%
Notes to Schedule:
assumptions used to set the actuarially
Methods and assumptions used to determine contribution rates:

ADC for fiscal year 6/30/2025
Actuarial valuation date 6/30/2023
Actuarial cost method Entry-Age Normal Cost Method
Asset valuation method Actuarial value of assets
Inflation 2.50%
Investment rate of return 6.25%
Healthcare cost trend rate Non-Medicare - 7.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076; Medicare - 5.65% for 2026, decreasing to an ultimate rate of 3.45% in 2076; Projected salary growth and increase Not applicable
Mortality CalPERS 2000-2019 Experience Study
1 Information only presented from the implementation year

City of Salinas
Required Supplemental Information (Unaudited)
Schedule of OPEB Contributions (Continued)

163
2022 2021 2020 2019 2018
Actuarially determined contribution 1,687,000$ 1,997,000$ 1,938,000$ 2,322,000$ 2,188,000$ Contributions in relation to the
actuarially determined contributions (940,051) (959,007) (931,063) (1,195,329) (1,165,000) Contribution deficiency (excess) 746,949$ 1,037,993$ 1,006,937$ 1,126,671$ 1,023,000$ Covered payroll 67,797,683$ 64,469,561$ 64,146,096$ 64,026,452$ 51,530,000$ Contributions as a percentage of
covered payroll 1.39% 1.49% 1.45% 1.87% 2.26%
Notes to Schedule:
assumptions used to set the actuarially
Methods and assumptions used to determine contribution rates:

ADC for fiscal year 6/30/2025
Actuarial valuation date 6/30/2023
Actuarial cost method Entry-Age Normal Cost Metho d
Asset valuation method Actuarial value of assets
Inflation 2.50%
Investment rate of return 6.25%
Healthcare cost trend rate Non-Medicare - 7.90% for 2026, decreasing to an ultimate rate of 3.45% in 2076; Medicare - 5.65% for 2026, decreasing to an ultimate rate of 3.45% in 2076; Projected salary growth and increase Not applicable
Mortality CalPERS 2000-2019 Experience Study
1 Information only presented from the implementation year

164
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165

SUPPLEMENTARY INFORMATION

166
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Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
EXPENDITURES:

Current:

General government 2,988,000$ 11,225,190 $ 2,520,742 $ 8,704,448 $ Public safety - 301,998 152,852 149,146 Public works 3,920,000 27,661,602 5,359,159 22,302,443 Recreation - 3,546,306 1,130,531 2,415,775 Library - 84,852 - 84,852 Capital outlay 11,854,115 87,145,025 19,484,166 86,611,320 Debt Service:

Principal 533,930 533,930 533,705 533,930 Interest and fiscal charges 26,030 26,030 25,921 109 Total expenditures 19,322,075 130,524,933 29,207,076 120,802,023 REVENUES OVER (UNDER) EXPENDITURES (19,322,075) (130,524,933) (29,207,076) (120,802,023) OTHER FINANCING SOURCES (USES):

Transfers in 18,704,000 138,961,302 27,870,450 (111,090,852) Total other financing sources (uses) 18,704,000 138,961,302 27,870,450 (111,090,852) Net change in fund balance (618,075)$ 8,436,369 $ (1,336,626) (9,772,995) $ FUND BALANCE:

Beginning of year 8,490,095
End of year 7,153,469$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Capital Projects Fund
For the Year Ended June 30, 2025
167
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Taxes - special assessments 510,000 $ 510,000 $ 501,200 $ (8,800) $ Investment income (loss) 12,000 12,000 16,391 4,391 Total revenues 522,000 522,000 517,591 (4,409) EXPENDITURES:

Current:

General government 15,000 15,000 7,126 7,874 Debt Service:

Principal 155,000 155,000 155,000 155,000 Interest and fiscal charges 304,200 304,200 301,684 2,516 Total expenditures 474,200 474,200 463,810 165,390 REVENUES OVER (UNDER) EXPENDITURES 47,800 47,800 53,781 (169,799) Net change in fund balance 47,800$ 47,800 $ 53,781 5,981 $ FUND BALANCE:

Beginning of year 933,253
End of year 987,034$
Budgeted Amounts
Monte Bella Debt Service Fund
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2019 Special Tax Bond
For the Year Ended June 30, 2025
168
Non-Major Non-Major Non-Major Total
Special Debt Capital Non-Major
Revenue Service Projects Governmental
Funds Funds Funds Funds
ASSETS
Cash and investments 61,879,186$ 2,042,663$ 6,745,115$ 70,666,964$ Receivables, net:

Accounts 13,483 - 582,758 596,241 Taxes 29,360 - - 29,360 Interest 1,201,405 6,409 420,117 1,627,931 Due from other agencies 3,396,612 - 1,099,334 4,495,946 Assessments - 45,000 - 45,000 Leases 18,975 - 3,307,506 3,326,481 Restricted cash and investments - 6,338,310 13,287 6,351,597 Loans and notes receivable, net of allowance 51,571 - - 51,571 Land and properties held for resale 1,380,000 - - 1,380,000 Total assets 67,970,592$ 8,432,382$ 12,168,117$ 88,571,091$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 231,587$ -$ -$ 231,587$ Accrued liabilities 205,235 - - 205,235 Due to other funds 2,739,499 1,018,962 5,613,106 9,371,567 Unearned revenues 930,869 45,000 - 975,869 Total liabilities 4,107,190 1,063,962 5,613,106 10,784,258

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 654,039 - - 654,039 Related to leases 14,193 - 2,967,094 2,981,287 Total deferred inflows of resources 668,232 - 2,967,094 3,635,326

Fund Balances:

Nonspendable 1,431,571 - - 1,431,571 Restricted 62,320,436 8,080,567 3,587,917 73,988,920 Unassigned (deficit) (556,837) (712,147) - (1,268,984) Total fund balances 63,195,170 7,368,420 3,587,917 74,151,507 Total liabilities, deferred inflows of
resources, and fund balances 67,970,592$ 8,432,382$ 12,168,117$ 88,571,091$ June 30, 2025
City of Salinas
Combing Balance Sheet
Nonmajor Governmental Funds
169
Non-Major Non-Major Non-Major Total
Special Debt Capital Non-Major
Revenue Service Projects Governmental
Funds Funds Funds Funds
REVENUES:

Taxes 648,806$ -$ -$ 648,806$ Taxes - special assessments - - - - Licenses and permits 97,006 - - 97,006 Intergovernmental 18,042,019 - 7,364,969 25,406,988 Charges for services 1,629,720 - 33,675 1,663,395 Investment income 2,493,166 446,994 295,583 3,235,743 Rental income 310,989 - - 310,989 Fines and forfeitures 258,136 - - 258,136 Miscellaneous 2,159,234 - - 2,159,234 Total revenues 25,639,076 446,994 7,694,227 33,780,297

EXPENDITURES:

Current:

General government 1,224,552 954,805 - 2,179,357 Public safety 4,646,283 - - 4,646,283 Public works 1,569,304 - 188 1,569,492 Recreation 959,621 - - 959,621 Library 318,877 - - 318,877 Capital outlay 252,510 - - 252,510 Debt service:

Principal - 6,189,000 - 6,189,000 Interest and fiscal charges - 4,023,938 - 4,023,938 Bond issuance costs - 63,684 - 63,684 Total expenditures 8,971,147 11,231,427
188 20,202,762

REVENUES OVER (UNDER) EXPENDITURES 16,667,929 (10,784,433) 7,694,039 13,577,535 OTHER FINANCING SOURCES (USES):

Proceeds from issuance of leases - 4,735,000 - 4,735,000 Transfers in 3,305,262 12,004,967 - 15,310,229 Transfers out (10,605,363) - (6,480,570) (17,085,933) Total other financing sources (uses) (7,300,101) 16,739,967 (6,480,570) 2,959,296 NET CHANGE IN FUND BALANCES 9,367,828 5,955,534 1,213,469 16,536,831 FUND BALANCES:

Beginning of year, as previously presented as of June 30, 2024 74,935,717 1,412,886 2,374,448 78,723,051 Change within financial reporting entity:
(nonmajor to major) (21,108,375) - - (21,108,375) Beginning of year, as restated (Note 22) 53,827,342 1,412,886 2,374,448 57,614,676 End of year 63,195,170$ 7,368,420$ 3,587,917$ 74,151,507$ For the Year Ended June 30, 2025
City of Salinas
Combing Statement of Revenues, Expenditures, and Changes in Fund Balances Non-Major Governmental Funds
170
Special Revenue Funds
Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for specified purposes. The Special Revenue Funds used by the City in this report are as follows:

Lighting, Landscape and Maintenance District - This fund accounts for monies received from the various maintenance districts throughout the City. Funds are used to pay for the lighting and landscape maintenance of the respective districts.

Local Public Safety - This fund accounts for monies received from federal and state grants, which are expended to enhance law enforcement services.

Gas Tax - This fund accounts for gas tax revenues received from State apportionments of gasoline taxes. Expenditures are restricted to street maintenance and street improvements. No expenditures are made directly from this fund, but transfers are made to the General Fund for street maintenance and engineering salaries and to the Capital Projects Fund for street improvements based on actual expenditures.

Emergency Medical Services - This fund accounts for monies received from County Service Area (CSA) 74. Funds are used to purchase emergency medical and safety equipment under the capital improvement program.

Asset Seizure - This fund accounts for the proceeds from sale of assets seized primarily from illegal narcotics activity.

These funds are used for law enforcement.

Traffic Safety - This fund accounts for revenues derived from traffic violations whose use is restricted by State statute for traffic safety and street maintenance purposes. No expenditures are made directly from this fund, but transfers are made to the General Fund for traffic safety expenditures and street maintenance.

Vehicle Abatement - This fund accounts for monies allocated by the State to fund the vehicle abatement program.

Cable - This funds accounts for revenues received for public, educational and governmental (PEG) fees from video service providers. Its use is restricted to provide non-commercial public, educational and government channels.

Contributions and Donations - This fund accounts for contributions and donations from different individuals and agencies to the Library, Rec-Park, Fire and Police Department. Use of the funds are restricted for use of the appropriate Department.

Nonmajor Governmental Funds
171
Special Revenue Funds (Continued)
KDF Los Padres Dev Social Services - This fund accounts for social services provided by the City of Salinas to lower income residents of the Development. On June 1, 2003, the Salinas Redevelopment Agency, the City of Salinas and the KDF Los Padres, L.P. entered into a loan agreement where loan payments will be collected annually by the City and used to provide recreational and social services to lower income residents of the Development. Term of the loan is 55 years commencing in 2006. Payment will increase by 3% annually.

Measure X Transport Safety & Inv Plan - This fund accounts for revenues allocated by TAMC from the transportation sales and use tax. Expenditures are restricted to road improvements, pothole repairs, street and road maintenance, traffic deduction and regional safety, mobility and walkability.

SB1 Road Maintenance & Rehab & SB1 Traffic Congestion Relief - This fund accounts for gas tax revenues received from State apportionments of an increased tax on gasoline and a new vehicle license fee from Senate Bill 1 (SB 1), the Road Repair and Accountability Act of 2017. Expenditures are restricted to street maintenance and street improvements including facilities for bicycles and pedestrians. No expenditures are made directly from this fund, but transfers are made to the General Fund for street maintenance and engineering salaries and to the Capital Projects Fund for street improvements based on actual expenditures.

SRA Public Improvement Grant - This fund accounts for the use of monies received fro m proceeds of the land sale located in Main Street where the “Taylor Farms” headquarters is constructed and other properties held for re-sale.

Affordable Housing - These funds are used to improve and increase the supply of low income housing within the City.

Grants - This fund accounts for various minor grants received for purposes ranging from library to police operations.

Rent Stabilization - This fund accounts for the monies received from the Residential Rental Registration and Rent Stabilization Programs. The Residential Rental Registration and Rent Stabilization Programs require property owners to register their residential rental units, ensuring compliance with approved ordinances.

Local Housing Trust - This fund accounts for the monies received from the California Department of Housing and Community Development Local Housing Trust Fund Program.

