0.00 1.00
2.00 3.00
4.00 5.00
6.00 7.00
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Coverage
174
I -
CITY OF SAN RAFAEL
DEMOGRAPHIC AND ECONOMIC STATISTICS
LAST TEN CALENDAR YEARS
Marin City Personal Per Capita Average
Calendar City County Population Income (2) Personal Unemployment Year Population (1) Population % of County (in thousands) Income (2) Rate (3) 2015 60,582 258,972 23.39% $2,699,436 $44,558 3.70%
2016 60,842 262,274 23.20% 2,817,497 46,308 3.40%
2017 60,651 263,604 23.01% 2,943,227 48,374 3.30%
2018 60,046 263,886 22.75% 3,152,985 52,509 2.30%
2019 59,807 262,879 22.75% 3,156,708 52,781 2.20%
2020 59,016 257,774 22.89% 3,301,286 55,938 6.70%
2021 60,560 257,135 23.55% 3,390,278 55,982 4.40%
2022 59,681 256,018 23.31% 3,789,444 63,494 2.50%
2023 59,585 254,407 23.42% 4,043,062 67,853 3.10%
2024 59,885 262,321 22.83% 4,097,381 68,420 3.60%
Source: (1) State of California, Department of Finance - Demographic Research Unit. The data represents the City's population as of January 1, of each year.
(2) US Censue Bureau, most recent American Community Survey (3) Unemployment Data: California Employment Development Department 0%
5%
10%
15%
20%
25%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
City Population as a % of County
Population
0 500000
1000000
1500000
2000000
2500000
3000000
3500000
4000000
4500000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Total Personal Income (in thousands)
0 10000
20000
30000
40000
50000
60000
70000
80000
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Per Capita Personal Income
0%
1%
2%
3%
4%
5%
6%
7%
8%
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
Average Citywide Unemployment Rate
175
I I I
CITY OF SAN RAFAEL
PRINCIPAL EMPLOYERS
FISCAL YEAR 2024-2025
LAST TEN CALENDAR YEARS
Employer # (A) # (A) # (A) # (A)
County of Marin 1690 5.77% 2505 1.96% 2,436 1.90% 2,366 1.84% Kaiser Permanente 1500 5.12% 902 0.71% 2,339 1.83% 2,339 1.82% San Rafael Elementary/High Schools Dist(s) 750 2.56% 700 0.55% 700 0.55% 700 0.55% Managed Health Network 500 1.71% - - - - - -
The Permanente Medical Group Inc 411 1.40% - - - - - -
The Pasha Group 400 1.37% - - - - - -
Marin County Office of Education 360 1.23% - - - - - -
City of San Rafael 416 1.42% 416 0.33% 420 0.33% 412 0.32%
0.00%
Dominican University of California 295 1.01% 302 0.24% 394 0.31% 394 0.31% Ghilotti Bros., Inc. 290 0.99% 298 0.23% 298 0.23% 298 0.23% BioMarin Pharmaceutical Inc. 249 0.85% 950 0.74% 950 0.74% 950 0.74% Totals 5,283 23.80% 4,718 5.66% 8,704 6.78% 9,120 7.26% # Number of FTE employees in Marin locations
(A) Percentage of total employment
Data Sources: Employment Development Department, Marin County, North Bay Business Journal (Annual Book of Lists), & City of San Rafael Adopted Budget FY24-25.
2023 2022
Note: From the EDD website, it shows that the Total Average 2024 Employment in the City of San Rafael was 29,300 of which it is used as the denominator for the 2024 percentages are calculated. 2024 2021
176
# (A) # (A) # (A) # (A) # (A) # (A)
2,358 1.88% 2,317 7.15% 2,305 7.29% 2,283 7.22% 2,206 6.73% 2,194 6.71% 2,059 1.64% 2,014 6.22% 2,092 6.62% 2,061 6.52% 662 2.02% 1,575 4.82% 700 0.56% 700 2.16% 700 2.22% 700 2.22% 650 1.98% 650 1.99% -- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
-- -- -- -- -- --
405 0.32% 410 1.27% 410 1.30% 454 1.44% 577 1.76% 581 1.78% 394 0.31% 421 1.30% 319 1.01% 456 1.44% 485 1.48% 422 1.29% 298 0.24% - - 175 0.55% 175 0.55% 150 0.46% - -
950 0.76% 950 2.93% - - - - - - - -
9,006 27.80% 6,663 21.09% 7,933 25.10% 5,314 16.20% 5,620 17.19% 6,025 19.37% l
2020 2019 2017 2018 2016 2015
177
CITY OF SAN RAFAEL
FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION
LAST TEN FISCAL YEARS
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
Function
General Government 60.61 62.11 60.11 63.11 62.11 61.41 63.69 60.69 63.69 85.40 Public Safety 175.75 176.55 175.35 175.65 175.30 181.50 185.00 185.00 187.00 175.00 Public Works and Parks 62.00 63.00 66.67 66.00 68.00 69.00 70.00 70.00 72.00 66.00 Community Development 19.80 20.00 21.00 22.00 21.75 21.75 23.00 24.00 27.00 24.00 Culture and Recreation 84.25 84.35 87.35 85.82 78.07 78.07 78.07 83.07 66.65 65.94 Total 402.41 406.01 410.48 412.58 405.23 411.73 419.76 422.76 416.34 416.34 Data Source: City of San Rafael's Finance Department
0 50
100
150
200
250
300
350
400
450
2016 2017 2018 2019 2020 2021 2022 2023 2024 2025
FTE's
General Government Public Safety Public Works and Parks Community Development Culture and Recreation 179
■ ■ ■ ■ ■
CITY OF SAN RAFAEL
OPERATING INDICATORS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
2016 2017 2018 2019
Function/Program
Public safety:
Fire:
Inspection permit issued 198 233 186 123
Police:
Police calls for service 57,026 53,567 51,013 47,919
Law violations:
Part I crimes 2,523 2,392 2,326 1,893
Physical arrests (adult and juvenile) 3,453 2,526 2,019 1,923 Traffic violations 3,252 3,341 2,758 2,944
Parking violations 34,803 36,169 36,208 40,407
Public works
Street resurfacing (miles) (Eng Div) 6.76 2.32 2.50 4.30 Potholes repaired N/A N/A N/A N/A
Asphalt used for street repairs (tons) 7,195 5,800 4,730 7,200 Culture and recreation:
Recreation class participants 12,725 13,493 12,842 N/A
Recreation Facility Rentals 5,146
Childcare School-Age program participants 7,592
Library:
Items in collection 227,890 117,354 115,812 123,432
Total items borrowed 469,790 327,297 324,452 356,301
Note: N/A denotes information not available.
180
2020 2021 2022 2023 2024 2025
167 207 195 170 191 201
47,968 43,649 42,901 42,693 44,150 46,211
2,988 2,546 2,015 2,024 2,318 1,676
2,527 1,893 1,945 1,769 1,140 1,872
2,342 2,161 1,710 1,734 1,123 2,183
28,029 24,099 30,178 35,399 33,510 34,451
14.30 5.00 11.70 21 12 32
967 1,368 1,024 1,335 1,275 1,226
5,885 3,650 5,100 3,411 11,494 92
N/A N/A N/A
3,875 1,550 1,962 7,001 7,160 7,755
6,270 2,132 3,675 2,660 2,703 2,677
140,610 103,399 95,687 97,117 93,136 90,092
199,903 113,385 169,378 185,800 184,897 120,724
181
CITY OF SAN RAFAEL
CAPITAL ASSET STATISTICS BY FUNCTION/PROGRAM
LAST TEN FISCAL YEARS
2016 2017 2018 2019
Function/Program
Public safety:
Fire stations 6666
Police stations 1111
Police Fleet
Public works
Miles of streets 173 173 173 173
Street lights 4,435 4,435 4,435 4,435
Parking District lights
Traffic Signals 89 89 89 89
Culture and recreation:
Community services:
City parks 20 20 20 20
City parks acreage 42424242
Playgrounds 14 14 14 14
City trails 20 20 20 20
Community gardens 1111
Cultural Art Centers
Community centers 4444
Senior centers 0000
Sports centers 0000
Performing arts centers 0000
Swimming pools 1111
Tennis courts 10 10 10 10
Basketball Courts 5555
Baseball/softball diamonds 5555
Soccer/football fields 2222
Library:
City Libraries 2222
Wastewater:
Miles of sanitary sewers 145 145 145 145
Data Source: City of San Rafael's Public Works Department 182
2020 2021 2022 2023 2024 2025
66 6 6 6 6
11 1 1 1 1
173 173 173 173 173 173
4,435 4,435 4,448 4,448 4,448 4,448
90 90 90 90 90 90
24 24 24 24 23 23
99 99 99 99 99 99
14 14 14 14 13 13
20 20 20 20 20 20
22 2 2 2 2
11 1 1 1 1
33 3 3 3 3
00 0 0 0 0
00 0 0 0 0
00 0 0 0 0
11 1 1 1 1
10 10 10 10 10 10
66 6 6 6 7
55 5 5 5 5
22 2 2 2 2
22 2 2 2 2
145 145 145 145 145 145
183
CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
FOR THE YEAR ENDED JUNE 30, 2025
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CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
For the Year Ended June 30, 2025
Table of Contents
Page
Memorandum on Internal Control .................................................................................................. 1 Schedule of Other Matters ...................................................................................................... 3 Status of Prior Year Other Matters ......................................................................................... 7 This Page Left Intentionally Blank
MEMORANDUM ON INTERNAL CONTROL
To the City Council of
the City of San Rafael, California
In planning and performing our audit of the basic financial statements of the City of San Rafael (City) as of and for the year ended June 30, 2025, in accordance with auditing standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the City’s financial statements will not be prevented, or detected and corrected, on a timely basis.
