Locality Media, Inc. Agreement Jan 2025 Page 5 of 13
but not limited to, acts of God, acts of civil or military authorities, strikes or other labor disputes, fires, interruptions in telecommunications or Internet or network provider services, power outages, and governmental restrictions.
25. This Agreement supersedes all prior agreements, understandings, representations, warranties, requests for proposal and negotiations, if any. Each provision of this Agreement is severable from each other provision for the purpose of determining the enforceability of any specific provision.
LOCALITY MEDIA, INC. City of Turlock Fire Department
By: By:
(Signature) (Signature)
Name: Name:
Title: Title:
Date: Date:
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Exhibit A - Quote
Locality Media, Inc. dba First Due
107 Seventh St
Garden City, NY 11530, United States
Phone: +1 (516) 874-2258
Website: https://www.firstdue.com/
Prepared By: Seth Dinehart
Valid Until: June 30, 2025
Quote Number: 1545132000391553783
BILL TO:
Kain Packwood
City of Turlock Fire Department
156 S. Broadway
Turlock, CA 95380
SHIP TO:
Turlock City Fire & Emergency Services
244 N Broadway
Turlock, CA 95380
Account: Turlock City Fire & Emergency Services
Subscription Start: March 31, 2025
Initial Term: 12 months
Annual Subscription: $52,700.00
Product Details Total
Occupancy Management & Pre-Incident Planning
Manage Occupancies, Pre-Incident Mapping, ArcGIS Maps, Fire Systems, Hazardous Material, and Contacts.
Responder
Web Responder dashboard and Responder iOS/Android App with notifications, statusing and routing.
Command
Comprehensive Incident Command Module with digital command board, drag and drop task assignment, customizable checklists, live map annotation and automated Incident log.
Hydrant Management – Advanced
Manage Hydrants including hydrants visible on pre-plan & response map, hydrant list, hydrant types, hydrant uploads, ArcGIS hydrant layers, hydrant setup, hydrant service checklist, data management, mapping, service inspections, hydrant flow test and reporting.
Inspections
Field Inspections, Configurable Checklists, Violation Management, Virtual Inspections, Inspections Scheduler, and Integrated Pre-Incident Planning.
Invoicing
Invoice Management, Bulk Mailing, Billing Report and Customizable Fee Schedules.
Permitting
Permit Management, Customizable Permit Types, Plan Review and Permit Fees.
Incident Reporting – NFIRS
NFIRS Incident Documentation, State and Federal Compliance with automated submission.
Incident Reporting – ePCR
ePCR Incident Documentation, State and Federal Compliance with automated submission.
AI Enhanced Documentation: ePCR
AI powered transcription and documentation solution to assist with completing EMS patient care reports.
Scheduling
Manage staff schedules with an interactive shift board, configurable call shifts module, messaging, time-off and shift trades.
Personnel Management
Store, Manage and Access Employee Records including demographic data, certifications and employment information.
Basic Training Records
Assign Training, Record Completions, View Training Logs, and Manage Certifications.
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Events & Activities
Create Events, View Global Activity Log, and Access Global Calendar.
Assets & Inventory
Assets, vehicles, equipment and inventory management, assets and equipment checks, and work order management.
Medications Tracking
Track all medications, including DEA Scheduled Medications. Tracking a medication's lifecycle (receipt, usage, waste or removal) by expiration date, lot number or serial number. Ensure compliance with internal and external signatures, as well as advanced role security and authentication.
CAD Integration (Other)
Receive CAD Data to support First Due Responder and Incident Reporting modules via sFTP, XML, or API.
Premium Onsite Training Package
Up to 5 Day Onsite Training with 2 certified First Due Instructor. Includes end user training and custom training curriculum.
Implementation and Configuration Services
Services related to configuring and customizing the First Due Platform as described in the Statement of Work.
One-Time Fees Subtotal $ 29,710.00
Subscription Fees Subtotal $ 52,700.00
Grand Total $ 82,410.00
*Excluding Tax
Statement of Work
Please see attached Statement of Work detailing the Implementation, Training, Data Migration, Integrations, Customer Success Manager, Customer Support, and Assumptions for this Exhibit A – Quote.
Terms and Conditions
The above-listed Grand Total will be invoiced on or around the Subscription Start date. For subsequent annual periods, the Service fees are due and payable annually in advance.
Payment Terms: Net 30 days
For electronic ACH payment: Wells Fargo Bank | ACH Routing Number: 121000248 |Account #: 4192384907
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Locality Media, Inc. Agreement Jan 2025 Page 8 of 13
Statement of Work
Locality Media, Inc. dba First Due
107 Seventh St
Garden City, NY 11530, United States
Phone: +1 (516) 874-2258
Website: https://www.firstdue.com/
For Quote Number: 1545132000391553783
Statement of Work | Turlock City Fire & Emergency Services
1. Introduction
1.1 Purpose
The purpose of this Statement of Work (SoW) document is to clearly define the Implementation, Training, Data Migration, Integrations, Customer Success Manager, Customer Support, and Assumptions for City of Turlock Fire Department (“Customer”) from Locality Media, Inc. dba First Due (“First Due”) for the purchased product(s) set forth in Exhibit A – Quote (“Purchased Products”) attached to the Agreement.
1.2 Scope:
This SOW includes the configuration, optimization, and deployment of the Purchased Products with the goal of meeting the organizational needs of the Customer.
2. Implementation
2.1 Overview
First Due utilizes a combination waterfall and iterative approach to implementation. This includes Discovery, Configuration, Optimization, Data Migration, Training, and Go-Live.
2.2 Implementation Resources
• Implementation Manager: Project lead and go-to person, acting as the primary liaison between the Customer and the First Due project team. The Implementation Manager will develop and execute the project plan, manage communication, and ensure adherence to predefined timelines and quality standards. This individual is also responsible for helping to configure the core system and some of the more straightforward modules.
• Implementation Product Specialist(s): While the Implementation Manager will lead the overall project, Product Specialists will be brought in to help configure and optimize specialty modules such as Fire Prevention, ePCR, Assets & Inventory, Training, Scheduling, and Reporting. They are product experts in First Due and are versed in industry best practices for their specific product specialties. Depending on the modules purchased and complexity, your project may be assigned 1-3 Product Specialists.
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• Technical Implementation Specialist: Responsible for managing data migration from your current vendor to First Due and the integration between First Due and CAD. The Technical Implementation Specialist team comes from a diverse background, ranging from database management to public safety software integration.
• Customer Success Manager: As the point person after project completion, the Customer Success Manager (CSM) will be part of the implementation as an advocate and to ensure a seamless transition to support post go-live. During the Implementation they will regularly check-in to ensure progress is being made and help with the addition of new modules or scope from a commercial perspective. Post go-live, they will provide regular check-ins to ensure the Customer is adopting the Purchased Products and deriving value from them.
• Training Manager: Responsible for developing and executing the training plan, with the goal of effective adoption of the Purchased Products by Customer. The Training Manager will be involved throughout the project to ensure they have the Customer specific knowledge to design the most effective training plan possible.
2.3 Implementation Phases
2.3.1 Discovery & Planning: Once the Project has been assigned, Customer will receive a set of tailored discovery questionnaires. Once filled out, the Implementation Manager will schedule a Project Kick-Off.
During this meeting the Customer will receive access to the First Due platform, meet the project team and receive an initial product tour. The Implementation Manager will also provide an overview of the project plan, decide the meeting cadence, and formalize the next steps. CAD Integration and Data Migration planning meetings are also held during this phase, if required. These meetings will be led by the Technical Implementation Specialist.
• Key Meeting(s): Project Kick-Off, CAD Kick-Off, Data Migration Planning • Milestone(s): Project Kick-Off, System Access
• Customer Task(s): Fill Discovery Questionnaires
• Deliverable(s): Welcome email, Initial Account Set-Up, System Logins Provided
2.3.2 Configuration: After planning is complete, the Implementation Manager will begin scheduling the Configuration sessions. Before each configuration session there will be some light prep work for the Customer to complete. Generally, there will generally be one (1) configuration session per module, but in cases where there is more complexity, there may be multiple. These sessions will be either be run by the Implementation Manager or the Implementation Product Specialist, depending on the module.
• Key Meeting(s): Module Configuration Sessions (1-2 per module) • Milestone(s): N/A
• Customer Task(s): Configuration Prep Work (per module) • Deliverable(s): Initial Module Configuration
• Scope: All Purchase Products
2.3.3 Optimization: After the configuration is complete, the Customer will be provided with test work (module User Acceptance Testing (UAT)) to complete. Following the completion of the UAT work, Optimization Sessions will be held to review Customer feedback, correct any issues, and finalize the configuration of the module. There will generally be one (1) Optimization session per module, but in cases where there is more complexity, there may be multiple. Once a module is configured and optimized, the Customer will be provided a module sign-off document to review and sign. Note Configuration and Optimization sessions may run interchangeably to ensure the project stays on-track.
• Key Meeting(s): Module Optimization Sessions (1-2 per module) • Milestone(s): Module Acceptance and Sign-Off (1 per module) • Customer Task(s): Optimization Prep Work (UAT per module) • Deliverable(s): Module Optimization resulting in Customer Acceptance • Scope: All Purchase Products
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2.3.4 Data Migration: Data Migration will occur through-out the project and can be summarized in three steps: (1) initial data migration at the beginning of the project required for configuration, (2) import of historical records, usually occurring throughout the project, and (3) final data migration immediately before go-live. First Due’s Data Migration team will review your legacy data environment and provide guidance on the best path to extract, map, and import the data into First Due.
• Key Meeting(s): Data Migration Planning
• Milestone(s): Data Migration Sign-Off
• Customer Task(s): Extract or provide access to legacy data based on guidance from First Due Data Migration team, Data Mapping Assistance, review and approve data load. • Deliverable(s): Data Migration Plan, Data Mapping Assistance, Data Import
2.3.5 Training: As the project is in the final stages, the Training Manager will work with the Customer to arrange a training plan that will result in the successful adoption of the Purchased Products. Note that while Webinar Administrator training will occur during configuration and optimization sessions, the Training Manager will arrange formal Webinar and/or Onsite Train-the-Trainer and/or End User Training Session(s). Additive to the provided training, Customer will also have access to live weekly training academy sessions as well as on demand online training videos and training guides via the First Due Knowledgebase.
• Key Meeting(s): Training Planning, Training Sessions
• Milestone(s): Training Completed
• Customer Task(s): Coordinate staff to be trained
• Deliverable(s): Training Plan and Training Session(s)
2.3.6 Go-Live: Once all modules have been signed off and training has been arranged or completed, First Due will work with the Customer to kick-off the Go-live process. This includes: (1) Final System Acceptance, (2) Go-live planning meeting, (3) Final Data Migration, (4) Go-live, and (5) Post go-live implementation support.
• Key Meeting(s): Go-live planning, Post Go-live Check-Ins • Milestone(s): System Acceptance, Go-live
• Customer Task(s): Final Testing
• Deliverable(s): Post Go-live Implementation Support (2-4 weeks)
2.3.7 Transition to Customer Success: Following the completion of the post go-live support period and assuming all critical implementation tasks are complete, Customer will be transitioned to their Customer Success Manager (CSM) and to the First Due Support team.
• Key Meeting(s): Customer Success Transition Meeting
• Milestone(s): Transition to Customer Success and Support • Customer Task(s): N/A
• Deliverable(s): N/A
3. Training
Training is an integral part of any successful implementation. First Due is focused on providing your agency adequate training to ensure effective user adoption of the platform. As part of this Statement of Work, the Customer shall receive:
• Formal training as outlined in Exhibit A - Quote
• Administrator Training as part of the Configuration / Optimization • Access to live First Due Academy Webinars
• Access to online recorded training videos and guides via an interactive knowledgebase
Any additional scope or detail related to Training will be listed below.
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4. Data Migration
First Due understands the importance of data migration to our customers and has extensive experience working to migrate historical records into the platform. First Due will use best efforts to migrate applicable data from Customer’s existing systems utilizing data migration best practices. This includes:
• Data Migration Planning Session
• Assistance/Guidance in extracting data from existing system/s • Mapping extracted data to First Due import workbooks
• Importing of Data into First Due
The Data Migration scope of this Statement of Work will be to import legacy data from Customer existing systems in order for the Purchased Products to be operational. This includes operational data and historic records. Note that there are times when certain data is not seen as valuable to migrate to First Due. First Due and Customer will agree during the planning phase on what data needs to be migrated and priorities around data migration.
5. Integrations
As part of this Statement of Work, First Due will Implement all integrations and relevant scope outlined in Exhibit A – Quote. Integrations will be implemented during the configuration and optimization phases outlined above. In most cases, these integrations will be aligned with the module they are related. The only exception to this is the CAD Integration which, if part of scope, will have its own dedicated session at the beginning of an implementation. Customer or complex integrations may follow this same exception and have their own sessions to implement.
First Due will support these integrations post go-live. Note First Due is not responsible for outages, issues, and failures of 3rd Party Vendors. First Due will, however, always endeavor to work with Customer to resolve issues, regardless of responsibility.
Any additional scope or detail related to Integrations will be listed below.
6. Customer Success Manager
First Due understands the value of ongoing Customer Success activities post go-live. As part of this Statement of Work, Customer will receive a Customer Success Manager who will be the point person for Customer post go-live. Customer will receive regular check-ins to ensure the adoption of the Purchased Products. As part of the regular check-ins, the Customer Success Manager can help Customer with any major enhancements or issues, new feature updates, interest in other modules and additional training needs.
7. Customer Support
A customer’s success is important to First Due and we understand having a reliable, knowledgeable Customer Support (or Support) team there to help is vital. Customer Support provides a central point of contact to ensure that all customer support requests are responded to and resolved. Below is a summary of the support components.
7.1 Contacting Customer Support
Customer Support is a service provided to our customers when they have questions, requests, or issues with the Services. When Customer submits a support request, a Support Ticket (or Ticket) is created within First Due’s Support CRM and a unique ID (or ticket number) is assigned to track and document Customer’s support request.
We offer a variety of channels to communicate with our Support team:
• Online: https://support.firstduesizeup.com/portal/en/kb/first-due-community-connect-support • Email: [email protected]
• Phone: (516) 874-5818
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7.2 Self-Service Resources
First Due strives to provide useful, empowering self-service resources that are available 24/7 on our online Support Center. Our Knowledgebase contains step-by-step/how-to articles, FAQs, videos, best practices, etc.
7.3 Hours of Operation
Customer Support hours of operation (Business Hours) are:
• Monday to Friday, 9:00am – 6:00pm ET**
• ** 24x7 Support available for Sev 1 (Down/Urgent) issues.
8. Assumptions
8.1 Customer Participation
Every successful implementation requires adequate participation from the Customer. Although First Due is ultimately responsible for deliverables in the SoW, Customer agrees to attend the necessary calls and complete required preparatory work in order to help drive the project forward. At a minimum, Customer resources will be required for one (1) hour per week for meetings, and half an hour to one (0.5-1) hour of prep work per week by one or multiple individuals. Customer understands the importance of ensuring the correct Customer resources are available when required.
8.2 Statement of Work Expiration
Excluding significant delays caused by the First Due team, this Statement of Work will expire within twelve (12) months of the Subscription Start Date as detailed in Exhibit A – Quote. In situations where the project is delayed for no fault of either party, First Due agrees to extend the term, only if there is an agreed plan to complete the project within the extension period. Note the term expiration does not apply to section 6 & 7 above and will not impact First Due’s ability to support the Customer post go-live.
8.3 Best Practice and Standard Workflow
First Due intends to meet the organizational needs of the Customer and their respective software requirements by configuring the Purchased Products to closely align with existing workflows. Although First Due is incredibly flexible, there may be times when First Due recommends using standard functionality or best practice to ensure a timely implementation, and simplification of current process. These workflows may differ from Customer existing workflows. Customer understands the importance of collaboration to achieve the ultimate goal of successfully adopting the Purchased Products and is aware there may be changes to existing workflow to accomplish this.
8.4 Go-live Requirements & Gaps
Over the course of the Implementation, both parties may uncover functionality gaps in the Purchased Products. Some of these gaps may have a material impact on the ability to implement or adopt the product.
Gaps of this nature, deemed Go-Live Requirements, will be prioritized to ensure a timely go-live and project completion. However, in the case that certain features are not complete before go-live, they will be added to module and system signoffs as exceptions and will be completed within an agreed upon timeframe.
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107 Seventh St Garden
City, NY 11530
516.874.4741
FirstDue.com
March 18th, 2025
Turlock Fire Department
244 N Broadway
Turlock, CA, 95380
First Due is the sole source for fire & life safetybased occupancy management, pre-planning, mobile and web response, command management, hydrant management, inspections, permitting, invoicing, NFIRS incident reporting, ePCR Incident reporting with AI transcription & documentation, scheduling, personnel, training records, events & activities, assets & inventory management and medications tracking for the Turlock Fire Department. The First Due platform proposed to Turlock Fire Department is the only known solution set providing these modules with a single administrative login and interaction to your CAD system across all modules provided. Other solutions in the marketplace are point solutions and would require multiple integrations to your CAD. First Due's platform ensures that agencies can avoid costly interfaces with other third party-systems.
To Whom It May Concern,
Locality
Media Inc dba First Due provides end-to-end support for fire/EMS services, fulfilling the identified needs and requirements set forth by t he Turlock Fire Department. This software is exclusively owned by Locality Media, Inc. and we are the sole provider of this solution. Below is a detailed list of modules and an explanation as to how each is unique within the First Due platform.
• A best-of-breed Occupancy Management and Pre-Incident Planning solution to automatically collect data and create comprehensive pre-plans in the field, and create pre-plans on every structure by interfacing with data sources such as the assessor’s office and the building department.
• A complete one-of-a-kind Responder application, tied to dispatch, so crews can access critical information at the time of response, as well as be notified en-route to the call, all available via the web, as well as iOS, and Android apps. • First Due provides a Command module, allowing agencies to have comprehensive incident command tools at their disposal with a digital command board, drag and drop task assignment, customizable checklists, live map annotation and automated logging.
• A Hydrant Management system, allowing users to view hydrants on pre-plan and responder maps,including hydrant lists, hydrant types, hydrant uploads, hydrant set up and ArcGIS hydrant layers. Our advanced system also includes expanded data management, service mapping, inspections and hydrant flow test tools. • A comprehensive Inspections module, including functionality for field inspections,virtual inspections, scheduling systems, pre-incident planning, and violation management tools. • A Permitting module, including permit management, customizable permit type creation,the ability to plan reviews, and manage permit fees.
• A next-gen invoicing module, designed to be highly configurable, and easy to use, allowing for bulk invoicing, online payments, and extensive reporting.
• An Incident Reporting platform with automated NFIRS reporting • An ePCR specific Incident Reporting platform allowing for patient incident documentation with automated submissions.
Our ePCR module includes AI powered transcription and documentation tools. • A Scheduling module that allows agencies to easily schedule personnel with simple drag & drop functionality and automation for the most simple or complex shifts, rotations and union rules. Users have both individual and agency wide tools including vacation bidding, shift trades, and time off requests and vacancy fills. • A Personnel Management allowing users and administrators to store, manage and access employee records including demographic data, certifications and employment information. • A Training Records module, allowing users to be assigned training, record completions, view training logs and manage certifications.
• An Events and Activities module allows users to align planned training, community events and station activities, as well as view a master global calendar.
• Asset and Inventory Management module with real-time insight and statistics into apparatus & equipment health, usage, and compliance.
• A Medications Tracking module, allowing users to track all medications including DEA Scheduled Medications. This covers life cycle, expiration dates, lot numbers, serial numbers and other key data and compliance metrics such as signatures and authentication.
• Integration, Implementation and Configuration Services are included with our software. This includes integrating First Due with your CAD system, with automated importing of calls.
All components of our platform are designed, produced and sold exclusively by First Due.
For more information, please visit www.firstdue.com.
Andreas Huber
CEO | First Due
ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
1. INSURANCE:
Service Provider shall not commence work under this Agreement until Service Provider has obtained City’s approval regarding all insurance requirements, forms, endorsements, amounts, and carrier ratings, nor shall Service Provider allow any sub-contractor to commence work on a subcontract until all similar insurance required of the sub-contractor shall have been so obtained and approved. Service Provider shall procure and maintain for the duration of this Agreement insurance against claims for injuries to persons or damages to property which may arise from or in connection with the performance of the work hereunder by Service Provider, its agents, representatives, employees or sub-contractor. Failure to maintain or renew coverage or to provide evidence of renewal may constitute a material breach of contract.
Any available insurance proceeds in excess of the specified minimum limits and coverage shall be available to City.
(a) General Liability Insurance: Service Provider shall maintain commercial general liability insurance with coverage at least as broad as Insurance Services Office form CG 00 01, in an amount not less than Two Million Dollars ($2,000,000) per occurrence, Four Million Dollars ($4,000,000) general aggregate, for bodily injury, personal injury, and property damage, including without limitation, blanket contractual liability and coverage for explosion, collapse and underground property damage hazards. Service Provider’s general liability policies shall be primary and not seeking contribution from the City’s coverages, and be endorsed using Insurance Services Office form CG 20 10 to provide that City and its officers, officials, employees, and agents shall be additional insureds under such policies.
(b) Workers’ Compensation Insurance: Service Provider shall maintain Workers’ Compensation Insurance (Statutory Limits) and Employer’s Liability Insurance with limits of at least One Million Dollars ($1,000,000). Service Provider shall submit to City, along with the certificate of insurance, a Waiver of Subrogation endorsement in favor of City, its officers, agents, employees, and volunteers.
(c) Auto Insurance: Service Provider shall maintain auto liability insurance for owned, non-owned, and hired autos using ISO Business Auto Coverage form CA 00 01, or the exact equivalent, with a limit of no less than Two Million Dollars ($2,000,000) per accident.
If Service Provider owns no vehicles, this requirement may be met through a non-owned auto endorsement to the CGL policy.
10/2024
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ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
(d) Cyber Liability Insurance: Service Provider shall maintain Cyber Liability Insurance with limits not less than Two Million Dollars ($2,000,000) per occurrence or claim.
Coverage shall be sufficiently broad to respond to the duties and obligations as is undertaken by Service Provider in this Agreement and shall include, but not be limited to, claims involving infringement of intellectual property, including but not limited to infringement of copyright, trademark, trade dress, invasion of privacy violations, information theft, damage to or destruction of electronic information, release of private information, alteration of electronic information, extortion and network security. The policy shall provide coverage for breach response costs as well as regulatory fines and penalties as well as credit monitoring expenses with limits sufficient to respond to these obligations.
(e) Umbrella or Excess Policy: Service Provider may use Umbrella or Excess Policies to provide the liability limits as required in this agreement. This form of insurance will be acceptable provided that all of the Primary and Umbrella or Excess Policies shall provide all of the insurance coverages herein required. The Umbrella or Excess policies shall be provided on a true “following form” or broader coverage basis, with coverage at least as broad as provided on the underlying Commercial General Liability and automobile Liability insurance. No insurance policies maintained by the Additional Insureds, whether primary or excess, and which also apply to a loss covered hereunder, shall be called upon to contribute to a loss until the Professional’s primary and excess liability policies are exhausted.
(f) Deductibles and Self-Insured Retentions: Upon request of City, any deductibles or self-insured retentions must be declared to and approved by City. At the option of City, either: (1) the insurer shall reduce or eliminate such deductibles or self-insured retentions as respects City, its elective and appointive boards, officers, agents, employees, and volunteers; or (2) Service Provider shall provide a financial guarantee satisfactory to City guaranteeing payment of losses and related investigations, claim administration and defense expenses.
(g) Other Insurance Provisions: The commercial general liability policy shall contain, or be endorsed to contain, the following provisions:
(1) City, its elective and appointive boards, officers, agents, employees, and volunteers are to be covered as additional insureds with respect to liability arising out of work or operations performed by or on behalf of Service Provider, including materials, parts or equipment furnished in connection with such work or operations, which coverage shall be maintained in effect for at least three (3) years following the completion of the work specified in the contract. General liability coverage can be provided in the form of an 10/2024
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ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
endorsement to Service Provider’s insurance (at least as broad as CG 20 10 for ongoing operations and CG 20 37 for products/completed operations), or as a separate Owners and Service Providers Protective Liability policy providing both ongoing operations and completed operations coverage.
(2) For any claims related to this project, Service Provider’s insurance coverage shall be primary insurance as respects City and any insurance or self-insurance maintained by City shall be excess of Service Provider’s insurance and shall not contribute with it.
(3) In the event of cancellation, non-renewal, or material change that reduces or restricts the insurance coverage afforded to City under this Agreement, the insurer, broker/producer, or Service Provider shall provide City with thirty (30) days’ prior written notice of such cancellation, non-renewal, or material change.
(4) Coverage shall not extend to any indemnity coverage for the active negligence of the additional insured in any case where an agreement to indemnify the additional insured would be invalid under Subdivision (b) of Section 2782 of the Civil Code.
(h) Acceptability of Insurers: Insurance is to be placed with insurers with a current A.M. Best’s rating of no less than A-:VII or with an insurer to which the City has provided prior approval.
(i) Verification of Coverage: Service Provider shall furnish City with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by City before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive Service Provider’s obligation to provide them. City reserves the right, at any time, to require complete, certified copies of all required insurance policies and endorsements.
(j) Waiver of Subrogation: With the exception of professional liability, Service Provider hereby agrees to waive subrogation which any insurer of Service Provider may acquire from Service Provider by virtue of the payment of any loss. The commercial general liability policy and workers’ compensation policy shall be endorsed to contain a waiver of subrogation in favor of City for all work performed by Service Provider, its agents, employees, independent Service Providers and sub-contractor. Service Provider agrees to obtain any endorsement that may be necessary to effect this waiver of subrogation. 10/2024
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ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
(k) Sub-contractors Service Provider shall include all sub-contractors as insureds under its policies or shall furnish separate certificates and endorsements for each sub- contractor. All coverages for sub-contractors shall be subject to all of the requirements stated herein.
(l) Surety Bonds: [Intentionally Omitted]
2. INDEMNIFICATION:
Indemnity for Professional Liability: When the law establishes a professional standard of care for Service Provider’s Services, to the fullest extent permitted by law, Service Provider shall indemnify, protect, defend, and hold harmless City and any and all of its elective and appointive boards, officers, officials, agents, employees or volunteers from and against any and all losses, liabilities, damages, costs, and expenses, including legal counsel’s fees and costs but only to the extent the Service Provider (and its Sub-contractors) are responsible for such damages, liabilities and costs on a comparative basis of fault between the Service Provider (and its Sub-contractors) and the City in the performance of professional services under this Agreement. Service Provider shall not be obligated to defend or indemnify City for the City’s own negligence or for the negligence of others.