Non-Major Governmental Funds (Continued)
172
Lighting,
Landscape,
and Local Emergency
Maintenance Public Gas Medical Asset
District Safety Tax Services Seizure
ASSETS
Cash and investments 11,033,471$ 3,175,200$ 7,703,029$ -$ 302,248$ Receivables, net:

Accounts - - 4,198 - - Taxes - - - - - Interest 35,926 4,470 26,632 - 928 Due from other agencies - 117,433 456,977 - - Leases - - - - - Loans and notes receivable, net of allowance - - - - - Land and properties held for resale - - - - - Total assets 11,069,397$ 3,297,103$ 8,190,836$ -$ 303,176$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 47,308$ -$ -$ 3,085$ -$ Accrued liabilities 11,139 - - 65,398 - Due to other funds 53,127 - 45,187 27,506 - Unearned revenues - - - - - Total liabilities 111,574 - 45,187 95,989 -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - - Related to leases - -
- - - Total deferred inflows of resources - - - - -

Fund Balances:

Nonspendable - - - - - Restricted 10,957,823 3,297,103 8,145,649 - 303,176 Unassigned (deficit) - - - (95,989) - Total fund balance (deficit) 10,957,823 3,297,103 8,145,649 (95,989) 303,176 Total liabilities, deferred inflows of
resources, and fund balances 11,069,397$ 3,297,103$ 8,190,836$ -$ 303,176$ (Continued)
City of Salinas
Combining Balance Sheet
Nonmajor Special Revenue Funds
June 30, 2025
173
KDF
Los Padres
Traffic Vehicle Contributions & Dev Social
Safety Abatement Cable Donations Services
ASSETS
Cash and investments -$ 274,888$ 520,844$ 549,339$ 232,094$ Receivables, net:

Accounts - - - - - Taxes - - 29,360 - - Interest - - - - - Due from other agencies - - - - - Leases - - - - - Loans and notes receivable, net of allowance - - - - - Land and properties held for resale - - - - - Total assets -$ 274,888$ 550,204$ 549,339$ 232,094$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable -$ -$ 36,250$ 13,548$ -$ Accrued liabilities - 11,096 - - - Due to other funds 59,575 - - - - Unearned revenues - - - - - Total liabilities 59,575 11,096 36,250 13,548 -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - - Related to leases - - - - -
Total deferred inflows of resources - - - - -

Fund Balances:

Nonspendable - - - - - Restricted - 263,792 513,954 535,791 232,094 Unassigned (deficit) (59,575) - - - - Total fund balance (deficit) (59,575) 263,792 513,954 535,791 232,094 Total liabilities, deferred inflows of
resources, and fund balances -$ 274,888$ 550,204$ 549,339$ 232,094$ (Continued)
City of Salinas
Combining Balance Sheet (Continued)
Nonmajor Special Revenue Funds
June 30, 2025
174
Measure X SRA
Transport SB1 Road SB1 Traffic Public
Safety & Maintenance & Congestion Improvement Affordable Inv Plan Rehab Relief Grant Housing
ASSETS
Cash and investments 15,706,794$ 9,468,932$ 628,062$ 1,800,598$ 3,494,779$ Receivables, net:

Accounts - - - - - Taxes - - - - - Interest 50,937 29,685 2,024 5,735 1,041,751 Due from other agencies 1,429,839 370,598 - - - Leases - - - - - Loans and notes receivable, net of allowance - - - - 51,571 Land and properties held for resale - - - 584,419 795,581 Total assets 17,187,570$ 9,869,215$ 630,086$ 2,390,752$ 5,383,682$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable -$ -$ -$ -$ 591$ Accrued liabilities - - - - - Due to other funds 27,809 41,475 - - - Unearned revenues - - - - 930,869 Total liabilities 27,809 41,475 - - 931,460

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - - Related to leases - - - - -
Total deferred inflows of resources - - - - -

Fund Balances:

Nonspendable - - - 584,419 847,152 Restricted 17,159,761 9,827,740 630,086 1,806,333 3,605,070 Unassigned (deficit) - - - - - Total fund balance (deficit) 17,159,761 9,827,740 630,086 2,390,752 4,452,222 Total liabilities, deferred inflows of
resources, and fund balances 17,187,570$ 9,869,215$ 630,086$ 2,390,752$ 5,383,682$ (Continued)
City of Salinas
Combining Balance Sheet (Continued)
Nonmajor Special Revenue Funds
June 30, 2025
175
Rent Local
Grants Stabilization Housing Trust Total
ASSETS
Cash and investments 1,945,507 $ 1,568,160 $ 3,475,241 $ 61,879,186 $ Receivables, net:

Accounts 9,285 - - 13,483 Taxes - - - 29,360 Interest 3,317 - - 1,201,405 Due from other agencies 1,021,765 - - 3,396,612 Leases 18,975 - - 18,975 Loans and notes receivable, net of allowance - - - 51,571 Land and properties held for resale - - - 1,380,000 Total assets 2,998,849$ 1,568,160 $ 3,475,241 $ 67,970,592 $

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 130,691 $ 114 $ - $ 231,587$ Accrued liabilities 116,379 197 1,026 205,235 Due to other funds 2,484,820 - - 2,739,499 Unearned revenues - - - 930,869 Total liabilities 2,731,890 311 1,026 4,107,190

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 654,039 - - 654,039 Related to leases 14,193 - - 14,193 Total deferred inflows of resources 668,232 - - 668,232

Fund Balances:

Nonspendable - - - 1,431,571 Restricted -
1,567,849 3,474,215 62,320,436
Unassigned (deficit) (401,273) - - (556,837) Total fund balance (deficit) (401,273) 1,567,849 3,474,215 63,195,170 Total liabilities, deferred inflows of
resources, and fund balances 2,998,849$ 1,568,160$ 3,475,241$ 67,970,592$ (Concluded)
City of Salinas
Combining Balance Sheet (Continued)
Nonmajor Special Revenue Funds
June 30, 2025
176
Lighting,
Landscape,
and Local Emergency
Maintenance Public Gas Development Medical
District Safety Tax Fees Services
REVENUES:

Taxes - $ 648,806$ - $ - $ Licenses and permits - - - - Intergovernmental - 486,395 4,340,025 138,646 Charges for services - - - - Investment income (loss) 531,904 12,858 394,885 - Rental income - - 260,632 - Fines and forfeitures - - - - Miscellaneous 1,780,468 - - - Total revenues 2,312,372 1,148,059 4,995,542 138,646

EXPENDITURES:

Current:

General government 1,938 - - - Public safety - 546,882 - 1,687,861 Public works 1,434,862 - - - Recreation 62,157 - - - Library - - - - Capital outlay - - - 1,116 Total expenditures 1,498,957 546,882 - 1,688,977

REVENUES OVER (UNDER) EXPENDITURES 813,415 601,177 4,995,542 (1,550,331) OTHER FINANCING SOURCES (USES):

Transfers in - - - 1,600,000 Transfers out (62,618) -
(3,436,791) -
Total other financing sources (uses) (62,618) - (3,436,791) 1,600,000 NET CHANGE IN FUND BALANCES 750,797 601,177 1,558,751 49,669 FUND BALANCES (DEFICIT):

Beginning of year, as previously presented as of June 30, 2024 10,207,026 2,695,926 6,586,898 21,108,375 (145,658) Change within financial reporting entity:
(nonmajor to major) - - - (21,108,375) - Beginning of year, as restated (Note 22) 10,207,026 2,695,926 6,586,898 - (145,658) End of year 10,957,823$ 3,297,103$ 8,145,649 $ -$ (95,989)$ (Continued)
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Special Revenue Funds
For the Year Ended June 30, 2025
177
Asset Traffic Vehicle Contributions &
Seizure Safety Abatement Cable Donations
REVENUES:

Taxes -$ -$ -$ -$ -$ Licenses and permits - - - 97,006 - Intergovernmental 48,818 - 252,344 - - Charges for services - - - - - Investment income (loss) 11,691 - - - - Rental income - - - - - Fines and forfeitures - 258,136 - - - Miscellaneous - - - - 54,362 Total revenues 60,509 258,136 252,344 97,006 54,362

EXPENDITURES:

Current:

General government - 85,205 - 145,000 - Public safety 4,128 - 244,883 - - Public works - - 124,703 - - Recreation - - - - 1,920 Library - - - - 22,880 Capital outlay - - - - - Total expenditures 4,128 85,205 369,586 145,000 24,800

REVENUES OVER (UNDER) EXPENDITURES 56,381 172,931 (117,242) (47,994) 29,562
OTHER FINANCING SOURCES (USES):

Transfers in - - - - - Transfers out - (200,000) - - - Total other financing sources (uses) - (200,000) - - - NET CHANGE IN FUND BALANCES 56,381 (27,069) (117,242) (47,994) 29,562 FUND BALANCES (DEFICIT):

Beginning of year, as previously presented as of June 30, 2024 246,795 (32,506) 381,034 561,948 506,229 Change within financial reporting entity:
(nonmajor to major) - - - - - Beginning of year, as restated (Note 22) 246,795 (32,506) 381,034 561,948 506,229 End of year 303,176$ (59,575)$ 263,792$ 513,954 $ 535,791$ (Continued)
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Special Revenue Funds
For the Year Ended June 30, 2025
178
KDF Measure X SRA
Los Padres Transport SB1 Road SB1 Traffic Public
& Dev Social Safety & Maintenance & Congestion Improvement Services Inv Plan Rehab Relief Grant
REVENUES:

Taxes - $ - $ - $ - $ - $ Licenses and permits - - - - - Intergovernmental - 4,628,185 4,403,564 - - Charges for services - - - - - Investment income (loss) - 807,998 409,185 30,573 88,127 Rental income - - - - - Fines and forfeitures - - - - - Miscellaneous - - - - - Total revenues - 5,436,183 4,812,749 30,573 88,127

EXPENDITURES:

Current:

General government - - - - - Public safety - - - - - Public works - - - - - Recreation 17,175 - - - - Library - - - - - Capital outlay - - - - - Total expenditures 17,175 - - - -

REVENUES OVER (UNDER) EXPENDITURES (17,175) 5,436,183 4,812,749 30,573 88,127
OTHER FINANCING SOURCES (USES):

Transfers in - - - - - Transfers out - (5,140,925) (1,765,029) - - Total other financing sources (uses) - (5,140,925) (1,765,029) - - NET CHANGE IN FUND BALANCES (17,175) 295,258 3,047,720 30,573 88,127 FUND BALANCES (DEFICIT):

Beginning of year, as previously presented as of June 30, 2024 249,269 16,864,503 6,780,020 599,513 2,302,625 Change within financial reporting entity:
(nonmajor to major) - - - - - Beginning of year, as restated (Note 22) 249,269 16,864,503 6,780,020 599,513 2,302,625 End of year 232,094$ 17,159,761$ 9,827,740$ 630,086 $ 2,390,752$ (Continued)
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Special Revenue Funds
For the Year Ended June 30, 2025
179
Affordable Rent Local
Housing Grants Stabilization Housing Trust Total
REVENUES:

Taxes - $ - $ - $ - $ 648,806$ Licenses and permits - - - - 97,006 Intergovernmental - 3,744,042 - - 18,042,019 Charges for services 124,439 - 1,505,281 - 1,629,720 Investment income (loss) 164,885 41,060 - - 2,493,166 Rental income - 50,357 - - 310,989 Fines and forfeitures - - - - 258,136 Miscellaneous 283,790 40,614 - - 2,159,234 Total revenues 573,114 3,876,073 1,505,281 - 25,639,076

EXPENDITURES:

Current:

General government 15,412 664,982 286,230 25,785 1,224,552 Public safety - 2,162,529 - - 4,646,283 Public works - 9,739 - - 1,569,304 Recreation - 878,369 - - 959,621 Library - 295,997 - - 318,877 Capital outlay - 251,394 - - 252,510 Total expenditures 15,412 4,263,010 286,230 25,785 8,971,147

REVENUES OVER (UNDER) EXPENDITURES 557,702 (386,937) 1,219,051 (25,785) 16,667,929
OTHER FINANCING SOURCES (USES):

Transfers in - 59 205,203 1,500,000 3,305,262 Transfers out - - - - (10,605,363) Total other financing sources (uses) - 59 205,203 1,500,000 (7,300,101) NET CHANGE IN FUND BALANCES 557,702 (386,878) 1,424,254 1,474,215 9,367,828 FUND BALANCES (DEFICIT):

Beginning of year, as previously presented as of June 30, 2024 3,894,520 (14,395) 143,595 2,000,000 74,935,717 Change within financial reporting entity:
(nonmajor to major) - - - - (21,108,375) Beginning of year, as restated (Note 22) 3,894,520 (14,395) 143,595 2,000,000 53,827,342 End of year 4,452,222$ (401,273)$ 1,567,849$ 3,474,215 $ 63,195,170$ (Concluded)
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Special Revenue Funds
For the Year Ended June 30, 2025
180
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 171,400 $ 171,400 $ 531,904 $ 360,504 $ Miscellaneous 1,975,660 1,975,660 1,780,468 (195,192) Total revenues 2,147,060 2,147,060 2,312,372 165,312 EXPENDITURES:

Current:

General government - - 1,938 (1,938) Public works 1,604,772 1,614,772 1,434,862 179,910 Recreation 55,100 55,100 62,157 (7,057) Capital outlay 15,000 5,000 - 5,000 Total expenditures 1,674,872 1,674,872 1,498,957 175,915 REVENUES OVER (UNDER) EXPENDITURES 472,188 472,188 813,415 (10,603) OTHER FINANCING SOURCES (USES):