Our consideration of internal control was for the limited purpose described in the first paragraph and was not designed to identify all deficiencies in internal control that might be material weaknesses. In addition, because of inherent limitations in internal control, including the possibility of management override of controls, misstatements due to error or fraud may occur and not be detected by such controls. Given these limitations during our audit, we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses may exist that have not been identified.
Included in the Schedule of Other Matters are recommendations not meeting the above definitions that we believe are opportunities for strengthening internal controls and operating efficiency.
Government Auditing Standards require the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Other Matters. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.
This communication is intended solely for the information and use of management, City Council, others within the organization, and agencies and pass-through entities requiring compliance with Government Auditing Standards, and is not intended to be and should not be used by anyone other than these specified parties.
Pleasant Hill, California
November 20, 2025
1 Accountancy Corporation
3478 Buskirk Avenue, Su ite 217
Pleasant Hill, CA 94523
T 925.228.2800
, [email protected]
w mazeassociates.com
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CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
2025-01 Purchasing Policy Compliance – Informal Bidding Documentation Per Section 2.55.260 of the City’s Purchasing Policy – Informal Bids – any contract or purchase not exceeding $75,000 but more than $5,000, may be made in accordance with the City’s informal bidding procedures. The policy further requires that documentation supporting the informal bid process be retained by the City.
During our testing of twenty-five disbursements for fiscal year 2025 to assess compliance with the City’s purchasing policy, we noted that the City was unable to provide supporting documentation demonstrating adherence to the informal bid process for two disbursements.
We understand that the absence of written documentation was primarily due to staff oversight within the department responsible for the purchases, as the staff did not retain documentation as part of the process.
However, we recommend that the City establish or reinforce procedures to ensure that all departments consistently retain documentation supporting informal bidding processes in accordance with the Purchasing Policy.
Management’s Response:
Management acknowledges the importance of reinforcing procedures to ensure compliance with the City’s Purchasing Policy, including Informal Bidding requirements. To this end, in conjunction with an update to the City’s Purchasing Policy, approved by the City Council on May 19, 2025, management has also update Purchasing Procedures guidelines provided to City staff.
These procedures are being further updated to highlight the requirement for the purchasing agent to retain a record of informal bids received, pursuant to Section 2.55.260 of the Purchasing Policy.
In addition, with the City’s transition to a new Enterprise Resource Planning (ERP) Financial system, back-up documentation related to all purchases and contract awards are now uploaded and verified at the time of setting up a Purchase Order or Contract.
Note, given that Purchase Orders are only required for purchases greater than $10,000, staff will be reviewing the current threshold requirement ($5,000) related to informal bidding procedures. 3 CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE The following comment represents new pronouncements taking affect in the next few years. We have cited them here to keep you informed of developments.
EFFECTIVE FISCAL YEAR 2025/26:
GASB 103 – Financial Reporting Model Improvements
The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This Statement also addresses certain application issues.
Management’s Discussion and Analysis - This Statement continues the requirement that the basic financial statements be preceded by management’s discussion and analysis (MD&A), which is presented as required supplementary information (RSI). MD&A provides an objective and easily readable analysis of the government’s financial activities based on currently known facts, decisions, or conditions and presents comparisons between the current year and the prior year. This Statement requires that the information presented in MD&A be limited to the related topics discussed in five sections: (1) Overview of the Financial Statements, (2) Financial Summary, (3) Detailed Analyses, (4) Significant Capital Asset and Long-Term Financing Activity, and (5) Currently Known Facts, Decisions, or Conditions.
Furthermore, this Statement stresses that the detailed analyses should explain why balances and results of operations changed rather than simply presenting the amounts or percentages by which they changed.
This Statement emphasizes that the analysis provided in MD&A should avoid unnecessary duplication by not repeating explanations that may be relevant to multiple sections and that “boilerplate” discussions should be avoided by presenting only the most relevant information, focused on the primary government.
In addition, this Statement continues the requirement that information included in MD&A distinguish between that of the primary government and its discretely presented component units.
Unusual or Infrequent Items - This Statement describes unusual or infrequent items as transactions and other events that are either unusual in nature or infrequent in occurrence. Furthermore, governments are required to display the inflows and outflows related to each unusual or infrequent item separately as the last presented flow(s) of resources prior to the net change in resource flows in the government-wide, governmental fund, and proprietary fund statements of resource flows.
Presentation of the Proprietary Fund Statement of Revenues, Expenses, and Changes in Fund Net Position - This Statement requires that the proprietary fund statement of revenues, expenses, and changes in fund net position continue to distinguish between operating and nonoperating revenues and expenses.
Operating revenues and expenses are defined as revenues and expenses other than nonoperating revenues and expenses. Nonoperating revenues and expenses are defined as (1) subsidies received and provided, (2) contributions to permanent and term endowments, (3) revenues and expenses related to financing, (4) resources from the disposal of capital assets and inventory, and (5) investment income and expenses. 4 CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
GASB 103 – Financial Reporting Model Improvements (Continued) In addition to the subtotals currently required in a proprietary fund statement of revenues, expenses, and changes in fund net position, this Statement requires that a subtotal for operating income (loss) and noncapital subsidies be presented before reporting other nonoperating revenues and expenses. Subsidies are defined as (1) resources received from another party or fund (a) for which the proprietary fund does not provide goods and services to the other party or fund and (b) that directly or indirectly keep the proprietary fund’s current or future fees and charges lower than they would be otherwise, (2) resources provided to another party or fund (a) for which the other party or fund does not provide goods and services to the proprietary fund and (b) that are recoverable through the proprietary fund’s current or future pricing policies, and (3) all other transfers.
Major Component Unit Information - This Statement requires governments to present each major component unit separately in the reporting entity’s statement of net position and statement of activities if it does not reduce the readability of the statements. If the readability of those statements would be reduced, combining statements of major component units should be presented after the fund financial statements.
Budgetary Comparison Information - This Statement requires governments to present budgetary comparison information using a single method of communication—RSI. Governments also are required to present (1) variances between original and final budget amounts and (2) variances between final budget and actual amounts. An explanation of significant variances is required to be presented in notes to RSI.
How the Changes in This Statement Will Improve Financial Reporting The requirements for MD&A will improve the quality of the analysis of changes from the prior year, which will enhance the relevance of that information. They also will provide clarity regarding what information should be presented in MD&A.
The requirements for the separate presentation of unusual or infrequent items will provide clarity regarding which items should be reported separately from other inflows and outflows of resources.
The definitions of operating revenues and expenses and of nonoperating revenues and expenses will replace accounting policies that vary from government to government, thereby improving comparability.
The addition of a subtotal for operating income (loss) and noncapital subsidies will improve the relevance of information provided in the proprietary fund statement of revenues, expenses, and changes in fund net position.
The requirement for presentation of major component unit information will improve comparability.
The requirement that budgetary comparison information be presented as RSI will improve comparability, and the inclusion of the specified variances and the explanations of significant variances will provide more useful information for making decisions and assessing accountability. 5 CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
SCHEDULE OF OTHER MATTERS
EFFECTIVE FISCAL YEAR 2026/27:
GASB 104 – Disclosure of Certain Capital Assets
State and local governments are required to provide detailed information about capital assets in notes to financial statements. GASB Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments, requires certain information regarding capital assets to be presented by major class. The objective of this Statement is to provide users of government financial statements with essential information about certain types of capital assets.
This Statement requires certain types of capital assets to be disclosed separately in the capital assets note disclosures required by Statement 34. Lease assets recognized in accordance with GASB Statement No. 87, Leases, and intangible right-to-use assets recognized in accordance with GASB 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. Subscription assets recognized in accordance with GASB Statement No. 96, Subscription-Based Information Technology Arrangements, also should be separately disclosed. In addition, this Statement requires intangible assets other than those three types to be disclosed separately by major class.
This Statement also requires additional disclosures for capital assets held for sale. A capital asset is a capital asset held for sale if (a) the government has decided to pursue the sale of the capital asset and (b) it is probable that the sale will be finalized within one year of the financial statement date. Governments should consider relevant factors to evaluate the likelihood of the capital asset being sold within the established time frame. This Statement requires that capital assets held for sale be evaluated each reporting period. Governments should disclose (1) the ending balance of capital assets held for sale, with separate disclosure for historical cost and accumulated depreciation by major class of asset, and (2) the carrying amount of debt for which the capital assets held for sale are pledged as collateral for each major class of asset.
How the Changes in This Statement Will Improve Financial Reporting The requirements of this Statement will improve financial reporting by providing users of financial statements with essential information about certain types of capital assets in order to make informed decisions and assess accountability. Additionally, the disclosure requirements will im-prove consistency and comparability between governments.
6 CITY OF SAN RAFAEL
MEMORANDUM ON INTERNAL CONTROL
STATUS OF PRIOR YEAR OTHER MATTERS
2024-01 Purchasing Policy Compliance and Clarification of Requirements – Prior Year Recommendation Not Implemented
2023-02 Purchasing Policy Compliance and Clarification of Requirements - Prior Year Recommendation Not Implemented
During the current year audit, we followed up on the status of the Other Matter identified on the Status of Prior Year Other Matters Items 2024-01, 2023-02 and 2022-02. We determined that the City adopted new purchasing guidelines effective July 1, 2024. Details of the matter are listed below.
Current Status: Implemented.
2022-02 Purchasing Policy Compliance and Clarification of Requirements The City’s Purchasing Policy should indicate when the use of a purchase order, contract, or both is required, including any exceptions, as necessary. The City’s Purchasing Policy defines a contract as including, but not being “limited to, a purchase order, a contract for services, a contract for maintenance, leasing of property or equipment, an addendum or change order, a letter agreement, a memorandum of understanding, or memorandum of agreement.” The Purchasing Policy defines a purchase order as “a standardized form to be utilized in contracts for materials, supplies, labor and equipment.” The Purchasing Policy does not specify whether a purchase order and a contract are required for all purchases, but we understand it is the City’s practice to obtain both documents for purchases.