Indemnity for other than Professional Liability: Other than in the performance of professional services and to the full extent permitted by law, Service Provider shall indemnify, defend, and hold harmless City and any and all of its elective and appointive boards, officers, officials, agents, employees or volunteers from and against any liability (including liability for claims, suits, actions, arbitration proceedings, administrative proceedings, regulatory proceedings, losses, expenses or costs of any kind, whether actual, alleged or threatened, including legal counsel’s fees and costs, court costs, interest, defense costs, and expert witness fees), where the same arise out of, are a consequence of, or are in any way attributable to, in whole or in part, the performance of this Agreement by Service Provider or by any individual or agency for which Service Provider is legally liable, including, but not limited to, officers, agents, employees, or sub-contractor of Service Provider.
3. TERM: This Agreement will be effective for an initial term of twelve (12) months (the "Initial Term") commencing on the Effective Date. After the Initial Term, this Agreement will automatically renew for successive terms of 12 months each (a "Renewal 10/2024
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ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
Term"), subject to the right of either party to cancel renewal at any time upon at least 60 days' written notice.
4. VOLUNTARY TERMINATION: Either party may terminate this Agreement without cause or legal excuse by providing thirty (60) days’ written notice to the other party.
5. CONFLICT: Should any conflict exist between the terms and conditions of the Agreement and this Addendum, the terms and conditions of the Addendum shall prevail.
6. CONFIDENTIALITY AND CALIFORNIA PUBLIC RECORDS ACT COMPLIANCE: Notwithstanding Sections 9 through 11 of Service Provider’s Agreement for Services, Service Provider understands and agrees that City must comply with the California Public Records Act, California Government Code section 7920 et seq. which may affect or limit City’s obligations under Sections 9 through 11.
7. EXECUTION AND COUNTERPARTS. This Addendum may be executed simultaneously, and in several counterparts, each of which shall be deemed an original, but which together shall constitute one and the same instrument. The Parties agree that this Addendum and any other documents to be delivered in connection herewith may be electronically signed utilizing services such as DocuSign and Nitro Sign, or by transmitting signatures in pdf or similar format, and that any electronic signatures appearing on this Addendum or such other documents are the same as handwritten signatures for the purposes of validity, enforceability, and admissibility.
8. GOVERNING LAW: This Addendum shall be interpreted, construed, and governed according to the laws of the State of California, and venue for all actions arising from or related to this Agreement shall be in the County of Stanislaus, State of California.
9. CONTRACT ADMINISTRATOR: The City’s contract administrator and contact person for this Agreement is:
Division Chief Kain Packwood
City of Turlock Fire Department
244 N. Broadway
Turlock, California 95380
Telephone Number: (209) 669-2118
E-mail Address: [email protected]
10/2024
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ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
[Signatures on following page]
IN WITNESS WHEREOF, the parties have caused this Addendum to be executed by and through their respective officer’s thereunto duly authorized.
CITY OF TURLOCK, a municipal corporationLOCALITY MEDIA, INC., a Delaware Corporation, dba FIRST DUE
By: _______________________________By: ______________________________ Reagan M. Wilson, City Manager
Title: _____________________________
Date: _____________________________
Print name: ________________________
By: _______________________________Date: _____________________________ Andrew Hunter, Deputy Fire Chief
APPROVED AS TO FORM:
By: _______________________________
George A. Petrulakis, City Attorney
10/2024
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ADDENDUM TO
CITY OF TURLOCK
AGREEMENT FOR SERVICES
Service Provider: Locality Media DBA First Due___________ Date: __03/25/2026_______________ City Contract No. _____________ Scope of Work: Fire Records Management System
ATTEST:
By: _______________________________
Nichole Fiez, City Clerk
10/2024
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City Council Staff Report
March 25, 2025
From: Jason Hedden, Police Chief
Prepared by: Amanda Fortado, Support Operations Manager Agendized by: Reagan M. Wilson, City Manager
1. ACTION RECOMMENDED:
Reviewing the Annual Military Equipment Report submitted by the Turlock Police Department pursuant to the Turlock Municipal Code Title 4, Chapter 19, Section 107 and Government Code 7072 and review and renewal of Turlock Ordinance No. 1290-CS adopting the City Military Equipment use policy pursuant to Government Code Section 7071
2. DISCUSSION OF ISSUE:
Assembly Bill 481, a state law approved in 2021, codified in Government Code sections 7070 through 7075, requiring a law enforcement agency (LEA) to obtain approval from the applicable governing body, via adoption of “military equipment” use policy (the Policy) by ordinance (the Ordinance), prior to the LEA funding, acquiring, or using “military equipment” as defined in the new law.
Review of the Military Equipment Inventory List (Attachment B) and renewal of the ordinance allows Turlock Police Department (TPD) to continue to purchase and use the vital equipment specified therein. Upon City Council renewal, the updated inventory list would be posted in the Turlock Municipal Code Title 4, Chapter 9, Section 104 “Military Equipment Inventory.”
Additionally, under Assembly Bill 481, a LEA is required to submit an Annual Military Equipment Report which requires City Council review. This Annual Report can be found in Attachment A.
Finally, under Assembly Bill 481, a LEA is required to hold at least one well-publicized and conveniently located community engagement meeting at which the public may discuss and ask questions of the submitted Annual Report (Attachment A). This requirement is being accomplished in two ways. First, it is being agenized publicly in a council report. Second, it is being publicized on the Turlock Police Department’s social media pages, inviting members of the public to the above-mentioned City Council Meeting. This is to encourage public participation.
It should be noted the term “military equipment,” as used in AB 481, in fact does not necessarily indicate equipment that has been used by the military. Pursuant to AB 481, items deemed to be “military equipment” include, but are not limited to, unmanned aerial or ground vehicles, armored vehicles, command and control vehicles, pepper balls, less lethal shotguns, less lethal 40mm projectile launchers, long range acoustic devices, and noise/flash/diversionary devices.
TPD is committed to using the most up to date tools and equipment to safeguard the
Agenda Staff Report
3/25/2025
residents of Turlock. Many of the items deemed to be “military equipment” by AB 481 are in fact employed by TPD, and numerous LEAs across the country, to significantly reduce risk to community members. These items provide peace officers with the ability to safely resolve volatile situations which otherwise might rise to the level of a lethal force encounter.
To that end, the items in the Inventory List (Attachment B) and accompanying Military Equipment Policy (Attachment C), provides TPD’s peace officers with vital tools that facilitate compliance with its stringent use of force policy.
3. BASIS OF RECOMMENDATION:
Renewal of this section of the Municipal Code will allow TPD to continue to provide for the safety of its community members without unnecessarily escalating situations with higher levels of force.
4. FISCAL IMPACT / BUDGET AMENDMENT:
Any purchases deemed necessary not on the attached proposed inventory list will be approved by council.
5. STAFF RECOMMENDATION:
Recommend approval.
6. CITY MANAGER COMMENTS:
Recommend approval.
7. ENVIRONMENTAL DETERMINATION:
This action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA guidelines. This action consists of “organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” and therefore is not considered a project.
8. ALTERNATIVES:
Council may choose not to accept the updated inventory list; however, this is not recommended because this update allows for Turlock Police Department to more efficiently protect the community.
9. ATTACHMENTS:
1. 2024 Military Equipment Annual Report - Resolution
2. Military Equipment Report - Attachment A
3. 2024 Equipment List - Attachment B
4. 2024 Military Policy - Attachment C
BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK
IN THE MATTER OF THE CITY COUNCIL }
REVIEWING THE ANNUAL MILITARY } RESOLUTION NO. 2025-
EQUIPMENT REPORT SUBMITTED BY }
THE TURLOCK POLICE DEPARTMENT }
PURSUANT TO TURLOCK MUNICIPAL }
CODE TITLE 4, CHAPTER 19, SECTION 107 }
AND GOVERNMENT CODE 7072 AND }
REVIEW AND RENEWAL OF TURLOCK }
ORDINANCE NO. 1290-CS ADOPTING THE }
CITY MILITARY EQUIPMENT USE POLICY }
PURSUANT TO GOVERNMENT CODE }
SECTION 7071 }
}
WHEREAS, pursuant to TMC Section 4-19-107 and Government Code Section 7072, the Police Department is required to submit an Annual Military Equipment Report (the “Annual Report”) to the City Council; and
WHEREAS, the City Council, annually, is required to review the ordinance adopting a Military Equipment Use Policy and vote on whether to renew such ordinance; and WHEREAS, the City Military Equipment Use Policy was adopted by Ordinance No. 1290- CS; and
WHEREAS, the City Council desires to renew the Military Equipment Use Policy and update the inventory list as derived from the Annual Report.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby accept the Annual Report after its submittal by the Turlock Police Department; and upon review of the Annual Report, makes the following determinations:
Each item of military equipment is necessary for use by the Turlock Police Department because there is no reasonable alternative to each item of equipment that can achieve the same objective of police officer and civilian safety. The Military Equipment Use Policy will safeguard public welfare, safety, civil rights, and civil liberties. Prior use of military equipment complied with the policy in effect at the time of use. To renew the Military Equipment Use Policy after review of it and Ordinance No. 1290-CS with the updated inventory list derived from the Annual Report.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 25th day of March 2025, by the following vote:
AYES:
NOES:
NOT PARTICIPATING:
ABSENT:
ATTEST:
___________________________
Nichole Fiez, City Clerk,
City of Turlock, County of Stanislaus, State of
California
Military Equipment Annual Report
2024
The City of
Turlock Police
Department
Military Equipment Annual Report 2024
2 Table of Contents
Introduction 3
Summary of Military Equipment 4
Unmanned Aerial Vehicle 4
Robots 5
Mobile Incident Command Post Vehicle 6
Distraction Devices, Chemical Agents, & Pepper Balls 7
Projectile Launch Munitions & Platforms 9
Ballistic Breaching Munitions & Platforms 11
Equipment Sought to be Purchased in 2025 12
Armored Rescue Vehicle 12
Unmanned Aerial Vehicle 13
Equipment Usage in 2024 14
Unmanned Aerial Vehicle Deployments 14
SWAT Deployments Involving Military Equipment 15
Other Military Equipment Used in 2024 15
Complaints Regarding Use of Military Equipment 15
Conclusion 15
Military Equipment Annual Report 2024
3 Introduction
On September 30, 2021, Assembly Bill 481 required law enforcement agencies to adopt a Military Equipment Use Policy by ordinance, no later than May 1, 2022. The Turlock Police Department complied with Assembly Bill 481 on April 26, 2022, when the policy was reviewed and approved by Turlock City Council. On that day, Ordinance No. 1290-CS was approved.
Assembly Bill 481, section 7072(a) requires law enforcement agencies to submit to the City Council an Annual Military Equipment Report on the use of the equipment, any complaint(s) or concern(s) regarding the use of the equipment, results of any internal audits on the use of the equipment, the annual costs for the equipment, the quantity of equipment possessed by the agency, and any intention to purchase additional equipment in the following year. In addition, within 30 days of submitting and publicly releasing the Annual Military Equipment Report, a well-publicized community engagement meeting must be held to allow for public comments.
Within this document is the required information under Assembly Bill 481, section 7072(a).
Military Equipment Annual Report 2024
4 Summary of Military Equipment:
Turlock Police Department employs the following military equipment, including the item description, purpose, fiscal impact, and guidelines for usage.
Unmanned Aerial Vehicle (UAV): An unmanned aircraft along with the associated equipment necessary to control it remotely.
a)Description, quantity, capabilities, and purchase cost of current UAV’s.
1.DJI Mavic 2 Enterprise Advanced: Cost $8,000, Quantity 1. Remotely operated aerial vehicle that has video recording and thermal video capabilities, and 31 minutes of flight time.
2.DJI Mavic 2 Enterprise Zoom: Cost $6,000, Quantity 1. Remotely operated aerial vehicle that has video recording capabilities and 31 minutes of flight time.
3.DJI Mavic Mini 2: Cost $560, Quantity 1. Remotely operated aerial vehicle that has video recording capabilities and 31 minutes of flight time.
4.DJI Matrice M30T: Cost $17,500, Quantity 1. Remotely operated aerial vehicle that has video recording and thermal video capabilities, and 41 minutes of flight time.
5. DJI Mavic 3T Enterprise: Cost $6,700, Quantity 1. Remotely operated aerial vehicle that has video recording and thermal video capabilities, and 45 minutes of flight time.
6.DJI Avata: Cost $2,400, Quantity 1. Remotely operated aerial vehicle that has video recording capabilities and 18 minutes of flight time.
7. DJI Avata 2: Cost $1,300, Quantity 1. Remotely operated aerial vehicle that has video recording capabilities and 23 minutes of flight time.
b)Purpose: UAV’s are to be deployed when its use would assist officers or Incident Commanders with the following situations, which include but not limited to:
1.Major collision investigations
2.Search for missing persons
3.Search and rescue missions
4.Crowd control situations
5.Perimeter searches and security
6.Natural disaster management
7.Crime scene investigations and photography
8.SWAT, tactical, and other public safety and life preservation missions
Military Equipment Annual Report 2024
5 c)Authorized use: Only authorized operators set forth in Department Policy 606 shall be permitted to operate any UAV, and only during approved missions.
d)Expected life span: All UAV equipment has a life expectancy of approximately 3 years. e)Fiscal impact: Annual maintenance and battery replacement cost is projected to be approximately $15,000.
f)Training: All UAV operators must obtain from the FAA Part 107 certification, go through in- service training on UAV systems and operations, as well as adhere to Department Policy 606. g)Legal procedures rules: Use is established under Department Policy 606 and in accordance with FAA certification. It is the policy of the Turlock Police Department to utilize UAV’s only for official law enforcement purposes and in a manner that respects Constitutional Rights and the privacy of our community, as well as in a manner pursuant to state and federal law.
Robots: A remotely controlled unmanned ground vehicle (Robot), which is used to enhance the safety of officers and the community.
a)Description, quantity, capabilities, and purchase cost of current robots.
1.Transcend Vantage Robot: Cost $40,000, Quantity 1. The Transcend Vantage robot enhances the capabilities of SWAT and tactical response teams by allowing them to quickly and safely inspect dangerous situations. There is no longer a need to send personnel in before there has been a chance to assess the situation. The robot can navigate various terrain including stairs, grass, and clothing. It has two-way audio and video recording capabilities and is remotely operated.
b)Purpose: This robot is used to gain visual and audio data in dangerous incidents, and deliver communication devices during high risk incidents. It can be used to open doors, disrupt packages, and safely clear buildings.
c)Authorized use: The use of the robots shall only be authorized by a designated Incident Commander or the SWAT Commander, based on the specific circumstances of a given critical incident. Robots shall only be used by officers trained in their deployment and in a manner consistent with department policy and training.
Military Equipment Annual Report 2024
6 d)Expected life span: The robot has a life expectancy of 5 to 10 years. e)Fiscal impact: Annual maintenance cost and battery replacement costs are projected to be approximately $500.
f)Training: All operators will be trained during in-service SWAT training on unmanned ground vehicle operations.
g)Legal procedure rules: Use is at the discretion of the Incident Commander or the SWAT Commander. The Turlock Police Department utilizes unmanned ground vehicles (Robots) for law enforcement purposes only and in a manner that respects the privacy of our community, pursuant to state and federal law.
Mobile Incident Command Post vehicle (Mobile CP): Commercial vehicle outfitted with electronics and communication equipment which allow for communication with units in the field and supplement communications capabilities, hostage negotiations, equipment storage, and restroom facilities during extended events.
a)Description, quantity, capabilities, and purchase of current CP Vehicle:
1.2009 GMC c5500 Commercial Vehicle: Cost $250,000, Quantity 1. This vehicle is used as a mobile office command center by the Turlock Police Department and the Ceres Police Department that provides shelter, access to department computers, communication systems, and restroom facilities during extended events. The vehicle is marked with the words “Turlock/Ceres Command Post” on both sides of the exterior walls. b)Purpose: To be used based on the specific circumstances of a given critical incident, large event, natural disaster, community event, or for crime scene management. c)Authorized use: The use of the Command Post vehicle shall only be authorized by a Watch Commander, a designated Incident Commander, or the SWAT Commander, based on the specific circumstances of a given critical incident or large event where the use of the command vehicle would aid law enforcement in services to the public. d)Expected life span: The Command Post vehicle has a life expectancy of approximately 15 years.
Military Equipment Annual Report 2024
7 e)Fiscal impact: Annual maintenance costs are projected to be approximately $17,000. f)Training: All drivers/operators will be trained with in-service training on vehicle operation and practical driving instruction and must possess a license through the State of California. g)Legal procedure rules: Use is determined by the Watch Commander, Incident Commander, or the SWAT Commander. Each use is on a case by case basis and is only used for official law enforcement purposes and in a manner pursuant to state law regarding the operation of motor vehicles.
Distraction devices, chemical agents, and pepper balls: Distraction devices are used to distract and disorient dangerous persons by utilizing brilliant light and loud report. Chemical agent canisters contain chemical agents that are released when deployed. Pepper balls are non-lethal projectiles that contain a chemical irritant.
a)Description, quantity, capabilities, and purchase cost of distraction devices.
1.Pepper Ball FTC Launchers: Cost $600 each, Quantity 2. These launchers are powered by compressed air that are designed to deploy non-lethal Pepper Ball projectiles which contain a chemical irritant.
2.Pepper Ball LIVE projectile: Cost $2 per projectile, Quantity 400. The basic Pepper Ball projectile contains 2% PAVA pepper powder and is designed for direct impact and area saturation, especially in confined interior spaces. The projectile is a non-lethal chemical irritant.
3.Noise Flash Distraction Device: Cost $40 each, Quantity 32. These are non-bursting, non- fragmenting devices that produce a brilliant light and loud report. They are ideal for distracting dangerous suspects in high risk situations.
4.Combined Tactical Systems (CTS) 3230 37mm: Cost $20, Quantity 5. These rounds are filled with a chemical agent irritant that are used to penetrate intermediate barrier and deliver irritant agents to adjacent rooms. They are used to bring volatile and dangerous situations to a peaceful end by causing temporary discomfort to the suspect and gain compliance.
5.Combined Tactical Systems (CTS) 3330 37mm Liquid CS: Cost $18, Quantity 11. These rounds are filled with chemical agent irritant (CS) and are used to penetrate intermediate barriers and deliver irritant agents into adjacent rooms. They are used to bring volatile and dangerous situations to a peaceful end by causing temporary discomfort to the suspect and gain compliance.
Military Equipment Annual Report 2024
8 6.Combined Tactical Systems (CTS) 5230B Gas Canister: Cost $50 each, Quantity 20. These are large diameter canisters that discharge a high volume of chemical agents that is delivered with the assistance of smoke through multiple ports located throughout the canister. This can be hand delivered or used with a launching system. They are used to bring volatile and dangerous situations to a peaceful end by causing temporary discomfort to the suspect and gain compliance.
7.Combined Tactical Systems (CTS) 4330 40mm: Cost $38 each, Quantity: 30. These rounds are filled with liquid oleoresin capsicum (OC) that are used to deliver irritant agents into structures or houses to bring volatile and dangerous situations to a peaceful end by causing temporary discomfort to the suspect and gain compliance.
8.Combined Tactical Systems (CTS) 3340 37mm: Cost $18, Quantity: 10. These rounds are filled with liquid oleoresin capsicum (OC) that are used to penetrate intermediate barriers and deliver irritant agents into adjacent rooms. They are used to bring volatile and dangerous situations to a peaceful end by causing temporary discomfort to the suspect and gain compliance.
9.Combined Tactical Systems (CTS) 6210 White Smoke Canister: Cost $45 each, Quantity 3.
These canisters deliver white smoke used to obstruct tactical movement or positions during high risk operations and for signaling and marking a landing zone during air operations.
These canisters are delivered by hand.
b)Purpose: Distraction devices are used to disorient and disrupt the actions of a dangerous suspect during hostage rescues, high risk warrant operations, or other high-risk operations. They produce a brilliant white light along with a loud report which gives those officers a tactical advantage while the suspect is temporarily disoriented or distracted. Chemical agent canisters are designed to limit the escalation of conflict and improve officer safety in high risk situations.
Situations for use of chemical agent systems may include but are not limited to:
1.Self-Destructive, dangerous, and/or combative suspects
2.Riot/crowd control and civil unrest incidents
3.Circumstances where a tactical advantage can be obtained
4.Potentially vicious animals
5.Training exercise and/or approved demonstrations
c)Authorized use: The use of chemical agent munitions and delivers systems are authorized to be used only by officers who have been trained by POST certified less lethal and chemical agent instructors. They can be used by officers trained in their deployment and in a manner consistent with department policy and training.
Military Equipment Annual Report 2024
9 d)Expected life span: Pepper Ball Launchers: 15 years, Pepper Ball projectiles: 3 years, Distraction Devices: 5 years, Chemical Agents: 5 years.
e)Fiscal impact: There are no projected annual maintenance costs. Supply replacement costs are projected to be $4,000.
f)Training: The use of chemical agent munitions and delivery systems are authorized to be used only by officers who have been trained by POST certified less lethal and chemical agent instructors. The use of distraction devices is authorized to be used by officers of the SWAT team and who are trained in their deployment by POST certified instructors and in a manner consistent with department policy and training.
g)Legal procedure rules: Use is established under Department Policy 300 (Use of Force) and policy 304 (Control Devices). It is the policy of the Turlock Police Department to utilize chemical agents, their delivery system, and distraction devices only for official law enforcement purposes and in a manner pursuant to state and federal law.
Projectile launch munitions and platforms: 40mm launchers are utilized by Department personnel to deploy less lethal foam baton rounds. 12 gage launchers are used to deploy super-sock bean bag impact rounds. 37mm and 40mm launchers are utilized by Department personnel as a chemical agent delivers system.
a)Description, quantity, capabilities, and purchase cost.
1.Remington 870 less lethal launcher: Cost $600 each, Quantity 9. The Remington 870 Less Lethal launcher is designed with high visibility bright orange stocks, foregrips, and barrel to distinctly identify them as only being used during less lethal situations. They are used to deploy less lethal super sock 2581 bean bag rounds to a distance of up to 60 feet. The range of the launching system helps maintain space between officers and a suspect reducing the immediacy of the threat which is a principle of De-escalation.
2.12 Gauge (CTS) Super-sock kinetic energy impact munition: Cost $5 per munition, Quantity 180. These munitions are deployed from the Remington 870 less lethal launcher. The munition is a ballistic fiber bag filled with 40 grams of led shot at a velocity of approximately 290 feet per second. Upon impact, the ballistic fiber bag flattens out and impacts a larger area of approximately 40mm. These are considered impact weapons and provide accurate and effective performance when fired from the approved distance of not less than 5 feet.
Effectiveness depends on many variables such as distance, clothing, stature, intoxicants, and the area the projectile impacts.
Military Equipment Annual Report 2024
10 3.Remington 870 Chemical Agent Launcher: Cost $600, Quantity 1. The Remington 870 chemical agent launcher is equipped with a special cup capable of holding and deploying one CTS 5230 chemical agent canister. This is utilized to deploy chemical agents through immediate barriers from an extended distance. The chemical agent canister is propelled by the use of a blank 12-gauge round. The chemical agent launcher is distinctly marked with a blue barrel.
4.CTS Penn Arms 40mm single shot launcher, model GL1-40: Cost $1,100, Quantity 1. The 40mm launcher deploys one 40mm less lethal impact munition. These are only authorized to be used by SWAT personnel.
5.CTS Penn Arms 40mm single shot launcher, model GL1-40-C: Cost $1,700, Quantity 1. The 40mm launcher deploys one 40mm chemical agent munition. These are only authorized to be used by SWAT personnel.
6.DEFTEC LMT 40mm single shot launcher, model 1425: Cost $1,100, Quantity 2. The 40mm launcher deploys one 40mm impact munition. These are only utilized by those trained and authorized by the department.
7.CTS Penn Arms 37mm multi-launcher: Cost $3,000, Quantity 1. The 37mm launcher has six chambers which holds one 37mm canister of chemical agent in each of the chambers and deploys one canister at a time. These are only authorized to be used by SWAT personnel.
8.Defense Technology 37mm single shot launcher: Cost $1,000, Quantity 1. The 37mm launcher holds one 37mm canister of chemical agent and deploys one canister at a time.
This is only authorized to be used by SWAT personnel.
9.CTS 40mm foam baton munition 4557: Cost $35 each, Quantity 60. These munitions are 40mm launched, spin stabilized less lethal direct impact munitions. The munition has a 50- yard range and has a velocity of 240 to 260 feet per second. These are considered impact weapons, and provide accurate and effective performance when fired from the approved distance of not less than 5 yards. Effectiveness depends on many variables such as distance, clothing, stature, intoxicants, and the area the projectile impacts.
10.Defense Technology 40mm exact impact 6325 munition: Cost $35, Quantity 21. These munitions are 40mm launched, spin stabilized less lethal direct impact munitions. The munition has a 40-yard range and has a velocity of 325 feet per second. These are considered impact weapons and provide accurate and effective performance when fired from the approved distance of not less than 5 feet. Effectiveness depends on many variables such as distance, clothing, stature, intoxicants, and the area the projectile impacts.
Military Equipment Annual Report 2024
11 b)Purpose: Less lethal munitions are designed to limit the escalation of conflict where employment of lethal force is prohibited or undesirable. Situations for use of less lethal weapon systems may include but are not limited to:
1.Self-destructive, dangerous, and/or combative suspects
2.Riot/crowd control and civil unrest
3.Circumstances where a tactical advantage can be obtained
4.Potentially vicious animals
5.Training exercise and/or approved demonstrations
c)Authorized use: The use of less lethal munition and delivery systems are authorized to be used only by officers who have been training by POST certified less lethal instructors. They can only be used by officers trained in their deployment and in a manner consistent with department policy and training.
d)Expected life span: 12-gauge launchers: 25-30 years, Super Sock munitions: 5 years, 37mm and 40mm launchers: 20 years.
e)Fiscal impact: Annual replacement/maintenance costs are projected to be approximately $5,000.
f)Training: The use of the less lethal munitions and launchers are authorized to be used only by officers who have been trained by POST certified less lethal instructors during in service training. g)Legal procedure rules: Use is established under Department Policy 300 (Use of Force) and policy 304 (Control Devices). It is the policy of the Turlock Police Department to utilize less lethal munitions and launchers only for official law enforcement purposes and in a manner pursuant to state and federal law.
Ballistic breaching munitions and platform: The ballistic breaching shotgun is used for gaining access to locked areas in an expeditious manner. The shotgun fires a munition that is filled with compressed zinc. The compressed zinc quickly disperses from its compact form once it has impacted a hard surface such as a door jam or locking mechanism.
a)Description, quantity, capabilities, and purchase cost of ballistic breaching tools.