Transfers out (696,000) (3,279,706) (62,618) 3,217,088 Total other financing sources (uses) (696,000) (3,279,706) (62,618) 3,217,088 Net change in fund balance (223,812)$ (2,807,518) $ 750,797 3,558,315 $ FUND BALANCE:

Beginning of year 10,207,026
End of year 10,957,823$
Budgeted Amounts
District Special Revenue Fund
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Lighting, Landscape, and Maintenance For the Year Ended June 30, 2025
181
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Taxes 600,000$ 600,000$ 648,806$ 48,806$ Intergovernmental 500,000 500,000 486,395 (13,605) Investment income (loss) 15,600 15,600 12,858 (2,742) Total revenues 1,115,600 1,115,600 1,148,059 32,459 EXPENDITURES:

Current:

Public safety 1,100,000 1,100,000 546,882 553,118 Total expenditures 1,100,000 1,100,000 546,882 553,118 REVENUES OVER (UNDER) EXPENDITURES 15,600 15,600 601,177 (520,659) Net change in fund balance 15,600$ 15,600$ 601,177 585,577$ FUND BALANCE:

Beginning of year 2,695,926
End of year 3,297,103$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Local Public Safety
Special Revenue Fund
For the Year Ended June 30, 2025
182
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 4,252,000 $ 4,252,000 $ 4,340,025 $ 88,025 $ Investment income (loss) 80,100 80,100 394,885 314,785 Rental income 250,000 250,000 260,632 10,632 Total revenues 4,582,100 4,582,100 4,995,542 413,442 REVENUES OVER (UNDER) EXPENDITURES 4,582,100 4,582,100 4,995,542 413,442 OTHER FINANCING SOURCES (USES):

Transfers out (5,140,000) (8,581,374) (3,436,791) 5,144,583 Total other financing sources (uses) (5,140,000) (8,581,374) (3,436,791) 5,144,583 Net change in fund balance (557,900)$ (3,999,274) $ 1,558,751 5,558,025 $ FUND BALANCE:

Beginning of year 6,586,898
End of year 8,145,649$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Gas Tax
Special Revenue Fund
For the Year Ended June 30, 2025
183
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 137,000 $ 137,000 $ 138,646 $ 1,646 $ Total revenues 137,000 137,000 138,646 1,646 EXPENDITURES:

Current:

Public safety 1,758,700 1,757,585 1,687,861 69,724 Capital outlay - 1,116 1,116 1,116 Total expenditures 1,758,700 1,758,701 1,688,977 70,840 REVENUES OVER (UNDER) EXPENDITURES (1,621,700) (1,621,701) (1,550,331) (69,194) OTHER FINANCING SOURCES (USES):

Transfers in 1,600,000 1,600,000 1,600,000 - Transfers out - (18,158) - 18,158 Total other financing sources (uses) 1,600,000 1,581,842 1,600,000 18,158 Net change in fund balance (21,700)$ (39,859) $ 49,669 89,528 $ FUND BALANCE (DEFICIT):

Beginning of year (145,658)
End of year (95,989)$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Emergency Medical Services Special Revenue Fund
For the Year Ended June 30, 2025
184
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 25,000 $ 25,000 $ 48,818 $ 23,818 $ Investment income (loss) 7,000 7,000 11,691 4,691 Total revenues 32,000 32,000 60,509 28,509 EXPENDITURES:

Current:

Public safety 30,000 30,000 4,128 25,872 Total expenditures 30,000 30,000 4,128 25,872 Net change in fund balance 2,000$ 2,000 $ 56,381 54,381 $ FUND BALANCE:

Beginning of year 246,795
End of year 303,176$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Asset Seizure
Special Revenue Fund
For the Year Ended June 30, 2025
185
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Fines and forfeitures 325,000$ 325,000$ 258,136$ (66,864)$ Total revenues 325,000 325,000 258,136 (66,864) EXPENDITURES:

Current:

General government 125,000 125,000 85,205 39,795 Total expenditures 125,000 125,000 85,205 39,795 REVENUES OVER (UNDER) EXPENDITURES 200,000 200,000 172,931 (106,659) OTHER FINANCING SOURCES (USES):

Transfers out (200,000) (200,000) (200,000) - Total other financing sources (uses) (200,000) (200,000) (200,000) - Net change in fund balance -$ -$ (27,069) (27,069)$ FUND BALANCE (DEFICIT):

Beginning of year (32,506)
End of year (59,575)$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Traffic Safety
Special Revenue Fund
For the Year Ended June 30, 2025
186
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 160,000$ 160,000$ 252,344$ 92,344$ Total revenues 160,000 160,000 252,344 92,344 EXPENDITURES:

Current:

Public safety 246,400 246,400 244,883 1,517 Public works - - 124,703 (124,703) Total expenditures 246,400 246,400 369,586 (123,186) Net change in fund balance (86,400)$ (86,400)$ (117,242) (30,842)$ FUND BALANCE:

Beginning of year 381,034
End of year 263,792$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Vehicle Abatement
Special Revenue Fund
For the Year Ended June 30, 2025
187
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Licenses and permits 150,000 $ 150,000 $ 97,006 $ (52,994) $ Total revenues 150,000 150,000 97,006 (52,994) EXPENDITURES:

Current:

General government 145,000 145,000 145,000 - Total expenditures 145,000 145,000 145,000 - Net change in fund balance 5,000$ 5,000 $ (47,994) (52,994) $ FUND BALANCE:

Beginning of year 561,948
End of year 513,954$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Cable
Special Revenue Fund
For the Year Ended June 30, 2025
188
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Miscellaneous - $ 29,293$ 54,362 $ 25,069 $ Total revenues - 29,293 54,362 25,069 EXPENDITURES:

Current:

Public safety - 396,613 - 396,613 Public works - 5,000 - 5,000 Recreation - 30,626 1,920 28,706 Library - 103,284 22,880 80,404 Total expenditures - 535,523 24,800 510,723 Net change in fund balance -$ (506,230)$ 29,562 535,792 $ FUND BALANCE:

Beginning of year 506,229
End of year 535,791$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Contributions & Donations Special Revenue Fund
For the Year Ended June 30, 2025
189
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
EXPENDITURES:

Current:

Recreation -$ - $ 17,175$ (17,175) $ Total expenditures - - 17,175 (17,175) REVENUES OVER (UNDER) EXPENDITURES - - (17,175) 17,175 Net change in fund balance -$ -$ (17,175) (17,175)$ FUND BALANCE:

Beginning of year 249,269
End of year 232,094$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - KDF Los Padres Dev Social Services Special Revenue Fund
For the Year Ended June 30, 2025
190
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 5,500,000 $ 5,500,000 $ 4,628,185 $ (871,815) $ Investment income (loss) 194,500 194,500 807,998 613,498 Total revenues 5,694,500 5,694,500 5,436,183 (258,317) REVENUES OVER (UNDER) EXPENDITURES 5,694,500 5,694,500 5,436,183 (258,317) OTHER FINANCING SOURCES (USES):

Transfers out (5,609,100) (11,309,062) (5,140,925) 6,168,137 Total other financing sources (uses) (5,609,100) (11,309,062) (5,140,925) 6,168,137 Net change in fund balance 85,400$ (5,614,562)$ 295,258 5,909,820 $ FUND BALANCE:

Beginning of year 16,864,503
End of year 17,159,761$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Measure X Transport Safety & Inv Plan Special Revenue Fund
For the Year Ended June 30, 2025
191
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 4,135,000 $ 4,135,000 $ 4,403,564 $ 268,564 $ Investment income (loss) 129,800 129,800 409,185 279,385 Total revenues 4,264,800 4,264,800 4,812,749 547,949 REVENUES OVER (UNDER) EXPENDITURES 4,264,800 4,264,800 4,812,749 547,949 OTHER FINANCING SOURCES (USES):

Transfers out (3,600,000) (7,919,060) (1,765,029) 6,154,031 Total other financing sources (uses) (3,600,000) (7,919,060) (1,765,029) 6,154,031 Net change in fund balance 664,800$ (3,654,260) $ 3,047,720 6,701,980 $ FUND BALANCE:

Beginning of year 6,780,020
End of year 9,827,740$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - SB1 Road Maintenance & Rehab Special Revenue Fund
For the Year Ended June 30, 2025
192
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 10,600 $ 10,600 $ 30,573 $ 19,973 $ Total revenues 10,600 10,600 30,573 19,973 Net change in fund balance 10,600$ 10,600 $ 30,573 19,973 $ FUND BALANCE:

Beginning of year 599,513
End of year 630,086$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - SB1 Traffic Congestion Relief Special Revenue Fund
For the Year Ended June 30, 2025
193
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 30,400 $ 30,400 $ 88,127 $ 57,727 $ Total revenues 30,400 30,400 88,127 57,727 Net change in fund balance 30,400$ 30,400 $ 88,127 57,727 $ FUND BALANCE:

Beginning of year 2,302,625
End of year 2,390,752$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - SRA Public Improvement Grant Special Revenue Fund
For the Year Ended June 30, 2025
194
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 83,000 $ 220,000 $ 124,439 $ (95,561) $ Investment income (loss) 61,000 61,000 164,885 103,885 Miscellaneous - - 283,790 283,790 Total revenues 144,000 281,000 573,114 292,114 EXPENDITURES:

Current:

General government 1,000 222,426 15,412 207,014 Total expenditures 1,000 222,426 15,412 207,014 Net change in fund balance 143,000$ 58,574 $ 557,702 499,128 $ FUND BALANCE:

Beginning of year 3,894,520
End of year 4,452,222$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Affordable Housing
Special Revenue Fund
For the Year Ended June 30, 2025
195
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental - $ 10,983,526$ 3,744,042 $ (7,239,484) $ Investment income (loss) - - 41,060 41,060 Rental income - - 50,357 50,357 Miscellaneous - 40,614 40,614 - Total revenues - 11,024,140 3,876,073 (7,148,067) EXPENDITURES:

Current:

General government 84,030 2,240,997 664,982 1,576,015 Public safety 475,740 5,625,884 2,162,529 3,463,355 Public works 400 4,096 9,739 (5,643) Recreation - 1,834,014 878,369 955,645 Library 83,340 375,866 295,997 79,869 Capital outlay - 578,098 251,394 578,098 Total expenditures 643,510 10,658,955 4,263,010 6,647,339 REVENUES OVER (UNDER) EXPENDITURES (643,510) 365,185 (386,937) (13,795,406) OTHER FINANCING SOURCES (USES):

Transfers in - - 59 59 Total other financing sources (uses) - - 59 59 Net change in fund balance (643,510)$ 365,185 $ (386,878) (752,063) $ FUND BALANCE (DEFICIT):

Beginning of year (14,395)
End of year (401,273)$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Grants
Special Revenue Fund
For the Year Ended June 30, 2025
196
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Charges for services 80,000 $ 310,047 $ 1,505,281 $ 1,195,234 $ Total revenues 80,000 310,047 1,505,281 1,195,234 EXPENDITURES:

Current:

General government 45,000 605,950 286,230 319,720 Capital outlay - 49,300 - 49,300 Total expenditures 45,000 655,250 286,230 369,020 REVENUES OVER (UNDER) EXPENDITURES 35,000 (345,203) 1,219,051 826,214 OTHER FINANCING SOURCES (USES):

Transfers in - 205,203 205,203 - Total other financing sources (uses) - 205,203 205,203 - Net change in fund balance 35,000$ (140,000) $ 1,424,254 1,564,254 $ FUND BALANCE:

Beginning of year 143,595
End of year 1,567,849$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Rent Stabilization
Special Revenue Fund
For the Year Ended June 30, 2025
197
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
EXPENDITURES:

Current:

General government - $ 2,000,000$ 25,785 $ 1,974,215 $ Total expenditures - 2,000,000 25,785 1,974,215 REVENUES OVER (UNDER) EXPENDITURES - (2,000,000) (25,785) (1,974,215) OTHER FINANCING SOURCES (USES):

Transfers in - 1,500,000 1,500,000 - Total other financing sources (uses) - 1,500,000 1,500,000 - Net change in fund balance -$ (500,000)$ 1,474,215 1,974,215$ FUND BALANCE:

Beginning of year 2,000,000
End of year 3,474,215$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Local Housing Trust
Special Revenue Fund
For the Year Ended June 30, 2025
198
Debt Service Funds
Debt Service Funds are used for the accumulation and disbursement of financial resources that will be used to make principal and interest payments on general long-term debt. The nonmajor debt service funds include the following debt issuances:

Assessment District Debt Service - This fund is used to accumulate monies for payment of the City's Assessment Districts Improvement Bonds. Debt service is financed with special assessments levied against property owners within the respective improvement districts.