During the fiscal year 2022 audit, we selected twenty-five disbursements for testing of supporting documentation and compliance with the City’s Purchasing Policy and noted two disbursements for which the disbursements were supported by a contract, however, they were not supported by a purchase order.
We also noted one disbursement that was supported by a purchase order, but not a contract. For similar types of transactions tested, we noted that these types of disbursements were supported by both a purchase order and a contract.
For one of the disbursements noted above, City staff indicated that the staff overseeing the initial project and contract is no longer with the City and that a purchase order was not created for the vendor and contract for the project due to a staff oversight. And, for the second disbursement noted above, City staff indicated that they did not think it was necessary for a purchase order to be created as the vendor is used for on-call repair sidewalk repair services. Lastly, for the third disbursement noted above, City staff indicated that the purchase order was created without a contract, due to a staff oversight. Although that appears reasonable, there does not appear to be such an exemption in the City’s Purchasing Policy for the use of a contract, purchase order or both. Therefore, the City is not in compliance with the Purchasing Policy for these purchases.
We recommend that the City ensure all purchases comply with purchase documentation requirements and revise the Purchasing Policy to clarify those requirements to reflect current practices.
Current Status: Implemented.
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CITY OF SAN RAFAEL
REQUIRED COMMUNICATIONS
FOR THE YEAR ENDED JUNE 30, 2025
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CITY OF SAN RAFAEL
REQUIRED COMMUNICATIONS
For the Year Ended June 30, 2025
Table of Contents
Page
Required Communications .................................................................................................................. 1 Significant Audit Matters:
Qualitative Aspects of Accounting Practices ..................................................................... 1 Difficulties Encountered in Performing the Audit ............................................................. 3 Corrected and Uncorrected Misstatements ......................................................................... 3 Disagreements with Management ....................................................................................... 3 Management Representations .............................................................................................. 3 Management Consultations with Other Independent Accountants ................................... 3 Other Audit Findings or Issues ............................................................................................ 4 Other Matters .............................................................................................................................. 4 This Page Left Intentionally Blank
REQUIRED COMMUNICATIONS
To the City Council of
the City of San Rafael, California
We have audited the basic financial statements of the City of San Rafael (City) for the year ended June 30, 2025. Professional standards require that we provide you with information about our responsibilities under generally accepted auditing standards and Government Auditing Standards and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated March 3, 2025. Professional standards also require that we communicate to you the following information related to our audit.
Significant Audit Matters
Qualitative Aspects of Accounting Practices
Accounting Policies - Management is responsible for the selection and use of appropriate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. No new accounting policies were adopted, and the application of existing policies was not changed during the year, except as follows:
The following pronouncements became effective, but did not have a material effect on the financial statements:
GASB 101 – Compensated Absences
GASB 102 – Certain Risk Disclosures
Unusual Transactions, Controversial or Emerging Areas - We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.
Accounting Estimates - Accounting estimates are an integral part of the financial statements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly sensitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:
Estimated Net Pension Liability and Pension-Related Deferred Outflows and Inflows of Resources: Management’s estimates of the net pension liability and related deferred outflows/inflows of resources are disclosed in Note 9 to the financial statements and are based on an actuarial study and accounting valuation determined by the Marin County Employees’ Retirement Association which are based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimates and determined they are reasonable in relation to the basic financial statements taken as a whole. 1 Accountancy Corporation
3478 Buskirk Avenue, Suite 217
Pleasant Hill, CA 94523
T 925.228.2800
, [email protected]
w mazeassociates.com
Estimated Net OPEB Liability and OPEB-Related Deferred Outflows and Inflows of Resources:
Management’s estimates of the net OPEB liability and related deferred outflows/inflows of resources are disclosed in Note 11 to the financial statements and are based on an actuarial study determined by a consultant, which is based on the experience of the City. We evaluated the key factors and assumptions used to develop the estimates and determined they are reasonable in relation to the basic financial statements taken as a whole.
Estimate of the depreciation: Management’s estimate of depreciation is based on useful lives determined by management. These lives have been determined by management based on the expected useful life of assets as disclosed in Note 1K to the financial statements. We evaluated the key factors and assumptions used to develop the depreciation estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimated Fair Value of Investments: As of June 30, 2025, cash and investments were measured by fair value, as disclosed in Note 2 to the financial statements. Fair value is essentially market pricing in effect as of June 30, 2025. These fair values are not required to be adjusted for changes in general market conditions occurring subsequent to June 30, 2025.
Estimated Long-Term Receivable from San Rafael Sanitation District: Management’s estimate of the long-term receivable from the District is disclosed in Note 4 to the financial statements and is based on the District’s estimated liability for pension and post-employment health care benefits incurred by the City for the District staff, but not yet funded. We evaluated the key factors and assumptions used to develop the long-term receivable from the District in determining that it is reasonable in relation to the basic financial statements taken as a whole.
Estimated Claims Liabilities: Management’s estimate of the claims liabilities payable is disclosed in Note 13 to the financial statements and is based on actuarial studies determined by a consultant, which are based on the claims experience of the City. We evaluated the key factors and assumptions used to develop the estimate and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimate of Compensated Absences: Accrued compensated absences which are comprised of accrued vacation, holiday, and certain other compensating time is estimated using accumulated unpaid leave hours and hourly pay rates in effect at the end of the fiscal year as disclosed in Note 1L to the financial statements. We evaluated the key factors and assumptions used to develop the accrued compensated absences and determined that it is reasonable in relation to the basic financial statements taken as a whole.
Estimated Lease Right-of Use Assets, Liabilities, Receivables and related Deferred Inflows of Resources: Management’s estimate of the lease related right-of use assets, liabilities, receivables and deferred inflows of resources is disclosed in Note 1R to the financial statements and is based on the incremental borrowing rate for the related lease. We evaluated the key factors and assumptions used to develop the lease related right-of use assets, liabilities, receivables and deferred inflows of resources in determining that it is reasonable in relation to the financial statements taken as a whole.
2 Estimated Subscription Right-of Use Assets and Liabilities: Management’s estimate of the subscription related right-of use assets and liabilities is disclosed in Note 1S to the financial statements and is based on the incremental borrowing rate for the related subscription. We evaluated the key factors and assumptions used to develop the subscription related right-of use assets and liabilities in determining that it is reasonable in relation to the financial statements taken as a whole.
Disclosures - The financial statement disclosures are neutral, consistent, and clear.
Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with management in performing and completing our audit.
Corrected and Uncorrected Misstatements
Professional standards require us to accumulate all known and likely misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. Management has corrected all such misstatements. In addition, none of the misstatements detected as a result of audit procedures and corrected by management were material, either individually or in the aggregate, to each opinion unit’s financial statements taken as a whole.
Professional standards require us to accumulate all known and likely uncorrected misstatements identified during the audit, other than those that are clearly trivial, and communicate them to the appropriate level of management. We have no such misstatements to report to the City Council.
Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.
Management Representations
We have requested certain representations from management that are included in a management representation letter dated November 20, 2025.
Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain situations. If a consultation involves application of an accounting principle to the City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine that the consultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.
3 Other Audit Findings or Issues
We generally discuss a variety of matters, including the application of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.
Other Matters
We applied certain limited procedures to the required supplementary information that accompanies and supplements the basic financial statements. Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We did not audit the required supplementary information and do not express an opinion or provide any assurance on the required supplementary information.
We were engaged to report on the supplementary information that accompanies the financial statements, but is not required supplementary information. With respect to this supplementary information, we made certain inquiries of management and evaluated the form, content, and methods of preparing the information to determine that the information complies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the underlying accounting records used to prepare the financial statements or to the financial statements themselves.
We were not engaged to report on the Introductory and Statistical Sections which accompany the financial statements, but are not required supplementary information. Such information has not been subjected to the auditing procedures applied in the audit of the basic financial statements, and accordingly, we do not express an opinion or provide any assurance them. ******
This information is intended solely for the use of City Council and management and is not intended to be, and should not be, used by anyone other than these specified parties.
Pleasant Hill, California
November 20, 2025
4 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2025
This Page Left Intentionally Blank
i
CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
FOR THE YEAR ENDED JUNE 30, 2025
Table of Contents
Page
INTRODUCTORY SECTION:
Table of Contents .......................................................................................................................................... i FINANCIAL SECTION:
Independent Auditor’s Report ................................................................................................................. 1 Basic Financial Statements
Balance Sheet ........................................................................................................................................ 5 Statement of Revenues, Expenditures and Changes in Fund Balance ................................................. 6 Notes to the Basic Financial Statements ............................................................................................... 7 Supplementary Information
Schedule of Federal, State, County and Local Awards ...................................................................... 11 Combining Statement of Revenues, Expenditures and Changes in Fund Balance ........................... 12 Schedule of Expenditures by State Categories ................................................................................... 13 Schedule of Claimed Administrative Costs ........................................................................................ 14 Schedule of Claimed Equipment Expenditures ................................................................................ 15 Schedule of Claimed Expenditures for Renovations and Repairs ...................................................... 16 Audited Attendance and Fiscal Reports/Audited Fiscal Reports:
CSPP 4281 – California State Preschool Program ........................................................................... 17 Audited Preschool Reserve Account Activity Report ...................................................................... 24 Notes to the Supplementary Information ............................................................................................ 27 Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................................... 29 Summary of Findings and Questioned Costs ................................................................................ 31 Current Status of Prior Year Findings and Questioned Costs ....................................................... 32 This Page Left Intentionally Blank
INDEPENDENT AUDITOR’S REPORT
To the Honorable Members of the City Council
City of San Rafael, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the City of San Rafael Child Development Program (Program) of the City of San Rafael (City), California, as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Program’s basic financial statements as listed in the Table of Contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the financial position of the Program as of June 30, 2025, and the change in financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the 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 requirement relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinion.