Military Equipment Annual Report 2024
12 1.Remington 870 shotgun: Cost $600, Quantity 2. The Remington 870 breaching shotgun is only used for breaching doors to gain quick entry to a confined area. This may be used during a hostage situation or on a heavily fortified door.
2.Defense Technology TKO 12-gauge Breaching Round: Cost $7 per round, Quantity 44. The Defense Technology breaching round is a shortened 12-gauge shotgun round used only for breaching doors. The round is made up of compressed zinc that defeats the locking mechanisms on doors.
b)Purpose: Ballistic breaching is utilized to gain quick access to locked areas of a house or structure. The use of ballistic breaching minimizes the use for traditional mechanical breaching tools which can cause injuries to officers and places them in harm’s way for a longer period of time. Ballistic breaching gives officers a faster response time to rescue hostages or captives held by suspects.
c)Authorized use: The use of the ballistic breaching shotgun is only used by those who have been sent to and trained by a POST certified course. They can only be used by officer trained in their deployment and in a manner consistent with department policy and training. d)Expected life span: Remington 870 shotgun: 20-30 years. Defense Technology TKO Breaching Rounds: 5 years.
e)Fiscal impact: There are no projected annual maintenance costs anticipated. Supply replacement costs are projected to be $140.
Equipment Sought to be Purchased in 2025:
Armored Rescue Vehicle
a)Description, quantity, capabilities, and purchase cost for the Armored Rescue Vehicle.
1.Lenco Bearcat Armored Rescue Vehicle: Cost $300,000, Quantity 1. Ballistically armored rescue vehicle capable of carrying twelve police personnel, or ten civilians, with an open floorplan which allows for rescue operations of downed personnel. The ballistic capabilities provide greater safety to citizens and officers beyond the protection of ballistic shield or body armor.
Military Equipment Annual Report 2024
13 2.Purpose: Armored Rescue Vehicles are to be used in response to critical incidents to enhance officer and community safety, improve scene containment and stabilization, and assist in resolving critical incidents.
3.Authorized use: The use of the Armored Rescue Vehicle shall only be authorized by a Watch Commander, a designated Incident Commander, or the SWAT Commander, based on the specific circumstances of a given critical incident. The Armored Rescue Vehicle shall only be used by officers trained in their deployment and in a manner consistent with department policy and training.
4.Expected life span: The life expectancy of the Armored Rescue Vehicle is approximately 20 years.
5.Fiscal Impact: Initial purchase price, tax, and shipping are expected to be approximately $300,000. Annual maintenance costs are projected to be $7,000.
6.Training: All drivers/operators will be trained with in-service training on vehicle operations and practical driving instruction.
Unmanned Aerial Vehicle (UAV)
a)Description, quantity, capabilities, and purchase cost of Unmanned Aerial Vehicle.
1.DJI Enterprise Matrice 4T Unmanned Aerial Vehicle: Cost $7,300, Quantity 6. Remotely operated aerial vehicle that has video and thermal recording capabilities, and 49 minutes of flight time. These are authorized for use only by those who have completed FAA training and continue with in-service training.
b)Purpose: UAV’s are to be deployed when its use would assist officers or Incident Commanders with the following situations, which include but not limited to:
1.Major collision investigations
2.Search for missing persons
3.Search and rescue missions
4.Crowd control situations
5.Perimeter searches and security
6.Natural disaster management
7.Crime scene investigations and photography
8.SWAT, tactical, and other public safety and life preservation missions
Military Equipment Annual Report 2024
14 c)Authorized use: Only authorized operators set forth in Department Policy 606 shall be permitted to operate any UAV and only during approved missions.
h)Expected life span: All UAV equipment has an expected life span of approximately 3 years. i)Fiscal impact: Annual maintenance and battery replacement cost is projected to be approximately $5,000.
j)Training: All UAV operators must obtain from the FAA Part 107 certification, go through in- service training on UAV systems and operations as well as adhere to Department Policy 606. k)Legal procedures rules: Use is established under Department Policy 606 and in accordance with FAA certification. It is the policy of the Turlock Police Department to utilize UAV’s only for official law enforcement purposes and in a manner that respects Constitutional Rights, the privacy of our community, and in a manner pursuant to state and federal law.
Equipment Usage in 2024:
This section outlines the military equipment usage for 2024. Certain items of military equipment, particularly consumables (munitions, distraction devices, pepper balls, chemical agents, etc.), are used throughout the year on a regular basis for training in order to maintain proficiency. Training usage is not captured in this section. This section only provides data for the operational use of military equipment listed within this annual equipment report.
Unmanned Aerial Vehicle deployments
The Turlock PD Unmanned Aerial Systems unit deployed designated equipment during 66 operational incidents during 2024. During some incidents more than one UAV of was deployed to maintain overlapping and/or continuous coverage.
•(15) Arrest/Search Warrant
•(4) Enhance Situational Awareness
•(4) Forensic Crime Scene
•(33) Perimeter Search and Security
•(2) Special Event
•(1) Traffic Collision
•(1) Emergency Response
•(4) Assist Other Agency
Military Equipment Annual Report 2024
15 •(1) Search and Rescue
•(1) Aerial Inspection of Marijuana Dispensary Per City Permitting Process SWAT deployments where military equipment was used
•(11) Operations which included emergency callouts and pre-planned events in which the command vehicle was also deployed. One of the operations involved a man who had barricaded himself in his bedroom while holding two family members captive. The SWAT team performed an emergency rescue to prevent the two family members from further harm.
•(16) Noise Flash Distraction Devices were deployed on various operations. •(1) Dignitary protection detail.
•(1) Security detail for community event.
Other military equipment used in 2024
•Our command post was deployed during the Stanislaus County Fair (July 5-14) Complaints regarding use of Military Equipment:
The Turlock Police Department is dedicated to providing the best service possible to our community. We take pride in keeping members of our community safe and making sure Turlock remains a safe place to live and visit. During some incidents it becomes necessary to use force (which may include military equipment) against violent combative suspects in order to maintain their safety, the safety of the public, and officer safety. The Turlock Police Department is dedicated to investigating complaints regarding the use of our military equipment and will conduct these investigations in a fair, impartial, and expeditious manner.
•There were no complaints/investigations regarding the use of military equipment in 2024.
Conclusion:
The Annual Military Equipment Report reflects the transparency the Turlock Police Department is committed to providing to our community and elected officials. The equipment, resources, and training outlined in this report allow the Department to better serve, protect, and enhance the safety of the public and our officers, enabling a critical incident to be brought to a peaceful and safe resolution.
City Council Staff Report
March 25, 2025
From: Jennifer Figueroa, Housing Program Manager
Prepared by: Jennifer Figueroa, Housing Program Manager Agendized by: Reagan M. Wilson, City Manager
1. ACTION RECOMMENDED:
Resolution: Approving the Issuance of A Letter of Support and a Financial Contribution of $1 for the Permanent Local Housing Allocation (PLHA) Grant Application Submitted by We Care Program
2. DISCUSSION OF ISSUE:
In 2017, Governor Brown signed a 15-bill housing package aimed at addressing the State’s housing shortage and high housing costs. As part of the package, the Building Homes and Jobs Act (SB2) established a $75 recording fee on real estate documents, which would be directed toward increasing the supply of affordable homes in California. The intent of the bill is to provide a permanent, on-going source of funding to local governments for housing- related projects and programs that assist in addressing the unmet housing needs of local communities.
The PLHA grant is available to CDBG entitlement jurisdictions to implement plans to address homelessness and increase affordable housing stock. PLHA is an ongoing formula grant that provides non-competitive funding to entitlement cities, as well as competitive grant funding to non-entitlement cities. The amount of PLHA funds allocated to each entitlement jurisdiction is directly proportionate to each jurisdiction’s share of the total 2017 CDBG allocation in California.
Stanislaus County, as an entitlement jurisdiction, released a Notice of Funding Availability (NOFA) to provide a one-time opportunity for shelter support funding to eligible existing shelters that participated in the 2024 and 2025 U.S. Department of Housing and Urban Development (HUD) Housing Inventory Count.
We Care Program – Turlock, as an eligible entity, applied to help fund their ongoing operating costs to run their emergency shelter. As a CDBG entitlement jurisdiction, the City of Turlock receives their own PLHA allocation. As a stipulation of the NOFA, if the shelter facility is located in a city that is eligible to receive their own independent PLHA allocation from the State, a financial contribution of one dollar ($1) is required from the respective city in order for the shelter to apply for the PLHA funds from Stanislaus County. In accordance with PLHA program guidance, all applicants must provide a Letter of Support and Financial Contribution. The applicant must submit the following to meet this requirement:
• Verification that a Letter of Support and Financial Contribution has been requested from the City Manager’s office of the city in which the proposed shelter activity will be conducted.
• A signed Letter of Support and Financial Contribution (minimum of $1 PLHA is required) from the City in which the shelter is located. • A certified resolution authorizing awarded PLHA funding to the proposed shelter activity to be submitted within 60 days of the shelter being awarded by Stanislaus
Agenda Staff Report
3/25/2025
County.
We Care has requested that the City of Turlock provide a Letter of Support and the financial match of $1 of PLHA funds, as stipulated by the NOFA. This will help enable We Care to access vital funding needed to continue funding the program at its current capacity and fund basic operational needs.
3. BASIS OF RECOMMENDATION:
Adopting the resolution to issue a letter of support and provide the required $1 match of PLHA funding will allow We Care Program to accept funding awarded. Approval of this resolution demonstrates the City of Turlock's commitment to addressing housing needs and supporting collaborative efforts between local agencies and non-profit organizations.
4. FISCAL IMPACT / BUDGET AMENDMENT:
The financial contribution required by the PLHA program is $1, which will be provided from Fund 260 “PLHA-Permanent Housing Alloc.” Account 260-41-494_47220 “Administration – City”. This amount will count as the required city match to enable We Care Program to accept PLHA funding, which will be used exclusively for the project outlined in the grant proposal.
5. STAFF RECOMMENDATION:
Recommend approval.
6. CITY MANAGER COMMENTS:
Recommend approval.
7. ENVIRONMENTAL DETERMINATION:
This action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA guidelines. This action consists of “organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” and therefore is not considered a project.
8. ALTERNATIVES:
9. ATTACHMENTS:
1. Draft Resolution
2. Letter of Support_We Care Program_PLHA Funding
3. PLHA Grant Application
BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK
WHEREAS, the California Department of Housing and Community Development (HCD) administers the Permanent Local Housing Allocation (PLHA) Program to provide funding to local agencies for the development, rehabilitation, and operation of the housing projects aimed at serving individuals experiencing homelessness; and
WHEREAS, We Care Program is seeking to apply for PLHA funding through Stanislaus County’s Notice of Funding Availability (NOFA) to assist the emergency shelter program operating costs. The costs include their direct services employee wages, utilities, security, rent, and supplies ; and
WHEREAS, the City of Turlock qualifies for an independent PLHA funding allocation, and We Care Program must secure a financial contribution from the City of Turlock to apply for the funding through Stanislaus County ; and
WHEREAS, as part of the PLHA program requirements, the City of Turlock is required to provide a minimum financial contribution of $1 in PLHA funds to demonstrate support for the project.
We Care Program has requested that the City of Turlock provide the $1 financial contribution and a letter of support as part of their application for PLHA funding.
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby:
1. Approve the issuance of a Letter of Support for the We Care Program’s application for PLHA funding for their operational needs.
2. Approve a financial contribution of $1 in PLHA funds from the City of Turlock to meet the minimum requirement for the PLHA funding match
3. Authorize the City Manager to take any further actions necessary to carry out the intent of the resolution, including providing the Letter of Support and the financial contribution
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 25th day of March, 2025, by the following vote:
AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )
}
}
}
}
}
}
}
RESOLUTION NO. 2025-XXXIN THE MATTER OF APPROVING THE
ISSUANCE OF A LETTER OF SUPPORT
AND A FINANCIAL CONTRIBUTION OF $1
FOR THE PERMANENT LOCAL HOUSING
ALLOCATION (PLHA) GRANT
APPLICATION SUBMITTED BY WE CARE
PROGRAM
Resolution No. 2025-XXX
ATTEST:
___________________________
Nichole Fiez, City Clerk,
City of Turlock, County of Stanislaus,
State of California
REAGAN M. WILSONOFFICE OF THE CITY MANAGER
CITY MANAGER [email protected]
156 S. BROADWAY, SUITE 230 | TURLOCK, CALIFORNIA 95380 | PHONE 209-668-5540 | FAX 209-668-5668 | TDD 1-800-735-2929 March 25, 2025
We Care Program
219 S. Broadway
Turlock, CA 95380
Dear We Care Program,
Re: Letter of Support and Financial Contribution for PLHA Application On behalf of the City of Turlock, I am pleased to provide this letter of support for your application to the Permanent Local Housing Allocation (PLHA) program, specifically for the funding of the We Care Program. The City recognizes the critical need for emergency housing and supportive services within our community, and we fully support your efforts in providing shelter and resources for individuals and families experiencing homelessness.
As required by the PLHA program guidance, the City of Turlock acknowledges that our city is eligible to receive an independent PLHA allocation from the State and understands the requirement of a financial contribution to ensure that your shelter facility may apply for PLHA funds through Stanislaus County.
In line with this requirement, the City of Turlock has committed to a financial contribution of one dollar ($1.00) toward your PLHA funding application. This contribution will assist in meeting the financial need necessary for the facility’s operation and expansion, ensuring the continued provision of services to the most vulnerable members of our community.
If you need any additional documentation or have any questions, please do not hesitate to contact me directly at 209-668-5540 or via email at [email protected].
Thank you for your ongoing work and dedication to addressing homelessness in our community. We look forward to seeing the positive impact your shelter facility will continue to have with the support of the PLHA funds.
Sincerely,
Reagan M. Wilson
City Manager
City of Turlock
City Council Staff Report
March 25, 2025
From: Isaac Moreno, Finance Director
Prepared by: Michael Lenhardt, Principal Accountant
Agendized by: Reagan M. Wilson, City Manager
1. ACTION RECOMMENDED:
Accepting the City of Turlock’s audited Financial Statements and related reports for the Fiscal Year ended June 30, 2023
2. DISCUSSION OF ISSUE:
This overview and analysis are provided by the Finance Department of the City of Turlock (City) for the Fiscal Year 2022-2023 Financial Statements (with comparative information for 2021-2022).
FISCAL YEAR 2022-2023 FINANCIAL HIGHLIGHTS
Government-Wide Highlights
• The City’s net position (assets and deferred outflows in excess of liabilities and deferred inflows) at June 30, 2023, totaled $676.6 million. Governmental activities accounted for $372.2 million of the net position, while $304.3 million are in the business-type activities.
• Total City revenues, including program and general revenues, were $155.9 million, while total expenses were $105.4 million.
• Governmental program revenues were $29.1 million compared to governmental program expenses of $70.8 million.
• Program revenues from business-type activities were $56.7 million, while expenses for business-type activities were $34.6 million.
Fund Highlights
• Net General Fund revenues exceeded expenditures and other financing sources (uses) by $13.2 million as compared to the prior year when revenues exceeded expenditures and other financing sources (uses) by $16.7 million. For financial reporting purposes, the “General Fund” includes not only the City’s General Fund, but also the Parks, Arts and Recreation Commission, Special Public Safety, Tourism (2 funds), Cannabis and Measure A funds.
• Fund balance of the General Fund is $51.8 million at June 30, 2023 compared to a projected $29.8 million when the 2022-2023 budget was originally adopted.
Additional discussion regarding the financial results for fiscal year 2022-2023 can be found
Agenda Staff Report
3/25/2025
in the “Financial Activities” section of the MD&A of the financial statements.
The City’s independent external auditors, Brown Armstrong Accountancy Corporation, have completed the City’s annual audit and issued the following financial reports for the Fiscal Year ended June 30, 2023:
• Basic Financial Statements for the City of Turlock
• Appropriations Limit Increment for the City of Turlock • Component Unit Financial Statements for the Turlock Public Financing Authority • Component Unit Financial Statements for the Transportation Development Act Funds
• Component Unit Financial Statements for the Abandoned Vehicle Abatement Program
The above financial statements are prepared by the City’s Finance Department in accordance with Generally Accepted Accounting Principles (GAAP). Our external auditors have the responsibility to audit these statements in accordance with Generally Accepted Auditing Standards with the goal of determining whether the financial statements are free of material misstatement. If this goal can be supported with the results of their audit, the external auditor will issue an unqualified or “clean” opinion. All the above listed financial statements contain an unqualified opinion.
In addition to the financial statements the Auditor’s also issue reports on Required Communications and a Memorandum of Internal Control (MOIC). These reports detail specifics about items of significant concern to the financial well-being of the City. The MOIC identifies deficiencies in the City’s system of internal control and identifies the weaknesses as either “material weaknesses” or “significant deficiencies”. A Material Weakness is a deficiency that creates a reasonable possibility a material misstatement will occur in the financial statements and a Significant Deficiency is a deficiency that is less severe than a Material Weakness.
The City’s report for June 30, 2023 includes one Material Weakness and zero Significant Deficiencies and Other Matters for fiscal 2023. The report also includes a section on the Status of Prior Year Material Weaknesses, Significant Deficiencies and an update of same (the complete report is attached). The Auditor’s report on Required Communications, in addition to addressing new accounting pronouncements, addresses the financial concern of the General Fund. The one Material Weakness reported in the Memorandum On Internal Controls (MOIC) for 2023 is as follows:
Material Weaknesses
1. 2023-001 Improper Revenue Recognition
In accordance with Governmental Accounting Standards Board (GASB) Statement No. 33, Accounting and Financial Reporting for Nonexchange Transactions, revenue should be recognized when eligibility requirements, including time requirements, are met. Resources
Agenda Staff Report
3/25/2025
transmitted before the eligibility requirements are met should be reported as deferred revenues by the recipients, with certain exceptions.
The City of Turlock (the City) received American Rescue Plan Act (ARPA) funds prior to meeting the eligibility requirements that were properly recorded as Deferred Revenue.
However, in fiscal year 2023 some of these funds were improperly reclassed from Deferred Revenue to Revenue in the amount of $2,612,681.
The misclassification of revenue from deferred revenue occurred due to a change in the process of how items are deemed as expensed when moved from the fund. Staff took the transfer of the $2,612,861 as reimbursement for expenses incurred in the project fund, however in this isolated case, the funds were only transferred to the project fund and not yet expended.
Overstated revenue from ARPA funds lead to an artificially created increase in net income (change in fund balance). This also resulted in inflated total revenues and fund balances.
The City must implement the following procedures to ensure proper revenue recognition:
1. Ensure no single individual has control over recording, approval, and reconciling revenue transactions.
2. Require dual authorization for revenue recognition, especially for large or complex transactions.
3. Implement tracking mechanisms to confirm grant eligibility requirements are met before revenue is recognized in compliance with GASB Statement No. 33.
4. Maintain proper documentation for each grant revenue source to support revenue recognized on financial statements.
5. If available, use specialized grant tracking systems to ensure grant funds are recognized only after eligibility requirements are met.
Management’s Response:
Management acknowledges and agrees with the finding and further has developed the following procedure to ensure that this does not occur again. The City will now submit all council agenda items that transfer funds from the ARPA fund that are being done as project funding appropriations before expenditures are incurred to the Principal Accountant in charge of grant reporting to ensure that those items are not misclassified as revenue.
3. BASIS OF RECOMMENDATION:
As noted above, the accompanying financial statements are prepared in accordance with GAAP, which is necessary to obtain an unqualified opinion from our auditors. This opinion provides overall assurance to Management as to the reliability of the City’s financial statements. In addition, an annual audit is a requirement for many of the City’s granting agencies as well as debt issuers and rating agencies related to the City’s outstanding bonds.
Agenda Staff Report
3/25/2025
4. FISCAL IMPACT / BUDGET AMENDMENT:
Funds are budgeted for the independent audit services required. There is no additional fiscal impact.
5. STAFF RECOMMENDATION:
Recommend approval.
6. CITY MANAGER COMMENTS:
Recommend approval.
7. ENVIRONMENTAL DETERMINATION:
This action is not subject to the provisions of the California Environmental Quality Act (CEQA) in accordance with Section 15378(b)(5) of the CEQA guidelines. This action consists of “organizational or administrative activities of governments that will not result in direct or indirect physical changes in the environment” and therefore is not considered a project.
8. ALTERNATIVES:
No alternatives are proposed, as staff is only asking for acceptance of these reports.
9. ATTACHMENTS:
1. Audit Acceptance Resolution March 2025
2. FY 2022-2023 City of Turlock Financial Statements
3. FY 2022-2023 City of Turlock Required Communications Letter (SAS 114)
4. FY 2022-2023 Single Audit Report
5. FY 2022-2023 Proposition 111 Appropriations (GANN) Limit Report
6. FY 2022-2023 Memorandum On Internal Controls (MOIC)
7. FY 2022-2023 Turlock Corrective Action Plan (CAP)
8. FY 2022-2023 Public Financing Authority (PFA) Financial Statements
9. FY 2022-2023 PFA Required Communications Letter (SAS 114)
10. FY 2022-2023 Turlock Abandoned Vehicle Abatement (AVA) Financial Statements
11. FY 2022-2023 AVA Required Communications Letter (SAS 114)
12. FY 2022-2023 Transportation Development Act (TDA) Funds Financial Statements
13. FY 2022-2023 TDA Required Communications Letter (SAS 114)
BEFORE THE CITY COUNCIL OF THE CITY OF TURLOCK
IN THE MATTER OF ACCEPTING THE } RESOLUTION NO. 2025-XXX FINANCIAL STATEMENTS AND SINGLE }
AUDIT FROM BROWN ARMSTRONG }
ACCOUNTANTCY CORPORATION }
FOR FISCAL YEAR 2023. }
}
WHEREAS, audited Financial Statements are necessary for all governmental entities; and
WHEREAS, on January 21, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the City of Turlock’s Financial Statements, Proposition 111 Appropriations Limit Increment, Single Audit; and
WHEREAS, on January 21, 2025, Brown Armstrong Accountancy Corporation issued the City of Turlock’s Memorandum on Internal Control, Required Communications, Corrective Action Plan; and
WHEREAS, on February 21, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the Turlock Public Financing Authority Financial Statements, Required Communications; and
WHEREAS, on February 27, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the Abandoned Vehicle Abatement Program Financial Statements, Required Communications; and
WHEREAS, on March 19, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the Transportation Development Act Funds Financial Statements, Required Communications; and
NOW, THEREFORE, BE IT RESOLVED that the City Council of the City of Turlock does hereby accept the above stated Financial Statements and Reports listed above.
PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 25th day of March, 2025, by the following vote:
AYES:
NOES:
NOT PARTICIPATING:
ABSENT:
ATTEST:
___________________________
Nicole Fiez, City Clerk,
City of Turlock, County of Stanislaus,
State of California
CITY OF TURLOCK
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2023
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CITY OF TURLOCK
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2023
PREPARED BY
THE FINANCE DEPARTMENT
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CITY OF TURLOCK
ANNUAL FINANCIAL REPORT
FOR THE YEAR ENDED
JUNE 30, 2023
TABLE OF CONTENTS
Page
FINANCIAL SECTION
Independent Auditor’s Report ...................................................................................................................... 1
Management’s Discussion and Analysis .................................................................................................... 5
Basic Financial Statements:
Government-Wide Financial Statements:
Statement of N et Position ............................................................................................................ 21
Statement of Activities ........................................................................................................................... 22
Fund Financial Statements:
Balance Sheet – Go vernmental Funds ................................................................................................ 28
Reconciliation of the Governm ental Funds Balance Sheet to the Government-Wide Statement of Net Position – Governmen tal Activities ............................... 29
Statement of Revenues, Expenditures, and Changes in Fund Bala nces – Government al Funds ........................................................................................................................... 30
Reconciliation of the Governm ental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities – Governmental Activities .................................................................................................... 31
Statements of Revenues, Expenditu res, and Changes in Fund Balance – Budget and Actual:
G eneral Fund ..................................................................................................................................... 32
F o r m e r L M I H o u s i n g F u n d ................................................................................................................ 33
G a s T a x / S t r e e t I m p r o v e m e n t F u n d .................................................................................................. 34
A R P A F u n d ........................................................................................................................................ 35
Statement of Net Positio n – Proprietary Funds ................................................................................... 38
Statement of Revenues, Expenses, and Changes in Fund Net Posi tion – Proprieta ry Funds ................................................................................................................................. 39
Statement of Cash Flows – Proprietary Funds .................................................................................... 40
Statement of Fiduciary Net Position – Fiduciary Funds ...................................................................... 42
Statement of Changes in Fiduciary Net Position − Fiduciary Funds .................................................. 43
Notes to Basic Financ ial Statements ....................................................................................................... 44
Page
Required Supplementary Information:
Schedule of Changes in the Net Pension Liability and Related Ratios – Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plan ............................................... 98
Schedule of Contributions – Miscellaneous Agent Multiple-Employer Defined Benefi t Pension Plan ................................................................................................................. 100
Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Plan – Cost-Sharing Multiple-Employer Defined Benefit Pension Plan .................................... 101
Schedule of Contributions – Safety Plan – Cost-Sharing Multiple-Employer Defined Benefi t Pension Plan ................................................................................................................. 102
Schedule of Changes in the Total Other Post-Employment Benefits (OPEB) Liability and R elated Ratios ..................................................................................................................... 103
Supplemental Information:
General Fund:
Combining Bal ance Sheet ........................................................................................................................ 106
Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances ......................................................................................................................................... 107
Nonmajor Governmental Funds:
Combining Bal ance Sheet ........................................................................................................................ 109
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .......................... 116
Nonmajor Enterprise Funds:
Combining Statement of Net Position ...................................................................................................... 124
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ........................... 125
Combining Stateme nt of Cash Flows ...................................................................................................... 126
Internal Service Funds:
Combining Statement of Net Position ...................................................................................................... 128
Combining Statement of Revenues, Expenses, and Changes in Fund Net Position ........................... 129
Combining Stateme nt of Cash Flows ...................................................................................................... 130
Custodial Funds:
Combining Statement of Fiduciary Net Position ..................................................................................... 132
Combining Statement of Changes in Fiduciary Net Position ................................................................. 133
FINANCIAL SECTION
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1 INDEPENDENT AUDITOR’S REPORT
To the Honorable Members of the City Council
City of Turlock, California
Report on the Audit of the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Turlock, California (the City), as of and for the y ear ended June 30, 2023, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above pres ent fairly, in all material respects, the respective financial position of the governmental activities, t he business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, and the respective changes in financial position, and, where applicable, cash flow s thereof and the respective budgetary comparisons for the General Fund, Former LMI Housing Fund, Gas Tax/Street Improvement Fund, and ARPA Fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions
We conducted our audit in accordance with auditing standards ge nerally accepted in the United States of America and the standards applicable to financial audits contai ned in Government Auditing Standards , issued by the Comptroller General of the United States. Our res ponsibilities under t hose standards are further described in the Auditor’s Responsibilities for the Aud it of the Financial Statements section of our report. We are required to be independent of the City and to me et our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Responsibilities of Management for the Financial Statements
Management is responsible for the preparation and fair presenta tion of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and main tenance of internal control rel evant to the preparation and fair presentation of financial statements that are free from materia l misstatement, whether due to fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial dou bt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
2 Auditor’s Responsibilities for the Audit of the Financial Statements
Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditor’s report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in acc ordance with auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it e xists. 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 cont rol. Misstatements are considered material if there is a substantial likelihood that, individually or in t he aggregate, they would influence the judgment made by a reasonable user based on the financial statements.