COP 1999 & COP 2004 Consolidation (2014) - This fund is used to accumulate funds for the payment of principal and interest on the 2014 Lease Purchase/Agreement that was issued on January 29, 2014 to refinance the portion of the 1999 Certificates of Participation that were used to finance the construction of the City Animal Shelter. Debt service for the Animal Shelter is used to finance the City’s General Fund. 2018 Lease-PS Building Police - This fund is used to accumulate monies for the designing, permitting, constructing and equipping the new public safety building, including ancillary parking and related facilities, located at 312 E Alisal Street in Salinas. Salinas Public Safety Facilities Inc. (SPF) issued lease revenue bonds to finance the construction of the new building. Lease payments are made from the City’s Measure G Funds.

COP 2018B T.R.I.P. Total Road Improvement - This fund is used to accumulate monies for the principal and interest payments for the Transportation Revenue COP Certificates issued to finance large scale street improvement projects.

COPs will be secured by Measure X Revenues the City receives from the Transportation Agency of Monterey County (TAMC).
2018 Lease-El Gabilan Library - This fund is used to accumulate monies for the designing, permitting, constructing and equipping the El Gabilan Library expansion, including ancillary parking, located at 1400 N Main Street in Salinas.

Salinas Public Safety Facilities, Inc. (SPF) issued lease revenue bonds to facilitate the construction of the El Gabilan Library. Lease payments are made from the City’s Measure E Funds. 2020A Refunding Energy - This fund is used to account for the refunding of the 2014 Energy Improvement Lease and accumulate monies for the payment of principal and interest. 2020A Refunding SVSWA - for the refunding of the outstanding portion of the Certificates of Participation Series 2015B (1997 Capital Improvement Projects) and accumulate monies for the payment of principal and interest.

Assessment District Administration - This fund accounts for the cost of administering the City’s assessment district bonds used to finance improvements within those districts. Funding is provided by an assessment equal to 5% of the assessment amount with a maximum $16 levy per parcel per bond.

Assessment District Reserve - This fund accounts for the reserves on outstanding assessment districts bonds. 2024 Energy Efficiency - This fund is used to account for the 2024 Energy Efficiency solar project at the Salinas Public Safety Building and accumulate monies for the payment of principal and interest.

Nonmajor Governmental Funds
199
COP 1999 & 2018 COP 2018B 2018
Assessment 2004 Lease-PS T.R.I.P. Lease
District Consolidation Building Total Road El Gabilan
Debt Service (2014) Police Improvement Library
ASSETS
Cash and investments -$ -$ -$ -$ -$ Receivables, net:

Interest - - - - - Assessments 45,000 - - - - Restricted cash and investments 143,413 - - 2,490,996 - Total assets 188,413$ -$ -$ 2,490,996$ -$

LIABILITIES AND FUND BALANCES
Liabilities:

Due to other funds 853,382 - - 163,402 - Unearned revenues 45,000 - - - - Total liabilities 898,382 - - 163,402 -

Fund Balances:

Restricted - - - 2,327,594 - Unassigned (deficit) (709,969) - - - - Total fund balances (709,969) - - 2,327,594 - Total liabilities and fund balances 188,413$ -$ -$ 2,490,996$ -$ (Continued)
City of Salinas
Combining Balance Sheet
Nonmajor Debt Service Funds
June 30, 2025
200
2020A 2020A Assessment Assessment
Refunding Refunding District District
Energy SVSWA Administration Reserve
ASSETS
Cash and investments -$ -$ -$ 2,042,663$ Receivables, net:

Interest - - - 6,409 Assessments - - - - Restricted cash and investments - - - - Total assets -$ -$ -$ 2,049,072$

LIABILITIES AND FUND BALANCES
Liabilities:

Due to other funds - - 2,178 - Unearned revenues - - - - Total liabilities - - 2,178 -

Fund Balances:

Restricted - - - 2,049,072 Unassigned (deficit) - - (2,178) - Total fund balances - - (2,178) 2,049,072 Total liabilities and fund balances -$ -$ -$ 2,049,072$ City of Salinas
Combining Balance Sheet (Continued)
Nonmajor Debt Service Funds
June 30, 2025
201
2024
Energy
Efficiency Total
ASSETS
Cash and investments -$ 2,042,663$ Receivables, net:

Interest - 6,409
Assessments - 45,000
Restricted cash and investments 3,703,901 6,338,310 Total assets 3,703,901$ 8,432,382 $

LIABILITIES AND FUND BALANCES
Liabilities:

Due to other funds - 1,018,962
Unearned revenues - 45,000
Total liabilities - 1,063,962

Fund Balances:

Restricted 3,703,901 8,080,567
Unassigned (deficit) - (712,147) Total fund balances 3,703,901 7,368,420
Total liabilities and fund balances 3,703,901$ 8,432,382 $ (Concluded)
City of Salinas
Combining Balance Sheet (Continued)
Nonmajor Debt Service Funds
June 30, 2025
202
COP 1999 & 2018 COP 2018B 2018
Assessment 2004 Lease-PS T.R.I.P. Lease
District Consolidation Building Total Road El Gabilan
Debt Service (2014) Police Improvement Library
REVENUES:

Investment income 7,558$ -$ -$ 261,493$ -$ Total revenues 7,558 - - 261,493 -

EXPENDITURES:

Current:

General government - - - - - Debt service:

Principal 45,000 179,000 3,210,000 850,000 240,000 Interest and fiscal charges 6,173 49,064 1,262,169 1,486,275 539,719 Bond issuance costs - - - - - Total expenditures 51,173 228,064 4,472,169 2,336,275 779,719

REVENUES OVER (UNDER) EXPENDITURES (43,615) (228,064) (4,472,169) (2,074,782) (779,719) OTHER FINANCING SOURCES (USES):

Proceeds from issuance of leases - - - - - Transfers in - 228,064 4,457,230 4,287,533 777,515 Total other financing sources (uses) - 228,064 4,457,230 4,287,533 777,515 NET CHANGE IN FUND BALANCES (43,615) - (14,939) 2,212,751 (2,204) FUND BALANCES (DEFICIT):

Beginning of year (666,354) - 14,939 114,843 2,204 End of year (709,969)$ -$ -$ 2,327,594$ -$ (Continued)
For the Year Ended June 30, 2025
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance Nonmajor Debt Service Funds
203
2020A 2020A Assessment Assessment
Refunding Refunding District District
Energy SVSWA Administration Reserve
REVENUES:

Investment income - $ - $ - $ 99,890$ Total revenues - - - 99,890

EXPENDITURES:

Current:

General government - - - - Debt service:

Principal 1,080,000 585,000 - - Interest and fiscal charges 511,295 78,580 - - Bond issuance costs - - - - Total expenditures 1,591,295 663,580 - -

REVENUES OVER (UNDER) EXPENDITURES (1,591,295) (663,580) - 99,890 OTHER FINANCING SOURCES (USES):

Proceeds from issuance of leases - - - - Transfers in 1,591,295 663,330 - - Total other financing sources (uses) 1,591,295 663,330 - - NET CHANGE IN FUND BALANCES - (250) - 99,890 FUND BALANCES (DEFICIT):

Beginning of year - 250 (2,178) 1,949,182 End of year - $ - $ (2,178)$ 2,049,072 $ (Continued)
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance (Continued) Nonmajor Debt Service Funds
For the Year Ended June 30, 2025
204
2024
Energy
Efficiency Total
REVENUES:

Investment income 78,053$ 446,994 $
Total revenues 78,053 446,994

EXPENDITURES:

Current:

General government 954,805 954,805
Debt service:

Principal - 6,189,000
Interest and fiscal charges 90,663 4,023,938 Bond issuance costs 63,684 63,684
Total expenditures 1,109,152 11,231,427

REVENUES OVER (UNDER) EXPENDITURES (1,031,099) (10,784,433) OTHER FINANCING SOURCES (USES):

Proceeds from issuance of leases 4,735,000 4,735,000 Transfers in - 12,004,967
Total other financing sources (uses) 4,735,000 16,739,967 NET CHANGE IN FUND BALANCES 3,703,901 5,955,534
FUND BALANCES (DEFICIT):

Beginning of year - 1,412,886
End of year 3,703,901$ 7,368,420$
(Concluded)
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balance (Continued) Nonmajor Debt Service Funds
For the Year Ended June 30, 2025
205
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Taxes - special assessments 50,000 $ 50,000 $ - $ (50,000)$ Investment income (loss) 4,400 4,400 7,558 3,158 Total revenues 54,400 54,400 7,558 (46,842) EXPENDITURES:

Debt Service:

Principal 45,000 45,000 45,000 45,000 Interest and fiscal charges 6,900 6,900 6,173 727 Total expenditures 51,900 51,900 51,173 45,727 Net change in fund balance 2,500$ 2,500 $ (43,615) (46,115) $ FUND BALANCE (DEFICIT):

Beginning of year (666,354)
End of year (709,969)$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Assessment District
Debt Service Fund
For the Year Ended June 30, 2025
206
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
EXPENDITURES:

Debt Service:

Principal 179,000$ 179,000 $ 179,000 $ 179,000 $ Interest and fiscal charges 49,100 49,100 49,064 36 Total expenditures 228,100 228,100 228,064 179,036 REVENUES OVER (UNDER) EXPENDITURES (228,100) (228,100) (228,064) (179,036) OTHER FINANCING SOURCES (USES):

Transfers in 228,100 228,100 228,064 (36) Total other financing sources (uses) 228,100 228,100 228,064 (36) Net change in fund balance -$ - $ - - $ FUND BALANCE:

Beginning of year -
End of year -$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - COP 1999 & 2004 Consolidation (2014) Debt Service Fund
For the Year Ended June 30, 2025
207
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 8,700 $ 8,700 $ - $ (8,700)$ Total revenues 8,700 8,700 - (8,700) EXPENDITURES:

Debt Service:

Principal 3,210,000 3,210,000 3,210,000 3,210,000 Interest and fiscal charges 1,263,200 1,263,200 1,262,169 1,031 Total expenditures 4,473,200 4,473,200 4,472,169 3,211,031 REVENUES OVER (UNDER) EXPENDITURES (4,464,500) (4,464,500) (4,472,169) (3,219,731) OTHER FINANCING SOURCES (USES):

Transfers in 5,543,900 5,543,900 4,457,230 (1,086,670) Total other financing sources (uses) 5,543,900 5,543,900 4,457,230 (1,086,670) Net change in fund balance 1,079,400$ 1,079,400 $ (14,939) (1,094,339) $ FUND BALANCE:

Beginning of year 14,939
End of year -$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2018 Lease-PS Building Police Debt Service Fund
For the Year Ended June 30, 2025
208
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 376,300 $ 376,300 $ 261,493 $ (114,807) $ Total revenues 376,300 376,300 261,493 (114,807) EXPENDITURES:

Debt Service:

Principal 850,000 850,000 850,000 850,000 Interest and fiscal charges 1,489,100 1,489,100 1,486,275 2,825 Total expenditures 2,339,100 2,339,100 2,336,275 852,825 REVENUES OVER (UNDER) EXPENDITURES (1,962,800) (1,962,800) (2,074,782) (967,632) OTHER FINANCING SOURCES (USES):

Transfers in 2,339,100 2,339,100 4,287,533 1,948,433 Total other financing sources (uses) 2,339,100 2,339,100 4,287,533 1,948,433 Net change in fund balance 376,300$ 376,300 $ 2,212,751 1,836,451 $ FUND BALANCE:

Beginning of year 114,843
End of year 2,327,594$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2018B T.R.I.P. Total Road Improvement Debt Service Fund
For the Year Ended June 30, 2025
209
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) 1,600 $ 1,600 $ - $ (1,600)$ Total revenues 1,600 1,600 - (1,600) EXPENDITURES:

Debt Service:

Principal 240,000 240,000 240,000 240,000 Interest and fiscal charges 544,200 544,200 539,719 4,481 Total expenditures 784,200 784,200 779,719 244,481 REVENUES OVER (UNDER) EXPENDITURES (782,600) (782,600) (779,719) (246,081) OTHER FINANCING SOURCES (USES):

Transfers in 1,175,100 1,175,100 777,515 (397,585) Total other financing sources (uses) 1,175,100 1,175,100 777,515 (397,585) Net change in fund balance 392,500$ 392,500 $ (2,204) (394,704) $ FUND BALANCE:

Beginning of year 2,204
End of year -$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2018 Lease El Gabilan Library Debt Service Fund
For the Year Ended June 30, 2025
210
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
EXPENDITURES:

Debt Service:

Principal 1,080,000$ 1,080,000 $ 1,080,000 $ 1,080,000 $ Interest and fiscal charges 512,300 512,300 511,295 1,005 Total expenditures 1,592,300 1,592,300 1,591,295 1,081,005 REVENUES OVER (UNDER) EXPENDITURES (1,592,300) (1,592,300) (1,591,295) (1,081,005) OTHER FINANCING SOURCES (USES):

Transfers in 1,592,600 1,592,600 1,591,295 (1,305) Total other financing sources (uses) 1,592,600 1,592,600 1,591,295 (1,305) Net change in fund balance 300$ 300 $ - (300) $ FUND BALANCE:

Beginning of year -
End of year -$
Bud
geted Amounts
City of Salinas
Required Supplementary Information (Unaudited)
Budgetary Comparison Schedule - 2020A Refunding Energy
Debt Service Fund
For the Year Ended June 30, 2025
211
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
EXPENDITURES:

Debt Service:

Principal 585,000$ 585,000 $ 585,000 $ 585,000 $ Interest and fiscal charges 80,300 80,300 78,580 1,720 Total expenditures 665,300 665,300 663,580 586,720 REVENUES OVER (UNDER) EXPENDITURES (665,300) (665,300) (663,580) (586,720) OTHER FINANCING SOURCES (USES):

Transfers in 665,300 665,300 663,330 (1,970) Total other financing sources (uses) 665,300 665,300 663,330 (1,970) Net change in fund balance -$ - $ (250) (250) $ FUND BALANCE:

Beginning of year 250
End of year -$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2020A Refunding SVSWA
Debt Service Fund
For the Year Ended June 30, 2025
212
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
Net change in fund balance -$ - $ - $ - $ FUND BALANCE (DEFICIT):

Beginning of year (2,178)
End of year (2,178)$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Assessment District Administration Debt Service Fund
For the Year Ended June 30, 2025
213
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income 34,100 $ 34,100 $ 99,890 $ 65,790 $ Total revenues 34,100 34,100 99,890 65,790 Net change in fund balance 34,100$ 34,100 $ 99,890 65,790 $ FUND BALANCE:

Beginning of year 1,949,182
End of year 2,049,072$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Assessment District Reserve Debt Service Fund
For the Year Ended June 30, 2025
214
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) - $ - $ 78,053$ 78,053 $ Total revenues - - 78,053 78,053 EXPENDITURES:

Current:

General government - - 954,805 (954,805) Debt Service:

Interest and fiscal charges - - 90,663 (90,663) Bond issuance costs - - 63,684 (63,684) Total expenditures - - 1,109,152 (1,109,152) REVENUES OVER (UNDER) EXPENDITURES - - (1,031,099) 1,187,205 OTHER FINANCING SOURCES (USES):

Proceeds from issuance of long-term debt - - 4,735,000 4,735,000 Total other financing sources (uses) - - 4,735,000 4,735,000 Net change in fund balance -$ - $ 3,703,901 3,703,901 $ FUND BALANCE:

Beginning of year -
End of year 3,703,901$
Bud
geted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2024 Energy Efficiency
Debt Service Fund
For the Year Ended June 30, 2025
215
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216
Capital Projects Funds
Capital Projects Funds are used to account for major capital acquisition and construction activities. The nonmajor Capital Projects Funds used by the City in this report are as follows:

Special Construction Assistance Capital Projects - This fund accounts for proceeds of long-term borrowings resulting from the sale of Certificates of Participation to finance the acquisition and construction of capital projects.

Special Aviation - This fund accounts for federal and state airport grants. Funds are used to reimburse the Capital Projects Fund for airport capital expenditures.

Assessment District Projects - This fund accounts for bond proceeds from assessment districts used for capital improvements. Funds are used to reimburse the Capital Projects Fund for assessment district capital project expenditures.
2019 Special Tax Bond Monte Bella - This fund accounts for bond proceeds from assessments from the Monte Bella District for Capital Improvements. Funds are used to reimburse the Capital Projects Fund for Monte Bella District Capital Project Expenditures.

Nonmajor Governmental Funds
217
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218
Special Assessment 2019 Special
Construction Special District Tax Bond
Assistance Aviation Project Monte Bella Total
ASSETS
Cash and investments 5,413,662 $ 853,212 $ 461,149 $ 17,092 $ 6,745,115 $ Receivables, net:

Accounts 582,758 - - - 582,758 Interest 415,985 2,530 1,518 84 420,117 Due from other agencies 1,049,218 50,116 - - 1,099,334 Assessments - - - - - Leases 3,307,506 - - - 3,307,506 Restricted cash and investments - - - 13,287 13,287 Total assets 10,769,129$ 905,858 $ 462,667 $ 30,463 $ 12,168,117$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Due to other funds 5,605,329 $ 7,777 $ - $ - $ 5,613,106$ Total liabilities 5,605,329 7,777 - - 5,613,106

DEFERRED INFLOWS OF RESOURCES
Related to leases 2,967,094 - - - 2,967,094 Total deferred inflows of resources 2,967,094 - - - 2,967,094

Fund Balances:

Restricted 2,196,706 898,081 462,667 30,463 3,587,917 Total fund balances 2,196,706 898,081 462,667 30,463 3,587,917 Total liabilities, deferred inflows of
resources, and fund balances 10,769,129$ 905,858$ 462,667$ 30,463$ 12,168,117$

June 30, 2025
City of Salinas
Combining Balance Sheet
Nonmajor Capital Projects Funds
219
Special Assessment 2019 Special
Construction Special District Tax Bond
Assistance Aviation Project Monte Bella Total
REVENUES:

Intergovernmental 6,649,188$ 715,781$ -$ -$ 7,364,969$ Charges for services 33,675 - - - 33,675 Investment income (loss) 232,147 39,386 22,290 1,760 295,583 Total revenues 6,915,010 755,167 22,290 1,760 7,694,227

EXPENDITURES:

Current:

Public works - 188 - - 188 Total expenditures - 188 - - 188

REVENUES OVER (UNDER) EXPENDITURES 6,915,010 754,979 22,290 1,760 7,694,039 OTHER FINANCING SOURCES (USES):

Transfers out (6,439,355) (41,215) - - (6,480,570) Total other financing sources (uses) (6,439,355) (41,215) - - (6,480,570) NET CHANGE IN FUND BALANCES 475,655 713,764 22,290 1,760 1,213,469 FUND BALANCES:

Beginning of year 1,721,051 184,317 440,377 28,703 2,374,448 End of year 2,196,706$ 898,081$ 462,667$ 30,463$ 3,587,917$ For the Year Ended June 30, 2025
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Capital Projects Funds
220
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental 100,000$ 350,000$ 6,649,188$ 6,299,188$ Charges for services - - 33,675 33,675 Investment income (loss) - - 232,147 232,147 Total revenues 100,000 350,000 6,915,010 6,565,010 REVENUES OVER (UNDER) EXPENDITURES 100,000 350,000 6,915,010 6,565,010 OTHER FINANCING SOURCES (USES):

Transfers out - (35,037,052) (6,439,355) 28,597,697 Total other financing sources (uses) - (35,037,052) (6,439,355) 28,597,697 Net change in fund balance 100,000$ (34,687,052)$ 475,655 35,162,707$ FUND BALANCE:

Beginning of year 1,721,051
End of year 2,196,706$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Special Construction Assistance Capital Projects Fund
For the Year Ended June 30, 2025
221
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Intergovernmental -$ -$ 715,781$ 715,781$ Investment income (loss) 14,900 14,900 39,386 24,486 Total revenues 14,900 14,900 755,167 740,267 EXPENDITURES:

Current:

Public works - - 188 - Total expenditures - - 188 - REVENUES OVER (UNDER) EXPENDITURES 14,900 14,900 754,979 740,267 OTHER FINANCING SOURCES (USES):

Transfers out - 199,388 (41,215) (240,603) Total other financing sources (uses) - 199,388 (41,215) (240,603) Net change in fund balance 14,900$ 214,288$ 713,764 499,476$ FUND BALANCE:

Beginning of year 184,317
End of year 898,081$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Special Aviation
Capital Projects Fund
For the Year Ended June 30, 2025
222
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) -$ -$ 22,290$ 22,290$ Total revenues - - 22,290 22,290 Net change in fund balance -$ -$ 22,290 22,290$ FUND BALANCE:

Beginning of year 440,377
End of year 462,667$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - Assessment District Project Capital Projects Fund
For the Year Ended June 30, 2025
223
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Investment income (loss) -$ -$ 1,760$ 1,760$ Total revenues - - 1,760 1,760 Net change in fund balance -$ -$ 1,760 1,760$ FUND BALANCE:

Beginning of year 28,703
End of year 30,463$
Budgeted Amounts
City of Salinas
Supplementary Information
Budgetary Comparison Schedule - 2019 Special Tax Bond Monte Bella Capital Projects Fund
For the Year Ended June 30, 2025
224
Internal Service Funds
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.

Risk Management - This fund is used to account for the City’s risk management program which administers employee benefits and the Internal Service Funds insurance programs.

General Insurance - This fund is used to account for city-wide safety programs, employee assistance programs, unemployment claims, biennial physical exams, and insurance for property, fine arts, and reimbursable damages.

Workers Compensation - This fund is used to account for the City’s self-insured workers compensation program.

General Liability - This fund is used to account for the City’s self-insured general liability insurance program.

Fleet Maintenance - This fund is used to account for the inspection, maintenance, and repair of all the City’s vehicles and equipment.
225
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226
Risk General Workers General Fleet
Management Insurance Compensation Liability Maintenance Total ASSETS
Current assets:

Cash and cash equivalents 194,440 $ - $ 7,090,560$ 3,144,515 $ 255,884 $ 10,685,399$ Due from other funds - - 16,831,462 - - 16,831,462 Accrued interest - - 24,541 4,470 - 29,011 Total current assets 194,440 - 23,946,563 3,148,985 255,884 27,545,872 Noncurrent assets:

Restricted cash and investments - - 278,435 235,625 - 514,060 Total noncurrent assets - - 278,435 235,625 - 514,060 Total assets 194,440 - 24,224,998 3,384,610 255,884 28,059,932

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions - - 90,721 - 302,410 393,131 Related to OPEB - - 10,823 12,787 44,889 68,499 Total deferred outflows of resources - - 101,544 12,787 347,299 461,630

LIABILITIES
Current liabilities:

Accounts payable - 28,753 18,596 55,036 56,377 158,762 Accrued liabilities - - 19,161 10,424 80,375 109,960 Due to other funds - 303,832 - - - 303,832 Insurance claims payable - due within one year - - 7,103,000 2,807,671 - 9,910,671
Compensated absences - due within one year - - 8,998 3,791 29,828 42,617 Total current liabilities - 332,585 7,149,755 2,876,922 166,580 10,525,842 Noncurrent liabilities:

Insurance claims payable - due in more than one year - - 32,240,333 1,162,332 - 33,402,665 Compensated absences - due in more than one year - - 35,991 15,167 119,312 170,470 Net pension liability - - 335,627 - 1,118,756 1,454,383 Net OPEB liability - - 43,633 51,555 180,978 276,166 Total noncurrent liabilities - - 32,655,584 1,229,054 1,419,046 35,303,684 Total liabilities - 332,585 39,805,339 4,105,976 1,585,626 45,829,526

DEFERRED INFLOWS OF RESOURCES
Related to pensions - - 5,085 - 16,952 22,037 Related to OPEB - - 35,087 41,457 145,530 222,074 Total deferred inflows of resources - - 40,172 41,457 162,482 244,111

NET POSITION
Unrestricted (deficit) 194,440 (332,585) (15,518,969) (750,036) (1,144,925) (17,552,075) Total net position (deficit) 194,440 $ (332,585)$ (15,518,969)$ (750,036) $ (1,144,925)$ (17,552,075) $ June 30, 2025
All Internal Service Funds
Combining Statement of Net Position
City of Salinas
227
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228
Risk General Workers General Fleet
Management Insurance Compensation Liability Maintenance Total OPERATING REVENUES:

Charges for services 220 $ 85,541 $ 7,067,969$ 383,411$ - $ 7,537,141$ Total operating revenues 220 85,541 7,067,969 383,411 - 7,537,141 OPERATING EXPENSES:

Personnel services - - 610,607 365,100 1,556,358 2,532,065 Contractual services - 87,116 - - 150,699 237,815 Supplies - - - - 849,878 849,878 Insurance - 1,822,554 693,103 3,913,863 - 6,429,520 Insurance claims - - 12,287,921 412,574 - 12,700,495 Other - 151,972 - - 17,373 169,345 Total operating expenses - 2,061,642 13,591,631 4,691,537 2,574,308 22,919,118 OPERATING INCOME (LOSS) 220 (1,976,101) (6,523,662) (4,308,126) (2,574,308) (15,381,977) NONOPERATING REVENUES (EXPENSES):