Emphasis of Matter
As discussed in Note 1, the financial statements present only the Program and do not purport to, and do not present fairly the financial position of the City as of June 30, 2025, or the change in its financial position for the year then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.
Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of the financial statements that are free from material misstatement, whether due to fraud or error.
1 Accountancy Corporation
3478 Buskirk Avenue, Suite 217
Pleasant Hill, CA 94523
T 925.228.2800
, [email protected]
w mazeassociates.com
Auditor’s Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinion. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists.
The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Program’s internal control. Accordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.
Supplementary Information
Our audit was conducted for the purpose of forming opinions on the basic financial statements that collective comprise the Program’s basic financial statements. The accompanying Supplementary Information, as listed in the Table of Contents, is presented for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures and in conformity with the CDE Audit Guide, issued by the California Department of Education, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, the Supplementary Information is fairly stated, in all material respects, in relation to the basic financial statements as a whole. 2 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 20, 2025, on our consideration of the Program’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Program’s internal 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 Program’s internal control over financial reporting and compliance.
Pleasant Hill, California
November 20, 2025
3 This Page Left Intentionally Blank
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
BALANCE SHEET
JUNE 30, 2025
ASSETS
Cash (Note 3) $1,628,235
Total Assets $1,628,235
LIABILITIES AND FUND BALANCE
Accounts payable $38,531
Fund balance, restricted (Note 4) 1,589,704
Total Liabilities and Fund Balance $1,628,235
See accompanying notes to financial statements
5 CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
STATEMENT OF REVENUES, EXPENDITURES AND CHANGE IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2025
REVENUES
Restricted:
State grants:
Current year grants $674,584
CDBG preschool grant (federal grant) 23,000
First Five school readiness grants 24,997
Local grants 14,320
Unrestricted:
Interest 33,684
Parent fees - noncertified children 3,414,126
Other revenue 800
Total Revenues 4,185,511
EXPENDITURES
Certified salaries 117,116
Classified salaries 1,883,042
Employee benefits 1,324,838
Training and instruction 2,730
Office supplies 2,649
Books and supplies 179,288
Utilities and housekeeping services 34,049
Rentals 19,963
Services and other operating expenditures 175,229
Equipment 56,258
Insurance 28,490
Renovations and repairs 10,916
Total Expenditures 3,834,568
CHANGE IN FUND BALANCE 350,943
FUND BALANCE
Beginning of year 1,238,761
End of year $1,589,704
See accompanying notes to financial statements
6 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 1 – ORGANIZATION
The City of San Rafael operates the Child Development Program encompassing eight childcare centers within the City of San Rafael. One of these centers provides day care services to subsidized families under the Child Development Program funded by the California Department of Education, which includes the Preschool program. The City is financially accountable for the activities of the Program. The Program has no employees and substantially all staff services which it requires are performed by the City's personnel. Costs incurred by the City to provide such services including compensation, retirement, and other benefit costs are reimbursed by the Program. These basic financial statements present only the activities of the Program and are not intended to present the financial position of the City of San Rafael, California, or the results of its operations. The financial statements of the Program are included as a Special Revenue Fund in the City's financial statements.
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Basis of Accounting
The accounting and reporting treatment applied to a fund is determined by its measurement focus.
Governmental funds are accounted for on a spending or “current financial resources” measurement focus. Accordingly, only current assets and current liabilities are generally included on the balance sheets. Operating statements of governmental funds present increases (revenues and other financial sources) and decreases (expenditures and other financial uses) in net current assets.
The Program’s financial activities are accounted for using the modified accrual basis of accounting.
Under this method, revenues are recognized when measurable and available. The City considers all revenues reported in the governmental funds to be available if the revenues are collected within sixty days after year-end. Revenues considered susceptible to accrual include charges for services, federal and state grants, and interest. Expenditures are recognized in the accounting period in which the liability is incurred, if measurable.
B. Fund Balance
Fund Balance is the excess of all the Program’s assets over all its liabilities. 7 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued) C. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The Program categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
NOTE 3 – CASH AND INVESTMENTS
The Program’s cash is included in a City-wide cash and investment pool, the details of which are presented in the City’s Annual Comprehensive Financial Report. The Program pools cash from all sources with the City of San Rafael so that it can be invested at the maximum yield, consistent with safety and liquidity, while individual funds can make expenditures at any time. The City’s investment policy and the California Government Code permit investments in Securities of the U.S. Government or its agencies, Non-Negotiable Certificates of Deposit, Negotiable Certificates of Deposit, Banker’s Acceptances, Commercial Paper, the State of California Local Agency Investment Fund (LAIF Pool), Repurchase Agreements, Medium-Term Corporate Notes, Municipal Securities of the State of California or any local agencies within California, Municipal Securities (Registered Treasury Notes or Bonds) of the other 49 states, Mortgage and Asset-Backed Obligations, Supranational Securities and Money Market/Mutual Funds.
The Program categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs. The City of San Rafael investment pool is not subject to the fair value hierarchy and therefore not defined as Level 1, Level 2, or Level 3 input. 8 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Basic Financial Statements
For the Year Ended June 30, 2025
NOTE 4 – FUND BALANCE
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
The Program’s fund balances are classified based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the Program prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint.
Nonspendable represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed or assigned, then Nonspendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Nonspendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by formal action of the City Council which may be altered only by formal action of the City Council. Nonspendable amounts subject to council commitments are included along with spendable resources.
Assigned fund balances are amounts constrained by the Program’s intent to be used for a specific purpose, but are neither restricted nor committed. Intent is expressed by the City Council or its designee and may be changed at the discretion of the City Council or its designee. This category includes nonspendables, when it is the Program’s intent to use proceeds or collections for a specific purpose.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned. This includes the residual general fund balance and residual fund deficits, if any, of other governmental funds.
NOTE 5 – CONTINGENCIES AND COMMITMENTS
The Program participates in Federal, State and County grant programs that are fully or partially funded by grants received from other governmental units. Expenditures financed by grants are subject to audit by the appropriate grantor government. If expenditures are disallowed due to noncompliance with grantor program regulations, the City may be required to reimburse the grantor government. As of June 30, 2025, some amounts of grant expenditures have not been audited, but the City believes that disallowed expenditures, if any, based on subsequent audits will not have a material effect on the Program or the overall financial condition of the City. 9 SUPPLEMENTARY INFORMATION
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF FEDERAL, STATE, COUNTY AND LOCAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2025
Program
Federal
Assistance
Listing
Number
Pass-Through Identifying
Number
Award
Amount Revenue Expenditures
Federal Awards
US Department of Housing and Urban Development
Pass-through from County of Marin
Community Development Block Grant 14.218 40CDBG24CD452 $23,000 $23,000 $23,000 US Department of Health and Human Services
Child Care and Development Fund 93.575
COVID 19 -- ARPA -- Stabilization Stipend Not available 325,893 COVID 19 -- ARPA -- Stabilization Stipend 004-0045655 24,806 Total Federal Awards $373,699 $23,000 $23,000
State Awards
State of California Department of Education
Child Development Division
State Preschool Program FY2025 CSPP-4281 $530,526 $521,963 $516,336 Cost of Care Award Funds FY2025 Not applicable 152,621 152,621 Total State Awards $683,147 $674,584 $516,336
County Awards
County of Marin
First Five - Preschool CSRI-21-009-11 $24,997 $24,997 $24,997 Total County Awards $24,997 $24,997 $24,997
Local Awards
Marin Child Care Council N/A $14,320 $14,320 $14,320
Total Local Awards $14,320 $14,320 $14,320
Total State, Federal, County and Local Awards $1,096,163 $736,901 $578,653 Pass-through from State of California,
Department of Education
11 CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
COMBINING SCHEDULE OF REVENUES, EXPENDITURES AND CHANGES IN FUND BALANCE FOR THE YEAR ENDED JUNE 30, 2025
State Preschool
Program Total CDE Non-CDE
(CSPP-4281) CD Contracts Programs Total
REVENUES
Restricted:
State grants:
Current year grants $674,584 $674,584 $674,584
CDBG preschool grant (federal grant) $23,000 23,000
First Five school readiness grants 24,997 24,997
Local grants 14,320 14,320
Unrestricted:
Interest 33,684 33,684
Parent fees - noncertified children 3,414,126 3,414,126 Other revenue 800 800
Total Revenues 674,584 674,584 3,510,927 4,185,511
EXPENDITURES
Certified salaries 117,116 117,116 117,116
Classified salaries 160,516 160,516 1,722,526 1,883,042 Employee benefits 194,276 194,276 1,130,562 1,324,838
Training and instruction 2,730 2,730
Office supplies 2,649 2,649
Books and supplies 21,981 21,981 157,307 179,288
Utilities and housekeeping services 34,049 34,049
Travel and conferences
Rentals 19,963 19,963
Services and other operating expenditures 22,447 22,447 152,782 175,229 Equipment 56,258 56,258
Insurance 28,490 28,490
Renovations and repairs 10,916 10,916
Total Expenditures 516,336 516,336 3,318,232 3,834,568
CHANGES IN FUND BALANCE $158,248 $158,248 $192,695 $350,943 12 CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF EXPENDITURES BY STATE CATEGORIES
FOR THE YEAR ENDED JUNE 30, 2025
CSPP-4281
State Preschool
Program Totals
EXPENDITURES:
1000 Certified personnel salaries $117,116 $117,116
Due from State
1100 Teachers' salaries 117,116 117,116
1200 Administration
1300 Supervisors' salaries
1600 Infant educators
2001 Classified personnel salaries $160,516 $160,516
2100 Instructional aides' salaries 160,516 160,516
2300 Clerical and other office salaries
2500 Food services salaries
2600 Transportation salaries
3000 Employee benefits $194,276 $194,276
3200 Payroll taxes (Medicare) 3,744 3,744
3300 Other benefits 64,572 64,572
3400 Health and welfare 2,981 2,981
3600 Workers' compensation insurance 122,979 122,979
4000 Books and supplies $21,981 $21,981
4200 Other books
4300 Instructional materials and supplies 21,981 21,981 4500 Other supplies
4600 Food supplies
5000 Services and other operating expenditures $22,447 $22,447 5100 Lecturer
5200 Travel and conferences
5300 Memberships and dues
5400 Insurance 2,021 2,021
5500 Utilities and housekeeping services 2,485 2,485
5600 Rentals, leases and repairs
5700 Audit expense 11,027 11,027
5800 Other direct services & admin. 6,914 6,914
6000 Capital Outlay
6100 Sites and improvements of sites
6200 Buildings and improvements of buildings
6400 Equipment (program-related)
6500 Equipment replacement (program related)
Depreciation
Costs capitalized as Fixed Assets
TOTAL OF REIMBURSABLE AND
NONREIMBURSABLE EXPENDITURES $516,336 $516,336
We have examined the claims filed for reimbursement and the original records supporting the transactions recorded under the contracts listed above to an extent considered necessary to assure ourselves that the amounts claimed by the contractor were eligible for reimbursement, reasonable, necessary, and adequately supported, according to governing laws, regulations, and contract provisions. 13 CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF CLAIMED ADMINISTRATIVE COSTS
FOR THE YEAR ENDED JUNE 30, 2025
CSPP-4281
State Preschool
Program
Administrative Costs
5000 Services and other operating expenses (including audit fees) $22,447 Total Administrative Costs claimed for reimbursement $22,447 14 Capitalized Equipment Expensed on the AUD with Prior Written Approval CSPP-4281 None $0
Subtotal 0
Capitalized Equipment Expensed on the AUD without Prior Written Approval CSPP-4281 None 0
Subtotal 0
Total $0
NOTE: The City's capitalization threshold is $5,000.
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF CLAIMED EQUIPMENT EXPENDITURES
FOR THE YEAR ENDED JUNE 30, 2025
15 Capitalized R&R Project Under $10,000 CSPP-4281
None $0
Subtotal 0
Capitalized R&R Project of $10,000 or More with Prior Written Approval CSPP-4281 None 0
Subtotal 0
Capitalized R&R Project of $10,000 or More without Prior Written Approval CSPP-4281 None 0
Subtotal 0
Total $0
NOTE: The City's capitalization threshold is $5,000.
CITY OF SAN RAFAEL CHILD DEVELOPMENT PROGRAM
SCHEDULE OF CLAIMED EXPENDITURES FOR RENOVATIONS AND REPAIRS FOR THE YEAR ENDED JUNE 30, 2025
16 Contract Number:
Fiscal Year Ended: June 30, 2025
Vendor Code:
Contractor Name:
California Department of EducationAudited Enrollment, Attendance and Fiscal Report for California State Preschool Program Section 1 – Number of Counties Where Services are Provided Number of counties where the agency provided services to certified children (Form 1): Number of counties where the agency provided mental health consultation services to certified children (Form 2): Number of counties where the agency provided services to non-certified children (Form 3): Number of counties where the agency provided mental health consultation services to non-certified children (Form 4): Total enrollment and attendance forms to attach: Note: For each of the above categories, submit one form for each service county.
Section 2 – Days of Enrollment, Attendance and Operation Enrollment and Attendance Form Summary
Column A
Cumulative FY
per CPARIS
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjusted Days
per Audit
Total Certified Days of Enrollment Total Certified Days of Enrollment with Mental Health Consultation Services Days of Attendance (including MHCS) N/A Total Non-Certified Days of Enrollment Total Non-Certified Days of Enrollment with Mental Health Consultation Services Days of Operation
Column A
Cumulative FY
per CPARIS
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjusted Days
per Audit
Days of Operation N/A
AUD 8501 Page 1 of Audit Report Page
City of San Rafael Child Development Program CSPP 4281
2193
1 0
0 0
1 11,786 11,786 10,226.8072
0 11,786 11,786
00 175 175
17 Contractor Name: Contract Number:
Section 3 – Revenue
Restricted Income Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Child Nutrition Programs Exceptional Needs/Severely Disabled Service Level Exemption Credit County Maintenance of Effort (EC Section 8260)
American Rescue Plan Act (ARPA)
Other: Other:
TOTAL RESTRICTED INCOME
Transfer from Reserve Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Transfer from Preschool Reserve Account
Other Income Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Family Fees for Certified Children Interest Earned on Apportionment Payments Unrestricted Income: Fees for Non-Certified Children Unrestricted Income: Head Start Other:
AUD 8501 Page 2 of Audit Report Page
City of San Rafael Child Development Program CSPP 4281
000000
000
000000
18 Contractor Name: Contract Number:
Section 4 - Reimbursable Expenses
Cost Category Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Direct Payments to Providers (FCCH only) Direct Payments to Subcontractors: Cost of Care Plus & One-Time Allocations Only 1000 Certificated Salaries 2000 Classified Salaries 3000 Employee Benefits 4000 Books and Supplies 5000 Services and Other Operating Expenses 6100/6200 Other Approved Capital Outlay 6400 New Equipment (program-related) 6500 Equipment Replacement (program-related) 6600 Lease Assets (used in governmental funds only) Depreciation or Use Allowance Start-up Expenses (service level exemption) Indirect Costs (included in Total Administrative Cost)
TOTAL REIMBURSABLE EXPENSES
AUD 8501 Page 3 of Audit Report Page
CSPP 4281 City of San Rafael Child Development Program
00 117,116 117,116160,516 160,516194,276 194,276
21,981 21,98122,447 22,447
0000000
516,336 0 516,336
19 Contractor Name: Contract Number:
Section 4 - Reimbursable Expenses (cont.)
Specific Items of Reimbursable Expenses Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Total Administrative Cost (included in Reimbursable Expenses) Total Staff Training Cost (included in Reimbursable Expenses) Total Program Closure Only (Management Bulletin 19-05) Total Exceptional Needs/Severely Disabled Service
Level Exception Credit Expense (included in Reimbursable Expenses) AUD 8501 Page 4 of Audit Report Page
CSPP 4281 City of San Rafael Child Development Program
22,447 22,447
00 20
Contractor Name: Contract Number:
Section 5 - Supplemental Funding
Supplemental Revenue Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Enhancement Funding Other: Other:
TOTAL SUPPLEMENTAL REVENUE
Supplemental Expenses Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit 1000 Certificated Salaries 2000 Classified Salaries 3000 Employee Benefits 4000 Books and Supplies 5000 Services and Other Operating Expenses 6000 Equipment / Capital Outlay Depreciation or Use Allowance Indirect Costs Non-Reimbursable Supplemental Expenses
TOTAL SUPPLEMENTAL EXPENSES
AUD 8501 Page 5 of Audit Report Page
City of San Rafael Child Development Program CSPP 4281
000
000
000000000
000
21 Contractor Name: Contract Number:
Section 6 - Summary
Description Column A – Cumulative FY per CPARIS Column B – Audit Adjustments Column C – Cumulative FY per Audit Total Certified Days of Enrollment (including MHCS) Days of Operation Days of Attendance (including MHCS) Total Certified Adjusted Days of Enrollment N/A N/A Total Non-Certified Adjusted Days of Enrollment N/A N/A Restricted Program Income Transfer from Preschool Reserve Account Family Fees for Certified Children Interest Earned on Apportionment Payments Direct Payments to Providers Start-up Expenses (service level exemption) Total Reimbursable Expenses Total Administrative Cost Total Staff Training Cost Total Exceptional Needs/Severely Disabled Service Level Exemption Credit Expenses (included in total Reimbursable Expenses) Non-Reimbursable Cost (State Use Only) N/A N/A AUD 8501 Page 6 of Audit Report Page
CSPP 4281 City of San Rafael Child Development Program
11,786 0 11,786
175 0 175
11,786 0 11,786
10,226.8072
0.0000
000000
00 0
000000000
516,336 0 516,336
0 22,447 22,44700 0000
22 Contractor Name: Contract Number:
Section 7 – Auditor’s Assurances Independent auditor's assurances on agency's compliance with the contract funding terms and conditions and program requirements of the California Department of Education, Early Education Division: Eligibility, enrollment and attendance records are being maintained as required (Select YES or NO): <HV 1RReimbursable expenses claimed in Section 4 are eligible for reimbursement, reasonable, necessary, and adequately supported (Select YES or NO): <HV 1RSection 8 – Comments Include any comments in the comment box. If necessary, attach additional sheets to explain adjustments. AUD 8501 Page 7 of Audit Report Page City of San Rafael Child Development Program CSPP 4281
✔
✔
Adjustments identified in Column B are adjustments made to report audit fees as administrative costs. 23 □
□
□
□
Contractor Name: Contract Number:
California State Preschool Program – Form 1 Certified Children Days of Enrollment and Attendance Service County:
Enrollment Description
Column A
Cumulative FY
per CPARIS June Report
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjustment
Factor
Column E
Adjusted Days
per Audit
7ZR<HDUV2OGDQGThree Years Old Full-time-plus 2.1240 7ZR<HDUV2OGDQGThree Years Old Full-time 1.8000 7ZR<HDUV2OGDQGThree Years Old Part-time Four Years and Older Full-time-plus 1.1800 Four Years and Older Full-time 1.0000 Four Years and Older Part-time Exceptional Needs Full-time-plus $FWLYH,(3,)632QO\
2.8320Exceptional Needs Full-time
$FWLYH,(3,)632QO\
2.4000
Exceptional Needs Part-time
$FWLYH,(3,)632QO\
Dual Language Learner Full-time-plus 1.4160 Dual Language Learner Full-time 1.2000 Dual Language Learner Part-time AUD 8501 – Form 1
)<±
Audit Report Page Page 1 of 2
City of San Rafael Child Development Program CSPP 4281
Marin
0 0.00000 0.0000
3,452 3,452 1.0872 3,753.0144
0 0.00000 0.0000
6,631 6,631 0.6040 4,005.1240
0 0.00000 0.0000
1,703 1,703 1.4496 2,468.6688
0 0.00000 0.00000 0.6040 0.0000
24 Contractor Name: Contract Number:
Enrollment Description
Column A
Cumulative FY
per CPARIS June Report
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjustment
Factor
Column E
Adjusted Days
per Audit
At Risk of Abuse or Neglect Full-time-plus 1.2980 At Risk of Abuse or Neglect Full-time 1.1000 At Risk of Abuse or Neglect Part-time Severely Disabled Full-time-plus $FWLYH,(3,)632QO\
2.8320
Severely Disabled Full-time
$FWLYH,(3,)632QO\
2.4000
Severely Disabled Part-time
$FWLYH,(3,)632QO\
TOTAL CERTIFIED DAYS OF ENROLLMENT N/A
Attendance
Column A
Cumulative FY
per CPARIS June Report
Column B
Audit
Adjustments
Column C
Cumulative FY
per Audit
Column D
Adjustment
Factor
Column E
Adjusted Days
per Audit
DAYS OF ATTENDANCE N/A N/A
(QWHUWKHVXPRITotal Certified Days of Enrollment from all Form 1s in the Total Certified Days of Enrollment line of AUD 8501, Section 2. (QWHUWKHVXPRIDays of Attendance from all Form 1s and Form 2s in the Days of Attendance line of AUD 8501, Section 2.
AUD 8501 – Form 1
)<±
Audit Report Page Page 2 of 2
CSPP 4281 City of San Rafael Child Development Program
0 0.00000 0.00000 0.6040 0.00000 0.00000 0.00000 1.4496 0.0000 11,786 0 11,786 10,226.807211,786 11,786
26 25
California Department of Education Fiscal Year Ending: June 30, 202 Audited 3UHVFKRROReserve Account Activity Report Vendor Code:
Contractor Name:
Section 1 – Prior Year Reserve Account Activity
Beginning Balance (202–2 $8'
$Ending Balance):
Plus Transfers to Reserve Account:
202–2Contract No.
Per 202–2
Post-Audit
((1FS 9530
Total Transferred from 202–2 Contracts
Less Excess Reserve to be Billed:
202–2 ((1)6
5HVHUYH%DODQFH$IWHU%LOOLQJ:
6ection 2 – Current Year Reserve Account Activity
Plus Interest Earned This Year on Reserve:
Description Column A
SHU&3$5,6
Column B
Audit Adjustments
Column C
Total per Audit
Interest Earned
6. Less Transfers to Contracts from Reserve:
202–2 Contract No. Column A
SHU&3$5,6
Column B
Audit Adjustments
Column C
Total per Audit
Total Transferred to Contracts
7. Ending Balance:
Description Column A
SHU&3$5,6
Column B
Audit Adjustments
Column C
Total per Audit
Ending Balance on June 30, 202
COMMENTS – If necessary, attach additional sheets to explain adjustments.
AUD 9530A Page 1 of 1 Audit Report Page
2193
City of San Rafael Child Development Program
50,257
64,447
CSPP4281 14,190
14,190
73 73
0 0
0 0 00
64,520 0 64,520
26 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
Notes to the Supplementary Information
For the Year Ended June 30, 2025
NOTE 1 – NOTE TO SUPPLEMENTARY INFORMATION
In accordance with the applicable requirements from the Funding Terms and Conditions of the City of San Rafael’s child development contract with the California Department of Education:
A. Interest Expense
Interest expense is only allowable as a reimbursable cost in certain circumstances when it has been preapproved by the administering state department or relates to the lease purchase, acquisition, or repair or renovation of early learning and care facilities owned or leased by the contractor. No interest expense was claimed as a reimbursable expense for the year ended June 30, 2025.
B. Related Party Rent Expense
All expenses claimed for reimbursement under a related party rent transaction must be supported by a fair market rental estimate from an independent appraiser, licensed by the California Office of Real Estate Appraisers. No related party rent expense was claimed as a reimbursable expense for the year ended June 30, 2025.
C. Bad Debt Expense
Bad debt expense is unallowable unless it relates to uncollected family fees where documentation of adequate collection attempts exists. No bad debt expense was claimed from a child development contract for the year ended June 30, 2025.
27 This Page Left Intentionally Blank
INDEPENDENT AUDITOR’S REPORT ON
INTERNAL CONTROL OVER FINANCIAL REPORTING
AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN
AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE
WITH GOVERNMENT AUDITING STANDARDS
To the Honorable Members of the City Council
City of San Rafael, California
We have audited, in accordance with the auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States, the basic financial statements of the City of San Rafael Child Development Program (Program) as of and for the year ended June 30, 2025, and have issued our report thereon dated November 20, 2025.
Report on Internal Control Over Financial Reporting
In planning and performing our audit of the financial statements, we considered the Program's internal control over financial reporting (internal control) as a basis for designing of audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of Program’s internal control.
Accordingly, we do not express an opinion on the effectiveness of the Program’s internal control.
A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the Program’s financial statements will not be prevented, or detected and corrected on a timely basis.
A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.
Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that have not been identified. 29 Accountancy Corporation
3478 Buskirk Avenue, Suite 217
Pleasant Hill, CA 94523
T 925.228.2800
, [email protected]
w mazeassociates.com
Report on Compliance and Other Matters
As part of obtaining reasonable assurance about whether the Program's financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. Our procedures included the applicable audit procedures contained in the California Department of Education Audit Guide (July 2025) and tests of compliance with the Program requirements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance that are required to be reported under Government Auditing Standards.
We have also issued a separate Memorandum on Internal Control dated November 20, 2025, which is an integral part of our audit and should be read in conjunction with this report.
Purpose of this Report
The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Program’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Program’s internal control and compliance.
Accordingly, this communication is not suitable for any other purpose.
This report is intended solely for the information and use of the California Department of Education, management, City Council, others within the City, and federal awarding agencies and pass-through entities and is not intended to be and should not be used by anyone other than these specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
November 20, 2025
30 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
SUMMARY OF FINDINGS AND QUESTIONED COSTS
For the Year Ended June 30, 2025
None noted.
31 CITY OF SAN RAFAEL
CHILD DEVELOPMENT PROGRAM
CURRENT STATUS OF PRIOR YEAR FINDINGS
AND QUESTIONED COSTS
For the Year Ended June 30, 2025
None noted.
32 INDEPENDENT ACCOUNTANT’S REPORT ON
APPLYING AGREED UPON PROCEDURES FOR
COMPLIANCE WITH THE PROPOSITION 111
2025-2026 APPROPRIATIONS LIMIT INCREMENT
Honorable Mayor and Members of the City Council
City of San Rafael, California
We have performed the procedures enumerated below on the Appropriations Limit Worksheet (Worksheet) of the City of San Rafael, California, for the year ended June 30, 2026. The City’s management is responsible for the Worksheet.
The City has agreed to and acknowledged that the procedures performed are appropriate to meet the intended purpose of these procedures, which were suggested by the League of California Cities and presented in their Article XIIIB Appropriations Limitation Uniform Guidelines, performed solely to assist you in meeting the requirements of Section 1.5 of Article XIIIB of the California Constitution. This report may not be suitable for any other purpose. The procedures performed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.
The procedures and associated findings are as follows:
A. We obtained the Worksheet (Exhibit B to the Resolution) and determined that the 2025-2026 Appropriations Limit of $197,230,566 and annual adjustment factors were adopted by Resolution of the City Council. We also determined that the population and inflation options were selected by a recorded vote of the City Council. However, the Resolution indicated that the change in the population of San Rafael was selected, but the Worksheet shows that the larger adjustment factor of the change in the population of Marin County was used for the calculation of the 2025-2026 Appropriations Limit.
B. We recomputed the 2025-2026 Appropriations Limit by multiplying the 2024-2025 Prior Year Appropriations Limit by the Total Growth Factor. We recomputed the Total Growth Factor by multiplying the population option by the inflation option.
C. For the Worksheet, we agreed the Per Capita Income Factor, City Population Factor and County Population Factor to California State Department of Finance Worksheets, and the Change in Assessment Roll for Nonresidential Construction Factor to the Marin County Worksheet.
We were engaged by the City to perform this agreed-upon procedures engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to and did not conduct an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Worksheet.
Accordingly, we do not express such an opinion or conclusion. Had we performed additional procedures, other matters might have come to our attention that would have been reported to you.
We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.
This report is intended solely for the information and use of management and the City Council and is not intended to be and should not be used by anyone other than those specified parties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.
Pleasant Hill, California
November 20, 2025
____________________________________________________________________________________
FOR CITY CLERK ONLY
Council Meeting:
Disposition: Resolution
Agenda Item No: 5.c
Meeting Date: December 1, 2025
SAN RAFAEL CITY COUNCIL AGENDA REPORT
Department: Finance
Prepared by: Paul Navazio, Finance Director City Manager Approval: ______________ TOPIC: FY2025-26 FIRST QUARTER BUDGET UPDATE
SUBJECT: FY2025-26 FIRST QUARTER BUDGET UPDATE: REVENUE AND EXPENDITURE RESULTS FOR THE QUARTER ENDING SEPTEMBER 30, 2025.
RECOMMENDATION:
1) Accept the FY 2025-26 First Quarter Budget Update, presenting revenue and expenditure results through the first quarter of the fiscal year 2025-26 (September 30, 2025). (Attachment A).
BACKGROUND:
This agenda item presents the first quarter budget update report summarizing revenue and expenditure results through the first quarter of fiscal year 2025-26. This is an informational report providing periodic updates of financial results relative to the approved budget.
Attachment A provides a summary of FY2025-26 first quarter revenue and expenditure results, organized as follows:
Table 1 – All Fund Revenues, by Fund Type Table 4 – General Fund Revenues Table 2 – All Fund Expenditures by Fund Type Table 5 – General Fund Expenditures by Category Table 3 – All Fund Expenditures by Dept. Table 6 – General Fund Expenditures by Dept.
Table 7 – All Fund revenues, by Fund
Table 8 – All Fund Expenditures by Fund
A Mid-Year (2nd Quarter) Budget Update is planned for February 2026 to include revenue and expenditure results through the first half of the fiscal year (December 31, 2025) as well as updated revenue and expenditure projections through the remainder of the fiscal year. The Mid-Year Budget Update serves to inform mid-year budget adjustments, as necessary, as well as inform the development of the City’s FY2026-27 budget.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 2
A third-quarter budget update is planned for May 2026, to coincide with the City Council’s consideration and review of the City’s proposed FY2026-27 budget.
The First Quarter Budget Update report was previewed with the Finance Sub-committee at their meeting on November 4th.
DISCUSSION
Highlights of the FY 2025-26 Q1 results (Summarized in Attachment A):
• All Funds revenues through the first quarter of FY 2025-26 were $26.09 million, or 13.7% of the amended revenue budget of $189.75 million (see Table 7 for revenue detail, by Fund). • All Funds expenditures through the first quarter of FY 2025-26 totaled $51.68 million. This, combined with an additional $17.41 million in encumbrances related to executed contracts and purchase orders, represents a total of 23.2% of the amended expenditure budget of $223.11 million (see Table 8 for expenditure detail, by Fund).
o The amended FY 2025-26 budget of $223.11 million reflects budget amendments totaling $30.82 million following the adoption of the budget. These include carryover of encumbered FY 2024-25 appropriations ($15.94 million), carryover of unencumbered FY2024-25 appropriations ($14.26 million), and specific FY 2025-26 supplemental budget appropriations authorized by the City Council since the start of the fiscal year ($614,570).
• General Fund revenues through the first quarter of FY 2025-26 totaled $8.19 million, or 7.6% of the adjusted budget of $107.55 million.
o General Fund revenues through the first quarter reflect the fact that the first Property Tax payments (from the County) and Sales Tax payments (from the State) are not received until the second quarter of the fiscal year.
o Most other General Fund revenues are initially tracking at, or above, the expected budget through the first quarter of the fiscal year.
• General Fund expenditures through the first quarter of FY 2025-26 were at $33.34 million.
Combined with encumbrances of $1.54 million, this represents a combined commitment of
30.0% of the adjusted budget of $116.15 million.
o Through the first quarter, results across most expenditure categories are tracking within budget, including personnel costs, which have historically trended below budget. o Departmental expenditures appear to be within budget, accounting for selected professional services contracts that reflect as encumbered appropriations as of the end of the first quarter.
• The following table summarizes activity for the FY 2025-26 Capital Improvement Plan (CIP) budget through the first quarter of the fiscal year:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 3
FY2025-26 Capital Improvement Plan
Expenditures By Fund
*The difference between the FY25-26 CIP budget presented to the Council on June 2nd and this table is an additional $50,000 was budgeted in the operating expense account for Measure A. In the financial system the $50,000 was budgeted in the Capital division. * • Through the first quarter of the fiscal year, capital project expenditure was $1.37 million. When combined with encumbrances (or executed contracts) of $6.49 million, commitments against the amended budget totaled $7.86 million, or 24.6% of the amended budget of $31.97 million. • The amended capital budget of $31.97 million reflects the original adopted budget of $16.01 million, as well as carry-over appropriations of $15.97 million (representing appropriations approved in the prior fiscal year that are required to support ongoing projects).
FISCAL IMPACT:
This agenda item provides financial results through the first quarter of the fiscal year as measured against the approved FY 2025-26 adjusted budget, which provides for authorized expenditure appropriations of $223.11 million supported by budgeted revenues of $189.75 million, as well as the use of available fund balances, across all funds. The amended FY 2025-26 General Fund budget provides for expenditure appropriations of $116.15 million supported by projected revenues of $107.55 million, along with available fund balance.
RECOMMENDED ACTION:
Staff recommends that the City Council:
1) Accept the FY 2025-26 First Quarter Budget Update, presenting revenue and expenditure results through the first quarter of the fiscal year 2025-26 (September 30, 2025). (Attachment A).
ATTACHMENTS:
Attachment A - FY 2025-26 Q1 Budget Update - summary results through 9/30/25 SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 4
ATTACHMENT A
FY 2025-26 Q1 Budget Update
Table 1
FY 2025-26 All Fund Revenues
by Fund Type
• All Funds revenues through the first quarter of FY 2025-26 were $26.09 million or 13.7% of the amended revenue budget of $195.56 million (see Attachment B for revenue detail, by Fund).
Table 2
FY 2025-26 All Fund Expenditures
by Fund Type
• All Funds expenditures through the first quarter of FY 2025-26 totaled $51.68 million. This, combined with an additional $17.41 million in encumbrances related to executed contracts and purchase orders, represents a total of 23.2% of the amended expenditure budget of $223.11 million (see Attachment B for expenditure detail by Fund). • The amended FY 2025-26 budget of $223.11 million reflects budget amendments totaling $30.82 million processed following the adoption of the budget. These include:
o Carryover of encumbered FY 2024-25 appropriations totaling $15.94 million authorized via the budget Resolution No. 15422 approved by the City Council on June 2, 2025; o Carryover of unencumbered FY2024-25 appropriations totaling $14.26 million authorized by Resolution No. 15456 approved on September 2, 2025; and o Specific FY 2025-26 supplemental budget appropriations authorized by the City Council since the start of the fiscal year ($614,570), including:
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 5
On-call Planning and Environmental Consulting Services $500,000 UKG Contract (Human Resources) 66,500
Pickleweed Library Renovation project 48,070
• All Funds expenditures through the first quarter of FY 2025-26 totaled $51.68 million. This, combined with an additional $17.41 million in encumbrances related to executed contracts, represents a total of 23.2% of the amended expenditure budget of $223.12 million.
Table 3
FY 2025-26 All Fund Expenditures
by Department
• Most operating departments are tracking within budget through the first three months of the fiscal year. Year-to-date commitments exceeding 25% of budget through the first quarter of the fiscal year are generally attributable to a) annual payments due at the start of the fiscal year, b) debt service payments, and c) encumbered contracts for professional services and construction contracts. Notable examples include:
o City Attorney – encumbrance of annual contract for outside legal services o City Manager’s Office – encumbrance of Encampment Resolution Fund (ERF- 3) grant funds;
o Finance Department – payment of City’s annual Marin Emergency Radio Agency contribution and Pt. San Pedro Assessment District debt service payments; o Human Resources – encumbrances for contract services related to UKG software implantation, Worker’s Compensation benefits administration; o Community and Economic Development – encumbrances related to Affordable Housing grant funds (awarded and pending disbursements) o Library and Recreation – encumbrances related to Pickleweed Library Branch Renovation project
o Non-Departmental – expenditures reflect $6.6 million in transfers to other operating and capital funds (as approve through the FY 2025-26 adopted budget), as well as Measure E debt service payments and charges from internals service funds.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 6
• Note – the FY 2025-26 amended budget also reflects a number of administrative budget adjustments transferring appropriations between operating departments that were required as part of the City’s implementation of its new ERP financial system. Specifically, several programs and divisions transferred ‘home departments” between the development of the FY2025-26 budget in the former EDEN financial system, and the new Tyler/ERP Financial System. Examples include:
o Risk Management (including Liability Fund and Workers’ Compensation Fund administration) transferring from the City Manager’s Office to Human Resources.
Table 4
FY 2025-26 General Fund Revenues
• General Fund revenues though the first quarter of FY 2025-26 totaled $8.19 million, or 7.6% of the adjusted budget of $107.55 million.
o General Fund revenues through the first quarter reflect the fact that the first Property Tax payments (from the County) and Sales Tax payments (from the State) are not received until the second quarter of the fiscal year.
o Most other General Fund revenues are initially tracking at, or above, the expected budget through the first quarter of the fiscal year.
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 7
Table 5
FY 2025-26 General Fund Expenditures
By Category
• General Fund expenditures through the first quarter of FY 2025-26 stand at $33.34 million.
Combined with encumbrances of $1.54 million, this represents a combined commitment of
30.0% of the adjusted budget of $116.15 million.
o Through the first quarter, results across most expenditure categories are tracking within budget, including personnel costs which have historically trended below budget. o Departmental expenditures appear to be within budget, accounting for selected professional services contracts that reflect as encumbered appropriations as of the end of the first quarter.
Table 6
FY 2025-26 General Fund Expenditures
By Department
SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 8
Table 7
FY 2025-26 Revenues
By Fund
Fund Adopted Budget FY26 Adjusted Budget FY26 Actual Thru Sep 2025 % Budget General Fund
101 General Fund 106,390,855.00 106,890,855.00 8,010,462.67 7.5% 102 General Plan 659,391.00 659,391.00 180,679.74 27.4% General Fund Total 107,050,246.00 107,550,246.00 8,191,142.41 7.6% Special Revenue Funds - - -
203 Abandoned Vehicle Abatement 190,000.00 190,000.00 45,768.31 24.1% 205 Stormwater 1,539,010.00 1,539,010.00 81,713.69 5.3% 206 Gas Tax 10,946,300.00 10,946,300.00 2,295,970.36 21.0% 207 Development Services - - 775.31 0.0%
208 Childcare 3,339,986.00 3,339,986.00 766,252.55 22.9% 210 Emergency Medical Services 9,599,809.00 9,599,809.00 952,217.31 9.9% 213 Library Endowment 17,709.00 17,709.00 2,019.27 11.4% 214 Library Fund 104,376.00 104,376.00 415,294.93 397.9% 215 Library Special Assessment 1,259,143.00 1,259,143.00 2,124.65 0.2% 216 Measure G - Cannabis 142,199.00 142,199.00 25,551.80 18.0% 217 State Lands 54,819.00 54,819.00 2,149.40 3.9%
222 Recreation 4,826,578.00 4,826,578.00 1,223,628.81 24.3% 230 Police Youth Services 15,000.00 15,000.00 - 0.0%
234 Pt. San Pedro-Maintenance 127,037.00 127,037.00 919.46 0.7% 235 Baypoint Lagoon A.D. 32,693.00 32,693.00 809.22 2.5% 236 Loch Lomond CFD #10 57,887.00 57,887.00 3,028.93 5.2% 237 Loch Lomond-Marina CFD #2 332,841.00 332,841.00 4,309.17 1.3% 240 Parkland Dedication 11,390.00 11,390.00 1,291.40 11.3% 241 Measure A Open Space 609,392.00 609,392.00 4,014.89 0.7% 242 Wildfire Prevention 3,945,872.00 3,945,872.00 125,046.19 3.2% 243 Affordable Housing In-Lieu-SR 1,070,529.00 1,070,529.00 8,211.37 0.8% 244 Successor RDA-L & M Housing 3,266.00 3,266.00 555.51 17.0% 245 Housing & Parking In Lieu 10,849.00 10,849.00 1,242.36 11.5% 246 Traffic Mitigation 390,619.00 390,619.00 113,954.96 29.2% 260 Childcare Preschool Grant 597,962.00 597,962.00 308,851.04 51.7% 281 Grant Fund - Safety 300,000.00 300,000.00 - 0.0%
283 Grants Fund - Other 3,218,897.00 3,218,897.00 17,817.53 0.6% Special Revenue Funds Total 42,744,163.00 42,744,163.00 6,403,518.42 14.9% Capital Funds - - -
401 Capital Improvement 2,099,211.00 2,099,211.00 1,582,347.65 75.4% 405 Open Space 3,773.00 3,773.00 427.78 11.3%
406 Parks & Rec. Facility Mtce. 4,698.00 4,698.00 1,049.03 22.3% 407 Parks Capital Improvements - - 3,300.00 0.0%
420 Essential Facilities 396,819.00 396,819.00 157,384.99 39.7% 430 Measure P Library Parcel Tax 6,320,000.00 6,320,000.00 - 0.0% Capital Funds Total 8,824,501.00 8,824,501.00 1,744,509.45 19.8% Enterprise Funds - - -
501 Parking Services 4,797,474.00 4,797,474.00 1,226,789.52 25.6% Enterprise Funds Total 4,797,474.00 4,797,474.00 1,226,789.52 25.6% Internal Service Funds - - -
611 Building Maintenance 1,208,543.00 1,208,543.00 277,698.92 23.0% 612 Technology 2,733,504.00 2,733,504.00 661,462.48 24.2% 614 Sewer Maintenance 3,773,508.00 3,773,508.00 170,367.92 4.5% 621 Vehicle Replacement 2,459,633.00 2,459,633.00 1,345,954.30 54.7% 622 Radio Replacement 462,105.00 462,105.00 112,500.00 24.3% 623 Communication Replacement 613,797.00 613,797.00 151,982.40 24.8% 624 Police Equipment Replacement 56,906.00 56,906.00 11,184.38 19.7% 625 Fire Equipment Replacement 167,985.00 167,985.00 37,127.10 22.1% 631 Liability Insurance 5,426,177.00 5,426,177.00 3,223,628.86 59.4% 632 Workers Compensation 3,397,762.00 3,397,762.00 813,736.58 23.9% 633 Dental Insurance 529,622.00 529,622.00 163,530.77 30.9% 641 Employee Benefits 734,049.00 734,049.00 174,103.44 23.7% 642 Employee Retirement 52,148.00 52,148.00 3,656.85 7.0% 643 Retiree Health Benefit (OPEB) 4,221,281.00 4,221,281.00 1,372,738.21 32.5% Internal Service Funds Total 25,837,020.00 25,837,020.00 8,519,672.21 33.0% Grand Total 189,253,404.00 189,753,404.00 26,085,632.01 13.7% SAN RAFAEL CITY COUNCIL AGENDA REPORT / Page: 9
Table 8
FY 2025-26 Expenditures
By Fund
Fund
Adopted Budget
FY26
Adjusted Budget
FY26
Actual Thru Sept
2025 Encumbrances % Budget
General Fund
101 General Fund 113,248,823 115,366,772 33,255,182 1,535,547 30.2% 102 General Plan 783,451 783,451 89,746 0 11.5%
General Fund Total 114,032,274 116,150,223 33,344,928 1,535,547 30.0% Special Revenue Funds
203 Abandoned Vehicle Abatement 190,505 190,505 46,986 - 24.7% 205 Stormwater 1,938,992 5,377,668 535,409 2,985,691 65.5% 206 Gas Tax 10,889,204 20,571,706 875,228 3,425,583 20.9% 208 Childcare 3,516,638 3,516,638 893,685 542 25.4%
210 Emergency Medical Services 10,155,208 10,155,208 2,417,045 118,610 25.0% 213 Library Endowment - 48,070 - - 0.0%
214 Library Fund 192,392 2,188,004 10,305 390,901 18.3% 215 Library Special Assessment 1,599,341 1,916,122 533,159 111,246 33.6% 216 Measure G - Cannabis 695,373 695,373 33,782 - 4.9%
222 Recreation 5,002,005 5,002,005 1,298,657 320,696 32.4% 230 Police Youth Services 40,043 40,043 - - 0.0%
234 Pt. San Pedro-Maintenance 183,186 222,736 33,453 14,546 21.5% 235 Baypoint Lagoon A.D. 34,700 34,700 - - 0.0%
236 Loch Lomond CFD #10 28,855 28,855 - - 0.0%
237 Loch Lomond-Marina CFD #2 150,030 162,568 24,139 4,157 17.4% 240 Parkland Dedication 375,000 375,000 - - 0.0%
241 Measure A Open Space 450,000 1,127,370 352,807 279,349 56.1% 242 Wildfire Prevention 3,946,919 3,961,220 640,728 1,155,082 45.3% 243 Affordable Housing In-Lieu-SR - 1,969,419 250,000 1,116,419 69.4% 244 Successor RDA-L & M Housing 85,770 85,770 - - 0.0%
246 Traffic Mitigation 400,000 476,376 - 103,899 21.8%
260 Childcare Preschool Grant 704,824 708,541 159,953 3,717 23.1% 281 Grant Fund - Safety 577,811 577,811 27,769 - 4.8%
283 Grants Fund - Other 1,810,563 5,930,216 389,696 2,494,268 48.6% Special Revenue Funds Total 42,967,359 65,361,924 8,522,803 12,524,707 32.2% Capital Funds
401 Capital Improvement 1,054,000 4,098,634 657,513 1,842,194 61.0% 420 Essential Facilities 880,000 884,000 - 180,237 20.4% 430 Measure P Library Parcel Tax 1,625,000 1,625,000 3,463 - 0.2% Capital Funds Total 3,559,000 6,607,634 660,975 2,022,431 40.6% Enterprise Funds
501 Parking Services 4,701,156 4,701,156 1,052,592 93,205 24.4% Enterprise Funds Total 4,701,156 4,701,156 1,052,592 93,205 24.4% Internal Service Funds
611 Building Maintenance 2,838,000 4,451,786 12,741 170,817 4.1% 612 Technology 3,489,856 4,865,761 876,122 468,066 27.6% 614 Sewer Maintenance 3,773,507 3,773,507 862,434 - 22.9% 621 Vehicle Replacement 430,000 559,656 492,918 10,682 90.0% 622 Radio Replacement 550,000 550,000 530,637 - 96.5%
623 Communication Replacement 694,540 694,540 104,290 - 15.0% 624 Police Equipment Replacement 130,000 130,000 19,377 - 14.9% 625 Fire Equipment Replacement 506,000 506,000 - - 0.0% 631 Liability Insurance 5,110,857 5,215,173 2,465,920 341,771 53.8% 632 Workers Compensation 3,680,585 3,686,423 809,194 231,646 28.2% 633 Dental Insurance 495,000 495,000 110,274 - 22.3%
641 Employee Benefits 822,752 822,752 554,035 14,037 69.0% 642 Employee Retirement 686,500 686,500 170,625 - 24.9% 643 Retiree Health Benefit (OPEB) 3,660,000 3,660,000 978,626 - 26.7% Internal Service Funds Total 26,867,597 30,097,098 7,987,194 1,237,019 30.6% Fiduciary Funds
714 Pt. San Pedro AD 155,002 155,002 105,818 - 68.3%
715 Successor Agency-Trust Fund 12,870 42,870 5,767 - 13.5% Fiduciary Funds Total 167,872 197,872 111,585 - 56.4%
Grand Total 192,295,258 223,115,907 51,680,077 17,412,908 31.0%