In performing an audit in accordance with auditing standards ge nerally accepted in the United States of America and Government Auditing Standards, we:
• Exercise professional judgment and maintain professional skept icism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures respons ive to those risks. Such procedures include examining, on a test basis, evidence regardi ng the amounts and disclosures in the financial statements.
• Obtain an understanding of internal control relevant to the au dit in order to design audit procedures that are appropriate in the circumstances, but not f or the purpose of expressing an opinion on the effectiveness of the City’s internal control. Ac cordingly, no such opinion is expressed.
• Evaluate the appropriateness of accounting policies used and t he reasonableness of significant accounting estimates made by management, as well as evaluate th e overall presentation of the financial statements.
• Conclude whether, in our judgment, there are conditions or eve nts, considered in the aggregate, that raise substantial doubt about the City’s ability to contin ue as a going concern for a reasonable period of time.
We are required to communicate with those charged with governan ce regarding, among other matters, the planned scope and timing of the audit, significant audit fi ndings, and certain internal control-related matters that we identified during the audit.
Required Supplementary Information
Accounting principles generally accepted in the United States o f America require that the management’s discussion and analysis and the Required Supplementary Informat ion (RSI), as listed in the table of contents, be presented to supplement the basic financial statem ents. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate op erational, economic, or historical context.
We have applied certain limited procedures to the management’s discussion and analysis and the RSI in accordance with auditing standar ds generally accepted in the Un ited States of America, which consisted of inquiries of management about the methods of preparing the i nformation 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 f inancial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.
Supplemental Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanyin g supplemental information, as listed in the table of contents, is presen ted for purposes of additional analysis and is not a required part of the basic financial statements. Such information is the responsibil ity of management and was derived from
3 and relates directly to the underlying accounting and other rec ords 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, i ncluding comparing a nd reconciling such information directly to the underlying accounting and other rec ords used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standar ds generally accepted in the Un ited States of America. In our opinion, the supplemental information is fairly stated, in all material respects, in relation to the basic financial statements as a whole.
Other Reporting Required by Government Auditing Standards
In accordance with Government Auditing Standards , we have also issued our report dated January 21, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contra cts, and grant agreements and other matters. The purpose of that report is solely to describe the s cope of our testing of internal control over financial reporting and compliance and the results of that test ing, and not to provide an opinion on the effectiveness of the City’s internal control over financial rep orting or on compliance. That report is an integral part of an audit pe rformed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.
BROWN ARMSTRONG
ACCOUNTANCY CORPORATION
Bakersfield, California
January 21, 2025
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5 CITY OF TURLOCK
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2023
This narrative overview and analysis are provided by the manage ment of the City of Turlock (City) for the fiscal year 2022-2023 financial statements (with comparative in formation for 2021-2022). We encourage our readers to consider this information in conjunction with th e information provided in the accompanying basic financial statements and notes thereto.
FISCAL YEAR 2022-2023 FINANCIAL HIGHLIGHTS
Government-Wide Highlights
• The City’s net position (assets and deferred outflows in exces s of liabilities and deferred inflows) at June 30, 2023, totaled $676.6 m illion. Governmental activities accounted for $372.2 million of the net position, while $304.3 million are in the business-type activities. • Total City revenues, includi ng program and general revenues, w ere $155.9 million, while total expenses were $105.4 million.
• Governmental program revenues were $29.1 million compared to g overnmental program expenses of $70.8 million.
• Program revenues from business-type activities were $56.7 milli on, while expenses for business- type activities were $34.6 million.
Fund Highlights
• Net General Fund revenues exceeded expenditures and other fina ncing sources (uses) by $13.2 million as compared to the prior ye ar when revenues exceeded expenditures and other financing sources (uses) by $16.7 million. For financial reporting purposes, the “General Fund” includes not only the City’s General Fund, but also the Parks, Arts and Recreation Commission, Special Public Safety, Tourism (2 funds), Cannabis and Measure A funds. • The fund balance of the General Fund is $51.8 million at June 30, 2023 compared to a projected $29.8 million when the 2022-2023 budget was originally adopted.
Additional discussion regarding the financial results for fisca l year 2022-2023 can be found in the “Financial Activities” section of this document.
OVERVIEW OF THESE FINANCIAL STATEMENTS
This discussion and analysis is intended to serve as an introdu ction to the City’s basic financial statements which are broken into the following four parts:
1) Management’s Discussion and Analysis (this part),
2) The Basic Financial Statements, which include the Government -Wide and the Fund financial statements, along with the Notes to these financial statements, 3) Required Supplementary Information, and
4) Supplemental Information.
THE BASIC FINANCIAL STATEMENTS
Government-Wide Financial Statements
The Government-Wide Financial Statements provide a longer-term, broader view of the City’s activities as a whole. These statements are more similar to private-sector fi nancial statements than the fund financial statements. The Government-Wide Financial Statements are compri sed of the Statement of Net Position and the Statement of Activities.
6 The Statement of Net Position provides information about the financial position of the City a s a whole, including all its capital assets and long-term liabilities on t he full accrual basis, similar to that used by the private sector. The difference between the City’s assets and deferred outflows of resources and liabilities and deferred inflows of resources is reported as “net position” . Over time, this Statement may serve as an indicator of the City’s general health and whether its overa ll financial position is improving or deteriorating.
The Statement of Activities provides information about all the City’s revenues and all its expenses. This Statement is also prepared using the full accrual basis of accounting, with an emphasis on measuring net revenues or expenses for each of the City’s programs.
All of the City’s activities ar e grouped into either Government al or Business-type activities as explained below. All the amounts in the Statement of Net Position and the Statement of Activities are separated into Governmental or Business-type Activities in order to provi de a summary of these two activities of the City as a whole.
• Governmental Activities – All of the City’s basic service s are considered to be governmen tal activities. These services include public safety (police and fire), parks and recreation, public ways and facilities/transportation, community development, and general a dministration. General City revenues such as taxes and program-specific revenues such as user and de veloper impact fees support and finance these services.
• Business-Type Activities – All the City’s enterprise activi ties are reported here includin g water, sewer, transit, and building department operations. Unlike gove rnmental services, these services are supported by charges paid by the users of these services.
As noted above, the Government-wide financial statements are pr epared on the full accrual basis of accounting, which means they measure the flow of all economic resources of the City as a whole.
Fund Financial Statements
The Fund Financial Statements report the City’s operations in m ore detail than the government-wide statements and focus primarily on the short-term activities of the City’s General Fund and other major funds. The Fund Financial Statem ents measure only current reve nues and expenditures and fund balances; they exclude capital assets, long-term debt and other long-term amounts.
The Fund Financial Statements provide detailed information abou t each of the City’s most significant funds, called “major funds”. Major funds account for the most significant financial activities of the City and are presented individually, while the activities of non-major f unds are presented in summary with subordinate schedules presenting the detail for each of these o ther funds. Since the City’s most significant fiscal activities may change from year to year, the funds designated as “major funds” may also change from year to year.
Fund Financial Statements include governmental, enterprise, int ernal service, and fiduciary funds as follows:
Governmental Fund Financial Statements are prepared on the modi fied accrual basis of accounting, which means they measure only current financial resources and u ses. Capital assets and other long- lived assets, along with long-term liabilities, are not present ed in the Governmental Fund Financial Statements.
The City has thirty (30) governmental funds of which four (4) a re considered major funds for presentation purposes – the General Fund, Former LMI Housing Fu nd, Gas Tax/Street Improvement Fund, and the Facility Fees Fund. Each major fund is presented separately in the Governmental Fund Balance Sheet and the Governmental Fund Statement of Reven ues, Expenditures and Changes in Fund Balances. The financial information for the rem aining non-major governmental funds is combined into a single, aggregated presentation. The basic governmental fund financial statements can be found starting on page 28 in this report.
7 Enterprise and Internal Service Fund Financial Statements are p repared on the full accrual basis and include all their assets, liab ilities and deferred outflows/inf lows of resources, current and long-term.
The City’s Enterprise Funds account for the financial activity of the City’s water, sewer, transportation (fixed route and dial-a-ride) and building/safety services. The Internal Service Funds account for the financial activity of the City’s equipment pool, self-insurance, information technology, and engineering services activities. Because these activities primarily benefi t the governmental rather than business- type functions, the resulting financial activities of the Inter nal Service Funds have been included within the governmental activities in the government-wide finan cial statements. The Enterprise and Internal Service Fund Financial Statements can be found starting on page 38.
Fiduciary Fund Financial Statements are used to account for res ources held for the benefit of parties outside the government. They are not included in the governmen t-wide financial statements because their resources are not available to support City programs. Wi th the dissolution of the Redevelopment Agency, the activities of the Successor Agency to the former Turlock Redevelopment Agency are reported as a Private Purpose Trust Fund in the Fidu ciary Fund Section. Additional information about the dissolution of the Redevelopment Agency c an be found in Note 14 on page 90 of the financial statements.
Notes to the Financial Statements. The notes to the financial statements provide additional information that is essential to a full understanding of the data provided in the government-wide and fund financial statements. The notes can be founding starting on page 44.
FINANCIAL ACTIVITIES OF THE CITY AS A WHOLE
Statement of Net Position
Over time, the City’s net position may serve as an indicator of a governmental entity’s financial position.
The City’s Statement of Net Position and Statement of Activities presented below and on the next page focus on the City’s net position and changes to net position fo r Governmental and Business-Type Activities.
STATEMENT OF NET POSITION
AS OF JUNE 30
(in thousands of dollars)
2023 2022 2023 2022 2023 2022
Cash and investments 166,447$ 135,589 $ 61,216 $ 66,806 $ 227,663 $ 202,395 $ Other assets 54,718 52,402 52,124 55,237 106,842 107,639 Capital assets, net 252,079 247,880 312,753 294,976 564,832 542,856 Total assets 473,244 435,871 426,093 417,019 899,337 852,890 Deferred outflows
of resources 36,058 17,121 5,903 3,023 41,961 20,144 Long-term liabilities 97,492 58,779 107,804 109,639 205,296 168,418 Other liabilities 22,686 18,403 16,466 17,915 39,152 36,318 Total liabilities 120,178 77,182 124,270 127,554 244,448 204,736 Deferred inflows
of resources 16,884 36,602 3,407 8,176 20,291 44,778 Net position:
Net investment
in capital assets 248,914 244,359 222,230 198,105 471,144 442,464 Restricted 122,673 109,962 - - 122,673 109,962 Unrestricted 653 (15,113) 82,089 86,207 82,742 71,094 Total net position 372,240$ 339,208 $ 304,319 $ 284,312 $ 676,559 $ 623,520 $ Governmental Activities Business-Type Activities Total
8 As noted above, the City’s primary investment is in its Net investment in capital assets. Capital assets, which account for approximately 69.4% of the City’s total net p osition, include all infrastructure such as the street/roadway system; sewer, water and storm drain collect ion systems as well as retention basins; the wastewater treatment plant, water wells, and pump stations; streetlights and traffic signals; and parks.
Capital assets also include all vehicles, equipment and buildin gs used by City employees in the course of their daily activities. By their very nature and use, capital assets are not available for future spending and are, therefore, not assets available to fund future activities.
Approximately $122.7 million or 1 8.1% of the City’s non-capital net position is subject to external restrictions as to their use. T he remaining $82.7 million is u nrestricted and available to meet the City’s on-going obligations to its citizens and creditors. Of this am ount, $0.6 million is related to governmental activities and $82.1 million to business-type activities.
The City’s overall net position increased by $53.0 million during the 2022-2023 fiscal year. Governmental activities experienced a $33.0 million increase in net position while the City’s business-type activities – those intended to be self-sufficient – experienced a $20.0 mill ion increase in net position. More information regarding the results of operations for all the City’s funds can be found later in this report.
Summary of Changes in Net Position
As the below table shows, $85.7 million of the City’s $155.9 million in total revenues comes from program revenue sources. Program revenues are those derived directly from the program itself (user fees) or from parties outside the reporting government’s taxpayers or citizen ry. Program revenues reduce the need for the cost of the function to be financed by general government r evenues. The largest portion of the City’s program revenues is “Charges for Services” which include user f ees from the City’s water and sewer operations, building permit-related fees, developer impact fees and special assessments.
Expenses are presented on a functi onal basis and represent only current year expenses. As such, they do not include capital outlay expenditures as capital outlay ex penditures are included in “capital assets” on the City’s Statement of Net Position.
Citywide expenses, which totaled $105.4 million, consisted of $ 70.8 million for governmental activities and $34.6 million for business-type activities. Of the $70.8 m illion in governmental activity expenses, $38.0 million or 53.7% relate to the provision of public safety (police and fire) services. The next largest component was $9.8 million or 13.8% for public ways, facilities and transportation. This component accounts for activities involved in the maintenance and constru ction of City streets and roads as well as City buildings.
9 SUMMARY OF CHANGES IN NET POSITION
FOR THE YEAR ENDED JUNE 30
(in thousands of dollars)
2023 2022 2023 2022 2023 2022
Program Revenues
Charges for services 11,526 $ 12,609 $ 47,712 $ 52,375 $ 59,238 $ 64,984 $ Operating grants and contributions 5,978 6,646 4,327 4,682 10,305 11,328 Capital grants and contributions 11,563 14,265 4,614 5,294 16,177 19,559 Total Program Revenues 29,067 33,520 56,653 62,351 85,720 95,871 General Revenues
Property taxes 8,803 7,528 - - 8,803 7,528 Sales taxes 36,309 34,269 - - 36,309 34,269 Property taxes - VLF in lieu 8,336 7,829 - - 8,336 7,829 Other taxes 14,353 4,836 - - 14,353 4,836 Interest and investment earnings 1,290 (1,647) 28 (786) 1,318 (2,433) Other income 1,228 691 - - 1,228 691 Gain (loss) on disposal
of capital assets 1 27 (205) - (204) 27 Total General Revenues 70,320 53,533 (177) (786) 70,143 52,747 Total Overall Revenues 99,387 87,053 56,476 61,565 155,863 148,618 Expenses
General government 9,435 7,606 - - 9,435 7,606 Public safety 38,025 32,898 - - 38,025 32,898 Public ways/facilities/transportation 9,776 10,347 - - 9,776 10,347 Parks and recreation 4,755 3,948 - - 4,755 3,948 Community development 8,665 1,836 - - 8,665 1,836 Interest on long-term debt 129 93 - - 129 93 Water - - 9,949 9,093 9,949 9,093 Sewer - - 18,182 17,972 18,182 17,972 Transportation - - 5,487 4,829 5,487 4,829 SRWA operations - - - - - - Building and safety - - 952 1,137 952 1,137 Total Expenses 70,785 56,728 34,570 33,031 105,355 89,759 Increase (Decrease) in Net Position
Before Transfers and Contributions 28,602 30,325 21,906 28,534 50,508 58,859 Transfers 1,899 2,743 (1,899) (2,743) - - Contributions for capital assets 2,400 - - - 2,400 - Contribution from Private-Purpose Trust 131 108 - - 131 108 Change in Net Position 33,032 33,176 20,007 25,791 53,039 58,967 Net Position, Beginning of Year 339,208 306,032 284,312 258,521 623,520 564,553 Net Position, End of Year 372,240 $ 339,208 $ 304,319 $ 284,312 $ 676,559 $ 623,520 $ Governmental Activities Business-Type Activities Total
10 Governmental Activities Revenue Composition
Governmental activity revenues totaling $102.0 million are comp rised of various non-dedicated tax revenues (General Revenues) as well as revenues received for specific purposes (Program Revenues), and revenues are categorized as follows:
• Charges for Services – Revenues for specialized City services w hich are typically not demanded by the general population – totaled $11.5 million. Included in th is revenue category are the special assessment revenues charged by the City’s Lighting and Landscap e maintenance districts as well as charges for specialized services provided by departments throug hout the City and fees for participation in City-offered recreation programs.
• Operating Grants and Contributions – Revenues received from oth er governmental agencies which are primarily used for operational needs – totaled $6.0 million . Operating grants include revenues received from the (1) U.S. Department of Housing and Urban Deve lopment (HUD) and the California Department of Housing and Community Development supporting the City’s affordable housing activities; (2) U.S. Department of Justice and California Offic e of Traffic Safety supporting various police activities; (3) Gas Tax and Local Transportation Funds u sed for street/road maintenance; and (4) revenues received by the City ’s recreation division to supp ort after school enrichment programs.
Since these types of revenues are generally received on a reimb ursement basis, annual amounts will vary from year-to-year depending on the activities in which the City is engaged.
• Capital Grants and Contributions – These are typically developm ent impact related revenues which are collected to finance the cost of new infrastructure as well as federal Department of Transportation revenues. Total revenues for 2022-2023 were $11.6 million. Th e Department of Transportation revenues are used for street/road reconstruction and other main tenance that is more extensive than pothole patching and slurry seals. Funds from Measure L, a locally approved sales tax measure to be used for transportation needs within Stanislaus County, are use d for street/road maintenance and rehabilitation.
11 • General revenues are all other revenues not classified as progr am revenues and are generally received for unrestricted uses. General revenues include prope rty taxes, sales tax, property tax – VLF in lieu, franchise fees, business license fees, transient o ccupancy taxes and investment earnings. The City’s governmental activity general revenues to taled $70.3 million for fiscal 2022- 2023. Property tax assessed values increased 6.71% or $526.2 mi llion between 2021-2022 and 2022-2023 to a total of $8.4 billion in assessed value for parc els within the City. This resulted in a $1.3 million increase in asse ssed value rela ted revenues. Sales taxes increased $2.0 m illion from 2021-2022. The increase in Sales Tax can be primarily attribute d to the Measure A sales tax in conjunction with increased sales from the local Amazon facility.
Governmental Activities Revenues and Expenses
Governmental activity revenues are primarily used to finance go vernmental activities such as public safety, park maintenance, culture and recreation programs, and general government administration. The tables below graphically depict the typical relationship betwee n program revenues and expenses for Governmental Activities for the past two years. In total, 2022 -2023 expenses for Governmental Activities exceeded program revenues by $41.7 million whereas in 2021-2022 expenses exceeded revenues by $23.2 million.
12 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
General
Government
Public
Safety
Public
Ways/Facilities/
Transportation
Parks and
Recreation
Community
Development
2021-2022 Program Revenues and Expenses
Governmental Activities
Expenses Revenues
Business-Type Activities
Business-Type Activities
Revenues by Service Sector
Water
48%
Sewer
44%
Transit
7%
SRWA
Operations
1%
Revenues for business-type activities totaled $56.7 million and related expenses totaled $34.6 million of which $18.2 million or 52.6% related to the maintenance and ope rations of the City’s wastewater treatment plant and the City’s storm drain collection system. Potable water maintenance and operations accounted for $9.9 million or 28. 8% of business-type activities expenses. Other business-type activities include the operation of both fi xed route and dial-a-ride trans it systems which provide service in Turlock as well as connecting those in need with County-wide transportation services. The City’s Building division assists all residents and devel opers in their pursuits of prope rty development and improvements within the City limits.
13 The pie chart above and the graphs below present the compositio n of revenue for the City’s Business- Type activities by functional area as well as a comparison for both fiscal years 2022-2023 and 2021-2022 of the program revenues vs expenses for each of the four functional areas.
$-
$4,000
$8,000
$12,000
$16,000
$20,000
$24,000
$28,000
$32,000
Water Sewer Transit SRWA Operations
2022-2023 Program Revenues and Expenses
Business-Type Activities
Expenses Revenues
$-
$4,000
$8,000
$12,000
$16,000
$20,000
$24,000
$28,000
$32,000
$36,000
Water Sewer Transit SRWA Operations
2021-2022 Program Revenues and Expenses
Business-Type Activities
Expenses Revenues
THE CITY’S FUND FINANCIAL STATEMENTS
Governmental Funds
As noted earlier, the focus of the City’s governmental funds (G eneral, Special Revenue and Capital Projects) is to provide information related to resources (mainl y cash), near-term inflows, outflows and spendable balances. This focus does not include capital assets and long-term debt.
At June 30, 2023, the City’s governmental funds reported combin ed fund balances of $143.1 million, a $24.2 million increase over the prior year. The General Fund’s fund balance is $51.8 million at June 30, 2023. Governmental fund revenues (including transfers in) were $110.1 million this year, of which General Fund revenues totaled $74.5 million or 68%. Government al fund expenditures (including transfers out) totaled $89.4 million with the General Fund repr esenting 69.7% of the total or $62.4 million.
The following provides additional information for select governmental funds.
14 General Fund – As previously mentioned, for financial reporting purposes, the “General Fund” includes not only the City’s General Fund, but also the Parks, Arts and Recreation Commission, Special Public Safety, Tourism (2 funds), Cannabis and Measure A funds. At Ju ne 30, 2023, the General Fund had a fund balance of $51.8 million with $46.2 million in the unassig ned category. As noted in footnote 8, fund balances in governmental funds can fall into one of five categories – nonspendable, restricted, committed, assigned or unassigned. Balances falling in the nonspendable t hrough assigned categories are there by virtue of (1) legal restrictions, (2) City Council action to co mmit resources for specific activities, and/or (3) action taken by management which signals the City’s intended us e of resources. All other balances are categorized as unassigned.
General Fund revenues exceeded expenditures by $13.2 million fo r 2022-2023. On-going General Fund revenues increased from $60.4 million in 2021-2022 to $70.8 million in 2022-2023.
The City continues to work balancing the economic vs. service d emand challenges associated with the activities funded by the General fund. The primary reason the General Fund was able to generate increases to the Fund Balance in 2022-2023 was primarily due to increases in taxes and assessments revenue of $3.1 million, license s and permits revenue of $3.2 m illion, use of money and property revenue of $1.5 million, and charges for current services of $2.0 million.
Former LMI Housing Fund – This fund serves as the successor to the former Housing Set-Aside Fund and was formed after the dissolution of the City’s Redevelopmen t Agency. The purpose of this fund is to account for housing related activities and assets the City elected to retain from the former Redevelopment Agency. For fiscal year 2022-202 3 the fund’s expenditures incl uded $125,295 in support of a Mobile Home Rental Subsidy program for income eligible senior citizens . This program is an enforceable obligation of the Successor Agency to the Turlock Redevelopment Agency.
Gas Tax/Street Improvement – This fund comprises the revenues a nd related expenditures the City receives from Gas Tax, Local Transportation Fund (LTF), Stanislaus County Measure L, State of CA SB 1 and Federal Department of Transportation (DOT) sources. Revenu es (including transfers in) for 2022- 2023 totaled $11.4 million while expenditures (including transf ers out) totaled $8.5 million. Federally- funded projects typically take 3-4 years from beginning to end. The funding is received on a reimbursement basis meaning that the City spends the money firs t in accordance with the grant documents and is then reimbursed. The City uses Gas Tax Sectio n 2103 dollars for the local match portion for many federally-funded projects. Major projects for which there were expenditures in 2022- 2023 include: Active Transportation Program improvements for r ehabilitation of Golden State Boulevard to Main Street, Hedstrom Road between Geer Road and Colorado Av enue, Lander Avenue D Street and State Route 99 and of Pedras Road between Geer Road and Golden State Boulevard.
The Gas Tax and Local Transportation Fund (LTF) dollars are use d for general street maintenance (pothole repairs, crack sealing, slurry seals and striping) as well as the operational costs of the City’s street lights which are not in an assessment district, traffic signals, leaf pick-up, and street tree trimming.
Local Transportation Fund dollars are also used for bicycle and pedestrian related-improvements contiguous to the City’s street/road system. The Gas Tax and L TF revenues are based on taxes paid when gasoline is purchased which is a revenue source that is no t growing due to more fuel-efficient vehicles on the road. Expenditures funded by these revenue sou rces were at a level consistent with the prior year.
American Rescue Plan Act (ARPA) – This fund accounts for revenu e and eligible expenditures as outlined in the American Rescue Plan Act guidelines. Expenditu res (including transfers out) totaled $5.5 million were primarily used in the funding of the Columbia Pool Project and to fund eligible salaries and benefits of specified public safety employees.
Enterprise Funds
The City’s enterprise funds provide the same information found in the government-wide financial statements for business-type activities only in a little more detail. The net position for the City’s enterprise funds increased $20.0 million during fiscal year 2022-2023, whi ch compares to a $25.8 million increase for fiscal year 2021-2022. Overall operating revenues were app roximately $4.7 million lower than the prior year while operating expen ses increased by $1.3 million. A decrease of $6.0 million from a
15 settlement for well remediation accounts for most of the decrease in operating revenues, which was offset by a modest increase in charges for current services. The City is a member of the Stanislaus Regional Water Authority which is a joi nt powers authority developing a surface water supply project to supply additional drinking water to the customers within the Authority member’s service area. More information related to this project can be found at www.stanrwa.org/ and in Note 13 to the financial statements. Net operating income at the City’s wastewater facility was $5.0 mil lion compared to $3.6 in 2021-2022. The City completed work on the North Valley Regional Recycled Water project which provides a beneficial reuse of the City’s tertiary treated effluent.
It should be noted that for both the water and wastewater syste ms, new development pays – via development impact fees - for the construction of infrastructur e in the newly developing areas of town.
The monthly user fees pay for the on-going delivery of water and sewer services as well as for the cost of replacing infrastructure either due to age or increasing regulatory requirements.
CAPITAL ASSETS
At June 30, 2023, the City had $564.8 million, net of depreciat ion, invested in a broad range of capital assets used in governmental and business type activities. This investment includes land and improvements, buildings, machinery, equipment, vehicles, infras tructure and construction in progress.
Infrastructure assets include items which are not moveable and are normally of use only to the City such as streets/roads, bridges, sidewalks, street lighting and traff ic signals, parks, drainage systems, sewer collection and treatment systems and water distribution systems. Net additions to the City’s capital asset investment (including construction in progress but excluding cu rrent year depreciation) during fiscal year 2022-2023 was approximately $39.3 million. Capital expenditure s include transit buses, upgrades at the Regional Water Quality Control Facility, North Valley Regional Recycling Water Pipeline; as well as the purchase of vehicles and equipment by various departments which are used in their daily operations.
Additional information regarding the City’s capital assets can be found in Note 6 to the financial statements starting on page 63.
DEBT ADMINISTRATION
At June 30, 2023 the City had $97.0 million in debt outstanding as compared to $103.7 million for the prior year.
The City’s principal debt service obligations for 2022-23, tota ling approximately $6.5 million, are made up of the following:
Debt Service
2017 Water Revenue Bonds 795,000 $
2022 Sewer Loan 2,978,000
SRF - WQC Upgrade 1,162,331
SRF - Harding Drain By-Pass 722,077
SRF - North Valley Water Program 531,964
PNC Lease/Fire Trucks 91,565
Motorola Equipment Lease/IBM 265,528
6,546,465$
Additional information regarding each of the City’s debt issues as well as debt service requirements is discussed in greater detail in Note 7 to the financial statements starting on page 65.
16 NEXT YEAR’S BUDGET AND THE ECONOMY
In June 2023, the City Council adopted the budget for fiscal ye ar 2023-2024. The 2023-2024 General Fund (Fund 110) budget projected a balanced budget with revenues equaling expenses of just over $52.2 million. The 2023-2024 budget included personnel cost increases budgeted based on existing MOUs and/or Schedules of Benefits as well as projected increases for retirement and increases to projected revenues, primarily sales tax revenue and property tax revenue.
More information regarding the City’s budget can be obtained by going to the Finance division section under Administrative Services on the City website at www.ci.turlock.ca.us.
REQUESTS FOR INFORMATION
This Basic Financial Report is intended to provide citizens, ta xpayers, investors, and creditors with a general overview of the City’s finances. Questions about this report should be directed to the City’s Finance Department, at 156 South Broadway, Suite 110, Turlock, CA 95380.
17 BASIC FINANCIAL STATEMENTS
GOVERNMENT-WIDE FINANCIAL STATEMENTS
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19 STATEMENT OF NET POSITION AND STATEMENT OF ACTIVITIES
The Statement of Net Position and the Statement of Activities s ummarize the entire City’s financial activities and financial position.
The Statement of Net Position reports the difference between the City’s total assets and deferred outflows of resources and the City’s total liabilities and deferred inflows of resources, including all the City’s capital assets and all its long-term debt. The Statement of Net Position summarizes the financial position of all of the City’s Governmental Activities in a single column, and the financial position of all of the City’s Business-Type Activities in a single column; these columns are followed by a Total column that presents the financial position of the entire City.
The City’s Governmental Activities include the activities of it s General Fund, along with all its Special Revenue and Capital Projects Funds. Since the City’s Internal S ervice Funds service these funds, their activities are consolidated with Governmental Activities, after eliminating interfund transactions and balances. The City’s Business-Type Activities include all its Enterprise Fund activities.
The Statement of Activities repo rts increases and decreases in the City’s net position. It is also prepared on the full accrual basis of accounting, which means it include s all the City’s revenues and all its expenses, regardless of when cash changes hands. This differs f rom the “modified accrual” basis of accounting used in the fund financial statements, which reflect only current assets, current liabilities, available revenues, and measurable expenditures.
The Statement of Activities pres ents the City’s expenses first, listed by program, followed by the expenses of its Business-Type Activities. Program revenues—that is, revenues which are generated directly by these programs—are then deducted from program expen ses to arrive at the net expense of each governmental and business-type program. The City’s general revenues are then listed in the Governmental Activities or Busin ess-Type Activities column, as appropriate, and the Change in Net Position is computed and reconciled with the Statement of Net Position.
Both of these statements include the financial activities of th e City and the Turlock Public Financing Authority, which is legally separate but is a component unit of the City because it is controlled by the City, which is financially accountable for the activities of this entity.
20 This page intentionally left blank.
See accompanying notes to basic financial statements.
21 CITY OF TURLOCK
STATEMENT OF NET POSITION
JUNE 30, 2023
Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments (Note 3) 166,446,969 $ 57,856,758 $ 224,303,727 $ Restricted cash and investments and
cash and investments with fiscal agent (Note 3) - 3,358,845 3,358,845 Accounts receivable, net (Note 5C) 15,045,218 12,263,110 27,308,328 Interest receivable 780,945 226,289 1,007,234 Prepaids 1,758,303 - 1,758,303 Due from developers (Note 5A) 287,284 157,663 444,947 Long-term loans receivable (Note 5B) 35,788,959 - 35,788,959 Investment in affordable housing property (Note 1K) 327,185 - 327,185 Investment in joint venture (Note 13D) - 39,477,968 39,477,968 Leases receivable (Note 15) 729,592 - 729,592 Capital assets, not being depreciated (Note 6) 49,255,701 67,595,767 116,851,468 Capital assets, being depreciated (net) (Note 6) 202,823,379 245,157,441 447,980,820 Total Assets 473,243,535 426,093,841 899,337,376
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 9) 34,484,935 5,522,023 40,006,958 Related to OPEB (Note 10) 1,573,214 380,809 1,954,023 Total Deferred Outflows of Resources 36,058,149 5,902,832 41,960,981
LIABILITIES
Accounts payable 7,191,102 3,140,093 10,331,195 Payroll payable 1,377,799 221,793 1,599,592 Interest payable 27,061 599,177 626,238 Unearned revenue 12,014,846 5,593,234 17,608,080 Deposits payable 1,000,628 499,547 1,500,175 Compensated absences (Note 1I):
Due within one year 702,950 142,630 845,580 Due in more than one year 2,811,804 570,526 3,382,330 Estimated claims liability (Note 12):
Due in more than one year 2,516,052 - 2,516,052 Long-term debt (Note 7):
Due within one year 371,156 6,269,404 6,640,560 Due in more than one year 2,793,428 87,612,234 90,405,662 Net pension liability (Note 9):
Due in more than one year 82,128,965 17,868,419 99,997,384 Total OPEB liability (Note 10):
Due in more than one year 7,241,312 1,752,816 8,994,128 Total Liabilities 120,177,103 124,269,873 244,446,976
DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 9) 5,820,160 899,662 6,719,822 Related to OPEB (Note 10) 10,360,081 2,507,738 12,867,819 Related to leases (Note 15) 704,215 - 704,215 Total Deferred Inflows of Resources 16,884,456 3,407,400 20,291,856 NET POSITION (Note 8)
Net investment in capital assets 248,914,496 222,230,415 471,144,911 Restricted for:
Capital projects 28,961,668 - 28,961,668 Special projects and programs 93,711,380 - 93,711,380 Unrestricted 652,581 82,088,985 82,741,566 Total Net Position 372,240,125 $ 304,319,400 $ 676,559,525 $
See accompanying notes to basic financial statements.
22 CITY OF TURLOCK
STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Tot al Governmental Activities:
General government 9,434,580 $ 4,933,052 $ 2,471,773 $ 785,153 $ 8,189,978 $ Public safety 38,025,462 2,441,103 569,818 1,020,215 4,031,136 Public ways and facilities/transportation 9,776,080 2,139,340 2,045,171 8,562,911 12,747,422 Parks and recreation 4,755,125 1,222,186 816,414 1,194,632 3,233,232 Community development 8,665,465 790,387 74,931 - 865,318 Interest and fiscal charges 129,284 - - - - Total Governmental Activities 70,785,996 11,526,068 5,978,107 11,562,911 29,067,086 Business-type Activities:
Water 9,948,754 25,397,775 345,779 1,499,666 27,243,220 Sewer 18,182,355 21,551,996 - 3,114,097 24,666,093 Transportation 5,486,844 183,164 3,981,157 - 4,164,321 SRWA Operations 951,975 579,367 - - 579,367 Total Business-Type Activities 34,569,928 47,712,302 4,326,936 4,613,763 56,653,001 Total 105,355,924 $ 59,238,370 $ 10,305,043 $ 16,176,674 $ 85,720,087 $ General revenues:
Taxes:
Property taxes
Sales taxes
Property tax - VLF in lieu
Other tax
Total taxes
Other revenue
Interest income (loss)
Contributions for capital assets
Contributions from private-purpose trust
Gain from sale of capital assets
Transfers (Note 4)
Total general revenues and transfers
Change in Net Position
Net Position - Beginning
Net Position - Ending
Program Revenues
See accompanying notes to basic financial statements.
23 CITY OF TURLOCK
STATEMENT OF ACTIVITIES (Continued)
FOR THE YEAR ENDED JUNE 30, 2023
Governmental Business-Type
Functions/Programs Activities Activities Total
Governmental Activities:
General government (1,244,602) $ - $ (1,244,602)$ Public safety (33,994,326) - (33,994,326) Public ways and facilities/transportation 2,971,342 - 2,971,342 Parks and recreation (1,521,893) - (1,521,893) Community development (7,800,147) - (7,800,147) Interest and fiscal charges (129,284) - (129,284) Total Governmental Activities (41,718,910) - (41,718,910) Business-type Activities:
Water - 17,294,466 17,294,466 Sewer - 6,483,738 6,483,738 Transportation - (1,322,523) (1,322,523) SRWA Operations - (372,608) (372,608) Total Business-Type Activities - 22,083,073 22,083,073 Total (41,718,910) 22,083,073 (19,635,837)
General revenues:
Taxes:
Property taxes 8,802,762 - 8,802,762 Sales taxes 36,309,141 - 36,309,141 Property tax - VLF in lieu 8,336,087 - 8,336,087 Other tax 14,353,172 - 14,353,172 Total taxes 67,801,162 - 67,801,162 Other revenue 1,227,988 - 1,227,988 Interest income (loss) 1,289,942 28,012 1,317,954 Contributions for capital assets 2,400,170 - 2,400,170 Contributions from private-purpose trust 131,462 - 131,462 Gain (Loss) from sale of capital assets 1,438 (204,686) (203,248) Transfers (Note 4) 1,898,807 (1,898,807) - Total general revenues and transfers 74,750,969 (2,075,481) 72,675,488 Change in Net Position 33,032,059 20,007,592 53,039,651 Net Position - Beginning 339,208,066 284,311,808 623,519,874 Net Position - Ending 372,240,125 $ 304,319,400 $ 676,559,525 $ Net (Expense) Revenue and
Changes in Net Position
24 This page intentionally left blank.
25 BASIC FINANCIAL STATEMENTS
FUND FINANCIAL STATEMENTS
26 This page intentionally left blank.
27 MAJOR GOVERNMENTAL FUNDS
The funds described below were determined to be Major Funds by the City in fiscal year 2023. Individual nonmajor funds may be found in the Supplemental Section.
GENERAL FUND
The General Fund is used for all the general revenues of the Ci ty not specifically levied or collected for other City funds. Expenditure activities within the General Fun d include public safety (police and fire), park maintenance, general City administration (includes City Cl erk, payroll/personnel, accounts receivable, accounts payable, accounting), planning, and the Ci ty attorney. For financial reporting purposes, the General Fund for the City of Turlock also includes Parks, Arts and Recreation Commission, Special Public Safety, Cannabis, Measure A, and Tourism (2 funds).
FORMER LMI HOUSING FUND
This fund accounts for the activity of the Housing Set-Aside fu nds post Turlock Redevelopment Agency dissolution.
GAS TAX/STREET IMPROVEMENT FUND
The Gas Tax/Street Improvement Fund accounts for the City’s Gas T a x ( H i g h w a y U s e r ’ s T a x ) , L o c a l Transportation Fund, and Measure L (Stanislaus County Sales Tax Transportation Measure) revenues as well as federal/state/local grants received for street improvem ent purposes. These revenue sources are used in the maintenance of the City’s street/road system includ ing street sweeping, pothole repairs, streetlight/traffic signal lighting and maintenance, and various street reconstruction projects which are the result of wear and tear. Expenditures in this fund do not include street construction projects which are due to development.
ARPA FUND
This fund accounts for American Rescue Plan Act (ARPA) funding.
See accompanying notes to basic financial statements.
28 CITY OF TURLOCK
BALANCE SHEET
GOVERNMENTAL FUNDS
JUNE 30, 2023
Former LMI Gas Tax/ Nonmajor Total
Housing Street Governmental Governmental
General Fund Improvement ARPA Funds Funds
ASSETS
Cash and investments (Note 3) 44,901,699$ 2,012,404 $ 20,541,082 $ 9,162,097 $ 69,990,391 $ 146,607,673 $ Accounts receivable (Note 5C) 11,231,321 450 2,077,270 - 1,397,147 14,706,188 Interest receivable 434,523 7,409 70,038 - 225,079 737,049 Due from developers (Note 5A) 20,041 - - - 267,243 287,284 Loans receivable (Note 5B) 5,058 17,798,625 - - 17,985,278 35,788,961 Prepaids 1,758,303 - - - - 1,758,303 Investment in affordable
housing property (Note 1K) - 327,184 - - - 327,184 Leases receivable (Note 15) 494,860 - - - 234,732 729,592 Total Assets 58,845,805 $ 20,146,072 $ 22,688,390 $ 9,162,097 $ 90,099,870 $ 200,942,234 $
LIABILITIES
Accounts payable 3,871,605 $ 8,920 $ 1,949,094$ 53,813 $ 537,151 $ 6,420,583 $ Payroll payable 1,272,355 - 18,217 - 52,388 1,342,960 Due to other funds (Note 4B) - - - - 426,650 426,650 Unearned revenue 218,879 - - 11,720,965 75,002 12,014,846 Deposits payable 994,122 - 256 - 6,250 1,000,628 Total Liabilities 6,356,961 8,920 1,967,567 11,774,778 1,097,441 21,205,667
DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (Notes 1F and 5B) 193,863 17,798,625 - - 17,985,278 35,977,766 Related to leases (Note 15) 480,409 - - - 223,806 704,215 Total Deferred Inflows of Resources 674,272 17,798,625 - - 18,209,084 36,681,981 FUND BALANCES (Note 8)
Nonspendable 1,789,239 - - - 267,243 2,056,482 Restricted - 2,338,527 20,720,823 - 43,150,477 66,209,827 Committed 3,271,333 - - - 27,375,771 30,647,104 Assigned 536,270 - - - - 536,270 Unassigned 46,217,730 - - (2,612,681) (146) 43,604,903 Total Fund Balances 51,814,572 2,338,527 20,720,823 (2,612,681) 70,793,345 143,054,586 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 58,845,805$ 20,146,072 $ 22,688,390 $ 9,162,097 $ 90,099,870 $ 200,942,234 $
See accompanying notes to basic financial statements.
29 CITY OF TURLOCK
RECONCILIATION OF THE GOVERNMENTAL FUNDS BALANCE SHEET
TO THE GOVERNMENT-WIDE STATEMENT OF NET POSITION –
GOVERNMENTAL ACTIVITIES
JUNE 30, 2023
Total fund balances reported on the Governmental Funds Balance Sheet 143,054,586 $ Amounts reported for Governmental Activities in the Statement of Net Position are different from those reported in the Governmental Funds above because of the following:
CAPITAL ASSETS
Capital assets used in Governmental Activities are not current assets or financial resources and therefore are not reported in the Governmental Funds. 248,626,063
ALLOCATION OF INTERNAL SERVICE FUND NET POSITION
Internal service funds are not Governmental Funds. However, they are used by management to charge the costs of certain activities, such as insurance, central services, and maintenance, to individual Governmental Funds. The net current assets of the Internal Service Funds are therefore included in Governmental Activities in the following line items in the Statement of Net Position.
Cash and investments 19,839,296
Accounts receivable 532,892
Interest receivable 43,896
Due from other funds 426,650
Capital assets (net of accumulated depreciation) 3,453,017 Accounts payable (770,519)
Payroll payable (34,839)
Compensated absences (116,027)
Estimated claims liability (2,516,052)
Net pension liability and related deferred outflows and inflows of resources (2,231,980) Total OPEB liability and related deferred inflows of resources ( 683,593)
ACCRUAL OF NONCURRENT REVENUES AND EXPENSES
Revenues that are unavailable on the Governmental Fund Balance Sheet because they are not available currently are taken into revenue in the Statement of Activities. 35,977,766
LONG-TERM ASSETS AND LIABILITIES
The assets and liabilities below are not due and payable in the current period and therefore are not reported in the Governmental Funds:
Accounts receivable (193,863)
Long-term debt (3,164,584)
Interest payable (27,061)
Compensated absences (3,398,727)
Net pension liability and related deferred outflows and inflows of resources (51,232,210) Total OPEB liability and related deferred inflows of resources (15,344,586) NET POSITION OF GOVERNMENTAL ACTIVITIES 372,240,125 $
See accompanying notes to basic financial statements.
30 CITY OF TURLOCK
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES
GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Former LMI Gas Tax/ Nonmajor Total
Housing Street Governmental Governmental
General Fund Improvement ARPA Funds Funds
REVENUES
Taxes and assessments 32,882,082 $ - $ - $ - $ 5,729,182$ 38,611,264 $ Measure A sales tax 15,247,244 - - - - 15,247,244 Licenses and permits 5,476,400 - - - 24,951 5,501,351 Fines, forfeitures, and penalties 105,216 - - - - 105,216 Use of money and property 604,271 24,149 165,490 - 392,077 1,185,987 Intergovernmental 8,656,448 - 11,146,467 2,859,092 3,215,098 25,877,105 Charges for current services 7,686,524 - 49,680 - 3,298,588 11,034,792 Other revenue 145,612 25,887 25,000 - 1,034,635 1,231,134 Total Revenues 70,803,797 50,036 11,386,637 2,859,092 13,694,531 98,794,093
EXPENDITURES
Current:
General government 7,900,081 - - 1,936,961 238,498 10,075,540 Public safety 36,077,447 - - - 1,035,367 37,112,814 Public ways and facilities/transportation 520,204 - 2,074,332 - 1,897,843 4,492,379 Parks and recreation 2,615,097 - - - 1,550,317 4,165,414 Community development 4,853,036 125,295 - - 3,557,616 8,535,947 Capital outlay 1,868,486 - 5,842,152 - 3,126,315 10,836,953 Debt service:
Principal 357,094 - - - - 357,094 Interest and fiscal charges 132,632 - - - - 132,632 Total Expenditures 54,324,077 125,295 7,916,484 1,936,961 11,405,956 75,708,773
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 16,479,720 (75,259) 3,470,153 922,131 2,288,575 23,085,320
OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - - - Contributions from other funds 1,010,682 - - - - 1,010,682 Contributions of capital assets - - - - 2,400,170 2,400,170 Contributions from private-purpose trust 87,729 38,608 - - 5,125 131,462 Proceeds from sale of property 1,028 - - - 410 1,438 Transfers in (Note 4A) 3,657,530 - 44,909 - 7,647,546 11,349,985 Transfers (out) (Note 4A) (8,044,683) - (558,578) (3,534,812) (1,597,206) (13,735,279) Total Other Financing Sources (Uses) (3,287,714) 38,608 (513,669) (3,534,812) 8,456,045 1,158,458 NET CHANGE IN FUND BALANCES 13,192,006 (36,651) 2,956,484 (2,612,681) 10,744,620 24,243,778 BEGINNING FUND BALANCES 38,622,566 2,375,178 17,764,339 - 60,048,725 118,810,808 ENDING FUND BALANCES 51,814,572 $ 2,338,527 $ 20,720,823 $ (2,612,681) $ 70,793,345 $ 143,054,586 $
See accompanying notes to basic financial statements.
31 CITY OF TURLOCK
RECONCILIATION OF THE GOVERNMENTAL FUNDS
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCES TO THE
GOVERNMENT-WIDE STATEMENT OF ACTIVITIES –
GOVERNMENTAL ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2023
NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 24,243,7 78$ Amounts reported for Governmental Activities in the Statement of Activities are different because of the following:
CAPITAL ASSETS TRANSACTIONS
Governmental Funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is capitalized and allocated over their estimated useful lives and reported as depreciation expense.
The capital outlay and other capitalized expenditures are therefore added back to fund balance. 12,745,369
Depreciation expense is deducted from the fund balance. (Depreciation expense is net of internal service fund depreciation of $914,355 which has already been allocated to serviced funds). (7,715,759)
LONG-TERM DEBT PROCEEDS AND PAYMENTS
Bond proceeds provide current financial resources to Governmental Funds, but issuing debt increases long-term liabilities in the Statement of Net Position.
Repayment of bond principal is an expenditure in the Governmental Funds, but in the Statement of Net Position the repayment reduces long-term liabilities.
Repayment of debt principal is added back to fund balance. 357,0 94
ACCRUAL OF NONCURRENT ITEMS
The amounts below included in the Statement of Activities do not provide (or require) the use of current financial resources and therefore are not reported as revenue or expenditures in the Governmental Funds (net change):
Unavailable revenue (111,909)
Interest payable 3,348
Compensated absences (566,497)
Net pension liability and related deferred outflows and inflows of resources (2,927,306) Total OPEB liability and related deferred outflows and inflows of resources (1,084,239)
ALLOCATION OF INTERNAL SERVICE FUND ACTIVITY
Internal Service Funds are used by management to charge the costs of certain activities, such as equipment acquisition, maintenance, and insurance, to individual funds. The portion of the net revenue (expense) of these Internal Service Funds arising out of their transactions with Governmental Funds is reported with Governmental Activities because they service those activities.
Change in Net Position - All Internal Service Funds 8,088,180 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 33,032,059 $ The schedule below reconciles the Net Change in Fund Balances reported on the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances, which measures only changes in current assets and current liabilities on the modified accrual basis of accounting, with the Change in the full accrual basis of accounting.
Net Position of Governmental Activities reported in the Statement of Activities, which is prepared on
See accompanying notes to basic financial statements.
32 CITY OF TURLOCK
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Original Final Actual Amounts Final Budget
REVENUES
Taxes and assessments 30,655,951 $ 30,655,951 $ 32,882,082 $ 2,226,131 $ Measure A sales tax 14,350,194 14,350,194 15,247,244 897,050 Licenses and permits 2,170,030 2,170,030 5,476,400 3,306,370 Fines, forfeitures, and penalties 109,000 109,000 105,216 (3,784) Use of money and property 166,700 166,700 604,271 437,571 Intergovernmental 8,822,400 8,822,400 8,656,448 (165,952) Charges for current services 5,978,932 5,988,002 7,686,524 1,698,522 Other revenue 137,785 137,785 145,612 7,827 Total Revenues 62,390,992 62,400,062 70,803,797 8,403,735
EXPENDITURES
Current:
General government 9,221,839 9,438,909 7,900,081 1,538,828 Public safety 39,610,717 40,120,760 36,077,447 4,043,313 Public ways and facilities/transportation 570,385 567,885 520,204 47,681 Parks and recreation 3,322,085 3,362,085 2,615,097 746,988 Community development 1,095,074 1,095,074 4,853,036 (3,757,962) Capital outlay 12,000,000 11,915,298 1,868,486 10,046,812 Debt service:
Principal 265,529 265,529 357,094 (91,565) Interest and fiscal charges 72,783 72,783 132,632 (59,849) Total Expenditures 66,158,412 66,838,323 54,324,077 12,514,246
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (3,767,420) (4,438,261) 16,479,720 20,917,981
OTHER FINANCING SOURCES (USES)
Contributions from other funds - - 1,010,682 1,010,682 Contributions from private-purpose trust 88,000 88,000 87,729 (271) Proceeds from sale of property - - 1,028 1,028 Transfers in 4,710,671 4,710,671 3,657,530 (1,053,141) Transfers (out) (6,505,392) (9,146,437) (8,044,683) 1,101,754 Total Other Financing Sources (Uses) (1,706,721) (4,347,766) (3,287,714) 1,060,052 NET CHANGE IN FUND BALANCE (5,474,141)$ (8,786,027) $ 13,192,006 21,978,033 $ BEGINNING FUND BALANCE 38,622,566
ENDING FUND BALANCE 51,814,572 $
Budgeted Amounts
See accompanying notes to basic financial statements.
33 CITY OF TURLOCK
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
FORMER LMI HOUSING FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Original Final Actual Amounts Final Budget
REVENUES
Use of money and property 4,500 $ 4,500 $ 24,149 $ 19,649 $ Other revenue 3,300 3,300 25,887 22,587 Total Revenues 7,800 7,800 50,036 42,236
EXPENDITURES
Current:
Community development 2,004,510 2,004,510 125,295 1,879,215 Total Expenditures 2,004,510 2,004,510 125,295 1,879,215
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,996,710) (1,996,710) (75,259) 1,921,451
OTHER FINANCING SOURCES (USES)
Contributions from private-purpose trust 62,000 62,000 38,608 (23,392) Transfers in - - - - Transfers (out) - - - - Total Other Financing Sources (Uses) 62,000 62,000 38,608 (23,392) NET CHANGE IN FUND BALANCE (1,934,710)$ (1,934,710) $ (36,651) 1,898,059 $ BEGINNING FUND BALANCE 2,375,178
ENDING FUND BALANCE 2,338,527 $
Budgeted Amounts
See accompanying notes to basic financial statements.
34 CITY OF TURLOCK
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
GAS TAX/STREET IMPROVEMENT FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Original Final Actual Amounts Final Budget
REVENUES
Use of money and property 54,100 $ 54,100 $ 165,490 $ 111,390 $ Intergovernmental 14,234,979 14,234,979 11,146,467 (3,088,512) Charges for current services 43,200 43,200 49,680 6,480 Other revenue 12,000 12,000 25,000 13,000 Total Revenues 14,344,279 14,344,279 11,386,637 (2,957,642)
EXPENDITURES
Current:
Public ways and facilities/transportation 3,061,176 3,061,176 2,074,332 986,844 Capital outlay 9,846,381 10,083,039 5,842,152 4,240,887 Total Expenditures 12,907,557 13,144,215 7,916,484 5,227,731
EXCESS OF REVENUES
OVER EXPENDITURES 1,436,722 1,200,064 3,470,153 2,270,089
OTHER FINANCING SOURCES (USES)
Transfers in 2,733,000 2,883,000 44,909 (2,838,091) Transfers (out) (3,417,691) (3,567,691) (558,578) 3,009,113 Total Other Financing Sources (Uses) (684,691) (684,691) (513,669) 171,022 NET CHANGE IN FUND BALANCE 752,031 $ 515,373 $ 2,956,484 2,441,111 $ BEGINNING FUND BALANCE 17,764,339
ENDING FUND BALANCE 20,720,823 $
Budgeted Amounts
See accompanying notes to basic financial statements.
35 CITY OF TURLOCK
STATEMENT OF REVENUES, EXPENDITURES, AND
CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
ARPA FUND
FOR THE YEAR ENDED JUNE 30, 2023
Variance with
Original Final Actual Amounts Final Budget
REVENUES
Intergovernmental - $ - $ 2,859,092$ 2,859,092 $ Charges for current services - - - - Other revenue - - - - Total Revenues - - 2,859,092 2,859,092
EXPENDITURES
Current:
General government 1,742,908 2,593,048 1,936,961 656,087 Public safety - - - - Public ways and facilities/transportation - - - - Parks and recreation - - - - Community development - - - - Capital outlay - - - - Total Expenditures 1,742,908 2,593,048 1,936,961 656,087
EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (1,742,908) (2,593,048) 922,131 3,515,179
OTHER FINANCING SOURCES (USES)
Contributions of capital assets - - - - Transfers in - - - - Transfers (out) (3,726,855) (3,726,855) (3,534,812) 192,043 Total Other Financing Sources (Uses) (3,726,855) (3,726,855) (3,534,812) 192,043 NET CHANGE IN FUND BALANCE (5,469,763)$ (6,319,903) $ (2,612,681) 3,707,222 $
BEGINNING FUND BALANCE -
ENDING FUND BALANCE (2,612,681) $
Budgeted Amounts
36 This page intentionally left blank.
37 MAJOR PROPRIETARY FUNDS
Proprietary funds account for City operations financed and oper ated in a manner similar to a private business enterprise. The intent of the City is that the cost of providing goods and services be financed primarily through user charges. The City has identified the funds below as major proprietary funds in fiscal year 2023, and the remaining enterprise funds are considered nonmajor funds.
WATER
The Water Fund accounts for the revenues collected and expenses incurred in providing potable water to residents throughout the City. All activities necessary to prov ide this service, including administration, operations/maintenance, capital improvements, billing/collections, and any financing costs, are accounted for in this fund.
SEWER
The Sewer Fund accounts for the revenues collected and expenses incurred in conjunction with the operation and maintenance of the City’s sewer and storm drainag e systems throughout the City. All activities necessary to provide this service, including adminis tration, operations/maintenance, capital improvements, billing/collections, and any financing costs, are accounted for in this fund.
TRANSPORTATION
The Transportation Fund accounts for the activities of the City ’s fixed-route and Dial-a-Ride bus systems, which are in part funded with Local Transportation and Federal Transportation funds.
See accompanying notes to basic financial statements.
38 CITY OF TURLOCK
STATEMENT OF NET POSITION
PROPRIETARY FUNDS
JUNE 30, 2023
Governmental
Nonmajor Activities -
Enterprise Internal Service
Water Sewer Transportation Funds Total Funds
ASSETS
Current assets:
Cash and investments (Note 3) 24,120,208 $ 32,746,298 $ 915,732 $ 74,520 $ 57,856,758$ 19,839,296 $ Restricted cash and investments and
cash and investments with fiscal agent (Note 3) 2,247 3,356,598 - - 3,358,845 - Accounts receivable (Note 5C) 3,480,072 2,989,562 5,793,476 - 12,263,110 532,892 Interest receivable 90,748 130,919 4,622 - 226,289 43,896 Due from developers (Note 5A) - 157,663 - - 157,663 - Due from other funds (Note 4B) - - - - - 426,650 Total current assets 27,693,275 39,381,040 6,713,830 74,520 73,862,665 20,842,734 Noncurrent assets:
Investment in Joint Venture (Note 12D) 39,477,968 - - - 39,477,968 - Capital assets not being depreciated (Note 6) 53,980,628 9,562,849 4,052,290 - 67,595,767 - Capital assets being depreciated (Note 6) 34,524,390 195,785,309 14,837,149 10,593 245,157,441 3,453,017 Total noncurrent assets 127,982,986 205,348,158 18,889,439 10,593 352,231,176 3,453,017 Total Assets 155,676,261 244,729,198 25,603,269 85,113 426,093,841 24,295,751
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 9) 1,865,428 3,115,468 464,865 76,262 5,522,023 930,468 Related to OPEB (Note 10) 127,658 207,099 32,221 13,831 380,809 67,096 Total Deferred Outflows of Resources 1,993,086 3,322,567 497,086 90,093 5,902,832 997,564
LIABILITIES
Current liabilities:
Accounts payable 2,087,792 736,011 271,317 44,973 3,140,093 770,519 Payroll payable 70,127 105,089 17,030 29,547 221,793 34,839 Interest payable 263,434 335,743 - - 599,177 - Compensated absences (Note 1I) 41,528 72,764 16,468 11,870 142,630 23,205 Bonds and loans payable (Note 7) 835,000 5,434,404 - - 6,269,404 - Unearned revenue - - 5,593,234 - 5,593,234 - Deposits payable 499,547 - - - 499,547 - Total current liabilities 3,797,428 6,684,011 5,898,049 86,390 16,465,878 828,563 Long-term liabilities:
Claims liability (Note 12) - - - - - 2,516,052 Compensated absences (Note 1I) 166,113 291,057 65,874 47,482 570,526 92,822 Total OPEB liability (Note 10) 587,593 953,247 148,313 63,663 1,752,816 308,837 Net pension liability (Note 9) 6,036,242 10,081,173 1,504,232 246,772 17,868,419 3,010,854 Bonds and loans payable (Note 7) 19,299,290 68,312,944 - - 87,612,234 - Total long-term liabilities 26,089,238 79,638,421 1,718,419 357,917 107,803,995 5,928,565 Total Liabilities 29,886,666 86,322,432 7,616,468 444,307 124,269,873 6,757,128
DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 9) 303,920 507,580 75,737 12,425 899,662 151,594 Related to OPEB (Note 10) 840,665 1,363,803 212,188 91,082 2,507,738 441,852 Total Deferred Inflows of Resources 1,144,585 1,871,383 287,925 103,507 3,407,400 593,446 NET POSITION (Note 8)
Net investment in capital assets 68,372,975 134,957,408 18,889,439 10,593 222,230,415 3,453,017 Unrestricted 58,265,121 24,900,542 (693,477) (383,201) 82,088,985 14,489,724 Total Net Position 126,638,096 $ 159,857,950 $ 18,195,962 $ (372,608) $ 304,319,400$ 17,942,741 $ Business-Type Activities - Enterprise Funds
See accompanying notes to basic financial statements.
39 CITY OF TURLOCK
STATEMENT OF REVENUES, EXPENSES, AND
CHANGES IN FUND NET POSITION
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Governmental
Nonmajor Activities -
Enterprise Internal Service
Water Sewer Transportation Funds Total Funds
OPERATING REVENUES
Charges for services 25,133,764 $ 21,455,360 $ 160,951 $ 579,367 $ 47,329,442$ 11,466,735 $ Other income 264,011 96,636 22,213 - 382,860 449,604 Total Operating Revenues 25,397,775 21,551,996 183,164 579,367 47,712,302 11,916,339
OPERATING EXPENSES
Salaries, benefits, and insurance 3,746,460 5,121,578 864,502 706,284 10,438,824 10,841,771 Contractual 1,459,159 2,320,281 2,547,519 1,738 6,328,697 539,653 Supplies and maintenance 852,611 365,805 404,374 222,817 1,845,607 83,494 Utilities 1,286,704 2,340,640 38,092 1,133 3,666,569 50,146 Fleet expense 138,855 303,776 300,694 2,760 746,085 35,128 Depreciation and amortization 1,239,704 5,915,444 1,172,688 180 8,328,016 914,355 Other expenses 397,393 199,030 158,975 15,312 770,710 63,002 Total Operating Expenses 9,120,886 16,566,554 5,486,844 950,224 32,124,508 12,527,549 Operating Income (Loss) 16,276,889 4,985,442 (5,303,680) (370,857) 15,587,794 (611,210)
NONOPERATING REVENUES (EXPENSES)
Operating grants 345,779 - 3,981,157 - 4,326,936 - Interest income 196,904 347,948 14,565 - 559,417 103,955 Interest (expense) (827,868) (1,615,801) - (1,751) (2,445,420) - Gain (loss) on disposal of capital assets 8,442 10,760 (223,888) - (204,686) 25,795 Total Nonoperating Revenues (Expenses) (276,743) (1,257,093) 3,771,834 (1,751) 2,236,247 129,750 Income (Loss) Before
Contributions and Transfers 16,000,146 3,728,349 (1,531,846) (372,608) 17,824,041 (481,460) Capital contributions - connection/impact fees 1,499,666 3,114,097 - - 4,613,763 - Contribution (to)/from other funds - - - (531,405) (531,405) 4,285,539 Transfers in (Note 4A) 56,021 206,786 388,382 - 651,189 4,289,514 Transfers (out) (Note 4A) (1,176,982) (1,297,854) (75,160) - (2,549,996) (5,413) Total Contributions and Transfers 378,705 2,023,029 313,222 (531,405) 2,183,551 8,569,640 Change in Net Position 16,378,851 5,751,378 (1,218,624) (904,013) 20,007,592 8,088,180 NET POSITION - BEGINNING 110,259,245 154,106,572 19,414,586 531,405 284,311,808 9,854,561 NET POSITION - ENDING 126,638,096 $ 159,857,950 $ 18,195,962 $ (372,608) $ 304,319,400$ 17,942,741 $ Business-Type Activities - Enterprise Funds
See accompanying notes to basic financial statements.
40 CITY OF TURLOCK
STATEMENT OF CASH FLOWS
PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Governmental
Nonmajor Activities -
Enterprise Internal Service
Water Sewer Transportation Funds Total Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 24,666,747 $ 21,230,799 $ (982,595) $ 579,367 $ 45,494,318$ 11,429,417 $ Payments to suppliers (5,673,978) (7,141,600) (4,121,495) (340,061) (17,277,134) (679,740) Payments to employees and benefits (3,652,866) (6,069,272) (975,575) (2,213,642) (12,911,355) (14,898,231) Other 264,011 96,636 22,213 - 382,860 449,604 Total Cash Flows from Operating Activities 15,603,914 8,116,563 (6,057,452) (1,974,336) 15,688,689 (3,698,950)
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Intergovernmental receipts - operations 345,779 - 5,799,198 - 6,144,977 - Interfund receipts (payments) - - - (531,405) (531,405) 4,535,270 Transfers in 56,021 206,786 388,382 - 651,189 4,289,514 Transfers (out) (1,176,982) (1,297,854) (75,160) - (2,549,996) (5,413) Total Cash Flows from Noncapital Financing Activities (775,182) (1,091,068) 6,112,420 (531,405) 3,714,765 8,819,371
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Acquisition of capital assets, net (20,109,829) (6,133,935) (55,640) (10,773) (26,310,177) (658,288) Charges for joint project contributions 5,088,988 - - - 5,088,988 - Long-term debt payment - principal (951,901) (5,394,372) - - (6,346,273) - Long-term debt payment - interest (840,938) (1,614,854) - (1,751) (2,457,543) - Connection/impact fees 1,499,666 3,114,097 - - 4,613,763 - Total Cash Flows from Capital and Related
Financing Activities (15,314,014) (10,029,064) (55,640) (12,524) (25,411,242) (658,288)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest 130,873 271,753 11,471 3,502 417,599 76,039 Total Cash Flows from Investing Activities 130,873 271,753 11,471 3,502 417,599 76,039 Net Cash Flows (354,409) (2,731,816) 10,799 (2,514,763) (5,590,189) 4,538,172 Cash and investments at beginning of period 24,476,864 38,834,712 904,933 2,589,283 66,805,792 15,301,124 Cash and investments at end of period 24,122,455 $ 36,102,896 $ 915,732 $ 74,520 $ 61,215,603$ 19,839,296 $ Displayed in the statement of net position as:
Cash and investments 24,120,208 $ 32,746,298 $ 915,732 $ 74,520 $ 57,856,758$ 19,839,296 $ Restricted cash and investments and
cash and investments with fiscal agent 2,247 3,356,598 - - 3,358,845 - Total 24,122,455 $ 36,102,896 $ 915,732 $ 74,520 $ 61,215,603$ 19,839,296 $ Reconciliation of Operating Income (Loss) to Total Cash Flows from Operating Activities:
Operating income (loss) 16,276,889 $ 4,985,442 $ (5,303,680) $ (370,857) $ 15,587,794 $ (611,210) $ Adjustments to reconcile operating income (loss) to total cash flows from operating activities:
Depreciation and amortization 1,239,704 5,915,444 1,172,688 180 8,328,016 914,355 Change in assets and liabilities:
Accounts receivable (467,017) (224,561) (1,143,546) - (1,835,124) (37,318) Accounts payable (1,373,331) (1,612,068) (671,841) (96,301) (3,753,541) 106,290 Payroll payable 15,386 6,799 (169) 14,319 36,335 (27,991) Compensated absences 30,440 17,838 11,424 20,880 80,582 (199,935) Claims liability - - - - - (14,607) Deferred outflows/inflows and total OPEB liability 17,269 (238,702) (10,124) (284,543) (516,100) (779,407) Deferred outflows/inflows and net pension liability 30,499 (733,629) (112,204) (1,258,014) (2,073,348) (3,049,127) Deposits payable (165,925) - - - (165,925) - Cash Flows from Operating Activities 15,603,914 $ 8,116,563 $ (6,057,452) $ (1,974,336) $ 15,688,689 $ (3,698,950) $ NONCASH TRANSACTIONS:
Amortization of bond premium 156,901 $ - $ - $ - $ 156,901$ - $ Total Noncash Capital and Related Financing Activities 156,901$ - $ - $ - $ 156,901$ - $ Business-Type Activities - Enterprise Funds
41 FIDUCIARY FUNDS
These funds are used to account for assets held by the City as an agent for individuals, private organizations, and other governments. The financial activities of these funds are excluded from the City- wide financial statements, but are presented in separate Fiduciary Fund financial statements.
SUCCESSOR AGENCY PRIVATE-PURPOSE TRUST FUND
The Successor Agency to the Turlock Redevelopment Agency (SA) w as established as a result of the passage of Assembly Bill 1x 26, w hich dissolved all redevelopme nt agencies in the State of California effective February 1, 2012. By Resolution No. 2012-009 adopted on January 10, 2012, pursuant to Health and Safety Code Section 34173, the Turlock City Council declare d that the City of Turlock would act in a special limited capacity as Successor Agency for the dissolved Turlock Redevelopment Agency, effective February 1, 2012. The SA is responsible for day-to-day administ ration of the former Turlock Redevelopment Agency, including identification and payment of e nforceable and recognized obligations of the former Turlock Redevelopment Agency, and disbursement of available assets. An Oversight Board, consisting of 7 members appointed by various taxing entities wi thin Stanislaus County as delineated in the dissolution law, supervises the SA’s activities in the wind ing down of the former Turlock Redevelopment Agency’s projects and programs.
CUSTODIAL FUNDS
Custodial Funds are used to report resources, not in a trust, t hat are held by the City for other parties outside of the City’s reporting entity.
See accompanying notes to basic financial statements.
42 CITY OF TURLOCK
STATEMENT OF FIDUCIARY NET POSITION
FIDUCIARY FUNDS
JUNE 30, 2023
Successor
Agency Other External
Private-Purpose Custodial Investment
Trust Fund Funds Pool Fund
ASSETS
Cash and investments (Note 3) 1,939,858 $ 563,938 $ 27,340,008 $ Cash and investments with fiscal agent (Note 3) 645,915 106,932 - Accounts receivable - 5,985 - Interest receivable - 1,135 - Total Assets 2,585,773 677,990 27,340,008
LIABILITIES
Accounts payable 196 153,007 - Interest payable 398,677 - - Long-term debt (Note 14B):
Due within one year 1,270,000 - - Due in more than one year 30,847,256 - - Total Liabilities 32,516,129 153,007 -
NET POSITION (DEFICIT)
Restricted for:
Other organizations - 524,983 - Pool participants - - 27,340,008 Net deficit held in trust for other governments (29,930,356) - - Total Net Position (Deficit) (29,930,356) $ 524,983 $ 27,340,008 $ Custodial Funds
See accompanying notes to basic financial statements.
43 CITY OF TURLOCK
STATEMENT OF CHANGES IN FIDUCIARY NET POSITION
FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2023
Successor
Agency Other External
Private-Purpose Custodial Investment
Trust Fund Funds Pool Fund
ADDITIONS
Property taxes 2,577,403 $ - $ - $ Assessments - 456,536 - Net investment income 13,658 7,524 63,797 Other receipts - - 139,350,988 Total Additions 2,591,061 464,060 139,414,785
DEDUCTIONS
Community development 7,448 - - Contributions to the City of Turlock 131,462 - - Administration expense - 26,059 313,263 Recipient payments - 153,007 152,213,564 Interest and fiscal charges 1,085,277 257,050 - Total Deductions 1,224,187 436,116 152,526,827 NET CHANGE IN NET POSITION 1,366,874 27,944 (13,112,042)
NET POSITION (DEFICIT)
Beginning of year (31,297,230) 497,039 40,452,050 End of year (29,930,356) $ 524,983 $ 27,340,008 $ Custodial Funds
44 CITY OF TURLOCK
NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2023
NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The City of Turlock (the City) was incorporated in 1908. The Ci ty operates under a Council-Manager form of government and provides the following services: police and f ire, streets and highways, sanitation, water, sewer, parks and recreation, public improvements, planni ng and zoning, and general administrative services.
The financial statements and accounting policies of the City co nform with accounting principles generally accepted in the United States of America applicable to governme nts. The Governmental Accounting Standards Board (GASB) is the ac cepted standard- setting body fo r governmental accounting and financial reporting principles. Significant accounting policies are summarized below:
A. Reporting Entity
The accompanying basic financia l statements present the financi al activity of the City, which is the primary government presented, along with the financial activiti es of the Turlock Public Financing Authority (the Authority) which is controlled by and dependent on the City. Although the City and the Authority are separat e legal entities, blended component units are in substance part of the City’s operations and are reported as an integral part of the City’s financial statements.
Turlock Public Financing Authority
The Authority is a separate government entity whose purpose is to assist with the financing or refinancing of certain public capital improvements within the C ity. The Authority has the power to purchase bonds issued by any local agency at a public or negotiated sale and may sell such bonds to public or private purchasers at a public or negotiated sale. Th e Authority is controlled by the City and has the same governing body as the City, which also performs al l accounting and administrative functions for the Authority. The Authority was established Dece mber 15, 1998, pursuant to Article 1, Chapter 5 of Division 7 of Title 1 of the Government Code of th e State of California. The City authorized the formation of a joint powers authority with the former Turlock Redevelopment Agency.
B. Basis of Presentation
The City’s Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America. GASB is the acknowled ged standard setting body for establishing accounting and financial reporting standards follo wed by governmental entities in the United States of America.
These standards require that the financial statements described below be presented.
Government-Wide Statements: The Statement of Net Position and the Statement of Activities display information about the primary government, the City, and its blended component unit. These statements include the financial activities of the overall City government, except for fiduciary activities.
Eliminations have been made to minimize the double counting of internal activities. These statements distinguish between the governmental and business-type activities of the City. Governmental activities generally are financed through taxes, intergovernmen tal revenues, and other nonexchange transactions. Business-type activities are financed in whole or in part by fees charged to external parties.
45 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
B. Basis of Presentation (Continued)
The Statement of Activities presents a comparison between direc t expenses and program revenues for each segment of the business-type activities of the City an d for each function of the City’s governmental activities. Direct expenses are those that are spe cifically associated with a program or function and, therefore, are clearly identifiable to a particul ar function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) grants and contributions that are restrict ed to meeting the operational ne eds of a particular program, and (c) fees, grants, and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues, i ncluding all taxes and franchise fees that are based on gross receipts, are presented as general revenues.
Fund Financial Statements: The fund financial statements provide information about the Cit y’s funds, including fiduciary funds and blended component units. S eparate statements for each fund category - governmental, proprietary, and fiduciary - are presented. The emphasis of fund financial statements is on major individual governmental and enterprise f unds, each of which is displayed in a separate column. All remaining governmental and enterprise fund s are aggregated and reported as nonmajor funds.
Proprietary fund operating revenues and expenses, such as charges for services and the rel ated costs, result from exchange tran sactions associated with the pr incipal activity of the fund. Exchange transactions are those in which each party receives and gives u p essentially equal values.
Nonoperating revenues and expenses, such as s ubsidies, investment earnings, and any related costs, result from nonexchange transactions or ancillary activities.
C. Major Funds
Major funds are defined as funds that have either assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, or expenditures/ex penses equal to ten percent of their fund-type total and five percent of the grand total. The Genera l Fund is always a major fund. The City may also select other funds it believes should be presented as major funds.
The City reports the following major governmental funds in the accompanying financial statements:
General Fund – The General Fund is used for all the general revenues of the Ci ty not specifically levied or collected for other City funds. Expenditure activitie s within the General Fund include public safety (police and fire), park maintenance, general City admini stration (includes City Clerk, payroll/personnel, accounts receivable, accounts payable, accou nting), planning, and the City attorney. For financial reporting purposes, the General Fund fo r the City of Turlock also includes Parks, Arts and Recreation Commi ssion, Special Public Safety, C annabis, Measure A, and Tourism (2 funds).
Former Low and Moderate Income (LMI) Housing Fund – This fund accounts for the activity of the Housing Set-Aside funds post redevelopment agency dissolution.
Gas Tax/Street Improvement Fund – The Gas Tax/Street Improvement Fund accounts for the City’s Gas Tax (Highway User’s Tax), Local Transportation Fund, and Me asure L (Stanislaus County Sales Tax Transportation Measure) revenues as well as federal/state/l ocal grants received for street improvement purposes. These revenue sources are used in the mai ntenance of the City’s street/road system including street sweepi ng, pothole repairs, streetlight/ traffic signal lighting and maintenance, and various street reconstructi on projects that are the result of wear and tear. Expenditures in this fund do not include street construction projects that are due to development.
APRA – This fund accounts for American Rescue Plan Act (ARPA) funding.
46 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
C. Major Funds (Continued)
The City reports the following enterprise funds as major funds in the accompanying financial statements:
Water Fund – Accounts for the revenues collected and expenses incurred in providing potable water to residents throughout the City. All activities necessary to p rovide this service, including administration, operations/maintenance, capital improvements, b illing/collections, and any financing costs are accounted for in this fund.
Sewer Fund – Accounts for the revenues colle cted and expenses incurred in conjunction with the operation and maintenance of the City’s sewer and storm drainag e systems throughout the City. All activities necessary to provide this service including administ ration, operations/maintenance, capital improvements, billing/collections, and any financing costs are accounted for in this fund.
Transportation Fund – The Transportation Fund accounts for the activities of the City ’s fixed-route and Dial-a-Ride bus systems which are in part funded with Local Transportation and Federal Transportation funds.
The City also reports the following fund types:
Internal Service Funds – The funds account for equipment pool, self-insurance, informa tion technology, and engineering activities, all of which provide se rvices to other departments on a cost- reimbursement basis.
Trust Fund – Trust funds account for asset s held by the City as an agent f or various functions. The Successor Agency to the Turlock Redevelopment Agency (the Succe ssor Agency) Private-Purpose Trust Fund accounts for the accumulation of resources to be use d for payments at appropriate amounts and times in the future. This fund accounts for winding down the affairs of the former Turlock Redevelopment Agency, makes payments on the Recognized Obligati on Payment Schedule, and disposes of assets and property of the former Turlock Redevelopment Agency for the benefit of taxing agencies. The financial activities of this fund are excluded from the City-wide financial statements, but are presented in separate Fiduciary Fund financial statements.
Custodial Funds are used to account for assets held by the City for the Northwe st Triangle Mello Roos Assessment District, Turlock Property and Business Improve ment District (PBID) #2, and monies held for an external investment pool for the Stanislaus Regional Water Authority, none of which are held in trust. The financial activities of these funds are excluded from the City-wide financial statements because they are not directly or indirectly governed by the City Council.
D. Basis of Accounting
The government-wide, proprietary, and fiduciary (trust and cust odial funds) fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recor ded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
Governmental funds are reported using the current financial resources measurement focus and the modified accrual basis of accounting. Under this me thod, 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 ninety days after year-end. E xpenditures are recorded when the related fund liability is incurred, except for principal and in terest on general long-term debt, including lease liabilities, claims and judgments, and accumulated unpaid vacation, sick pay, and other employee benefit amounts, which are recognized as expenditures to the extent they have matured.
General capital asset acquisitions, including entering into con tracts giving the City the right to use leased assets, are reported as expenditures in governmental funds. Proceeds of general long-term debt and financing through leases are reported as other financing sources.
47 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
D. Basis of Accounting (Continued)
Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include property taxes, grants, entitlements, and donations. On the accrual basis of accounting, rev enue from taxes is recognized i n the fiscal year for which the taxes are levied or assessed. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Other revenues susceptible to accrual are sales taxes and inter est revenue. Forfeitures, licenses, other permits, and miscellaneous revenue are not susceptible to accrual because they are not measurable until received in cash. Grant funding received in ad vance of the related expenditure is accounted for as unearned revenue.
Grant revenues are recognized in the fiscal year in which all e ligibility requirements are met. Under the terms of grant agreements, the City may fund certain progra ms with a combination of cost- reimbursement grants, categorical block grants, and general rev enues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by unrestricted resources if necessary.
E. Prepaids, Materials, Supplies, and Deposits
Certain payments to vendors refl ect costs applicable to future fiscal years and are recorded as prepaid items in both government-wide and fund financial statem ents. The cost of prepaid items is recorded as an expenditure/expense when consumed, rather than when purchased.
Materials and supplies are valued at cost on a first-in first-o ut basis. Supplies in the enterprise and internal funds consist principally of materials and supplies fo r utility and internal operations. Materials and supplies of the governmental funds consist of expendable su pplies and materials held for consumption. The cost is recorded as an expense or expenditure in the funds at the time individual inventory items are consumed, rather than when purchased.
Prepaids, materials, supplies, and deposits in governmental funds are equally offset by nonspendable fund balance which indicates that they do not constitute availa ble spendable resources even though they are a component of net current assets.
F. Deferred Inflows of Resource s and Deferred Outflows of Resources
In addition to assets, the Statement of Net Position or Balance Sheet reports a separate section for deferred outflows of resources. The City has deferred outflows of resources related to pensions and other post-employment benefits (O PEB) as discussed in Notes 9 a nd 10. This separate financial statement element, deferred outfl ows of resources, represents a consumption of net assets or fund balance that applies to a future period(s) and so will not be r ecognized as an outflow of resources (expense/expenditure) until then.
In addition to liabilities, the Statement of Net Position or Ba lance Sheet reports a separate section for deferred inflows of resources. Th is separate financial statemen t element, deferred inflows of resources, represents an acquisition of net assets or fund bala nce that applies to a future period(s) and so will not be recognized as an inflow of resources (revenu e) until that time. The City has one item which arises only under a modified accrual basis of accoun ting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is report ed only in the governmental funds Balance Sheet. The governmental funds report unavailable revenu es from loans receivable and accounts receivable. The City als o has deferred inflows of reso urces related to pensions and OPEB as discussed in Notes 9 and 10 and leases receivable as discuss ed in Note 15. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available.
48 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
G. Property Tax Revenue
All property taxes are collected and allocated by the County of Stanislaus (the County) to the various taxing entities. Secured property taxes are determined annually as of January 1, and attach as an enforceable lien on real property as of July 1. Taxes are due N ovember 1 and February 1, and are delinquent if not paid by December 10 and April 10, respectively.
In November 1993, the City adopted the “Teeter Plan” method of property tax distribution. Under the Teeter Plan, the County remits property taxes to the City based on assessments, not on collections, according to the following schedule: 55% in December, 40% in Ap ril, and 5% at the end of the fiscal year. Under this plan, a need for an allowance for uncollectible taxes is eliminated.
Property tax is recognized when it is available and measurable. The City considers property tax as available if it is received within 60 days after the fiscal year end. Unsecured property taxes are due on July 1, and become delinquent if not paid by August 31.
H. Revenue Recognition for Water and Sewer
All receivables are shown net of an allowance for doubtful accounts. Service charge revenues (water, sewer, and refuse collection) are recorded as billed to custome rs on a cyclical basis. All utility customers are billed monthly, in arrears. The amounts billed in July for June services are accrued as accounts receivable as of June 30.
I. Compensated Absences
For governmental and business-type activities, compensated abse nces are recorded as earned (vested) and the rela ted expenses and liab ilities are reported in the government-wide financial statements.
In governmental funds, compensated absences are recorded as exp enditures in the year paid as it is the City’s policy to liquidate any unpaid compensated absences at June 30 from future resources, rather than currently available financial funds. In proprietary funds, compensated absences are expensed to the various funds as earned (vested) and each propr ietary fund’s share of the unpaid liability is recorded as a liability of the fund.
The City accrues vacation and sick time payable based on negoti ated Memoranda of Understanding (MOU) and Schedules of Benefits with the City’s various bargain ing units. The agreements indicate the methodology for accruing time and the maximum accrual limits.
The changes of the compensated ab sences during the fiscal year ended June 30, 2023, were as follows:
Governmental Business-Type Total
Beginning Balance 3,186,664 $ 632,574 $ 3,819,238 $ Net Change 328,090 80,582 408,672 Ending Balance 3,514,754 $ 713,156 $ 4,227,910 $ Current Portion 702,950 $ 142,630 $ 845,580 $
Compensated absences are liquidated by the fund that has record ed the liability. The long-term portion of governmental activities compensated absences is liquidated primarily by the General Fund.
49 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)
J. 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 City categorizes its fair value measurements within the fair value hierarchy established by accounting principles generally accepted in the United States of America. The fair value hierar chy categorizes the inputs to valuation techniques used to measure fair value into three levels based o n 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 w ithin 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 in puts from more than one level of the fair value hierarchy, the measurement is considered to be based on t he lowest priority level input that is significant to the entire measurement.
K. Investment in Affordable Housing Property
The former Turlock Redevelopment Agency purchased parcels that are to be used for affordable housing purposes. The Successor Agency transferred affordable h ousing property with a carrying value of $327,185 to the City as Housing Successor during fisca l year 2017. Such land parcels are accounted for at the lower of cost or net realizable value or a greed-upon sales price if a disposition agreement has been made with a developer.
The balance of the investment in affordable housing property in the Former LMI Housing Special Revenue Fund at June 30, 2023, was $327,185.
L. Use of Estimates
The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estima tes and assumptions that affect the reported amounts of assets and liabilities, disclosure of c ontingent assets and liabilities at the date of the financial statements, and the reported amounts of r evenues and expenses during the reporting period. Actual results could differ from those estimates.
NOTE 2 – BUDGETS AND BUDGETARY ACCOUNTING
A. Budgetary Control and Accounting
The City follows these procedures in establishing the budgetary data reflected in the basic financial statements:
1. The City Manager submits to the City Council a proposed budg et for the fiscal year beginning July 1. The budget includes proposed expenditures and the means of financing them.
2. The City Council reviews the proposed budget at meetings whi ch are open to the public. The Council also conducts a public hearing on the proposed budget t o obtain comments from interested citizens.
3. Prior to July 1, the budget is legally adopted through a pas sage of a resolution.
4. The City Manager is authorized to transfer funds within depa rtmental budgets between major object classifications and between capital projects in the same fund. The City Council must authorize transfers between fund s, between departments, and fro m the fund balances reserved for specific purposes.
50 NOTE 2 – BUDGETS AND BUDGETARY ACCOUNTING (Continued)
A. Budgetary Control and Accounting (Continued)
5. Formal budgetary accounting is employed as a management tool for all funds, except the Custodial funds. Annual budgets are legally adopted and amended as required for the General Fund, Special Revenue Funds, Capital Projects Funds, Enterprise Funds, and Internal Service Funds. All budgets are prepared on a basis consistent with acco unting principles generally accepted in the United States.
6. Budgeted amounts are reflect ed after all applicable amendments and revisions.
7. For each legally adopted operating budget, expenditures may not exceed budgeted appropriations at the department level. Departments can realloc ate spending within an object (e.g., supplies or utilities) with the exception of personnel or capital outlay. The total expenditures for that object cannot be increased without the approval of the City Manager or City Council. Any reallocations between objects must be approved by the City Mana ger. Only the City Council can approve increases in the total appropriation for a department w ithin the General Fund or a fund, other than the General Fund. A “department” for legal appropria tion purposes may be a single organization (e.g., City Attorney) or an entire department havi ng multiple divisions (e.g., Parks and Recreation).
NOTE 3 – CASH AND INVESTMENTS
The City pools cash resources from all funds, except cash and i nvestments with fiscal agents, in order to facilitate the management of cash. The balance in the pooled ca sh account is available to meet current operating requirements. Cash in e xcess of current requirements is invested in various interest-bearing accounts and other investments for varying terms.
A. Policies
The City invests in individual investments and in investment po ols. Individual investments are evidenced by specific identifiable securities instruments , or by an electronic entry registering the owner in the records of the institution issuing the security, c alled the book entry system. In order to increase security, the City employs the Trust Department of a b ank as the custodian of certain City managed investments, regardless of their form.
Cash equivalents are considered amounts in demand deposits and short-term investments with a maturity date within three months of the date acquired by the C ity and are presented as “Cash and Investments” in the accompanying Basic Financial Statements.
California law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City’s cash on deposit, or first tr ust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California law, this collateral is held in a separate investment pool by another institution in the City’s name and places the City ahead of general creditors of the institution.
The City’s investments are carried at fair value, as required b y accounting principles generally accepted in the United States of America. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includ es the effects of these adjustments in income for that fiscal year.
51 NOTE 3 – CASH AND INVESTMENTS (Continued)
B. Classification
Cash and investments are classified in the financial statements as shown below, based on whether or not their use is restricted under the terms of City debt instruments or other agreements.
City cash and investments:
Cash and investments available for operations 224,303,727 $ Restricted cash and investments and cash and investments with fiscal agent 3,358,845
Total City Cash and Investments 227,662,572
Cash and investments in Fiduciary Funds (Separate Statement):
Successor Agency to the Redevelopment Agency
Private-Purpose Trust Fund:
Cash available for operations 1,939,858
Cash and investments with fiscal agent 645,915
Custodial Funds:
Cash and investments available for operations 563,938
Cash and investments with fiscal agent 106,932
Custodial Fund - External investment pool 27,340,008
Total Cash and Investments 258,259,223 $
Cash and investments as of June 30, 2023, consist of the following:
Cash on hand 9,920 $
Deposits with financial institutions 92,537,752
Investments 165,711,551
Total Cash and Investments 258,259,223 $
For purposes of the Statement of Cash Flows, cash equivalents a re defined as investments with original maturities of 90 days or less, which are readily conve rtible to known amounts of cash. The City considers all pooled cash and investments (consisting of c ash and investments and restricted cash and investments) held by the City as cash and cash equival ents because the pool is used essentially as a demand deposit account from the standpoint of the funds. The City also considers all non-pooled cash and investments (c onsisting of funds with fisca l agents) as cash and cash equivalents because investments meet the criteria for cash equivalents defined above.
52 NOTE 3 – CASH AND INVESTMENTS (Continued)
C. Investments Authorized by the California Government Code and the City’s Investment Policy
The City’s Investment Policy and the California Government Code a l l o w t h e C i t y t o i n v e s t i n t h e following, provided the credit ratings of the issuers are accep table to the City, and approved percentages and maturities are not exceeded. The table below also identifies certain provisions of the California Government Code or the City’s Investment Policy where it is more restrictive:
Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality of Portfolio in One Iss uer U.S. Treasury Notes, Bonds, and/or Bills 5 years A Unlimited N/A U.S. Government Agency Securities 5 years A Unlimited 25% Negotiable Certificates of Deposit 5 years N/A 30% N/A
Certificates of Deposit 5 years A Unlimited N/A
Bankers' Acceptances 180 days A 40% 30%
Commercial Paper 270 days A-1 or Higher 25% 10%
State of California Local Agency
Investment Fund (LAIF) N/A N/A
Equal to maximum
limit set by LAIF N/A
Repurchase Agreements 1 year N/A Unlimited N/A
Money Market and Mutual Funds N/A A 20% N/A
Corporate Notes 5 years AA 30% N/A
D. Investments Authorized by Debt Agreements
The City must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt i ssues. These funds are unexpen ded bond proceeds or are pledged reserves to be used if the City fails to meet its obligations u nder these debt issues. The California Government Code requires these funds to be invested in accordan ce with City resolutions, bond indentures, or State statutes. The table below identifies the i nvestment types that are authorized for investments held by fiscal agents. The table also identifies ce rtain provisions of these debt agreements:
Minimum Maximum
Maximum Credit Percentage
Authorized Investment Type Maturity Quality of Portfolio U.S. Treasury Notes, Bonds, and/or Bills 5 years N/A No maximum U.S. Government Sponsored Securities 5 years N/A No maximum State Obligations N/A A No maximum
Pre-Refunded Municipal Obligations N/A AAA No maximum
Certificates of Deposit 30 days A-1 No maximum
Bankers' Acceptances 30 days A-1 No maximum
Commercial Paper 270 days A-1+ No maximum
State of California Local Agency
Investment Fund (LAIF) N/A N/A LAIF limits
Repurchase Agreements 270 days A No maximum
Guaranteed Investment Contracts N/A AA No maximum
Money Market Funds N/A Aam or Aam-G No maximum
Corporate Notes N/A
Two highest
rating
categories No maximum
Negotiable Certificates of Deposit N/A N/A No maximum
53 NOTE 3 – CASH AND INVESTMENTS (Continued)
E. Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Normally, the longer the maturity of an investme nt, the greater the sensitivity of its fair value to changes in market interest rates. The City generally m anages its interest rate risk by holding investments to maturity.
Information about the sensitivity of the fair values of the Cit y’s investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following table that shows the distribution of the City’s investments by maturity or earliest call date:
12 Months 13 to 24 25 to 60
Investment Type or Less Months Months Total
Held by City:
U.S. Treasury Notes 15,650,774 $ 13,217,500 $ 20,374,883 $ 49,243,157 $ U.S. Government Agency Securities 5,880,597 3,918,236 13,033,152 22,831,985 Certificates of Deposit 12,194,818 2,120,570 897,338 15,212,726 State of California Local Agency
Investment Fund 73,862,137 - - 73,862,137 Held by Trustee:
Money Market Mutual Funds 755,094 - - 755,094 Corporate Notes/Bonds - - 3,806,452 3,806,452 Total Investments 108,343,420 $ 19,256,306 $ 38,111,825 $ 165,711,551 $
The City is a participant in the Local Agency Investment Fund ( LAIF) that is regulated by California Government Code Section 16429 un der the oversight of the Treasu rer of the State of California. The City reports its investment in LAIF at the fair value amount pr ovided by LAIF, which is the same as the value of the pool share. The balance is available for withd rawal on demand, and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floa ting rate securities issued by federal agencies, government-sponsored enterprises, United States Treas ury Notes and Bills, and corporations. At June 30, 2023, these investments matured in an average of 260 days.
Money market mutual funds that are available for withdrawal on demand at June 30, 2023, matured in an average of 23 days.
54 NOTE 3 – CASH AND INVESTMENTS (Continued)
F. Credit Risk
Credit risk is the risk that an issuer of an investment will no t fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of June 30, 2023, for each investment type as provided by Standard and Poor’s investment rating system:
Investment Type AAAm AA+ Total
Held by City:
U.S. Government Agency Securities 4,754,792 $ 18,077,193 $ 22,831,985 $ Held by Trustee:
Money Market Mutual Funds 755,094 - 755,094 Corporate Notes/Bonds 3,806,452 - 3,806,452 Total Rated Investments 9,316,338 $ 18,077,193 $ 27,393,531 Not Rated:
Certificates of Deposit 15,212,726
State of California Local Agency
Investment Fund 73,862,137
Exempt from Credit Rating Disclosure:
U.S. Treasury Notes 49,243,157
Total Investments 165,711,551 $
G. Fair Value Hierarchy
The City categorizes its fair value measurements within the fai r value hierarchy established by accounting principles generally accepted in the United States o f America. The hierarchy is based on the valuation inputs used to meas ure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are signific ant other observable inputs; and Level 3 inputs are significant unobservable inputs.
The following is a summary of the fair value hierarchy of the f air value of investments of the City as of June 30, 2023:
Level 1 Level 2 Total
Investments by Fair Value Level:
Held by City:
U.S. Treasury Notes - $ 49,243,157$ 49,243,157 $ U.S. Government Agency Securities - 22,831,985 22,831,985 Certificates of Deposit 11,951,185 3,261,541 15,212,726 Subtotal 11,951,185 $ 75,336,683 $ 87,287,868
Investments Measured at Amortized Cost:
Held by Trustee:
Money Market Mutual Funds 755,094
Corporate Notes/Bonds 3,806,452
Investment Exempt from Fair Value Hierarchy:
State of California Local Agency
Investment Fund 73,862,137
Total Investments 165,711,551 $
55 NOTE 3 – CASH AND INVESTMENTS (Continued)
G. Fair Value Hierarchy (Continued)
U.S. Treasury Notes and U.S. Gov ernment Agency Securities class ified in Level 2 of the fair value hierarchy are valued using matrix pricing or Interactive Date P ricing and Reference Data (IDC).
Certificate of Deposits classified in the Level 2 of the fair v alue hierarchy are valued using Bloomberg or IDC pricing. These prices are obtained from various pricing sources by the City’s custodian bank.
Fair value is defined as the quoted market value on the last trading day of the period.
NOTE 4 – INTERFUND TRANSACTIONS
A. Transfers Between Funds
With Council approval, resources may be transferred from one Ci ty fund to another. The City uses interfund transfers for two main purposes. First, to apportion costs initially accounted for in one fund to other funds that benefit from the goods and/or services acqu ired. Secondly, to account for shared funding of capital improvement p rojects. The City accounts for capital improvement projects in one fund and the funds that are provi ding funding assistance transf er monies representing their contribution to the project fund.
56 NOTE 4 – INTERFUND TRANSACTIONS
A. Transfers Between Funds (Continued)
Transfers between funds during the fiscal year ended June 30, 2023, were as follows:
Amount
Fund Making Transfer Fund Receiving Transfer Transferred General Fund Nonmajor Gov ernmental Funds 4,396,671 (A), (B), ( C) Internal Service Funds 3,648,012 (A)
Gas Tax/Street Improvement Fund Sewer Enterprise Fund 40,878 (A), (B) Transportation Enterprise Fund 388,382 (D)
Internal Service Funds 129,318 (A)
ARPA General Fund 477,946 (B)
Nonmajor Governmental Funds 3,000,000 (C)
Internal Service Funds 56,866 (B)
Nonmajor Governmental Funds General Fund 1,084,075 (B) Nonmajor Governmental Funds 183,241 (A), (B) Water Enterprise Fund 56,021 (A), (B)
Sewer Enterprise Fund 206,786 (A), (B)
Internal Service Funds 67,083 (A)
Water Enterprise Fund General Fund 890,112 (B), (E) Nonmajor Governmental Funds 1,870 (B)
Internal Service Funds 285,000 (A)
Sewer Enterprise Fund General Fund 1,130,237 (B), (E) Gas Tax/Street Improvement Fund 44,909 (B)
Nonmajor Governmental Funds 21,973 (A), (B) Internal Service Funds 100,735 (A)
Transportation Enterprise Fund General Fund 75,160 (E) Internal Service Funds Nonmaj or Governmental Funds 2,913 (B) Internal Service Funds 2,500 (B)
16,290,688$
(A) To fund capital improvements or equipment.
(B) To fund operations, including computer replacement. (C) To fund the Internal Service Equipment Pool for future vehicle purchases. (D) To fund transportation operations from Measure L.
(E) To fund administrative expenses.
57 NOTE 4 – INTERFUND TRANSACTIONS
B. Current Interfund Balances
Current interfund balances arise mainly due to the time lag between the dates that (1) interfund goods and services are provided or reimbursable expenditures occur, ( 2) transactions are recorded in the accounting system, and (3) paymen ts between funds are made. The se balances are expected to be repaid shortly after the end of the fiscal year. Current amount s due to the Equipment Pool Internal Service Fund from the funds listed below at June 30, 2023, were as follows:
Amount Due to
Equipment
Pool Internal
Service Fund
Nonmajor Special Revenue Fund:
CDBG 222,031 $
Home ARP 204,619
Total 426,650 $
C. Internal Balances
Internal balances are presented in the entity-wide financial st atements only. They represent the net interfund receivables and payables remaining after the eliminat ion of all such balances within governmental and business-type activities.
NOTE 5 – DUE FROM DEVELOPERS, LOANS RECEIVABLE, AND ACCOUNTS RECEIVABLE
At June 30, 2023, the City had the following amounts due from d evelopers and loans receivable. These amounts are further described below the table.
Governmental Business-Type
Activities Activities Total
Due from developers 287,284 $ 157,663 $ 444,947 $ Loans receivable 35,788,959 - 35,788,959 Total 36,076,243 $ 157,663 $ 36,233,906 $
A. Due from Developers
These amounts represent funds expended by the City in the prepa ration of the master plan and related planning documents required for the development of the City’s Northwest Specific Triangle Plan Area, its Northeast Master Plan Area, and its Morgan Ranch Master Plan Area. The amounts expended by the City are being recovered as these plan areas de velop via a specific development impact fee. The Northwest Specific Triangle Plan receivable of $157,663 is recorded in the Sewer Enterprise Fund, the Northeast Master Plan receivable of $20,04 1 is recorded in the General Fund, and the Morgan Ranch Master Plan receivable of $267,243 is reco rded in the Facility Fees Capital Projects Fund.
58 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)
B. Loans Receivable
Loans receivable at June 30, 2023, consist of the following:
Type of Loan/Borrower Amount
Central Valley Coalition for Affordable Housing 10,780,644 $ First Time Homebuyer Loans 7,235,314
EAH, Inc. (Avena Bella) 13,723,151
Owner-Occupied Rehabilitation Loans 2,380,087
Rehabilitation Forgivable Loans for Energy Improvements 62,005 Rental Rehabilitation Loans 5,500
Turlock Gospel Mission Loans 300,000
We Care Program Loan 266,000
Haven Women's Center Loan 178,500
United Samaritans Foundation Loan 175,000
Housing Authority of the County of Stanislaus Loan 389,700 Greater Modesto Interfaith Hospitality Network Loan 288,000 Subtotal 35,783,901
Employee Computer Loans 5,058
Total Long-Term Notes Receivable 35,788,959 $
Central Valley Coalition for Affordable Housing
The Central Valley Coalition for Affordable Housing (CVCAH) is a Community Housing Development Organization (CHDO) participating in various projects in the Ci ty. A CHDO is a private, nonprofit, community-based service organization that has the capacity to d evelop affordable housing for the community it serves. The City, under the HOME Investment Partne rship Program (HOME), is required to reserve HOME funds for investment in housing to be developed, sponsored, or owned by CHDOs. The City must identify and certify qualifying nonprofit organizations as CHDOs through U.S.
Department of Housing and Urban Development (HUD) regulations.
CVCAH is currently participating in three types of projects within the City. The first is Crane Terrace, a 44-unit, three-story, low-income senior living apartment comple x. Using 20% Set-Aside monies, the former Turlock Redevelopment Agency loaned $4 million to this $ 10.5 million project under a Disposition and Development Agreement (DDA) dated April 26, 2005. The DDA calls for repayment of the 55-year note to begin in year 31 from residual rental receipts. The note carries 3% simple interest.
The total outstanding principal and interest at June 30, 2023, was $6,416,081.
The second type of project is the acquisition and rehabilitatio n of single-family residential units which will be rented out to HUD qualifying low/moderate income famili es. CVCAH currently has three of these properties for which the City holds promissory notes tota ling $1,017,529. The notes each carry a 5% annual interest rate and are due and payable, along with all accrued, unpaid interest at maturity, unless the underlying property is sold, at which time the note and all accrued, unpaid interest is due and payable. Total outstanding principal and interest at June 3 0, 2023, on these three properties was $1,860,694.
59 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)
B. Loans Receivable (Continued)
Central Valley Coalition for Affordable Housing (Continued)
The third type of project is the acquisition of multi-family pr operties which will be rented to HUD qualifying, low-income families. CVCAH currently owns three multi-family properties for which the City holds promissory notes totaling $1,394,604. The notes each carry annual interest rates from 3% - 5% and are due and payable, along with all accrued, unpaid interes t at maturity, unless the underlying property is sold, at which time the note and all accrued, unpai d interest is due and payable. Total outstanding principal and interest at June 30, 2023, on these three properties was $2,503,869.
First Time Homebuyer Loans
The First Time Homebuyer Loan program, funded using Federal and /or State of California HOME funds, Federal Community Development Block Grant (CDBG) funds, and the former Turlock Redevelopment Agency low/moderate income housing funds, provide s eligible prospective homebuyers within the City wit h up to $80,000 in funding assist ance through a silent second deed of trust on their home. The loans are interest free for the first five years and accrue interest at 3% - 5% simple interest annually thereafter. The loans are due and paya ble should the homeowner refinance or sell the property. Proceeds from repaid loans are used to ex tend new loans. As of June 30, 2023, the City had 153 loans outstanding, totaling to $7,235,314.
EAH, Inc. (Avena Bella)
EAH, Inc., (EAH) is a nonprofit co rporation which develops and manages affordable housing projects in the western United States. The former Turlock Redevelopment Agency entered into two Disposition and Development Agreements (DDA) with EAH to assist in the deve lopment and help secure financing for the Avena Bella multi-family housing project on 6 .7 acres of property in the area of Linwood Avenue and Hwy 99. The site was initially owned by the City and will be conveyed to the developer (EAH) pursuant to the terms of the DDA. The proposed project is a two-phased, 140 unit, three-story, apartment complex for low and very low income fami lies with amenities that would complement the project and surrounding neighborhood.
The DDA for Phase I and construction of the first 80 units on 4 .3 acres contains funding of up to $5 million of former Turlock Redevelopment Agency low and moderate income funds divided into two separate funding horizons. The first is a pre-development loan of up to $1 million to reimburse the developer for certain pre-construction, design, and engineering costs. The second is a development cost loan of up to $4 million to be used for construction and d evelopment of the project, excluding development fees, management fees, or other similar fees.
The DDA for Phase II, which is projected to construct an additi onal 60 units on the remaining 2.4 acres, provides for up to $500,000 in advanced pre-development costs in the form of a loan. The balance of the $3,744,107 million loan is for construction and final development of the project, excluding development fees, management fees, or other similar f ees. The California Department of Finance has concluded that the DDA for Phase II is an enforceable obligation and has issued a Letter of Final and Conclusive Determination related to this DDA.
Both DDAs contain conditions which must be achieved in order fo r the developer to be eligible to receive funding as well as conditions related to the developmen t of the project, additional funding sources which must be obtained, and conditions for the transfer of ownership of the property.
Each loan is memorialized with a Promissory Note and a recorded deed of trust against the property.
The combined loans carry a 3% annual simple interest rate and w ill be repaid using residual receipts over a 55 year period. As of June 30, 2021, EAH had drawn down all the funds associated with the DDAs for Phase I and II of the project.
60 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)
B. Loans Receivable (Continued)
EAH, Inc. (Avena Bella) (Continued)
In connection with Phase II of the apartment complex, the City issued two additional loans during fiscal year 2020. The first loan in the amount of $2,467,373 wa s funded with HOME funds to assist with the development and construction of the additional 60 mult i-family residential housing units. The loan accrues simple interest of 3%, will be repaid with residua l receipts. The second loan, in the amount of $885,000, was issued for the acquisition of the prop erty from the City. The loan accrues simple interest of 1% and no payments are due until the maturit y date. Principal and accrued interest on both the HOME loan and the acquisition loan are due October 1, 2074. Both loans were fully drawn down as of June 30, 2020.
Outstanding principal and accrued interest for all four loans f or this project totaled $13,723,151, as of June 30, 2023.
Owner-Occupied Rehabilitation Loans
The Owner-Occupied Rehabilitation Loan program, funded with eit her Federal CDBG or State of California HOME funds, provides eligible homeowners with fundin g for health, safety, and/or building code related improvements to t heir home. Eligibility is establi shed based on the age and income requirements for HUD funded programs. The loans are for a maxim um of 20 years and can be either fully amortizing or deferred, depending on the age and income l evel of the applicant. The fully amortizing loans carry a 5% simple interest rate for the entire term, while the deferred loans accrue simple interest at 5% for the first 10 years and then no intere st for the remaining 10 years. All loans are secured by a recorded silent second deed of trust on the property. The loans are due and payable should the homeowner refinance or sell the property. As of June 30, 2023, the City had 32 loans outstanding, totaling to $2,380,087.
Rehabilitation Forgivable Loans for Energy Improvements
Using CDBG-R funding, the City has been able to provide forgiva ble loans for energy improvements made as part of the rehabilitation process for a qualified low/ moderate income homeowner. The forgivable loans can be used for structural (e.g., windows, wea ther stripping, insulation) and/or appliance (e.g., HVAC, refrigerator) improvements to the proper ty which reduce the energy usage of the home. The forgivable loans are for up to $20,000, carry no interest, and are forgiven equally over a five-year period provided the home continues to be the primar y residence of the qualified homeowner. At June 30, 2023, the City had 6 loans outstanding w ith principal and accrued interest of $62,005.
Rental Rehabilitation Loans
The Rental Rehabilitation Loan pr ogram, funded with CDBG funds, is similar to the owner-occupied program except it is for rental properties. To be eligible, the property must be occupied by a qualified low/moderate income tenant based on HUD requirements. These ful ly amortizing loans are for a maximum of 20 years and carry a 6.5% simple interest rate. The loans are due and payable should the homeowner refinance or sell the property or have a non-qual ifying tenant. As of June 30, 2023, the City had one loan outstanding totaling to $5,500.
61 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)
B. Loans Receivable (Continued)
Turlock Gospel Mission Loans
In March 2016, the City, using CDBG funds, executed a loan agre ement and promissory note secured by a deed of trust with the Turlock Gospel Mission (a C alifornia nonprofit public benefit corporation) (TGM) to assist TGM with the purchase of property to be used as the home for TGM’s Homeless Assistance Ministry C enter (HAM Center). Since 2012, t he HAM Center serves as a homeless day center as well as provides case management service s to obtain identification, connection to mental health services and benefits, substance ab use programs, and other social service assistance. Its mission is to provide hope and assistan ce to those currently homeless in an effort to help them obtain jobs and essential services, and sec ure permanent housing opportunities.
The loan agreement provides for the note to be forgiven equally over a 10 year period provided TGM continues to use the property for its intended purpose. No inte rest accrues on the note as long as the borrower is not in default per terms of the loan agreement. As of June 30, 2023, the amount outstanding was $36,000.
In May 2021, the City, using Homeless Emergency Aid Program (HE AP) funds, executed a second loan agreement and promissory note secured by a deed of trust w ith TGM to assist with the renovation of a commercial building to provide shelter and inte nsive case management for homeless intervention. The building is loc ated at 432 South Broadway. Th e loan agreement in the amount of $330,000 provides for the promissory note to be forgiven at a r ate of 10% per year for a total of ten years provided that the property continues to be used as a home less shelter. As of June 30, 2023, the amount outstanding was $264,000.
We Care Program Loan
In September 2015 the City, using both CDBG and HOME funds, executed a loan agreement and two promissory notes each secured by a deed of trust with the We Ca re Program Turlock (a California nonprofit public benefit corporation) (We Care) to assist We Ca re with the purchase a fourplex to be used as transitional housing for persons at or below sixty perc ent (60%) of the median income in the County as defined by HUD. The CDBG portion of the loan is for $ 240,000 and the HOME portion is $110,000. No interest accrues and no periodic payments are due on either note as long as the borrower is not in default and the property continues to be used for its intended purpose.
The HOME loan is equally forgivable over a 20 year period provi ded We Care continues to use the property for its intended purpose and is not otherwise in defau lt as defined by the loan agreement.
The CDBG loan is not forgivable and is repayable at the time the borrower ceases to use the property for its intended purpose. The CDBG loan also contains an equity sharing provision, which means that, if the borrower sells the proper ty for more than the repayment amount required under the CDBG and HOME loan notes, 50% of the excess proceeds will be paid to the City. As of June 30, 2023, the amounts outstanding on the CDBG and HOME notes were $156,00 and $110,000, respectively.
Haven Women’s Center Loan
In August 2016, using both CDBG and HOME funds, the City execut ed a loan agreement and two promissory notes each secured by a deed of trust with Haven Wom en’s Center of Stanislaus (a California nonprofit public benefit corporation) (Haven Women’s Center) to assist the Haven Women’s Center with the purchase of a si ngle family residence to be ren ted to families or persons at or below sixty percent (60%) of the medi an income in the County, as defi ned by HUD. The CDBG portion of the loan is for $105,000 and the HOME portion is $105,000. No i nterest accrues and no periodic payments are due on either loan as long as the borrower is not in default and the property continues to be used for its intended purpose.
62 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)
B. Loans Receivable (Continued)
Haven Women’s Center Loan (Continued)
The CDBG loan is equally forgivable over a 20 year period provi ded Haven Women’s Center is not otherwise in default as defined by the loan agreement. The HOME loan is not forgivable and is repayable at the time the borrower ceases to use the property f or its intended purpose. The HOME loan also contains an equity sharing provision, which means that, if the borrower sells the property for more than the repayment amount required under the CDBG and HOME loan notes, 50% of the excess proceeds will be paid to the City. As of June 30, 2023, the amounts outstanding on the CDBG and HOME loans were $73,500 and $105,000, respectively.
United Samaritans Foundation Loan
In March 2018, the City, using CDBG funds, executed a loan agre ement and promissory note secured by a deed of trust with United Samaritans Foundation (U SF) to assist with the restoration of the bathroom and shower facilitie s for the building that is bei ng leased to the We Care Program Turlock for the purposes of providing sheltering and other serv ices to homeless men. The building is located at 219 South Broadway and has served as a shelter since 2003. The loan agreement to USF in the amount of $175,000 provides for the promissory note to b e forgiven at that end of six years provided that the property continues to be used as a homeless shelter.
Housing Authority of the County of Stanislaus Loan
In November 2020, the City, using HOME funds, executed a loan a greement and promissory note secured by a deed of trust with the Housing Authority of the Co unty of Stanislaus (the Housing Authority) to assist the Housing Authority with the purchase a single family home and a triplex to be used as transitional housing for persons at or below sixty perc ent (60%) of the median income in the County as defined by HUD. The HOME loan is for $433,000. No int erest accrues and no periodic payments are due on the note as long as the borrower is not in default and the property continues to be used for its intended purpose. The HOME loan is forgivable a t a rate of 5% per year over twenty years. As of June 30, 2023, the amount outstanding on the HOME note was $389,700.
Greater Modesto Interfaith Hospitality Network Loan
In September 2020 the City, using CDBG funds, executed a loan a greement and promissory note secured by a deed of trust with the Greater Modesto Interfaith Hospitality Network (a California nonprofit public benefit corporatio n) (the Network) to assist t he Network with the purchase a single family home to be used as transitional housing for persons at o r below eighty percent (80%) of the median income in the City as defined by HUD. The CDBG loan is f or $288,000. No interest accrues and no periodic payments are due on the note as long as the bor rower is not in default and the property continues to be used for its intended purpose. The CDB G loan is not forgivable and is repayable at the time the borrower ceases to use the property f or its intended purpose. The CDBG loan also contains an equity sharing provision, which means that, if the borrower sells the property for more than the repayment amount required under the CDBG loan not es, 50% of the excess proceeds will be paid to the City. As of June 30, 2023, the amount outst anding on the CDBG note was $288,000.
Employee Computer Loans
All full-time City employees who have completed their probation ary period are eligible to obtain an interest free loan of up to $2,500 to purchase a computer. All requests for loans are subject to review by the Service Area Director and must be approved by either the City Manager or Assistant City Manager. Repayment of these loans is handled through payroll de ductions which are spread out equally over a two year period. Employees must repay the outsta nding balance of their loans upon ending their employment with the City. As of June 30, 2023, 5 e mployees had loans due to the City totaling $5,058.
63 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)
C. Accounts Receivable
The following table provides a detailed listing of the City’s a ccounts receivable by type as of June 30, 2023:
Due from Other Accounts
Governments Receivable Total
General Fund 7,660,588 $ 3,570,733 $ 11,231,321 $ Former LMI Housing Special Revenue Fund - 450 450 Gas Tax/Street Improvement Special Revenue Fund 2,077,270 - 2,077,270 Nonmajor Governmental Funds 1,329,032 68,115 1,397,147 Water Enterprise Fund 279,032 3,201,040 3,480,072 Sewer Enterprise Fund 378,073 2,611,489 2,989,562 Transportation Enterprise Fund 5,788,430 5,046 5,793,476 Internal Service Fund 40 532,852 532,892 Total 17,512,465 9,989,725 27,502,190
Less Allowance for Collectability (193,863) - (193,863) Total, Net 17,318,602 $ 9,989,725 $ 27,308,327 $
NOTE 6 – CAPITAL ASSETS
Capital assets, which include land, buildings, improvements, eq uipment, and infrastructure assets (e.g., roads, bridges, sidewalks, and similar items), are reported in the applicable governmental or business- type activities in the Government-Wide Financial Statements. Ca pital assets are recorded at historical cost or estimated historical cost if actual cost is not availab le. Donated assets are valued at their estimated fair value on the date donated. City policy has set t he capitalization thresholds for reporting capital assets at the following:
General Capital Assets 10,000 $
Infrastructure Capital Assets 50,000 $
Depreciation has been provided on a straight-line basis over the following useful lives:
Years
Land Improvements and Infrastructure 25-60
Buildings 30-50
Furniture and Equipment 5-10
Vehicles 5-10
The City defines infrastructure as the basic physical assets th at allow the City to function. The assets include streets, sewer, parklands, and buildings. Each major in frastructure system can be divided into subsystems. For example, the street system can be subdivided in to pavement, curb and gutters, sidewalks, medians, streetli ghts, landscaping, and land. These subsystems were not delineated in the basic financial statements. The appropriate operating departmen t maintains information regarding the subsystems.
Interest accrued during the construction of capital assets, if any, is capitalized for the business-type activities in the proprietary funds as part of the asset cost.
64 NOTE 6 – CAPITAL ASSETS (Continued)
A. Capital Assets Additions and Retirements
At June 30, 2023, the City’s capital assets for governmental activities consisted of the following:
Balance Retirements/ Balance
June 30, 2022 Additions Adjustments Transfers June 30, 2023 Capital assets not being depreciated:
Land 17,574,358 $ - $ - $ - $ 17,574,358$ Construction in progress 31,349,104 9,611,696 - (9,279,457) 31,681,343 Total capital assets not being depreciated 48,923,462 9,611,696 - (9,279,457) 49,255,701 Capital assets being depreciated:
Land improvements 38,163,767 - - - 38,163,767 Buildings 55,553,953 11,370 - - 55,565,323 Furniture and equipment 17,406,185 73,662 (25,637) - 17,454,210 Vehicles 13,410,680 689,642 (433,430) - 13,666,892 Infrastructure 212,898,040 2,400,172 - 9,279,457 224,577,669 Total capital assets being depreciated 337,432,625 3,174,846 (459,067) 9,279,457 349,427,861 Less accumulated depreciation for:
Land improvements (18,732,283) (939,828) - - (19,672,111) Buildings (17,355,088) (1,469,869) - - (18,824,957) Furniture and equipment (12,131,505) (559,626) 25,637 - (12,665,494) Vehicles (9,885,344) (859,283) 420,742 - (10,323,885) Infrastructure (80,371,542) (4,746,493) - - (85,118,035) Total accumulated depreciation (138,475,762) (8,575,099) 446,379 - (146,604,482) Net capital assets being depreciated 198,956,863 (5,400,253) (12,688) 9,279,457 202,823,379 Governmental activities capital assets, net 247,880,325$ 4,211,443 $ (12,688) $ - $ 252,079,080$
Governmental activities depreciation expense for capital assets for the year ended June 30, 2023, was as follows:
Governmental Activities
General government 605,973 $
Public safety 1,294,040
Public ways and facilities/transportation 5,185,881
Parks and recreation 447,060
Community development 127,790
Internal service funds 914,355
Total Governmental Activities 8,575,099 $
65 NOTE 6 – CAPITAL ASSETS (Continued)
A. Capital Assets Additions and Retirements (Continued)
At June 30, 2023, the City’s capital assets for business-type activities consisted of the following:
Balance Retirements/ Balance
June 30, 2022 Additions Adjustments Transfers June 30, 2023 Capital assets not being depreciated:
Land 5,144,541 $ - $ - $ - $ 5,144,541$ Construction in progress 40,136,482 23,668,063 (223,887) (1,129,432) 62,451,226 Total capital assets not being depreciated 45,281,023 23,668,063 (223,887) (1,129,432) 67,595,767 Capital assets being depreciated:
Land improvements 10,283,313 - - - 10,283,313 Buildings and improvements 13,020,830 - - - 13,020,830 Furniture and equipment 47,040,778 263,577 (272,963) - 47,031,392 Vehicles 9,746,785 15,243 (52,035) - 9,709,993 Infrastructure 365,479,644 2,546,527 - 1,129,432 369,155,603 Total capital assets being depreciated 445,571,350 2,825,347 (324,998) 1,129,432 449,201,131 Less accumulated depreciation for:
Land improvements (3,534,551) (279,312) - - (3,813,863) Buildings and improvements (4,274,266) (392,200) - - (4,666,466) Furniture and equipment (21,415,483) (855,978) 269,470 - (22,001,991) Vehicles (3,220,946) (760,701) 48,395 - (3,933,252) Infrastructure (163,431,394) (6,196,724) - - (169,628,118) Total accumulated depreciation (195,876,640) (8,484,915) 317,865 - (204,043,690) Net capital assets being depreciated 249,694,710 (5,659,568) (7,133) 1,129,432 245,157,441 Business-type activities capital assets, net 294,975,733$ 18,008,495 $ (231,020) $ - $ 312,753,208$
Business-type activities depreciation expense for capital asset s for the year ended June 30, 2023, was as follows:
Business-Type Activities
Water 1,396,605 $
Sewer 5,915,442
Stanislaus Regional Water Authority (SRWA) Operations 180 Transportation 1,172,688
Total Business-Type Activities 8,484,915 $
NOTE 7 – LONG-TERM DEBT
The City generally incurs long-term debt to finance projects or purchase assets which will have useful lives equal to or greater than the related debt.
Government-Wide Financial Statements
Long-term debt and other financial obligations are reported as liabilities in the appropriate activities. Bond premiums and discounts are deferred and amortized over the life of the bonds using the straight-line method.
Fund Financial Statements
The Governmental Fund Financial Statements do not include long- term debt, as this liability is not payable in the current period. The face amount of debt issued a nd any premiums received are reported as other financing sources, while discounts are reported as other financing uses.
66 NOTE 7 – LONG-TERM DEBT (Continued)
Fund Financial Statements (Continued)
Proprietary Fund Financial Statements use the same principles a s those used in the Government-Wide Financial Statements.
A. Current Year Governmental Act ivities Transactions and Balances
The City’s governmental debt issues and transactions are summar ized below and discussed in detail thereafter.
Due in
Original Issue Balance Balance Due Within More than
Amount June 30, 2022 Additions Retirements June 30, 2023 One Year One Year Governmental Activities:
Direct Borrowing:
Lease Financings:
Motorola Equipment Lease 2,727,690$ 1,766,567 $ - $ 265,528$ 1,501,039 $ 276,469 $ 1,224,570 $ PNC Lease - Fire Trucks 1,755,110 1,755,110 - 91,565 1,663,545 94,687 1,568,858 Total Governmental Activities Debt 4,482,800$ 3,521,677 $ - $ 357,093$ 3,164,584 $ 371,156 $ 2,793,428 $
Lease Financing
Motorola Equipment Lease Purchase Agreement
On March 22, 2018, the City Council approved the lease financin g/purchase and installation of the Turlock Radio System with a $1 million down payment and the pur chase of a Public Safety Computer Aided Dispatch/Records Management System (CAD/RMS) and associat ed components, systems, and programs in a total amount not to exceed $5,727,690 for the project plus intere st from the lease of the radio system. The lease, totaling $2,727,690, carries an annual interest rate of 4.12% and requires monthly principal and interest payments due on the fir st of each month until April 2028 when the lease terminates. The City has pledged the radio system as collateral for the lease. Events of default under the lease agreement include failure to make any l ease payment within ten days of the due date or failure of other lease covenants or conditions incl uded in the lease agreement not cured within twenty days, which would accelerate repayment of the lea se. The City can terminate the lease at any time by paying the prescribed prepayment price as set forth in the lease payment schedule.
Fire Engine Lease Purchase Agreement
On April 15, 2022, the City entered into a lease financing/purchase agreement for the purchase of two new Pierce Velocity Pumpers. The lease, totaling $1,755,110, ca rries an annual interest rate of
3.41% and requires annual principal and interest payments due o n the 15th of each month until April 2037 when the lease terminates. The City has pledged the veloci ty pumpers as collateral for the lease. Events of default under the lease agreement include fail ure to make any lease payment within ten days of the due date or failure to comply with other lease covenants or conditions included in the lease agreement that are not cured within thirty days, which would accelerate repayment of the lease.
The City can terminate the lease at any time after April 15, 20 24, by paying the prescribed prepayment price as set forth in the lease payment schedule.
67 NOTE 7 – LONG-TERM DEBT (Continued)
A. Current Year Governmental Act ivities Transactions and Balances (Continued)
Debt Service Requirements
Annual debt service requirements for governmental activities debt are shown below:
For the Year
Ending June 30, Principal Interest
2024 371,156 $ 118,570 $
2025 385,775 103,950
2026 400,974 88,752
2027 416,773 72,950
2028 433,203 56,523
2029-2033 599,358 157,712
2034-2037 557,345 48,310
Total 3,164,584 $ 646,767 $
Lease Financing Payable
Governmental Activities -
Direct Borrowing
B. Current Year Business-Type Act ivities Transactions and Balances
The City’s business-type debt issues and transactions are summa rized below and discussed in detail thereafter:
Due in
Original Issue Balance Balance Due Within More than
Amount June 30, 2022 Additions Retirements June 30, 2023 One Year One Year Business-Type Activities Debt:
General Obligation Revenue Bonds:
2017 Water Revenue Refunding 22,405,000$ 18,615,000 $ - $ 795,000$ 17,820,000$ 835,000 $ 16,985,000$ Add: Unamortized bond premium - 2,471,191 - 156,901 2,314,290 - 2,314,290 Loans Payable - Direct Borrowing:
State Revolving Fund Loan -
Harding Drain By-Pass 15,090,416 9,794,207 - 722,077 9,072,130 737,962 8,334,168 State Revolving Fund Loan -
TRWQCF Upgrade 24,752,169 17,274,970 - 1,162,331 16,112,639 1,187,902 14,924,737 State Revolving Fund Loan -
NVRRWP 28,907,112 19,148,543 - 531,964 18,616,579 541,540 18,075,039 2022 Sewer Loan (Webster Bank) 32,924,000 32,924,000 - 2,978,000 29,946,000 2,967,000 26,979,000 Total Business-Type Activities Debt 124,078,697$ 100,227,911 $ - $ 6,346,273$ 93,881,638 $ 6,269,404 $ 87,612,234 $
Revenue Bonds
2017 Water Revenue Refunding Bonds
In June 2017, the Authority issued $22,405,000 in Water Revenue Bonds Series 2017 to advance refund the series 2008 Water Revenue Bonds and to pay costs of issuance of the 2017 Bonds. The bonds, which carry coupon interest rates ranging from 4.00% - 5 .250%, have semi-annual principal and interest payments on the first of March through 2038. Event s of default on the 2017 Bonds include failure to make any debt service payment by the due dat e or failure to perform the other agreements or covenants required in the Master Installment Purc hase Agreement (MIPA) between the Authority and the City not c ured within sixty days of notic e to the City, which would accelerate repayment of the bonds. The City can prepay the bonds at any ti me by paying the prescribed prepayment premium as set forth in the bond documents.
68 NOTE 7 – LONG-TERM DEBT (Continued)
B. Current Year Business-Type Act ivities Transactions and Balances (Continued)
Revenue Bonds (Continued)
2017 Water Revenue Refunding Bonds (Continued)
Pursuant to the MIPA, the City h as pledged the net water system revenues (as defined in the MIPA) from the Water Enterprise Fund operations for repayment of the 2017 bonds. Based on fiscal year 2022-23 net system revenues of $ 17,516,593, annual principal an d interest payments (totaling $1,635,938 in fiscal year 2022-23) were 9.3% of net water system revenues.
On April 12, 2023, S&P Global Ratings withdrew its ratings on t he bonds due to the City’s delay in issuing the audited financial statements.
Loans Payable
2022 Sewer Loan
On June 22, 2022, the City entered into a direct placement loan agreement in the amount of $32,924,000. The proceeds of the loan, secured by revenue from the City’s Wastewater Treatment operations as defined in the loan agreement, were used to refun d and defease the outstanding 2012 Sewer Revenue Bonds. The 2012 Bonds will be repaid in their ent irety on September 15, 2022. No new project monies were included in this loan agreement. The re funding resulted in an overall debt service savings of $1,440,968. The net present value of the deb t service savings is called an economic gain and amounted to $1,231,964. The loan bears intere st of 2.99% and matures in September 2033. Payments of principal are due annually on Septe mber 15th and interest is due semi-annually on the September 15th and March 15th. Events of default on the loan include failure to make any loan repayment by the due date or failure to perform t he other agreements or covenants required in the loan agreement not cured within sixty days of n otice to the City, would make all principal and interest outstanding on the loan immediately due and payable. The City can prepay the loan after September 15, 2024, by paying the prescribed prepayment premium as set forth in the loan agreement.
The City has pledged the net sewer system revenues (defined as total system revenues excluding certain revenues related to deposits, and proceeds from borrowi ngs less maintenance and operating costs) from the Sewer Enterprise Fund operations for repayment of the 2022 Sewer Loan and the State Revolving Fund Loans. Based on fiscal year 2022-23 net sy stem revenues of $10,900,886, annual principal and interest payments (totaling $3,652,658 in fiscal year 2022-23) were 33.5% of net system revenues.
State Revolving Fund Loans
The City entered into three agreements with the California Stat e Water Resources Control Board for State Revolving Fund (SRF) project financing. These loans are o n parity with the defeased 2012 Sewer Revenue Bonds. This means that the loans have equal right s to pledged revenues as the sewer bonds.
The first agreement was executed in December 2011 in the amount of $20 million to fund the Harding Drain Bypass project. The agreement was amended in October 2012 to reduce the project funding to $15,811,425. The notice of completio n for the project was issue d on April 22, 2014. The City drew down all the funds on this loan, including capitalized interest , totaling $15,090,416. The loan bears annual interest of 2.2%, and annual principal and interest payments are due January 1, 2015, through January 1, 2034.
69 NOTE 7 – LONG-TERM DEBT (Continued)
B. Current Year Business-Type Act ivities Transactions and Balances (Continued)
Loans Payable (Continued)
State Revolving Fund Loans (Continued)
The second agreement was executed in April 2012 in the amount o f $24 million to fund the Turlock Regional Water Quality Control Facility (TRWQCF) upgrade and ex pansion project. The agreement was amended in January 2013 to increase the project funding to $26,187,900. The notice of completion for the project was issued May 26, 2015. The City dr ew down all the funds on this loan, including capitalized interest, totaling $24,752,169. The loan bears annual interest of 2.2%, and annual principal and interest payments are due December 1, 2015, through December 1, 2034.
For the third agreement, the City entered into a construction i nstallment sale agreement with the California State Water Resources Control Board (CSWRCB) for SRF project financing. This loan is on parity with the defeased 2012 Sewer Revenue Bonds and SRF Loans . This means that the loan has equal rights to pledged revenues as the sewer bonds and loans.
The loan and grant agreement was executed in August 2018 in the amount of $39,461,000 to fund the North Valley Regional Recycled Water Program project. In De cember 2019, the loan and grant agreement was amended to adjust the loan amount to $33,907,112. $2.5 million of the project funding was forgiven during the fiscal year ended June 30, 2020; $2.5 m illion was given as a grant during fiscal year 2020; and the balance ($28,907,112) was expected to be in the form of two loans payable to the CSWRCB in the amounts of $14,453,556 each, funded from SRF and Proposition 1. The loans bear annual interest of 1.8% beginning with each disbursement a nd repayment of principal and interest will begin one year after the completion of constructi on on the project. The loans will be amortized with equal annual payments over a period from that date to May 18, 2050.
After the loan documents were executed in August 2018, it took until December 2019 for the State to finally approve the Final Budget Document, which is a document required before the City could submit a reimbursement request on the loan funds. In December 2 019, the City submitted the first reimbursement request in the amount of $1,417,418 for pre-const ruction costs. The City submitted the second reimbursement request in the amount of $9,740,230 in November 2020 and the final reimbursement request in the amount of $13,816,579 in August 20 21. The full amount of the original loan was not needed due to a combination of lower than expected design and construction costs and the loan forgiveness provisions that were added to the agreemen t after the original loan was approved. Principal and interest payments on the loan began in fiscal year 2022 and the outstanding balance of the loan is $18,616,579 as of June 30, 2023. The fun ding for this project comes from two primary sources (in addition to City Sewer Fund resources for costs which are not reimbursable under either the SRF loan or the Department of the Interior grant). T he SRF reimbursement requests are coordinated with the funding received from the Department of the Interior grant.
Events of default on the loans include a revenue shortfall, uns cheduled draws on reserve funds, adverse water quality findings by the Regional Water Quality Co ntrol Board, litigation related to the system revenues or the project, or failure to make any debt ser vice payment by the due date, which would accelerate repayment of the loans. The City can prepay th e loans at any time by paying the principal and outstanding accrued interest through the date of prepayment.
70 NOTE 7 – LONG-TERM DEBT (Continued)
B. Current Year Business-Type Act ivities Transactions and Balances (Continued)
Debt Service Requirements
Annual debt service requirements for business-type activities debt are shown below:
For the Year
Ending June 30, Principal Interest Principal Interest Principal Inter est 2024 835,000 $ 801,188 $ 5,434,405 $ 1,740,192 $ 6,269,405 $ 2,541,380 $ 2025 880,000 759,438 5,582,522 1,597,927 6,462,522 2,357,364 2026 920,000 715,438 5,186,746 1,459,831 6,106,746 2,175,269 2027 970,000 669,438 5,329,101 1,326,002 6,299,101 1,995,439 2028 1,015,000 620,938 5,472,612 1,188,385 6,487,612 1,809,323 2029-2033 5,915,000 2,275,350 27,488,925 3,836,065 33,403,925 6,111,415 2034-2038 7,285,000 897,000 9,867,387 1,186,119 17,152,387 2,083,119 2039-2043 - - 3,668,182 715,009 3,668,182 715,009 2044-2048 - - 4,010,419 372,772 4,010,419 372,772 2049-2050 - - 1,707,049 46,227 1,707,049 46,227 Total 17,820,000 6,738,788 $ 73,747,348 13,468,530 $ 91,567,348 20,207,318 $ Add: Unamortized
Bond Premium 2,314,290 - 2,314,290 Net Long-Term Debt 20,134,290$ 73,747,348 $ 93,881,638 $ Revenue Bonds Direct Borrowing - Loan Payable Total
C. Debt With No City Commitment
The City has no legal liability with respect to the payment of any indebtedness of the Community Financing District No. 1 Monte Vista Crossings. The City acts solely as an agent for the bondholders in collecting and forwarding the special assessment. Accordingl y, no liability for these bonds has been recorded in the City’s basic financial statements. The pri ncipal amount of outstanding debt of the above district was $505,000 at June 30, 2023.
NOTE 8 – NET POSITION AND FUND BALANCES
Net position is measured on the full accrual basis of accountin g while fund balance is measured on the modified accrual basis of accounting, as explained in Note 1D.
A. Net Position
Net position is the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources. Net position is divided into three captions. These captions apply only to net position, which is determined only for proprietary funds and at the government-wide level, and are described below:
Net Investment in Capital Assets describes the portion of net pos ition that is represented by th e current net book value of the City’s capital assets, less the o utstanding balance of any debt issued to finance these assets.
Restricted describes the portion of net position that is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, l aws, or other restrictions which the City cannot unilaterally alter.
Unrestricted describes the portion of net position that does not meet the de finition of “net investment in capital assets” or “restricted net position.”