Investment income - - 373,423 20,515 - 393,938 Other non-operating revenue (expense) - (395) (252,888) - (23,006) (276,289) Total nonoperating revenues (expenses) - (395) 120,535 20,515 (23,006) 117,649 INCOME (LOSS) BEFORE TRANSFERS 220 (1,976,496) (6,403,127) (4,287,611) (2,597,314) (15,264,328) TRANSFERS:

Transfers in -
1,450,000 - 6,650,000 2,000,000 10,100,000 Transfers out - - (650,000) - - (650,000) Total transfers - 1,450,000 (650,000) 6,650,000 2,000,000 9,450,000 Changes in net position 220 (526,496) (7,053,127) 2,362,389 (597,314) (5,814,328) NET POSITION (DEFICIT):

Beginning of year 194,220 193,911 (8,465,842) (3,112,425) (547,611) (11,737,747) End of year 194,440 $ (332,585)$ (15,518,969)$ (750,036) $ (1,144,925)$ (17,552,075) $ For the Year Ended June 30, 2025
All Internal Service Funds
Combining Statement of Revenues, Expenses, and Changes in Net Position City of Salinas
229
Risk General Workers General Fleet
Management Insurance Compensation Liability Maintenance Total CASH FLOWS FROM OPERATING ACTIVITIES:

Receipts from customers 220 $ 85,541 $ 7,067,969$ 383,411 $ - $ 7,537,141$ Payments to suppliers for goods and services - (1,897,048) (16,087) (206,802) (1,086,924) (3,206,861) Payments to employees for services - - (596,326) (354,615) (1,600,036) (2,550,977) Payments to claimants - - (5,866,616) (4,105,142) - (9,971,758) Other - (151,972) - - (17,373) (169,345) Net cash provided by (used in)
operating activities 220 (1,963,479) 588,940 (4,283,148) (2,704,333) (8,361,800)

CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES:

Other expenses - (395) (252,888) - (23,006) (276,289) Transfers from other funds - 1,450,000 - 6,650,000 2,000,000 10,100,000 Transfers to other funds - -
(650,000) - - (650,000) Net cash provided by (used in) noncapital
financing activities - 1,753,437 (902,888) 6,650,000 1,976,994 9,477,543 CASH FLOWS FROM INVESTING ACTIVITIES:

Investment income - - 376,431 16,045 - 392,476 Net cash provided by investing activities - - 376,431 16,045 - 392,476 Net change in cash and cash equivalents 220 (210,042) 62,483 2,382,897 (727,339) 1,508,219 CASH AND CASH EQUIVALENTS:

Beginning of year 194,220 210,042 7,306,512 997,243 983,223 9,691,240 End of year 194,440 $ - $ 7,368,995$ 3,380,140 $ 255,884 $ 11,199,459$

RECONCILIATION OF CASH AND

CASH EQUIVALENTS TO
STATEMENT OF NET POSITION:

Cash and cash investments 194,440 $ - $ 7,090,560$ 3,144,515 $ 255,884 $ 10,685,399$ Total cash and cash equivalents 194,440 $ - $ 7,368,995$ 3,380,140 $ 255,884 $ 11,199,459$ City of Salinas
For the Year Ended June 30, 2025
All Internal Service Funds
Combining Statement of Cash Flows
230
Risk General Workers General Fleet
Management Insurance Compensation Liability Maintenance Total

RECONCILIATION OF OPERATING

INCOME (LOSS) TO NET CASH (USED IN)
OPERATING ACTIVITIES:

Operating income (loss) 220 $ (1,976,101) $ (6,523,662) $ (4,308,126) $ (2,574,308) $ (15,381,977) $ Adjustments to reconcile operating (loss) to net
cash provided by (used in) operating activities:

Changes in operating assets and liabilities, and
deferred outflows and inflows of resources:

Deferred outflows - related to pensions - - 47,274 - 203,764 251,038 Deferred outflows - related to OPEB - - 2,369 2,799 9,826 14,994 Accounts payable - 12,622 (16,087) (206,802) (86,347) (296,614) Accrued liabilities - - 19,161 10,424 80,375 109,960 Insurance claims payable - - 7,114,408 221,295 - 7,335,703 Compensated absences - - 11,578 4,274 21,712 37,564 Net pension liability - - (55,626) - (316,386) (372,012) Net OPEB liability - - 1,519 1,796 6,302 9,617 Deferred inflows - related to pensions - - (4,539) - (18,351) (22,890) Deferred inflows - related to OPEB - - (7,455) (8,808) (30,920) (47,183) Total adjustments - 12,622 7,112,602 24,978 (130,025) 7,020,177 Net cash provided by (used in)
operating activities 220 $ (1,963,479)$ 588,940 $ (4,283,148)$ (2,704,333) $ (8,361,800) $ For the Year Ended June 30, 2025
All Internal Service Funds
Combining Statement of Cash Flows (Continued)
City of Salinas
231
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232

PRIVATE PURPOSE TRUST FUNDS
The private-purpose trust funds accounts for assets and activities of the dissolved Redevelopment Agency, which is accounted for in the Successor Agency Trust, and other trust arrangement not otherwise reported in a pension trust.

Successor Agency Redevelopment Obligation Retirement – This fund accounts for all the financial activities of the Redevelopment Obligation Retirement Fund (RORF) related to the former Redevelopment Project Area in accordance with AB 1x26 and AB 1484 which unwind the Redevelopment Agency of the City of Salinas.

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

Other Private Purpose Trust Funds – These funds are used to account for other trust arrangements not properly reported in a pension trust fund under which principal and income benefit individuals, private organizations, or other governments. The City accounts 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, Monterey County Tourism Improvement District, Leadership Salinas, and miscellaneous.

Fiduciary Funds
233
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234
Redevelopment Total Other Total
Obligation Successor Agency Private Purpose Private Purpose Retirement Fund Administration Trust Trust Fund Trust Funds ASSETS
Cash and investments 2,340,179$ 34,018$ 2,374,197$ 1,310,130$ 3,684,327$ Receivables:

Accounts - - - 7,618 7,618 Interest 6,662 - 6,662 1,096 7,758 Loans and notes 163,900 - 163,900 - 163,900 Total assets 2,510,741 34,018 2,544,759 1,318,844 3,863,603

LIABILITIES
Accounts payable - 66 66 191,758 191,824 Deposits payable - - - 169,744 169,744 Unearned revenue 817,554 10,000 827,554 - 827,554 Long-term debt:

Due in more than one year 157,500 - 157,500 - 157,500 Total liabilities 975,054 10,066 985,120 361,502 1,346,622

NET POSITION
Restricted for individuals and organizations 1,535,687 23,952 1,559,639 957,342 2,516,981 Total net position 1,535,687$ 23,952$ 1,559,639$ 957,342$ 2,516,981$ Combining Statement of Fiduciary Net Position
Successor Agency Trust
City of Salinas
Private Purpose Trust Funds
June 30, 2025
235
Redevelopment Total Other Total
Obligation Successor Agency Private Purpose Private Purpose Retirement Fund Administration Trust Trust Fund Trust Funds ADDITIONS:

Taxes 4,246,550$ 10,000$ 4,256,550$ -$ 4,256,550$ Private contributions - - - 6,306,404 6,306,404 Interest 90,738 - 90,738 18,445 109,183 Miscellaneous - - - 449,032 449,032 Total additions 4,337,288 10,000 4,347,288 6,773,881 11,121,169 DEDUCTIONS:

Expenses 107,621 1,159 108,780 130,790 239,570 Payments on behalf of trustees - 4,309 4,309 6,106,395 6,110,704 Contributions to other agencies 3,192,836 - 3,192,836 - 3,192,836 Payments to City 946,093 - 946,093 - 946,093 Total deductions 4,246,550 5,468 4,252,018 6,237,185 10,489,203 Change in net position 90,738 4,532 95,270 536,696 631,966 NET POSITION:

Beginning of year 1,444,949 19,420 1,464,369 420,646 1,885,015 End of year 1,535,687$ 23,952$ 1,559,639$ 957,342$ 2,516,981$ City of Salinas
Combining Statement of Changes in Fiduciary Net Position Successor Agency Trust
Private Purpose Trust Funds
For the Year Ended June 30, 2025
236
Custodial Funds
Custodial Funds are used to account for assets held by the City as an agent for individuals, private organizations, other governments and/or other funds. Agency Funds operate as a clearing mechanism. Cash resources are collected, held for a brief period and then distributed to the proper recipients. The City has a fiduciary responsibility for the assets, which it does not own outright.

Flexible Spending - This fund is used to account for revenues resulting of employee concessions contributions used to reduce the cost of medical, vision and dental health insurance premiums.

Downtown Community Benefit District - This fund accounts for the property assessment generated revenues imposed on the Downtown Community Benefit District. The concept is that eventually the Downtown Community Benefit District will grow and receive revenues from multiple sources within a defined boundary that can among other things, including entrepreneurial activities, special mandate, are not be excluded, and no exemptions for not-for-profit entities are being considered. It can be governed by a 501(c)3 non-profit corporation, merging the existing energies in Downtown into just one organization, rather than the 501(c)6 BID and the OSA Foundation. It can receive grants and donations, and merge these with more assessments that are powerful.

Fiduciary Funds
237
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238
Downtown Total
Flexible Community Custodial
Spending Benefit District Funds
ASSETS
Cash and investments 77,986$ 3,890$ 81,876$ Total assets 77,986 3,890 81,876

LIABILITIES
Accounts payable 169,087 3,890 172,977 Total liabilities 169,087 3,890 172,977

NET POSITION (DEFICIT)
Restricted for individuals and organizations (91,101) - (91,101) Total net position (deficit) (91,101)$ -$ (91,101)$ Combining Statement of Fiduciary Net Position
City of Salinas
Custodial Funds
June 30, 2025
239
Downtown Total
Flexible Community Custodial
Spending Benefit District Funds
ADDITIONS:

Taxes -$ 505,983$ 505,983 $ Plan member contributions 365,659 - 365,659 Total additions 365,659 505,983 871,642 DEDUCTIONS:

Expenses 352,368 - 352,368 Benefit payments 136,722 - 136,722 Assessments disbursed to other governments - 505,983 505,983 Total deductions 489,090 505,983 995,073 Change in net position (123,431) - (123,431) NET POSITION (DEFICIT):

Beginning of year 32,330 - 32,330 End of year (91,101)$ - $ (91,101)$ City of Salinas
Combining Statement of Changes of Fiduciary Net Position Custodial Funds
For the Year Ended June 30, 2025
240
General Measure E Measure G
Fund Fund Fund Total
ASSETS
Cash and investments 41,278,214$ 23,730,631$ 25,211,234$ 90,220,079$ Receivables, net:

Accounts 917,236 - - 917,236 Taxes 10,127,718 3,499,433 7,035,175 20,662,326 Interest 296,775 74,550 80,284 451,609 Due from other agencies 98,864 - - 98,864 Leases 1,052,262 - - 1,052,262 Due from other funds 11,784,054 - - 11,784,054 Advances to other funds 2,785,000 - - 2,785,000 Total assets 68,340,123$ 27,304,614$ 32,326,693$ 127,971,430$

LIABILITIES, DEFERRED INFLOWS OF

RESOURCES, AND FUND BALANCES
Liabilities:

Accounts payable 2,473,046$ 231,382$ 625,829$ 3,330,257$ Accrued liabilities 4,129,409 457,226 773,794 5,360,429 Due to other funds 17,235,353 313,154 975,077 18,523,584 Deposits payable 52,802 - - 52,802 Total liabilities 23,890,610 1,001,762 2,374,700 27,267,072

DEFERRED INFLOWS OF RESOURCES
Related to leases 995,273 - - 995,273 Total deferred inflows of resources 995,273 - - 995,273

Fund Balances (deficit):

Nonspendable 2,785,000 - - 2,785,000 Restricted 6,000,000 1,320,000 2,680,000 10,000,000 Committed 21,362,658 3,713,235
13,166,286 38,242,179
Assigned 8,134,367 7,702,794 8,987,839 24,825,000 Unassigned (deficit) 5,172,215 13,566,823 5,117,868 23,856,906 Total fund balances (deficit) 43,454,240 26,302,852 29,951,993 99,709,085 Total liabilities, deferred inflows of
resources, and fund balances 68,340,123$ 27,304,614$ 32,326,693$ 127,971,430$ June 30, 2025
City of Salinas
Combining Balance Sheet
General, Measure E, & Measure G Funds
241
General Measure E Measure G Intrafund
Fund Fund Fund Eliminations Total
REVENUES:

Taxes 105,760,656 $ 17,960,622 $ 36,033,894 $ - $ 159,755,172$ Licenses and permits 10,919,325 - - - 10,919,325 Intergovernmental 1,428,928 - - - 1,428,928 Charges for services 9,305,281 - - - 9,305,281 Interest (loss) 3,102,038 1,088,861 1,279,159 - 5,470,058 Rental income 406,138 - - - 406,138 Fines and forfeitures 198,664 - - - 198,664 Miscellaneous 1,017,855 (123) 351 - 1,018,083 Total revenues 132,138,885 19,049,360 37,313,404 - 188,501,649

EXPENDITURES:

Current:

General government 27,329,978 2,736 2,836,272 - 30,168,986 Public safety 75,823,190 3,961,042 9,339,186 - 89,123,418 Public works 10,079,553 8,383 6,898,201 - 16,986,137 Recreation 791,896 2,569,713 5,496,409 - 8,858,018 Library - 6,095,902 - - 6,095,902 Capital outlay 254,055 - 152,635 - 406,690 Debt service:

Principal 1,148,865 - - - 1,148,865 Interest and fiscal charges 163,990 -
- - 163,990 Total expenditures 115,591,527 12,637,776 24,722,703 - 152,952,006

REVENUES OVER (UNDER) EXPENDITURES 16,547,358 6,411,584 12,590,701 - 35,549,643 OTHER FINANCING SOURCES (USES):

Proceeds from issuance of long-term debt 239,641 - - - 239,641 Transfers in 4,977,200 - - (2,512,200) 2,465,000 Transfers out (18,221,803) (2,391,593) (14,805,692) 2,512,200 (32,906,888) Total other financing sources (uses) (13,004,962) (2,391,593) (14,805,692) - (30,202,247) NET CHANGE IN FUND BALANCES 3,542,396 4,019,991 (2,214,991) - 5,347,396 FUND BALANCES:

Beginning of year 39,911,844 22,282,861 32,166,984 - 94,361,689 End of year 43,454,240$ 26,302,852$ 29,951,993$ -$ 99,709,085$ For the Year Ended June 30, 2025
City of Salinas
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances General, Measure E, & Measure G Funds
242
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Taxes 17,200,000 $ 17,200,000 $ 17,960,622 $ 760,622 $ Interest 300,000 300,000 1,088,861 788,861 Miscellaneous - - (123) (123) Total revenues 17,500,000 17,500,000 19,049,360 1,549,360 EXPENDITURES:

Current:

General government 59,000 59,000 2,736 56,264 Public safety 4,456,200 4,459,200 3,961,042 498,158 Public works - 9,772 8,383 1,389 Recreation 2,888,270 2,878,498 2,569,713 308,785 Library 6,136,900 6,136,901 6,095,902 40,999 Total expenditures 13,540,370 13,543,371 12,637,776 905,595 REVENUES OVER (UNDER) EXPENDITURES 3,959,630 3,956,629 6,411,584 (2,454,955) OTHER FINANCING SOURCES (USES):

Transfers out (2,169,700) (12,098,972) (2,391,593) (9,707,379) Total other financing sources (uses) (2,169,700) (12,098,972) (2,391,593) (9,707,379) Net change in fund balance 1,789,930$ (8,142,343) $ 4,019,991 12,162,334 $ FUND BALANCE:

Beginning of year 22,282,861
End of year 26,302,852$
City of Salinas
Budgetary Comparison Schedule
Measure E
For the Year Ended June 30, 2025
Budgeted Amounts
243
Variance with
Final Budget
Actual Favorable/
Original Final Amounts (Unfavorable)
REVENUES:

Taxes 34,400,000 $ 34,400,000 $ 36,033,894 $ 1,633,894 $ Interest 500,000 500,000 1,279,159 779,159 Total revenues 34,900,000 34,900,000 37,313,404 2,413,404 EXPENDITURES:

Current:

General government 2,965,170 3,777,670 2,836,272 941,398 Public safety 8,713,520 8,728,560 9,339,186 (610,626) Public works 7,038,678 7,264,252 6,898,201 366,051 Recreation 5,363,377 5,647,689 5,496,409 151,280 Capital outlay 122,825 136,998 152,635 136,998 Total expenditures 24,203,570 25,555,169 24,722,703 985,101 REVENUES OVER (UNDER) EXPENDITURES 10,696,430 9,344,831 12,590,701 (3,245,870) OTHER FINANCING SOURCES (USES):

Transfers out (10,256,200) (33,113,804) (14,805,692) (18,308,112) Total other financing sources (uses) (10,256,200) (33,113,804) (14,805,692) (18,308,112) Net change in fund balance 440,230$ (23,768,973)$ (2,214,991) 21,553,982$ FUND BALANCE:

Beginning of year 32,166,984
End of year 29,951,993$
City of Salinas
Budgetary Comparison Schedule
Measure G
For the Year Ended June 30, 2025
Budgeted Amounts
244

OTHER INFORMATION
245
2016 2017 2018 2019 2020
Net earned required contribution
and investment revenues 1,019,378$ 1,074,526$ 863,563$ 342,324$ 263,104$ Unallocated expenses 339,171 314,127 374,303 651,645 748,046 Estimated incurred claims and expenses,
end of policy year 534,565 36,271 7,532 892,986 4,006 Paid claims as of:

End of policy year 116,262 15,603 6,310 75,401 3,618 One year later 20,991 227,379 22,088 387,594 7,635 Two years later 64,153 846,232 285,818 2,660,599 312,080 Three years later 65,043 947,734 340,771 2,723,293 225,494 Four years later 66,412 1,019,825 1,072,628 895,990 308,901 Five years later 835,586 1,721,882 438,723 927,957 354,018 Six years later 588,263 90,970 525,270 927,957 Seven years later 563,125 90,970 525,675 Eight years later 563,125 90,970
Nine years later 563,125
Reestimated incurred claims and expenses:

End of policy year 234,565 36,271 7,532 892,986 4,006 One year later 194,433 357,416 796,619 1,583,466 42,411 Two years later 79,955 1,714,261 327,418 3,952,801 468,435 Three years later 94,678 949,419 666,518 3,936,716 51,124 Four years later 80,580 1,041,511 1,144,430 17,475 204,287 Five years later 835,586 1,721,882 8,760 2,434,585 204,287 Six years later 1,234,203
131,016 1,000,872 2,434,585
Seven years later 26,455 1,635,665 1,000,872 Eight years later 622,109 1,635,665
Nine years later 622,109
Increase/(decrease) in estimated incurred
claims and expenses 387,544 1,599,394 993,340 1,541,599 200,281 City of Salinas
Other Information (Unaudited)
Claims Development
Internal Service Funds - General Liability Insurance
Last Ten Fiscal Years
246
2021 2022 2023 2024 2025
Net earned required contribution
and investment revenues 276,393$ 1,228,577$ 273,301$ 265,624$ 403,927$ Unallocated expenses 1,090,415 1,860,605 2,140,090 2,890,348 2,537,406 Estimated incurred claims and expenses,
end of policy year 53,317 603,165 19,883 19,203 50,678 Paid claims as of:

End of policy year 2,999 233,121 120 50,111 81,911 One year later 33,435 47,068 337 877,899 Two years later 428,518 126,776 328,869 Three years later 513,811 340,302
Four years later 538,056
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Reestimated incurred claims and expenses:

End of policy year 53,317 603,165 19,883 19,203 50,678 One year later 778,790 66,288 38,767 51,986 Two years later 11,615 818,262 122,675 Three years later 707,865 1,143,262
Four years later 887,865
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Increase/(decrease) in estimated incurred
claims and expenses 834,548 540,097 102,793 32,783 - City of Salinas
Other Information (Unaudited)
Claims Development
Internal Service Funds - General Liability Insurance (Continued) Last Ten Fiscal Years
247
2016 2017 2018 2019 2020
Net earned required contribution
and investment revenues 13,748,053$ 4,743,276$ 4,922,253$ 6,079,547$ 10,151,619$ Unallocated expenses 471,472 334,542 1,056,134 210,341 436,618 Estimated incurred claims and expenses,
end of policy year 813,874 953,545 1,284,514 1,222,180 1,638,983 Paid claims as of:

End of policy year 333,561 357,390 346,475 722,652 567,497 One year later 1,061,264 1,070,983 1,177,834 1,580,493 1,844,018 Two years later 1,602,857 1,997,607 1,617,945 1,987,948 2,550,102 Three years later 1,895,742 2,329,308 1,937,327 2,763,247 2,996,808 Four years later 2,014,757 2,558,332 2,010,366 2,941,966 3,444,801 Five years later 2,044,352 270,304 2,133,667 3,077,553 3,641,213 Six years later 2,064,349 2,846,811 2,170,114 3,470,753 Seven years later 2,105,316 3,594,261 2,199,891 Eight years later 2,151,551 3,654,630
Nine years later 2,158,501
Reestimated incurred claims and expenses:

End of policy year 813,874 953,545 1,284,514 1,222,180 1,638,983 One year later 1,711,199 1,934,390 1,833,783 2,488,357 3,759,255 Two years later 2,433,616 2,924,696 2,290,339 3,269,045 4,558,744 Three years later 2,406,924 2,932,147 3,249,184 4,060,647 2,012,955 Four years later 2,505,621 3,111,763 3,195,733 1,061,645 1,801,516 Five years later 2,618,375 3,804,982 1,135,620 1,134,913 1,616,899 Six years later 2,636,313
1,104,685 1,088,259 1,016,053
Seven years later 576,053 319,687 1,073,138 Eight years later 727,812 321,398
Nine years later 318,619
Increase/(decrease) in estimated incurred
claims and expenses (495,255) (632,147) (211,376) (206,127) (22,084) City of Salinas
Other Information (Unaudited)
Claims Development
Internal Service Funds - Workers Compensation Insurance Last Ten Fiscal Years
248
2021 2022 2023 2024 2025
Net earned required contribution
and investment revenues 8,119,793$ 5,176,801$ 5,807,667$ 6,502,944$ 7,441,392$ Unallocated expenses 323,042 216,651 216,651 216,651 223,150 Estimated incurred claims and expenses,
end of policy year 4,366,805 2,233,467 2,515,012 2,311,342 3,403,343 Paid claims as of:

End of policy year 1,420,172 930,895 1,518,668 1,093,682 824,823 One year later 2,372,771 3,271,499 3,811,029 2,767,901 Two years later 3,310,505 5,525,014 5,416,865 Three years later 4,778,794 6,724,967
Four years later 5,111,407
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Reestimated incurred claims and expenses:

End of policy year 4,366,805 2,223,467 2,515,012 2,311,342 3,403,343 One year later 5,391,076 4,145,263 3,587,562 2,812,896 Two years later 3,959,616 4,678,243 3,180,582 Three years later 1,495,635 4,480,758
Four years later 1,092,887
Five years later
Six years later
Seven years later
Eight years later
Nine years later
Increase/(decrease) in estimated incurred
claims and expenses (3,273,918) 2,257,291 665,570 501,554 - City of Salinas
Other Information (Unaudited)
Claims Development
Internal Service Funds - Workers Compensation Insurance (Continued) Last Ten Fiscal Years
249
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250

STATISTICAL SECTION
251
2015-16 2016-17 2017-18 2018-19 2019-20
Governmental Activities:

Net investment in capital assets 149,110,836$ 151,863,517 $ 165,269,307 $ 132,079,740 $ 143,281,912 $ Restricted 44,746,885 38,505,368 43,285,333 87,701,244 89,496,097 Unrestricted (deficit) (134,121,226) (116,218,453) (133,796,786) (120,946,521) (134,321,510) Total government activities net position 59,736,495$ 74,150,432$ 74,757,854$ 98,834,463$ 98,456,499$ Business-type Activities:

Net investment in capital assets 86,565,608$ 83,589,376 $ 80,551,269 $ 78,755,026 $ 76,397,363 $ Restricted 3,696,823 3,018,809 1,932,223 1,965,948 1,949,081 Unrestricted 6,578,760 6,639,777 7,886,163 8,036,958 8,998,352 Total business-type net position 96,841,191$ 93,247,962 $ 90,369,655 $ 88,757,932 $ 87,344,796 $ Primary Government
Net investment in capital assets 235,676,444$ 235,452,893 $ 245,820,576 $ 210,834,766 $ 219,679,275 $ Restricted 48,443,708 41,524,177 45,217,556 89,667,192 91,445,178 Unrestricted (deficit) (127,542,466) (109,578,676) (125,910,623) (112,909,563) (125,323,158) Total primary government net position 156,577,686$ 167,398,394 $ 165,127,509 $ 187,592,395 $ 185,801,295 $ City of Salinas
Net Position by Component
Last Ten Fiscal Years
accrual basis of accounting
252
Schedule 1
2020-21 2021-22 2022-23 2023-24 2024-25
Governmental Activities:

Net investment in capital assets 167,726,772$ 204,559,079 $ 212,511,725 $ 223,199,988 $ 221,270,561 $ Restricted 80,741,294 76,573,216 84,106,986 89,559,884 123,726,335 Unrestricted (deficit) (132,215,799) (111,270,940) (103,386,480) (125,547,113) (129,249,480) Total government activities net position 116,252,267$ 169,861,355 $ 193,232,231 $ 187,212,759 $ 215,747,416 $ Business-type Activities:

Net investment in capital assets 77,467,957$ 47,973,525$ 45,330,812$ 44,273,730$ 42,828,175$ Restricted 6,807 - - - - Unrestricted (deficit) 7,395,738 8,245,394 7,105,284 10,174,571 10,485,064 Total primary government net position 84,870,502$ 56,218,919$ 52,436,096$ 54,448,301$ 53,313,239$ Primary Government
Net investment in capital assets 245,194,729$ 252,532,604$ 257,842,537$ 267,473,718$ 264,098,736$ Restricted 80,748,101 76,573,216 84,106,986 89,559,884 123,726,335 Unrestricted (deficit) (124,820,061) (103,025,546) (96,281,196) (115,372,542) (118,764,416) Total primary government net position 201,122,769$ 226,080,274$ 245,668,327$ 241,661,060$ 269,060,655$ City of Salinas
Net Position by Component (Continued)
Last Ten Fiscal Years
accrual basis of accounting
253
2015-16 2016-17 2017-18 2018-19 2019-20
Program Functions
Governmental activities
General government (10,490,317) $ (11,703,239) $ (15,576,829) $ 3,892,145 $ (3,549,819) $ Public safety (54,464,917) (62,938,627) (65,552,658) (87,583,641) (99,190,153) Public works (17,413,222) (26,931,555) (27,431,103) (22,913,235) (18,938,990) Recreation (2,523,212) (2,535,785) (2,873,180) (4,153,713) (4,212,571) Library (3,942,678) (4,289,362) (4,760,510) (4,926,139) (4,681,660) Interest on long-term debt (1,486,654) (1,639,707) (1,103,866) (3,746,197) (3,807,469) Total government activities program functions (90,321,000) (110,038,275) (117,298,146) (119,430,780) (134,380,662) General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Sales tax 62,373,876 $ 64,579,520 $ 64,924,869 $ 72,866,480 $ 69,670,899 $ Property tax 26,049,176 26,987,393 28,499,277 30,099,616 31,484,162 Utility users tax 12,060,151 11,669,515 12,562,782 11,663,551 11,654,328 Franchise tax 8,701,170 9,064,319 8,920,619 9,088,100 9,305,059 Business tax 4,828,100 7,435,123 7,205,531 8,040,739 7,434,073 Transient occupancy tax 2,601,117 2,730,456 2,917,997 3,610,296 2,824,027 Other taxes 1,029,889 580,430 421,584 773,899 708,577 Investment Earnings 304,982 509,020 1,045,387 4,487,749 2,753,098 Gain (loss) on sale of capital assets 2,239,354 377,969 (270,444) 54,930 - Miscellaneous revenue 581,326 1,505,726 1,271,291 1,792,717 2,231,781 Transfers (1,290,241) (855,521)
(1,900,111) (3,703,420) (4,063,306)
Total government activities general revenues 119,478,900 124,583,950 125,598,782 138,774,657 134,002,698 Total government activities changes in net position 29,157,900$ 14,545,675$ 8,300,636$ 19,343,877$ (377,964)$ Program Functions
Business Type activities
Airport 712,576$ 168,108$ (240,653)$ (631,541)$ (463,611)$ Industrial waste 2,759,859 1,476,455 1,763,043 851,477 1,030,744 Municipal golf courses (731,129) (622,086) (599,405) (441,054) (228,041) Sanitary sewer (254,385) (581,000) (164,315) (498,418) (663,157) Storm sewer (4,074,720) (4,541,418) (4,086,805) (5,710,647) (4,563,120) Water utility (10,267) (10,046) (15,731) (15,774) (13,381) Downtown parking (1,305,652) (1,356,967) (1,505,068) 36,662 (3,232) Permit services - - 102,237 691,666 (362,346) Interest on long-term debt - - - - - Total business type program function (2,903,718) (5,466,954) (4,746,697) (5,717,629) (5,266,144) General Revenues and Other Changes in Net Position
Business Type activities
Taxes
Revenue from Fiduciary Funds -$ -$ -$ -$ -$ Investment Earnings 106,627 67,261 157,966 379,511 328,265 Gain (loss) on sale of capital assets - - (18,843) 3,886 4,501 Miscellaneous revenue 950,535 950,943
951,566 - -
Transfers 1,314,577 855,521 1,900,111 3,703,420 4,063,306 Total business type activities general revenues 2,371,739 1,873,725 2,990,800 4,086,817 4,396,072 Total business type activities changes in net position (531,979)$ (3,593,229)$ (1,755,897)$ (1,630,812)$ (870,072)$ Total primary government changes in net position 28,625,921$ 10,952,446$ 6,544,739$ 17,713,065$ (1,248,036)$ City of Salinas
Changes in Net Position
Last Ten Fiscal Years
accrual basis of accounting
254
Schedule 2
2020-21 2021-22 2022-23 2023-24 2024-25
Program Functions
Governmental activities
General government 6,262,338 $ (13,706,071) $ (2,980,124) $ (14,424,431) $ (13,769,549) $ Public safety (95,334,628) (86,324,078) (97,734,106) (120,478,622) (95,612,921) Public works (23,081,474) (14,887,126) (23,146,312) (26,409,016) (21,246,383) Recreation (3,932,796) (7,503,502) (10,157,949) (11,985,675) (13,532,105) Library (4,762,278) (4,863,134) (5,820,068) (6,426,865) (6,395,481) Interest on long-term debt (4,954,767) (4,808,025) (4,371,939) (4,063,122) (3,921,907) Total government activities program functions (125,803,605) (132,091,936) (144,210,498) (183,787,731) (154,478,346) General Revenues and Other Changes in Net Position
Governmental activities
Taxes
Sales tax 80,811,345 $ 88,968,698 $ 91,620,947 $ 91,312,258 $ 94,640,604 $ Property tax 33,087,471 34,755,630 37,290,006 39,126,724 40,561,028 Utility users tax 11,608,242 12,106,526 12,766,039 14,050,246 15,758,261 Franchise tax 9,620,994 10,600,386 9,717,168 10,043,832 10,423,060 Business tax 7,034,664 7,234,759 6,902,315 7,481,659 6,724,871 Transient occupancy tax 2,338,402 3,682,621 3,224,396 2,906,219 2,828,874 Other taxes - - - 3,045 261,482 Investment Earnings 777,268 (1,572,611) 6,345,564 11,203,141 11,638,579 Gain (loss) on sale of capital assets 10,926 (34,879) (47,200) 5,690 (3,653,255) Miscellaneous revenue 1,834,421 1,220,103 262,754 991,325 418,622 Transfers (3,524,360)
4,243,402 (500,615) 644,120 3,410,877 Total government activities general revenues 143,599,373 161,204,635 167,581,374 177,768,259 183,013,003 Total government activities changes in net position 17,795,768$ 29,112,699$ 23,370,876$ (6,019,472)$ 28,534,657$ Program Functions
Business Type activities
Airport (604,366)$ (398,015)$ (558,191)$ (382,276)$ (841,554)$ Industrial waste 905,368 878,616 (370,171) (293,894) 747,922 Municipal golf courses (336,722) - - - - Sanitary sewer (861,624) (900,846) (797,807) (663,643) (952,224) Storm sewer (5,426,920) - - - - Water utility (12,577) - - - - Downtown parking (220,274) (1,831,590) (1,432,311) (1,576,209) (1,831,521) Permit services 444,299 972,911 (370,221) 2,193,952 1,544,963 Interest on long-term debt - (709,198) (671,380) (629,735) (584,217) Total business type program function (6,112,816) (1,988,122) (4,200,081) (1,351,805) (1,916,631) General Revenues and Other Changes in Net Position
Business Type activities
Taxes
Revenue from Fiduciary Funds -$ -$ -$ -$ 946,093$ Investment Earnings 87,962 (37,810) 503,455 925,646 1,032,269 Gain (loss) on sale of capital assets 26,200 - (2,402,411) (12,058) - Miscellaneous revenue -
2,614,571 1,815,599 3,094,542 2,214,084 Transfers 3,524,360 (4,243,402) 500,615 (644,120) (3,410,877) Total business type activities general revenues 3,638,522 (1,666,641) 417,258 3,364,010 781,569 Total business type activities changes in net position (2,474,294)$ (3,654,763)$ (3,782,823)$ 2,012,205$ (1,135,062)$ Total primary government changes in net position 15,321,474$ 25,457,936$ 19,588,053$ (4,007,267)$ 27,399,595$ City of Salinas
Changes in Net Position (Continued)
Last Ten Fiscal Years
accrual basis of accounting
255
2015-16 2016-17 2017-18 2018-19 2019-20
General Fund
Nonspendable 4,226,413 $ 4,975,310 $ 6,948,604 $ 6,171,019 $ 6,618,146 $ Restricted - - - - - Committed 12,819,700 15,177,339 5,038,675 5,038,675 5,038,675 Assigned 13,169,516 6,439,802 12,161,256 30,739,004 30,739,004 Unassigned 3,040,076 16,301,224 9,764,806 10,323,543 13,015,196 Total general fund 33,255,705 $ 42,893,675 $ 33,913,341 $ 52,272,241 $ 55,411,021 $ All Other Governmental Funds
Nonspendable 6,514,124 $ 2,507,553 $ 2,524,124 $ 2,734,158 $ 2,507,553 $ Restricted 37,237,337 35,131,863 40,241,770 84,967,086 86,988,544 Committed 2,000,000 4,159,828 8,516,804 2,000,000 2,096,246 Assigned 1,794,208 - - - - Unassigned (deficit) (1,317,970) (1,264,764) (9,545,676) (3,880,400) (3,166,131) Total all other governmental funds 46,227,699 $ 40,534,480 $ 41,737,022 $ 85,820,844 $ 88,426,212 $ Total all governmental funds 79,483,404 $ 83,428,155 $ 75,650,363 $ 138,093,085 $ 143,837,233 $ City of Salinas
Fund Balances of Governmental Funds
Last Ten Fiscal Years
accrual basis of accounting
256
Schedule 3
2020-21 2021-22 2022-23 2023-24 2024-25
General Fund
Nonspendable 7,060,000 $ 2,785,000 $ 2,785,000 $ 2,785,000 $ 2,785,000 $ Restricted - 6,000,000 6,000,000 10,000,000 10,000,000 Committed 2,345,602 36,365,323 36,101,009 39,909,826 38,242,179 Assigned 25,079,875 15,266,804 18,387,565 31,490,364 23,856,906 Unassigned 30,010,062 9,567,543 22,085,188 10,176,499 24,825,000 Total general fund 64,495,539 $ 69,984,670 $ 85,358,762 $ 94,361,689 $ 99,709,085 $ All Other Governmental Funds
Nonspendable 2,524,124 $ 1,463,139 $ 1,450,526 $ 1,439,746 $ 3,303,696 $ Restricted 70,273,209 73,000,753 81,557,344 88,415,240 112,144,762 Committed 2,000,000 2,141,985 2,141,985 8,632,080 7,153,469 Assigned - - - - - Unassigned (deficit) (877,889) (3,263,121) (4,295,780) (10,397,442) (1,268,984) Total all other governmental funds 73,919,444 $ 73,342,756 $ 80,854,075 $ 88,089,624 $ 121,332,943 $ Total all governmental funds 138,414,983 $ 143,327,426 $ 166,212,837 $ 182,451,313 $ 221,042,028 $ City of Salinas
Fund Balances of Governmental Funds (Continued)
Last Ten Fiscal Years
accrual basis of accounting
257
2015-16 2016-17 2017-18 2018-19 2019-20
Revenues
Taxes 116,588,839 $ 115,611,632 $ 118,261,582 $ 127,939,543 $ 132,305,683 $ Taxes - special assessments 2,833,325 2,483,106 2,514,982 2,479,777 2,521,100 Licenses and permits 1,591,305 6,642,397 6,357,723 7,490,908 824,569 Intergovernmental 17,239,454 17,441,983 24,531,643 19,052,616 21,287,712 Charges for service 5,779,360 6,340,509 6,507,589 8,304,237 6,224,883 Investment income (loss) 572,229 509,019 1,045,387 3,416,428 2,989,595 Rental income 575,124 512,490 608,312 635,882 545,137 Fines and forfeitures 474,447 792,725 847,826 549,831 640,262 Miscellaneous 1,247,912 1,871,079 1,124,430 1,705,367 4,513,618 Total revenues 146,901,995 152,204,940 161,799,474 171,574,589 171,852,559 Expenditures
Current: