Turlock City Council
November 18, 2025

Resolution No. 2025-

for the suballocation of 2021 Regional Early Action Planning (REAP 2.0) gran funds and authorizing receipt of REAP 2.0 funds and authorizing the Interim City Manager to enter into, execute and deliver the MOU, and any and all other documents necessary to secure the grant; and

PASSED AND ADOPTED at a regular meeting of the City Council of the City of Turlock this 18th day of November, 2025, by the following vote:

AYES: ( )
NOES: ( )
NOT PARTICIPATING: ( )
ABSENT: ( )

ATTEST:

___________________________
Nichole Fiez, City Clerk,
City of Turlock, County of Stanislaus,
State of California

City Council Staff Report
November 18, 2025

From: Isaac Moreno, Finance Director
Prepared by: Michael Lenhardt, Principal Accountant
Agendized by: Susan E. Borrego, Interim City Manager

1. ACTION RECOMMENDED:

Accepting the City of Turlock’s audited Financial Statements and related reports for the Fiscal Year ended June 30, 2024

2. NARRATIVE:

This overview and analysis are provided by the Finance Department of the City of Turlock (City) for the Fiscal Year 2023-2024 Financial Statements (with comparative information for 2022-2023).

FISCAL YEAR 2023-2024 FINANCIAL HIGHLIGHTS

Government-Wide Highlights
• The City’s net position (assets and deferred outflows in excess of liabilities and deferred inflows) at June 30, 2024, totaled $724.9 million. Governmental activities accounted for $400.7 million of the net position, while $324.2 million are in the business-type activities.
• Total City revenues, including program and general revenues, were $175.9 million, while total expenses were $128.8 million.
• Governmental program revenues were $34.1 million compared to governmental program expenses of $86.5 million.
• Program revenues from business-type activities were $60.8 million, while expenses for business-type activities were $42.4 million.

Fund Highlights
• Net General Fund revenues exceeded expenditures and other financing sources (uses) by $4.6 million as compared to the prior year when revenues exceeded expenditures and other financing sources (uses) by $13.2 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 $56.5 million at June 30, 2024 compared to a projected $43.7 million when the 2023-2024 budget was originally adopted.

Additional discussion regarding the financial results for Fiscal Year 2023-2024 can be found in the “Financial Activities” section of the MD&A of the financial statements.

Agenda Staff Report
11/18/2025

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, 2024:
• 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, 2024 includes zero Material Weakness and zero Significant Deficiencies and Other Matters for Fiscal Year 2023-2024. 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.

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.

3. FISCAL IMPACT / BUDGET AMENDMENT:

Funds are budgeted for the independent audit services required. There is no additional fiscal impact.

4. ENVIRONMENTAL DETERMINATION:

This action is not subject to the provisions of the California Environmental Quality Act

Agenda Staff Report
11/18/2025

(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.

5. ATTACHMENTS:

1. Draft Audit Acceptance Resolution

2. FY 2023-2024 City of Turlock Financial Statements

3. FY 2023-2024 City of Turlock Single Audit Report

4. FY 2023-2024 City of Turlock Memorandum On Internal Controls

5. FY 2023-2024 City of Turlock Required Communications Letter (SAS 114)

6. FY 2023-2024 City of Turlock Proposition 111 Appropriations (GANN) Limit Report Report - Final

7. FY 2023-2024 Public Financing Authority (PFA) Financial Statements

8. FY 2023-2024 PFA Required Communications Letter (SAS 114)

9. FY 2023-2024 Transportation Development Act (TDA) Funds Financial Statements

10. FY 2023-2024 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 2023-2024 }
}

WHEREAS, audited Financial Statements are necessary for all governmental entities; and

WHEREAS, on September 22, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the City of Turlock’s Financial Statements, Single Audit; and

WHEREAS, on September 22, 2025, Brown Armstrong Accountancy Corporation issued the City of Turlock’s Memorandum on Internal Control, Required Communications; and

WHEREAS, on October 2, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the Proposition 111 Appropriations Limit Increment, Required Communications; and

WHEREAS, on November 5, 2025, Brown Armstrong Accountancy Corporation issued their opinion on the Turlock Public Financing Authority Financial Statements, Required Communications; and

WHEREAS, on November 5, 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 18th day of November, 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, 2024

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CITY OF TURLOCK

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED
JUNE 30, 2024

PREPARED BY

THE FINANCE DEPARTMENT

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CITY OF TURLOCK

ANNUAL FINANCIAL REPORT

FOR THE YEAR ENDED
JUNE 30, 2024

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

Statement of Net Positio n – Proprietary Funds ................................................................................... 36

Statement of Revenues, Expenses, and Changes in Fund Net Posi tion – Proprieta ry Funds ................................................................................................................................. 37

Statement of Cash Flows – Proprietary Funds .................................................................................... 38

Statement of Fiduciary Net Position – Fiduciary Funds ...................................................................... 40

Statement of Changes in Fiduciary Net Position − Fiduciary Funds .................................................. 41

Notes to Basic Financ ial Statements ....................................................................................................... 42

Page
Required Supplementary Information:

Schedule of Changes in the Net Pension Liability and Related Ratios – Miscellaneous Agent Multiple-Employer Defined Benefit Pension Plan ............................................... 96

Schedule of Contributions – Miscellaneous Agent Multiple-Employer Defined Benefi t Pension Plan ................................................................................................................. 98

Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Plan – Cost-Sharing Multiple-Employer Defined Benefit Pension Plan .................................... 99

Schedule of Contributions – Safety Plan – Cost-Sharing Multiple-Employer Defined Benefi t Pension Plan ................................................................................................................. 100

Schedule of Changes in the Total Other Post-Employment Benefits (OPEB) Liability and R elated Ratios ..................................................................................................................... 101

Supplemental Information:

General Fund:

Combining Bal ance Sheet ........................................................................................................................ 104

Combining Schedule of Revenues, Expenditures, and Changes in Fund Balances ......................................................................................................................................... 105

Nonmajor Governmental Funds:

Combining Bal ance Sheet ........................................................................................................................ 107

Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .......................... 115

Internal Service 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

Custodial Funds:

Combining Statement of Fiduciary Net Position ..................................................................................... 128

Combining Statement of Changes in Fiduciary Net Position ................................................................. 129

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, 2024, 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, 2024, 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, and Gas Tax/Street Improvement Fund for the year then ended in accordance with accounting principles ge nerally 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 September 22, 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
September 22, 2025

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5 CITY OF TURLOCK
MANAGEMENT’S DISCUSSION AND ANALYSIS
JUNE 30, 2024

This narrative overview and analysis are provided by the manage ment of the City of Turlock (City) for the fiscal year 2023-2024 financial statements (with comparative in formation for 2022-2023). 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 2023-2024 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, 2024, totaled $724.9 m illion. Governmental activities accounted for $400.7 million of the net position, while $324.2 million are in the business-type activities. • Total City revenues, includi ng program and general revenues, w ere $175.9 million, while total expenses were $128.8 million.
• Governmental program revenues were $34.1 million compared to g overnmental program expenses of $86.5 million.
• Program revenues from business-type activities were $60.8 milli on, while expenses for business- type activities were $42.4 million.

Fund Highlights

• Net General Fund revenues exceeded expenditures and other fina ncing sources (uses) by $4.6 million as compared to the prior ye ar when revenues exceeded expenditures and other financing sources (uses) by $13.2 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 $56.5 million at June 30, 2024, compared to a projected $43.7 million when the 2023-2024 budget was originally adopted.

Additional discussion regarding the financial results for fisca l year 2023-2024 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 of accounting, similar to that used by the private sector. The difference between the Ci ty’s assets and deferred outflows of resources and liabilities and defer red inflows of resources is reported as “net position.” Over time, this statement may serve as an indicator of the City’s general healt h and whether its overall 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 acco unting, 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, and transit operations. Un like governmental services, th ese services are supported by charges paid by the users of these services.

As noted above, the Government-W ide 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 nonmajor fu nds 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 three (3) are considered major funds for presentation purposes – the General Fund, Former Low and Modera te Income (LMI) Housing Fund, and the Gas Tax/Street Improvement Fund. Each major fund is pr esented separately in the Governmental Fund Balance Sheet and the Governmental Fund State ment of Revenues, Expenditures and Changes in Fund Balances. The financial inform ation for the remaining nonmajor governmental funds is combined into a single, aggregated presen tation. 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 of accounting and include all their assets, liabilities, and defer red outflows/inflows of resources, current and long-term. The City’s Enterprise Funds account for the financial activity of the City’s water, sewer, and transportation (fixed route and dial-a-ride) services. The Internal Service Funds account for the financial activity of the City’s equipment pool, self-insurance , and information technology activities.

Because these activities primarily benefit the governmental rat her than business-type functions, the resulting financial activities of the Internal Service Funds have been included within the governmental activities in the Government-Wide Financial Statements. The Ent erprise and Internal Service Fund Financial Statements can be found starting on page 36.

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 progr ams. With 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 87 of the financial statements.

Notes to the Financial Statements. The notes to the financial s tatements provide additional information that is essential to a full understanding of the da ta provided in the Government-Wide and Fund Financial Statements. The notes can be founding starting on page 42.

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 its financial position. The City’s Statement of Net Position and Statement of Activities presented below and on a following page focus on the City’s net position and changes to net position for governmental and business-type activities.

STATEMENT OF NET POSITION
AS OF JUNE 30
(in thousands of dollars)

2024 2023 2024 2023 2024 2023
Cash and investments 180,263$ 166,447 $ 74,984 $ 61,216 $ 255,247 $ 227,663 $ Other assets 55,471 54,718 53,164 52,124 108,635 106,842 Capital assets, net 269,302 252,079 316,308 312,753 585,610 564,832 Total assets 505,036 473,244 444,456 426,093 949,492 899,337 Deferred outflows
of resources 33,695 36,058 5,884 5,903 39,579 41,961 Long-term liabilities 101,625 97,492 103,174 107,804 204,799 205,296 Other liabilities 19,803 22,686 20,051 16,466 39,854 39,152 Total liabilities 121,428 120,178 123,225 124,270 244,653 244,448 Deferred inflows
of resources 16,625 16,884 2,882 3,407 19,507 20,291 Net position:

Net investment
in capital assets 266,097 248,914 231,960 222,230 498,057 471,144 Restricted 131,801 122,673 - - 131,801 122,673 Unrestricted 2,780 653 92,273 82,089 95,053 82,742 Total net position 400,678$ 372,240 $ 324,233 $ 304,319 $ 724,911 $ 676,559 $ 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 68.7% of the City’s total net p osition, include all infrastructure such as the street/roadway system; sewer, water, and storm drain collec tion 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 buildings 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 $131.8 million or 1 8.2% of the City’s non-capital net position is subject to external restrictions as to their use. T he remaining $95.1 million is u nrestricted and available to meet the City’s on-going obligations to its citizens and creditors. Of this am ount, $2.8 million is related to governmental activities and $92.3 million to business-type activities.

The City’s overall net position increased by $48.4 million duri ng the 2023-2024 fiscal year. governmental activities experienced a $28.4 million increase in net position while the City’s business-type activities – those intended to be self-sufficient – experienced a $19.9 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, $94.9 million of the City’s $175.9 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 fees 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 $128.8 million, consisted of $ 86.4 million for governmental activities and $42.4 million for business-type activities. Of the $86.4 m illion in governmental a ctivities expenses, $48.7 million or 56.4% relate to the provision of public safety (police and fire) services. The next largest component was $13.8 million or 15.9% for public ways, facilitie s, 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 YEARS ENDED JUNE 30
(in thousands of dollars)

2024 2023 2024 2023 2024 2023
Program Revenues
Charges for services 14,033 $ 11,526 $ 50,196 $ 47,712 $ 64,229 $ 59,238 $ Operating grants and contributions 9,094 5,978 4,880 4,327 13,974 10,305 Capital grants and contributions 10,934 11,563 5,767 4,614 16,701 16,177 Total Program Revenues 34,061 29,067 60,843 56,653 94,904 85,720 General Revenues
Property taxes 9,303 8,803 - - 9,303 8,803 Sales taxes 37,664 36,309 - - 37,664 36,309 Property taxes - VLF in lieu 8,869 8,336 - - 8,869 8,336 Other taxes 14,385 14,353 - - 14,385 14,353 Interest and investment earnings 7,398 1,290 3,009 28 10,407 1,318 Other income 367 1,228 - - 367 1,228 Gain (loss) on disposal
of capital assets 11 1 9 (205) 20 (204) Total General Revenues 77,997 70,320 3,018 (177) 81,015 70,143 Total Overall Revenues 112,058 99,387 63,861 56,476 175,919 155,863 Expenses
General government 10,328 9,435 - - 10,328 9,435 Public safety 48,733 38,025 - - 48,733 38,025 Public ways/facilities/transportation 13,787 9,776 - - 13,787 9,776 Parks and recreation 6,477 4,755 - - 6,477 4,755 Community development 7,004 8,665 - - 7,004 8,665 Interest on long-term debt 126 129 - - 126 129 Water - - 10,774 9,949 10,774 9,949 Sewer - - 20,616 18,182 20,616 18,182 Transportation - - 5,900 5,487 5,900 5,487 SRWA operations - - 5,074 - 5,074 - Building and safety - - - 952 - 952 Total Expenses 86,455 70,785 42,364 34,570 128,819 105,355 Increase (Decrease) in Net Position
Before Transfers and Contributions 25,603 28,602 21,497 21,906 47,100 50,508 Transfers 1,583 1,899 (1,583) (1,899) - - Contributions for capital assets 1,159 2,400 - - 1,159 2,400 Contribution from Private-Purpose Trust 93 131 - - 93 131 Change in Net Position 28,438 33,032 19,914 20,007 48,352 53,039 Net Position, Beginning of Year 372,240 339,208 304,319 284,312 676,559 623,520 Net Position, End of Year 400,678$ 372,240 $ 324,233 $ 304,319 $ 724,911 $ 676,559 $ Governmental Activities Business-Type Activities Total

10 Governmental Activities Revenue Composition

Charges for
Serv ices
12%
Operating Grants
and Contributions
8%
Capital Grants
and Contributions
10%
Property Taxes
8%
Sales Taxes
34%
Property Taxes -
VLF in Lieu
8%
Interest and
Other Income
7%
Other Taxes
13%

Governmental activities revenu es totaling $112.1 million are co mprised 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 $14.0 million. Included in th is revenue category are the special assessment revenues charged by the City’s Lighting and Landscape 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 $9.1 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 2023-2024 were $10.9 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 activities general revenues totaled $70.3 million for fiscal 2023- 2024. Property tax assessed values increased 7.4% or $662.4 mil lion between 2022-2023 and 2023- 2024 to a total of $9.6 billion in assessed value for parcels w ithin the City. This resulted in a $1.3 million increase in assessed val ue related revenues. Sales tax es increased $2.0 million from 2022- 2023. The increase in sales tax can be primarily attributed to the increased sales in the region from the local Amazon facility.

Governmental Activities Revenues and Expenses

Governmental activities revenues are primarily used to finance governmental 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, 2023 -2024 expenses for governmental activities exceeded program revenues by $52.4 million whereas in 2022-2023 expenses exceeded revenues by $41.7 million.

$-
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
General
Government
Public
Safety
Public
Ways/Facilities/
Transportation
Parks and
Recreation
Community
Development
2023-2024 Program Revenues and Expenses
Governmental Activities
Expenses Revenues

12 $-
$5,000
$10,000
$15,000
$20,000
$25,000
$30,000
$35,000
$40,000
General
Government
Public
Safety
Public
Ways/Facilities/
Transportation
Parks and
Recreation
Community
Development
2022-2023 Program Revenues and Expenses
Governmental Activities
Expenses Revenues

Business-Type Activities

Business-Type Activities
Revenues by Service Sector

Water
45%
Sewer
42%
Transit
8%
SRWA
Operations
5%

Revenues for business-type activities totaled $63.9 million and related expenses totaled $42.4 million, of which $20.6 million or 48.7% 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 $10.8 million or 25.4% of business-type activitie s expenses. Other business-type activities include the operation of both fi xed route and dial-a-ride trans it systems which provide service in the City as well as connecting those in need with County-wide transporta tion services. The City’s Building Division assists all residents and developers in their pursuits of property 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 2023-2024 and 2022-2023 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
2023-2024 Program Revenues and Expenses
Busine ss-Type Activitie s
Expenses Revenues

$-
$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

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 or long-term debt.

At June 30, 2024, the City’s governmental funds reported combin ed fund balances of $159.7 million, a $16.6 million increase over the prior year. The General Fund’s fund balance is $56.5 million at June 30, 2024. Governmental fund revenues (including transfers in) were $120.5 million this year, of which General Fund revenues totaled $8 2.0 million or 68.0%. Governme ntal fund expenditures (including transfers out) totaled $105.7 m illion with the General Fund rep resenting 73.7% of the total or $77.9 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 J une 30, 2024, the General Fund had a fund balance of $56.5 million with $35.3 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 $4.6 million for 2023-2024. On-going General Fund revenues increased from $70.8 million in 2022-2023 to $78.7 million in 2023-2024.

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 2023-2024 was primarily due to increases in taxes and assessments revenue of $1.7 million, use of money and property revenue of $ 3.0 million, intergovernmental revenue of $0.7 million, and charges for current services of $2.2 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 2023-202 4 the fund’s expenditures incl uded $187,406 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 Fund – This fund comprises the reven ues and related expenditures the City receives from Gas Tax, Local Transportation Fund (LTF), Stanisl aus County Measure L, State of California Senate Bill (SB) 1 and Federal Department of Transpo rtation (DOT) s ources. Revenues (including transfers in) for 2023-2024 totaled $11.4 million wh ile expenditures (including transfers out) totaled $6.9 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 first in accordance with the grant documents and is then reimbursed. Th e City uses Gas Tax Section 2103 dollars for the local match portion for many federally-funded projects. Major projects for which there were expenditures in 2023-2024 include: Active Transportation Progr am improvements for the Southeast Quadrant Road Rehabilitation, Lander Avenue Rehabilitation betw een D St and SR-99, Pedras Rd Rehabilitation, and Intersection Improvements at Countryside Dr and the Business Entrance.

The Gas Tax and LTF dollars are used for general street mainten ance (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 si gnals, leaf pick-up, and street tree trimming. LTF dollars are also used for bicycle and pedestrian related-improvements contiguous to the C ity’s street/road system. The Gas Tax and LTF revenues are based on taxes paid when gasoline is purchased, which is a revenue source that is not growing due to more fuel-efficient vehicles on the road. E xpenditures funded by these revenue sources were at a level consistent with the prior year.

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 d etail. The net position for the City’s enterprise funds increased $324.2 million during fiscal year 2023-2024, which compares to a $19.9 million increase for fiscal year 2022-2023. Overall operating revenues were approximately $ 2.5 million higher than the prior year while operating expenses increased by $7.7 million. An increase of $2.7 million from charges for services in operating revenues, which was offset by an increase in salaries and benefits of $4.0 million. The City is a member of the Stanislaus Regional Water Authority (SRWA) which is a joint powers authority developing a surf ace water supply project to s upply additional drinking water to the customers within SRWA members’ service area. More information related to this project can be found at

15 www.stanrwa.org/ and in Note 13 to the financial statements. Net operating inc ome at the City’s wastewater facility was $2.3 m illion compared to $5.0 million i n 2022-2023. 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, 2024, the City had $584.8 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 2023-2024 was approximately $38.8 million. Capital expenditure s include construction for the roads program as well as road rehabilitation, wellhead treatment inst allation, Columbia Pool, roof and HVAC replacements, biotower rehabilitation equipment installation, a s 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 61.

DEBT ADMINISTRATION

At June 30, 2024, the City had $90.2 million in debt outstanding as compared to $97.0 million for the prior year.

The City’s principal debt service obligations for 2023-2024, to taling approximately $6.6 million, are made up of the following:

Debt Service
2017 Water Revenue Bonds 835,000 $
2022 Sewer Loan 2,967,000
SRF - WQC Upgrade 1,187,902
SRF - Harding Drain By-Pass 737,962
SRF - North Valley Water Program 541,540
PNC Lease/Fire Trucks 276,468
Motorola Equipment Lease/IBM 94,687
6,640,559$

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 63.

NEXT YEAR’S BUDGET AND THE ECONOMY

In June 2024, the City Council adopted the budget for fiscal ye ar 2024-2025. The 2024-2025 General Fund (Fund 110) budget projected a balanced budget with revenue s equaling expenses of just under $62.5 million. The 2024-2025 budget included personnel cost inc reases budgeted based on existing Memoranda of Understanding (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.

16 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

18 This page intentionally left blank.

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 governmental 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 Business-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, 2024

Governmental Business-Type
Activities Activities Total
ASSETS
Cash and investments (Note 3) 180,263,179 $ 71,624,133 $ 251,887,312 $ Restricted cash and investments and
cash and investments with fiscal agent (Note 3) - 3,359,633 3,359,633 Accounts receivable, net (Note 5C) 14,612,360 12,727,920 27,340,280 Interest receivable 1,881,949 655,452 2,537,401 Prepaids 1,787,545 33,728 1,821,273 Due from developers (Note 5A) 287,284 157,663 444,947 Long-term loans receivable (Note 5B) 35,875,420 - 35,875,420 Investment in affordable housing property (Note 1K) 327,184 - 327,184 Investment in joint venture (Note 13D) - 39,589,428 39,589,428 Leases receivable (Note 15) 699,280 - 699,280 Capital assets:

Capital assets, not being depreciated (Note 6) 70,062,983 68,355,003 138,417,986 Capital assets, being depreciated (net) (Note 6) 198,746,452 247,647,491 446,393,943 Right-to-use lease assets (net) (Note 6) 492,090 143,388 635,478 Right-to-use subscription assets (net) (Note 6) - 162,140 162,140 Total Assets 505,035,726 444,455,979 949,491,705

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 9) 32,262,395 5,529,779 37,792,174 Related to OPEB (Note 10) 1,432,828 353,993 1,786,821 Total Deferred Outflows of Resources 33,695,223 5,883,772 39,578,995

LIABILITIES
Accounts payable 9,032,449 3,383,275 12,415,724 Payroll payable 1,789,631 265,943 2,055,574 Interest payable 23,580 561,016 584,596 Unearned revenue 6,321,242 8,652,415 14,973,657 Deposits payable 1,087,259 468,325 1,555,584 Compensated absences (Note 1I):

Due within one year 780,223 175,767 955,990 Due in more than one year 3,120,892 703,070 3,823,962 Estimated claims liability (Note 12):

Due within one year 285,654 - 285,654 Due in more than one year 2,795,718 - 2,795,718 Long-term debt (Note 7):

Due within one year 385,775 6,462,522 6,848,297 Due in more than one year 2,407,654 80,992,811 83,400,465 Lease lability (Note 15):

Due within one year 96,720 48,170 144,890 Due in more than one year 314,725 96,294 411,019 IT subscription liability (Note 16):

Due within one year - 33,554 33,554 Due in more than one year - 74,276 74,276 Net pension liability (Note 9):

Due in more than one year 86,131,913 19,614,143 105,746,056 Total OPEB liability (Note 10):

Due in more than one year 6,854,271 1,693,410 8,547,681 Total Liabilities 121,427,706 123,224,991 244,652,697

DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 9) 5,961,726 411,032 6,372,758 Related to OPEB (Note 10) 9,999,564 2,470,487 12,470,051 Related to leases (Note 15) 663,498 - 663,498 Total Deferred Inflows of Resources 16,624,788 2,881,519 19,506,307 NET POSITION (Note 8)
Net investment in capital assets 266,096,651 231,960,028 498,056,679 Restricted for:

Capital projects 31,869,600 - 31,869,600 Special projects and programs 99,931,305 - 99,931,305 Unrestricted 2,780,899 92,273,213 95,054,112 Total Net Position 400,678,455 $ 324,233,241 $ 724,911,696 $

See accompanying notes to basic financial statements.
22 CITY OF TURLOCK

STATEMENT OF ACTIVITIES
FOR THE YEAR ENDED JUNE 30, 2024

Operating Capital
Charges for Grants and Grants and
Functions/Programs Expenses Services Contributions Contributions Tot al Governmental Activities:

General government 10,328,106 $ 2,394,926 $ 6,140,746 $ 150,482 $ 8,686,154 $ Public safety 48,732,396 729,482 910,691 41,188 1,681,361 Public ways and facilities/transportation 13,787,158 2,819,446 - 10,536,061 13,355,507 Parks and recreation 6,477,338 2,126,581 1,152,480 - 3,279,061 Community development 7,003,954 5,962,978 889,805 206,364 7,059,147 Interest and fiscal charges 126,148 - - - - Total Governmental Activities 86,455,100 14,033,413 9,093,722 10,934,095 34,061,230 Business-Type Activities:

Water 10,774,371 25,743,272 432,888 1,166,722 27,342,882 Sewer 20,616,050 21,239,759 - 4,599,870 25,839,629 Transportation 5,899,821 174,956 4,447,305 - 4,622,261 SRWA Operations 5,074,153 3,037,888 - - 3,037,888 Total Business-Type Activities 42,364,395 50,195,875 4,880,193 5,766,592 60,842,660 Total 128,819,495 $ 64,229,288 $ 13,973,915 $ 16,700,687 $ 94,903,890 $ 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, 2024

Governmental Business-Type
Functions/Programs Activities Activities Total
Governmental Activities:

General government (1,641,952) $ - $ (1,641,952)$ Public safety (47,051,035) - (47,051,035) Public ways and facilities/transportation (431,651) - (431,651) Parks and recreation (3,198,277) - (3,198,277) Community development 55,193 - 55,193 Interest and fiscal charges (126,148) - (126,148) Total Governmental Activities (52,393,870) - (52,393,870) Business-Type Activities:

Water - 16,568,511 16,568,511 Sewer - 5,223,579 5,223,579 Transportation - (1,277,560) (1,277,560) SRWA Operations - (2,036,265) (2,036,265) Total Business-Type Activities - 18,478,265 18,478,265 Total (52,393,870) 18,478,265 (33,915,605)
General Revenues:

Taxes:

Property taxes 9,303,073 - 9,303,073 Sales taxes 37,664,648 - 37,664,648 Property tax - VLF in lieu 8,868,839 - 8,868,839 Other tax 14,384,875 - 14,384,875 Total taxes 70,221,435 - 70,221,435 Other revenue 367,448 - 367,448 Interest income (loss) 7,398,252 3,009,548 10,407,800 Contributions for capital assets 1,159,049 - 1,159,049 Contributions from private-purpose trust 92,551 - 92,551 Gain from sale of capital assets 10,937 8,556 19,493 Transfers (Note 4) 1,582,528 (1,582,528) - Total General Revenues and Transfers 80,832,200 1,435,576 82,267,776 Change in Net Position 28,438,330 19,913,841 48,352,171 Net Position - Beginning 372,240,125 304,319,400 676,559,525 Net Position - Ending 400,678,455 $ 324,233,241 $ 724,911,696 $ 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 2024. 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 also includes Parks, Ar ts and Recreation Commission, Special Public Safety, Cannabis, 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 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.

See accompanying notes to basic financial statements.
28 CITY OF TURLOCK

BALANCE SHEET

GOVERNMENTAL FUNDS
JUNE 30, 2024

Gas Tax/ Nonmajor Total
Former LMI Street Governmental Governmental
General Housing Improvement Funds Funds
ASSETS
Cash and investments (Note 3) 49,503,059$ 1,990,735 $ 24,191,578 $ 82,750,950 $ 158,436,322 $ Accounts receivable (Note 5C) 11,167,311 450 1,959,449 937,303 14,064,513 Interest receivable 948,407 17,796 193,235 620,955 1,780,393 Due from developers (Note 5A) 20,041 - - 267,243 287,284 Due from other funds (Note 4B) 506,933 - - - 506,933 Loans receivable (Note 5B) 7,487 18,102,995 - 17,764,938 35,875,420 Prepaids 1,768,627 - - 18,918 1,787,545 Investment in affordable
housing property (Note 1K) - 327,184 - - 327,184 Leases receivable (Note 15) 484,703 - - 214,577 699,280 Total Assets 64,406,568 $ 20,439,160 $ 26,344,262 $ 102,574,884 $ 213,764,874 $

LIABILITIES
Accounts payable 4,379,263 $ 13,600 $ 1,170,743 $ 2,150,699 $ 7,714,305 $ Payroll payable 1,666,119 - 20,885 51,337 1,738,341 Due to other funds (Note 4B) - - - 506,933 506,933 Unearned revenue 162,120 - - 6,159,122 6,321,242 Deposits payable 1,081,009 - - 6,250 1,087,259 Total Liabilities 7,288,511 13,600 1,191,628 8,874,341 17,368,080

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue (Notes 1F and 5B) 193,863 18,102,995 - 17,764,938 36,061,796 Related to leases (Note 15) 463,251 - - 200,247 663,498 Total Deferred Inflows of Resources 657,114 18,102,995 - 17,965,185 36,725,294 FUND BALANCES (Note 8)
Nonspendable 2,324,540 - - 267,243 2,591,783 Restricted - 2,322,565 25,152,634 47,051,053 74,526,252 Committed 18,106,809 - - 28,551,389 46,658,198 Assigned 724,625 - - - 724,625 Unassigned 35,304,969 - - (134,327) 35,170,642 Total Fund Balances 56,460,943 2,322,565 25,152,634 75,735,358 159,671,500 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 64,406,568$ 20,439,160 $ 26,344,262 $ 102,574,884 $ 213,764,874 $

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, 2024

Total fund balances reported on the Governmental Funds Balance Sheet 159,671,500 $ 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. 265,390,718

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 21,826,857
Accounts receivable 741,710
Interest receivable 101,556
Capital assets (net of accumulated depreciation) 3,910,807 Accounts payable (1,318,144)
Payroll payable (51,290)
Compensated absences (137,968)
Estimated claims liability (3,081,372)
Net pension liability and related deferred outflows and inflows of resources (2,211,409) Total OPEB liability and related deferred outflows and inflows of resources (664,101)

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. 36,061,796

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 (2,793,429)
Lease liability (411,445)
Interest payable (23,580)
Compensated absences (3,763,147)
Net pension liability and related deferred outflows and inflows of resources (57,619,835) Total OPEB liability and related deferred outflows and inflows of resources (14,756,906) NET POSITION OF GOVERNMENTAL ACTIVITIES 400,678,455 $

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, 2024

Gas Tax/ Nonmajor Total
Former LMI Street Governmental Governmental
General Housing Improvement Funds Funds

REVENUES
Taxes and assessments 34,598,491 $ - $ - $ 5,705,652$ 40,304,143 $ Measure A sales tax 15,233,905 - - - 15,233,905 Licenses and permits 5,614,646 - - 41,850 5,656,496 Fines, forfeitures, and penalties 158,052 - - - 158,052 Use of money and property 3,559,395 49,280 777,205 2,608,547 6,994,427 Intergovernmental 9,388,952 - 10,536,061 8,971,643 28,896,656 Charges for current services 9,898,306 - 49,885 3,481,209 13,429,400 Other revenue 254,506 87,888 186 544,851 887,431 Total Revenues 78,706,253 137,168 11,363,337 21,353,752 111,560,510

EXPENDITURES
Current:

General government 10,245,612 - - 2,382,878 12,628,490 Public safety 40,808,604 - - 1,528,012 42,336,616 Public ways and facilities/transportation 480,420 - 2,450,204 4,914,120 7,844,744 Parks and recreation 2,700,474 - - 1,838,349 4,538,823 Community development 5,307,292 187,407 - 1,335,220 6,829,919 Capital outlay 11,116,152 - 3,917,855 5,972,463 21,006,470 Debt service:

Principal 457,611 - - - 457,611 Interest and fiscal charges 129,630 - - - 129,630 Total Expenditures 71,245,795 187,407 6,368,059 17,971,042 95,772,303

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 7,460,458 (50,239) 4,995,278 3,382,710 15,788,207

OTHER FINANCING SOURCES (USES)
Issuance of debt 497,902 - - - 497,902 Contributions of capital assets - - - 1,159,049 1,159,049 Contributions from private-purpose trust 58,274 34,277 - - 92,551 Proceeds from sale of property 6,205 - - 4,732 10,937 Transfers in (Note 4A) 3,285,917 - - 5,689,228 8,975,145 Transfers (out) (Note 4A) (6,662,385) - (563,467) (2,681,025) (9,906,877) Total Other Financing Sources (Uses) (2,814,087) 34,277 (563,467) 4,171,984 828,707 NET CHANGE IN FUND BALANCES 4,646,371 (15,962) 4,431,811 7,554,694 16,616,914 BEGINNING FUND BALANCES 51,814,572 2,338,527 20,720,823 68,180,664 143,054,586 ENDING FUND BALANCES 56,460,943 $ 2,322,565 $ 25,152,634 $ 75,735,358 $ 159,671,500 $

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, 2024

NET CHANGE IN FUND BALANCES - TOTAL GOVERNMENTAL FUNDS 16,616,9 14$ 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. 24,627,493
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.) (7,862,836)

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.

Issuance of debt is deducted from fund balance. (497,902) Repayment of debt principal is added back to fund balance. 457,6 11

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 84,030
Interest payable 3,482
Compensated absences (364,420)
Net pension liability and related deferred outflows and inflows of resources (6,387,626) Total OPEB liability and related deferred outflows and inflows of resources 587,679

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 1,173,905 CHANGE IN NET POSITION OF GOVERNMENTAL ACTIVITIES 28,438,330 $ 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, 2024

Variance with
Original Final Actual Amounts Final Budget

REVENUES
Taxes and assessments 31,452,110 $ 34,305,500 $ 34,598,491 $ 292,991 $ Measure A sales tax 14,912,570 14,912,570 15,233,905 321,335 Licenses and permits 4,846,030 5,201,030 5,614,646 413,616 Fines, forfeitures, and penalties 85,700 85,700 158,052 72,352 Use of money and property 816,000 839,800 3,559,395 2,719,595 Intergovernmental 9,306,882 9,366,882 9,388,952 22,070 Charges for current services 4,227,779 9,415,779 9,898,306 482,527 Other revenue 107,735 123,385 254,506 131,121 Total Revenues 65,754,806 74,250,646 78,706,253 4,455,607

EXPENDITURES
Current:

General government 11,105,451 11,430,840 10,245,612 1,185,228 Public safety 41,647,426 42,354,468 40,808,604 1,545,864 Public ways and facilities/transportation 518,631 518,631 480,420 38,211 Parks and recreation 2,757,364 2,921,864 2,700,474 221,390 Community development 1,213,515 7,173,969 5,307,292 1,866,677 Capital outlay 13,840,600 13,995,783 11,116,152 2,879,631 Debt service:

Principal 371,156 371,156 457,611 (86,455) Interest and fiscal charges 118,570 118,570 129,630 (11,060) Total Expenditures 71,572,713 78,885,281 71,245,795 7,639,486

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (5,817,907) (4,634,635) 7,460,458 12,095,093

OTHER FINANCING SOURCES (USES)
Issuance of debt - - 497,902 497,902 Contributions from private-purpose trust 60,444 60,444 58,274 (2,170) Proceeds from sale of property - - 6,205 6,205 Transfers in 6,160,127 13,456,142 3,285,917 (10,170,225) Transfers (out) (7,691,812) (17,032,834) (6,662,385) 10,370,449 Total Other Financing Sources (Uses) (1,471,241) (3,516,248) (2,814,087) 702,161 NET CHANGE IN FUND BALANCE (7,289,148)$ (8,150,883) $ 4,646,371 12,797,254 $ BEGINNING FUND BALANCE 51,814,572
ENDING FUND BALANCE 56,460,943 $
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, 2024

Variance with
Original Final Actual Amounts Final Budget

REVENUES
Use of money and property - $ - $ 49,280$ 49,280 $ Other revenue 20,600 20,600 87,888 67,288 Total Revenues 20,600 20,600 137,168 116,568

EXPENDITURES
Current:

Community development 291,500 291,500 187,407 104,093 Total Expenditures 291,500 291,500 187,407 104,093

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (270,900) (270,900) (50,239) 220,661

OTHER FINANCING SOURCES (USES)
Contributions from private-purpose trust 39,500 39,500 34,277 (5,223) Transfers in - - - - Transfers (out) - - - - Total Other Financing Sources (Uses) 39,500 39,500 34,277 (5,223) NET CHANGE IN FUND BALANCE (231,400) $ (231,400) $ (15,962) 215,438 $ BEGINNING FUND BALANCE 2,338,527
ENDING FUND BALANCE 2,322,565 $
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, 2024

Variance with
Original Final Actual Amounts Final Budget

REVENUES
Use of money and property 199,000 $ 199,000 $ 777,205 $ 578,205 $ Intergovernmental 15,427,593 15,427,593 10,536,061 (4,891,532) Charges for current services 48,700 48,700 49,885 1,185 Other revenue 1,000 1,000 186 (814) Total Revenues 15,676,293 15,676,293 11,363,337 (4,312,956)

EXPENDITURES
Current:

Public ways and facilities/transportation 2,862,586 2,957,586 2,450,204 507,382 Capital outlay 8,575,848 8,904,527 3,917,855 4,986,672 Total Expenditures 11,438,434 11,862,113 6,368,059 5,494,054

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 4,237,859 3,814,180 4,995,278 1,181,098

OTHER FINANCING SOURCES (USES)
Transfers in 1,779,000 1,942,540 - (1,942,540) Transfers (out) (1,903,675) (2,067,215) (563,467) 1,503,748 Total Other Financing Sources (Uses) (124,675) (124,675) (563,467) (438,792) NET CHANGE IN FUND BALANCE 4,113,184 $ 3,689,505 $ 4,431,811 742,306 $ BEGINNING FUND BALANCE 20,720,823
ENDING FUND BALANCE 25,152,634 $
Budgeted Amounts

35 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 2024, 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.

NONMAJOR ENTERPRISE FUNDS

SRWA Operations

The Stanislaus Regional Water Aut hority (SRWA) operations fund accounts for the activities associated with operation and maintenance of the SRWA Surface Water Treatm ent Plant (WTP), which provides potable drinking water for the City of Turlock and the City of C e r e s . T h e W T P u s e s a c o n v e n t i o n a l treatment process using ozone as a primary disinfectant with so dium hypochlorite as the secondary disinfectant. The WTP treatment processes are designed and moni tored with stringent health standards to ensure compliance with the water quality standards establish ed by the California State Water Resources Control Board.

See accompanying notes to basic financial statements.
36 CITY OF TURLOCK

STATEMENT OF NET POSITION

PROPRIETARY FUNDS
JUNE 30, 2024

Governmental
Nonmajor Fund Activities -
SRWA Internal Service
Water Sewer Transportation Operations Total Funds
ASSETS
Current assets:

Cash and investments (Note 3) 32,935,707 $ 35,433,910 $ 3,196,632 $ 57,884 $ 71,624,133$ 21,826,857 $ Restricted cash and investments and
cash and investments with fiscal agent (Note 3) 3,035 3,356,598 - - 3,359,633 - Accounts receivable (Note 5C) 3,242,824 2,882,308 6,602,784 4 12,727,920 741,710 Interest receivable 290,270 341,482 22,672 1,028 655,452 101,556 Due from developers (Note 5A) - 157,663 - - 157,663 - Prepaids - - 33,728 - 33,728 - Total current assets 36,471,836 42,171,961 9,855,816 58,916 88,558,529 22,670,123 Noncurrent assets:

Investment in Joint Venture (Note 12D) 39,589,428 - - - 39,589,428 - Capital assets not being depreciated (Note 6) 54,940,766 9,341,139 4,073,098 - 68,355,003 14,364 Capital assets being depreciated (net) (Note 6) 40,551,961 193,004,333 13,833,198 257,999 247,647,491 3,896,443 Right-to-use lease assets (net) (Note 6) - - - 143,388 143,388 - Right-to-use subscription assets (net) (Note 6) - - 162,140 - 162,140 - Total noncurrent assets 135,082,155 202,345,472 18,068,436 401,387 355,897,450 3,910,807 Total Assets 171,553,991 244,517,433 27,924,252 460,303 444,455,979 26,580,930

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 9) 1,764,898 2,588,353 417,233 759,295 5,529,779 843,619 Related to OPEB (Note 10) 112,762 161,203 30,868 49,160 353,993 61,703 Total Deferred Outflows of Resources 1,877,660 2,749,556 448,101 808,455 5,883,772 905,322

LIABILITIES
Current liabilities:

Accounts payable 1,727,552 1,246,771 340,236 68,716 3,383,275 1,318,144 Payroll payable 79,218 121,330 27,486 37,909 265,943 51,290 Interest payable 249,706 311,310 - - 561,016 - Claims liability (Note 12) - - - - - 285,654 Compensated absences (Note 1I) 52,358 87,733 17,293 18,383 175,767 27,594 Bonds and loans payable (Note 7) 880,000 5,582,522 - - 6,462,522 - Unearned revenue - - 8,652,415 - 8,652,415 - Deposits payable 468,325 - - - 468,325 - Lease liability (Note 15) - - - 48,170 48,170 - IT subscription liability (Note 16) - - 33,554 - 33,554 - Total current liabilities 3,457,159 7,349,666 9,070,984 173,178 20,050,987 1,682,682 Long-term liabilities:

Claims liability (Note 12) - - - - - 2,795,718 Compensated absences (Note 1I) 209,432 350,932 69,172 73,534 703,070 110,374 Total OPEB liability (Note 10) 539,426 771,153 147,665 235,166 1,693,410 295,179 Net pension liability (Note 9) 6,260,104 9,180,885 1,479,930 2,693,224 19,614,143 2,992,322 Bonds and loans payable (Note 7) 18,262,389 62,730,422 - - 80,992,811 - Lease liability (Note 15) - - - 96,294 96,294 - IT subscription liability (Note 16) - - 74,276 - 74,276 - Total long-term liabilities 25,271,351 73,033,392 1,771,043 3,098,218 103,174,004 6,193,593 Total Liabilities 28,728,510 80,383,058 10,842,027 3,271,396 123,224,991 7,876,275

DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 9) 131,186 192,394 31,013 56,439 411,032 62,706 Related to OPEB (Note 10) 786,959 1,125,021 215,426 343,081 2,470,487 430,625 Total Deferred Inflows of Resources 918,145 1,317,415 246,439 399,520 2,881,519 493,331 NET POSITION (Note 8)
Net investment in capital assets 76,353,373 137,389,126 17,960,606 256,923 231,960,028 3,910,807 Unrestricted 67,431,623 28,177,390 (676,719) (2,659,081) 92,273,213 15,205,839 Total Net Position 143,784,996 $ 165,566,516 $ 17,283,887 $ (2,402,158) $ 324,233,241 $ 19,116,646 $ Business-Type Activities - Enterprise Funds

See accompanying notes to basic financial statements.
37 CITY OF TURLOCK

STATEMENT OF REVENUES, EXPENSES, AND

CHANGES IN FUND NET POSITION

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024

Governmental
Nonmajor Fund Activities -
SRWA Internal Service
Water Sewer Transportation Operations Total Funds

OPERATING REVENUES
Charges for services 25,623,224 $ 21,207,510 $ 163,781 $ 3,037,888 $ 50,032,403 $ 13,556,072 $ Other income 120,048 32,249 11,175 - 163,472 569,525 Total Operating Revenues 25,743,272 21,239,759 174,956 3,037,888 50,195,875 14,125,597

OPERATING EXPENSES
Salaries, benefits, and insurance 4,143,432 5,122,964 1,176,659 4,032,160 14,475,215 14,043,160 Contractual 1,720,799 2,639,679 2,764,996 523,925 7,649,399 723,480 Supplies and maintenance 786,690 2,296,181 386,441 390,901 3,860,213 168,578 Utilities 1,270,095 2,128,799 33,840 12,457 3,445,191 49,227 Fleet expense 143,151 328,018 327,048 24,220 822,437 23,087 Depreciation and amortization 1,366,766 5,990,345 1,062,038 55,074 8,474,223 927,132 Other expenses 555,978 394,305 147,341 22,361 1,119,985 88,441 Total Operating Expenses 9,986,911 18,900,291 5,898,363 5,061,098 39,846,663 16,023,105 Operating Income (Loss) 15,756,361 2,339,468 (5,723,407) (2,023,210) 10,349,212 (1,897,508)

NONOPERATING REVENUES (EXPENSES)
Operating grants 432,888 - 4,447,305 - 4,880,193 - Interest income 1,341,851 1,630,588 31,174 5,935 3,009,548 403,825 Interest (expense) (787,460) (1,715,759) (1,458) (13,055) (2,517,732) - Gain (loss) on disposal of capital assets 1,031 6,354 391 780 8,556 153,328 Total Nonoperating Revenues (Expenses) 988,310 (78,817) 4,477,412 (6,340) 5,380,565 557,153 Income (Loss) Before
Contributions and Transfers 16,744,671 2,260,651 (1,245,995) (2,029,550) 15,729,777 (1,340,355) Capital contributions - connection/impact fees 1,166,722 4,599,870 - - 5,766,592 - Transfers in (Note 4A) 227,665 138,663 411,925 - 778,253 2,546,588 Transfers (out) (Note 4A) (992,158) (1,290,618) (78,005) - (2,360,781) (32,328) Total Contributions and Transfers 402,229 3,447,915 333,920 - 4,184,064 2,514,260 Change in Net Position 17,146,900 5,708,566 (912,075) (2,029,550) 19,913,841 1,173,905 NET POSITION - BEGINNING 126,638,096 159,857,950 18,195,962 (372,608) 304,319,400 17,942,741 NET POSITION - ENDING 143,784,996 $ 165,566,516 $ 17,283,887 $ (2,402,158) $ 324,233,241 $ 19,116,646 $ Business-Type Activities - Enterprise Funds

See accompanying notes to basic financial statements.
38 CITY OF TURLOCK

STATEMENT OF CASH FLOWS

PROPRIETARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024

Governmental
Nonmajor Fund Activities -
SRWA Internal Service
Water Sewer Transportation Operations Total Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 25,860,472 $ 21,314,764 $ (645,527) $ 3,037,884 $ 49,567,593 $ 13,347,254 $ Payments to suppliers (4,711,274) (7,276,222) (3,624,475) (950,121) (16,562,092) 60,132 Payments to employees and benefits (4,015,511) (6,095,218) (1,179,531) (1,795,627) (13,085,887) (14,044,831) Other 120,048 32,249 11,175 - 163,472 569,525 Net Cash Flows from Operating Activities 17,253,735 7,975,573 (5,438,358) 292,136 20,083,086 (67,920)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Intergovernmental receipts - operations 432,888 - 7,506,486 - 7,939,374 - Interfund receipts (payments) - - - - - 426,650 Transfers in 227,665 138,663 411,925 - 778,253 2,546,588 Transfers (out) (992,158) (1,290,618) (78,005) - (2,360,781) (32,328) Net Cash Flows from Noncapital Financing Activities (331,605) (1,151,955) 7,840,406 - 6,356,846 2,940,910

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets, net (8,511,376) (2,987,659) (74,262) (256,808) (11,830,105) (1,384,922) Proceeds from sale of capital assets 1,031 6,354 391 780 8,556 153,328 Charges for joint project contributions (111,460) - - - (111,460) - Long-term debt payment - principal (991,901) (5,434,404) - - (6,426,305) - Long-term debt payment - interest (801,188) (1,740,192) - - (2,541,380) - Right-to-use leased assets - principal - - - (44,596) (44,596) - Right-to-use leased assets - interest - - - (13,055) (13,055) - IT subscription assets - principal - - (58,943) - (58,943) - IT subscription assets - interest - - (1,458) - (1,458) - Connection/impact fees 1,166,722 4,599,870 - - 5,766,592 - Net Cash Flows from Capital and Related
Financing Activities (9,248,172) (5,556,031) (134,272) (313,679) (15,252,154) (1,231,594)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest 1,142,329 1,420,025 13,124 4,907 2,580,385 346,165 Net Cash Flows from Investing Activities 1,142,329 1,420,025 13,124 4,907 2,580,385 346,165 Total Net Cash Flows 8,816,287 2,687,612 2,280,900 (16,636) 13,768,163 1,987,561 Cash and Investments at Beginning of Period 24,122,455 36,102,896 915,732 74,520 61,215,603 19,839,296 Cash and Investments at End of Period 32,938,742 $ 38,790,508 $ 3,196,632 $ 57,884 $ 74,983,766$ 21,826,857 $ Displayed in the Statement of Net Position as:

Cash and investments 32,935,707 $ 35,433,910 $ 3,196,632 $ 57,884 $ 71,624,133$ 21,826,857 $ Restricted cash and investments and
cash and investments with fiscal agent 3,035 3,356,598 - - 3,359,633 - Total 32,938,742 $ 38,790,508 $ 3,196,632 $ 57,884 $ 74,983,766$ 21,826,857 $ Reconciliation of Operating Income (Loss) to Net Cash Flows from Operating Activities:

Operating income (loss) 15,756,361 $ 2,339,468 $ (5,723,407) $ (2,023,210) $ 10,349,212 $ (1,897,508) $ Adjustments to reconcile operating income (loss) to net cash flows from operating activities:

Depreciation and amortization 1,523,667 5,990,345 1,062,038 55,074 8,631,124 927,132 Change in assets and liabilities:

Accounts receivable 237,248 107,254 (809,308) (4) (464,810) (208,818) Prepaids - - (33,728) - (33,728) - Accounts payable (360,240) 510,760 68,919 23,743 243,182 547,625 Payroll payable 9,091 16,241 10,456 8,362 44,150 16,451 Compensated absences 54,149 74,844 4,123 32,565 165,681 21,941 Claims liability - - - - - 565,320 Deferred outflows/inflows and total OPEB liability (86,977) (374,980) 3,943 388,173 (69,841) (19,492) Deferred outflows/inflows and net pension liability 151,658 (688,359) (21,394) 1,807,433 1,249,338 (20,571) Deposits payable (31,222)
- - - (31,222) - Net Cash Flows from Operating Activities 17,253,735 $ 7,975,573 $ (5,438,358) $ 292,136 $ 20,083,086$ (67,920) $ NONCASH INVESTING, CAPITAL, AND FINANCIAL ACTIVITIES:

Amortization of bond premium 156,901 $ - $ - $ - $ 156,901$ - $ Acquisition of right-to-use leased assets - - - 189,060 189,060 - Acquisition of right-to-use subscription assets - - 166,773 - 166,773 - Retirement of capital assets 34,491 90,440 - - 124,931 625,809 Total noncash investing, capital, and financing activities 191,3 92$ 90,440 $ 166,773 $ 189,060 $ 637,665 $ 625,809 $ Business-Type Activities - Enterprise Funds

39 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 seven members appointed by various taxing entitie s within Stanislaus County as delineated in the dissolution law, supervises the SA’s activities in the w inding 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.
40 CITY OF TURLOCK

STATEMENT OF FIDUCIARY NET POSITION

FIDUCIARY FUNDS
JUNE 30, 2024

Successor
Agency Other External
Private-Purpose Custodial Investment
Trust Fund Funds Pool Fund
ASSETS
Cash and investments (Note 3) 1,954,062 $ 403,370 $ 37,070,982 $ Cash and investments with fiscal agent (Note 3) 679,704 112,253 - Accounts receivable - 25,689 - Interest receivable - 2,909 - Total Assets 2,633,766 544,221 37,070,982

LIABILITIES
Accounts payable 3,450 16,407 - Interest payable 377,798 - - Long-term debt (Note 14B):

Due within one year 1,335,000 - - Due in more than one year 29,374,669 - - Total Liabilities 31,090,917 16,407 -

NET POSITION (DEFICIT)
Restricted for:

Other organizations - 527,814 - Pool participants - - 37,070,982 Net deficit held in trust for other governments (28,457,151) - - Total Net Position (Deficit) (28,457,151) $ 527,814 $ 37,070,982 $ Custodial Funds

See accompanying notes to basic financial statements.
41 CITY OF TURLOCK

STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

FIDUCIARY FUNDS
FOR THE YEAR ENDED JUNE 30, 2024

Successor
Agency Other External
Private-Purpose Custodial Investment
Trust Fund Funds Pool Fund

ADDITIONS
Property taxes 2,578,872 $ - $ - $ Assessments - 482,276 - Net investment income 17,994 12,088 867,903 Other receipts - - 90,044,300 Total Additions 2,596,866 494,364 90,912,203

DEDUCTIONS
Community development 8,819 - - Contributions to the City of Turlock 92,551 - - Administration expense - 26,966 - Recipient payments - 203,691 81,181,229 Interest and fiscal charges 1,022,291 260,876 - Total Deductions 1,123,661 491,533 81,181,229 NET CHANGE IN NET POSITION 1,473,205 2,831 9,730,974

NET POSITION (DEFICIT)
Beginning of year (29,930,356) 524,983 27,340,008 End of year (28,457,151) $ 527,814 $ 37,070,982 $ Custodial Funds

42 CITY OF TURLOCK

NOTES TO BASIC FINANCIAL STATEMENTS
JUNE 30, 2024

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.

43 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.

44 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, and inf ormation technology activities, all of whi ch provide services to other d epartments 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 (SRWA), none of which are held in trust. The financial activities of th ese 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.

45 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.

46 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, 2024, were as follows:

Governmental Business-Type Total
Beginning Balance 3,514,754 $ 713,155 $ 4,227,909 $ Net Change 386,361 165,681 552,042 Ending Balance 3,901,115 $ 878,836 $ 4,779,951 $ Current Portion 780,223 $ 175,767 $ 955,990 $

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.

47 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 $327,184 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, 2024, was $327,184.

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.

48 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.

49 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 251,887,312 $ Restricted cash and investments and cash and investments with fiscal agent 3,359,633
Total City Cash and Investments 255,246,945
Cash and investments in Fiduciary Funds (Separate Statement):

Successor Agency to the Redevelopment Agency
Private-Purpose Trust Fund:

Cash available for operations 1,954,062
Cash and investments with fiscal agent 679,704
Custodial Funds:

Cash and investments available for operations 403,370
Cash and investments with fiscal agent 112,253
Custodial Fund - External investment pool 37,070,982
Total Cash and Investments 295,467,316 $

Cash and investments as of June 30, 2024, consist of the following:

Cash on hand 7,880 $
Deposits with financial institutions 16,164,450
Investments 279,294,986
Total Cash and Investments 295,467,316 $

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.

50 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 Agenc
y
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

51 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 21,602,180 $ 17,197,578 $ 54,209,219 $ 93,008,977 $ U.S. Government Agency Securities 6,872,834 15,632,409 34,038,647 56,543,890 California Asset Management Program 67,445,670 - - 67,445,670 Certificates of Deposit 14,258,907 1,187,974 250,297 15,697,178 Money Market Mutual Funds 1,544,026 - - 1,544,026 State of California Local Agency
Investment Fund 26,535,778 - - 26,535,778 Held by Trustee:

Money Market Mutual Funds 794,992 - - 794,992 Corporate Notes/Bonds - - 3,824,475 3,824,475 Total Investments 139,054,387 $ 34,017,961 $ 92,322,638 $ 265,394,986 $

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, 2024, these investments matured in an average of 217 days.

52 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, 2024, 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 - $ 56,543,890$ 56,543,890 $ Held by Trustee:

Money Market Mutual Funds 794,992 - 794,992 Corporate Notes/Bonds 1,929,534 1,894,941 3,824,475 Total Rated Investments 2,724,526 $ 58,438,831 $ 61,163,357 Not Rated:

California Asset Management Program 26,535,778
Certificates of Deposit 15,697,178
Money Market Mutual Funds 67,445,670
State of California Local Agency
Investment Fund 15,444,026
Exempt from Credit Rating Disclosure:

U.S. Treasury Notes 93,008,977
Total Investments 279,294,986 $

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.

53 NOTE 3 – CASH AND INVESTMENTS (Continued)

G. Fair Value Hierarchy (Continued)

The following is a summary of the fair value hierarchy of the f air value of investments of the City as of June 30, 2024:

Level 1 Level 2 Total
Investments by Fair Value Level:

Held by City:

U.S. Treasury Notes - $ 93,008,977$ 93,008,977 $ U.S. Government Agency Securities - 56,543,890 56,543,890 Certificates of Deposit - 2,416,471 2,416,471 Subtotal - $ 151,969,338$ 151,969,338 Investments Measured at Amortized Cost:

Held by Trustee:

Money Market Mutual Funds 794,992
Corporate Notes/Bonds 3,824,475
Investment Exempt from Fair Value Hierarchy:

California Asset Management Program 67,445,670
Certificates of Deposit 13,280,707
Money Market Mutual Funds 15,444,026
State of California Local Agency
Investment Fund 26,535,778
Total Investments 279,294,986 $

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 City Council approval, resources may be transferred from o ne City fund to another. The City uses interfund transfers for two main purposes. First, to appor tion costs initially accounted for in one fund to other funds that benefit f rom the goods and/or services acquired. Secondly, to account for shared funding of capital improvement projects. The City accounts for capital improvement projects in one fund and the funds that are p roviding funding assistance tr ansfer monies representing their contribution to the project fund.

54 NOTE 4 – INTERFUND TRANSACTIONS (Continued)

A. Transfers Between Funds (Continued)

Transfers between funds during the fiscal year ended June 30, 2024, were as follows:

Amount
Fund Making Transfer Fund Receiving Transfer Transferred General Fund Nonmajor Governmental Funds 4,657,933 $ (A), (B), (C) Internal Service Funds 2,004,452 (A)
Gas Tax/Street Improvement Fund Nonmajor Governmental Funds 22,2 24 (A), (B) Transportation Enterprise Fund 411,925 (D)
Internal Service Funds 129,318 (A)
Nonmajor Governmental Funds General Fund 1,160,178 (B) Nonmajor Governmental Funds 987,436 (A), (B)
Water Enterprise Fund 227,665 (B)
Sewer Enterprise Fund 138,663 (B)
Internal Service Funds 167,083 (A)
Water Enterprise Fund General Fund 854,532 (B), (E) Nonmajor Governmental Funds 2,626 (B)
Internal Service Funds 135,000 (A)
Sewer Enterprise Fund General Fund 1,193,202 (B), (E) Nonmajor Governmental Funds 16,681 (A), (B) Internal Service Funds 80,735 (A)
Transportation Enterprise Fund General Fund 78,005 (E) Internal Service Funds Nonmajor Governmental Funds 2,328 (B) Internal Service Funds 30,000 (B)
12,299,986$
(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.

55 NOTE 4 – INTERFUND TRANSACTIONS (Continued)

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 General Fund from the funds listed below at June 30, 2024, were as follows:

Amount Due to
General Fund
Nonmajor Special Revenue Fund:

CDBG 95,342 $
Grant Funds 308,788
Home ARP 102,803
Total 506,933 $

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, 2024, 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 35,875,420 - 35,875,420 Total 36,162,704 $ 157,663 $ 36,320,367 $

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.

56 NOTE 5 – DUE FROM DEVELOPERS, LOA NS RECEIVABLE, AND ACCOUNTS RE CEIVABLE (Continued)

B. Loans Receivable

Loans receivable at June 30, 2024, consist of the following:

Type of Loan/Borrower Amount
Central Valley Coalition for Affordable Housing 11,022,401 $ First Time Homebuyer Loans 7,201,173
EAH, Inc. (Avena Bella) 14,031,373
Owner-Occupied Rehabilitation Loans 2,201,966
Rehabilitation Forgivable Loans for Energy Improvements 67,220 Rental Rehabilitation Loans 5,500
Turlock Gospel Mission Loans 255,000
We Care Program Loan 254,000
Haven Women's Center Loan 173,250
Housing Authority of the County of Stanislaus Loan 368,050 Greater Modesto Interfaith Hospitality Network Loan 288,000 Subtotal 35,867,933
Employee Computer Loans 7,487
Total Long-Term Notes Receivable 35,875,420 $

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, 2024, was $6,541,952.

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, 2024, on these three properties was $1,911,709.

57 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, 2024, on these three properties was $2,569,739.

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, 2024, the City had 137 loans outstanding, totaling to $7,201,172.

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.

58 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 prope rty 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 $14,031,373, as of June 30, 2024.

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, 2024, the City had 28 loans outstanding, totaling to $2,201,966.

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, 2024, the City had six loans outstanding with principal and accrued interest of $67,220.

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, 2024, the City had one loan outstanding totaling to $5,500.

59 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, 2024, the amount outstanding was $24,000.

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, 2024, the amount outstanding was $231,000.

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, 2024, the amounts outstanding on the CDBG and HOME notes were $144,000 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.

60 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, 2024, the amounts outstanding on the CDBG and HOME loans were $68,250 and $105,000, respectively.

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, 2024, the amount outstanding on the HOME note was $368,050.

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, 2024, 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, 2024, sev en employees had loans due to the City totaling $7,487.

61 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, 2024:

Due from Other Accounts
Governments Receivable Total
General Fund 7,648,443 $ 3,518,868 $ 11,167,311 $ Former LMI Housing Special Revenue Fund - 450 450 Gas Tax/Street Improvement Special Revenue Fund 1,959,423 26 1,959,449 Nonmajor Governmental Funds 709,017 228,286 937,303 Water Enterprise Fund 33 3,242,791 3,242,824 Sewer Enterprise Fund 385,541 2,496,767 2,882,308 Transportation Enterprise Fund 6,600,742 2,042 6,602,784 Nonmajor Enterprise Funds 4 - 4 Internal Service Fund - 741,710 741,710 Total 17,303,203 10,230,940 27,534,143
Less Allowance for Collectability (193,863) - (193,863) Total, Net 17,109,340 $ 10,230,940 $ 27,340,280 $

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/amortization 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.

62 NOTE 6 – CAPITAL ASSETS (Continued)

A. Capital Assets Additions and Retirements

At June 30, 2024, the City’s capital assets for governmental activities consisted of the following:

Balance Retirements/ Balance
June 30, 2023 Additions Adjustments Transfers June 30, 2024 Capital assets not being depreciated/amortized:

Land 17,574,358 $ - $ - $ - $ 17,574,358$ Construction in progress 31,681,343 22,345,093 (10,951) (1,526,859) 52,488,626 Total capital assets not being
depreciated/amortized 49,255,701 22,345,093 (10,951) (1,526,859) 70,062,984 Capital assets being depreciated/amortized:

Land improvements 38,163,767 15,970 - - 38,179,737 Buildings 55,565,323 - - 413,196 55,978,519 Furniture and equipment 17,454,210 253,824 (289,242) 800,181 18,218,973 Vehicles 13,666,892 1,674,192 (883,254) - 14,457,830 Infrastructure 224,577,669 1,159,049 - 313,482 226,050,200 Right-to-use leased assets - 590,508 - - 590,508 Total capital assets being
depreciated/amortized 349,427,861 3,693,543 (1,172,496) 1,526,859 353,475,767 Less accumulated depreciation/amortization for:

Land improvements (19,672,111) (911,956) - - (20,584,067) Buildings (18,824,957) (1,468,765) - - (20,293,722) Furniture and equipment (12,665,494) (510,428) 289,242 - (12,886,680) Vehicles (10,323,885) (928,993) 867,982 - (10,384,896) Infrastructure (85,118,035) (4,871,408) - - (89,989,443) Right-to-use leased assets - (98,418) - - (98,418) Total accumulated depreciation/amortization (146,604,482) (8,789,968) 1,157,224 - (154,237,226) Net capital assets being depreciated/amortized 202,823,379 (5,096,425) (15,272) 1,526,859 199,238,541 Governmental activities capital assets, net 252,079,080$ 17,248,668 $ (26,223) $ - $ 269,301,525$

Governmental activities depreciation/amortization expense for capital assets for the year ended June 30, 2024, was as follows:

Governmental Activities
General government 579,026 $
Public safety 1,360,674
Public ways and facilities/transportation 5,346,623
Parks and recreation 440,318
Community development 136,195
Internal service funds 927,132
Total Governmental Activities 8,789,968 $

63 NOTE 6 – CAPITAL ASSETS (Continued)

A. Capital Assets Additions and Retirements (Continued)

At June 30, 2024, the City’s capital assets for business-type activities consisted of the following:

Balance Retirements/ Balance
June 30, 2023 Additions Adjustments Transfers June 30, 2024 Capital assets not being depreciated/amortized:

Land 5,144,541 $ - $ - $ - $ 5,144,541$ Construction in progress 62,451,226 9,069,959 - (8,310,723) 63,210,462 Total capital assets not being
depreciated/amortized 67,595,767 9,069,959 - (8,310,723) 68,355,003 Capital assets being depreciated/amortized:

Land improvements 10,283,313 - - - 10,283,313 Buildings and improvements 13,020,830 - - - 13,020,830 Furniture and equipment 47,031,392 1,032,158 (72,620) 13,399 48,004,329 Vehicles 9,709,993 809,665 (52,311) - 10,467,347 Infrastructure 369,155,603 918,323 - 8,297,324 378,371,250 Right-to-use leased assets - 189,060 - - 189,060 Right-to-use subscription assets - 166,773 - - 166,773 Total capital assets being
depreciated/amortized 449,201,131 3,115,979 (124,931) 8,310,723 460,502,902 Less accumulated depreciation/amortization for:

Land improvements (3,813,863) (278,479) - - (4,092,342) Buildings and improvements (4,666,466) (392,200) - - (5,058,666) Furniture and equipment (22,001,991) (855,851) 72,620 - (22,785,222) Vehicles (3,933,252) (663,473) 52,311 - (4,544,414) Infrastructure (169,628,118) (6,390,816) - - (176,018,934) Right-to-use leased assets - (45,672) - - (45,672) Right-to-use subscription assets - (4,633) - - (4,633) Total accumulated depreciation/amortization (204,043,690) (8,631,124) 124,931 - (212,549,883) Net capital assets being depreciated/amortized 245,157,441 (5,515,145) - 8,310,723 247,953,019 Business-type activities capital assets, net 312,753,208$ 3,554,814 $ - $ - $ 316,308,022$

Business-type activities depreciation/amortization expense for capital assets for the year ended June 30, 2024, was as follows:

Business-Type Activities
Water 1,523,667 $
Sewer 5,990,346
Stanislaus Regional Water Authority (SRWA) Operations 55,074 Transportation 1,062,037
Total Business-Type Activities 8,631,124 $

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.

64 NOTE 7 – LONG-TERM DEBT (Continued)

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.

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, 2023 Additions Retirements June 30, 2024 One Year One Year Governmental Activities:

Direct Borrowing:

Lease Financings:

Motorola Equipment Lease 2,727,690$ 1,501,039 $ - $ 276,468$ 1,224,571 $ 287,859 $ 936,712 $ PNC Lease - Fire Trucks 1,755,110 1,663,545 - 94,687 1,568,858 97,916 1,470,942 Total Governmental Activities Debt 4,482,800$ 3,164,584 $ - $ 371,155$ 2,793,429 $ 385,775 $ 2,407,654 $

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.

65 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
2025 385,775 $ 103,950 $
2026 400,974 88,752
2027 416,773 72,950
2028 433,203 56,523
2029 111,970 39,444
2030-2034 619,796 137,274
2035-2037 424,938 29,305
Total 2,793,429 $ 528,198 $
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, 2023 Additions Retirements June 30, 2024 One Year One Year Business-Type Activities Debt:

General Obligation Revenue Bonds:
2017 Water Revenue Refunding 22,405,000$ 17,820,000 $ - $ 835,000$ 16,985,000$ 880,000 $ 16,105,000$ Add: Unamortized bond premium - 2,314,290 - 156,901 2,157,389 - 2,157,389 Loans Payable - Direct Borrowing:

State Revolving Fund Loan -
Harding Drain By-Pass 15,090,416 9,072,130 - 737,962 8,334,168 754,198 7,579,970 State Revolving Fund Loan -
TRWQCF Upgrade 24,752,169 16,112,639 - 1,187,902 14,924,737 1,214,036 13,710,701 State Revolving Fund Loan -
NVRRWP 28,907,112 18,616,579 - 541,540 18,075,039 551,288 17,523,751 2022 Sewer Loan (Webster Bank) 32,924,000 29,946,000 - 2,967,000 26,979,000 3,063,000 23,916,000 Total Business-Type Activities Debt 124,078,697$ 93,881,638 $ - $ 6,426,305$ 87,455,333 $ 6,462,522 $ 80,992,811 $

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.

66 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 2023-2024 net system revenues of $17,123,127, annual principal and interest payments (totaling $1,636,188 in fiscal year 2023-2024) were 9.6% 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 were repaid in their entire ty 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 2023-2024 net system revenues of $8,329,813, annual principal and interest payments (totaling $3,818,029 in fiscal year 2023-2024) were 45.8% 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 By-Pass 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.

67 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 Recycl ed Water Program (NVRRWP) proje ct. In December 2019, the loan and grant agreement was amended to adjust the loan amount to $3 3,907,112. $2.5 million of the project funding was forgiven during the fiscal year ended June 30, 2020; $2.5 million was given as a grant during fiscal year 2020; and the balance ($28,907,112) wa s 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 and repayment of principal and interest will begin one year after t he completion of construction 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 $18,075,039 as of June 30, 2024. 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.

68 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 2025 880,000 $ 759,438 $ 5,582,522 $ 1,597,927 $ 6,462,522 $ 2,357,365 $ 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 1,995,440 2028 1,015,000 620,938 5,472,612 1,188,385 6,487,612 1,809,323 2029 1,070,000 570,188 5,613,303 1,047,017 6,683,303 1,617,205 2030-2034 6,190,000 1,996,563 27,525,984 3,143,258 33,715,984 5,139,821 2035-2039 5,940,000 605,600 4,924,721 1,000,850 10,864,721 1,606,450 2040-2044 - - 3,734,209 648,982 3,734,209 648,982 2045-2049 - - 4,082,607 300,585 4,082,607 300,585 2050 - - 861,139 15,500 861,139 15,500 Total 16,985,000 5,937,603 $ 68,312,944 11,728,337 $ 85,297,944 17,665,940 $ Add: Unamortized
Bond Premium 2,157,389 - 2,157,389 Net Long-Term Debt 19,142,389$ 68,312,944 $ 87,455,333 $ Revenue Bonds Direct Borrowing - Loans 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 $255,000 at June 30, 2024.

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.”

69 NOTE 8 – NET POSITION AND FUND BALANCES (Continued)

B. Fund Balances

Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash, receivables, and deferred ou tflows of resources, less its liabilities and deferred inflows of resources. Portions of a fund’s balance may be restricted, committed, or assigned for future expenditure.

The City’s fund balances are classified based on spending const raints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigne d. Each category in the following hierarchy is ranked according to the degree of spending constraint:

Nonspendable represents balances set aside to indicate items do not represen t available, spendable resources even though they are a component of assets. Assets not expected to be converted to cash, such as prepaids, notes receivable, and property held for resal e, are included. However, if proceeds realized from the sale or collection of nonspendable assets are restricted, committed, or assigned, then nonspendable amounts are required to be presented as a component of the applicable category.

Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation that requires the resource s to be used only for a specific purpose.

Encumbrances and nonspendable amounts subject to restrictions a re included along with spendable resources.

Committed fund balances have constraints imposed by resolution of the Cit y Council that may be altered only by formal action of the City Council. Encumbrances and nonspendable amounts subject to council commitments are included along with spendable resources.

Assigned fund balances are amounts constrained by the City’s intent to b e used for a specific purpose, but are neither restricted nor committed. Intent is ex pressed by the City Council or its designee and may be changed at the discretion of the City Counc il or its designee, the City Manager.

This category includes encumbrances; nonspendables, when it is the City’s intent to use proceeds or collections for a specific purpose; and residual fund balances, if any, of Special Revenue and Capital Projects Funds that have not been restricted or committed.

Unassigned fund balance represents residual amounts that have not been res tricted, committed, or assigned. This includes the residual General Fund balance and r esidual fund deficits, if any, of other governmental funds.

70 NOTE 8 – NET POSITION AND FUND BALANCES (Continued)

B. Fund Balances (Continued)

Gas Tax/
Street Other
General LMI Housing Improvement Governmental
Fund Balance Classifications Fund Fund Fund Funds Total Nonspendable:

Items not in spendable form:

Prepaids 1,768,627 $ - $ - $ - $ 1,768,627$ Loans receivable 7,487 - - - 7,487 Interfund loans 506,933 - - - 506,933 Due from developers 20,041 - - 267,243 287,284 Leases receivable 21,452 - - - 21,452 Total Nonspendable Fund Balances 2,324,540 - - 267,243 2,591,783 Restricted for:

Low and moderate income housing - 2,322,566 - 5,526,518 7,849,084 Capital expenditures - - 25,152,634 16,948,455 42,101,089 Assessment districts - - - 22,156,854 22,156,854 Resource conservation - - - 1,363,012 1,363,012 Public safety - - - 1,056,213 1,056,213 Total Restricted Fund Balances - 2,322,566 25,152,634 47,051,052 74,526,252 Committed to:

Roads projects 12,563,336 - - - 12,563,336 Public safety 2,090,755 - - 166,189 2,256,944 Tourism 1,252,718 - - - 1,252,718 Capital expenditures 2,200,000 - - 28,385,200 30,585,200 Total Committed Fund Balances 18,106,809 - - 28,551,389 46,658,198 Assigned to:

Compensated absences 724,625 - - - 724,625 Total Assigned Fund Balances 724,625 - - - 724,625 Unassigned:

General Fund 35,304,969 - - - 35,304,969 Other governmental fund deficits - - - (134,327) (134,327) Total Unassigned Fund Balances 35,304,969 - - (134,327) 35,170,642 Total Fund Balances 56,460,943 $ 2,322,566 $ 25,152,634 $ 75,735,357 $ 159,671,500 $ Special Revenue Funds

C. Emergency/Contingency Reserve

The City established a General Fund Emergency/Contingency Reser ve with Resolution 2011-123.

The required balance of the Emergency/Contingency Reserve is $6 ,500,000, which is reported within the unassigned fund balance of the General Fund.

D. Fund Balance/Net Position Deficits

The following funds had deficit fund balances or net position as of June 30, 2024:

Amount
Nonmajor Governmental Funds:

Home ARP 111,146 $
ARPA 23,181
Nonmajor Enterprise Fund:

SRWA Operations 2,402,158
Internal Service Fund:

Information Technology 916,073

71 NOTE 8 – NET POSITION AND FUND BALANCES (Continued)

D. Fund Balance/Net Position Deficits (Continued)

The deficit in the Home ARP Special Revenue Fund will be eliminated by future revenues.

The deficit in the ARPA Special Revenue Fund will be eliminated when the unearned revenue is recognized upon the completion of the capital projects funded by the ARPA grant.

The deficit in SRWA Operations E nterprise Fund were primarily d ue to the recognition of the net pension liability, total OPEB liability and related deferred ou tflows/inflows of res ources. The City will fund the liabilities over time through annual contributions to cure the deficits.

The deficit in the Information Technology Internal Service Fund was primarily due to the recognition of the net pension liability, total OPEB liability, and related de ferred outflows/inflows of resources. The City will fund the liability over time through annual contributions to cure the deficit.

NOTE 9 – PENSION PLANS

A. Plan Descriptions and Su mmary of Balances by Plan

The City has two defined benefit pension plans, one Miscellaneo us Plan and one Safety Plan (Fire and Police) (the Plans). The Miscellaneous Plan is an Agent Mul tiple-Employer Plan and the Safety Plan is a Cost-Sharing Multiple-Employer Plan. Benefit provisio ns under the Plans are established by State statute and City Ordinance . All qualified permanent and p robationary employees are eligible to participate in the Plan for which they are an eligible member b ased on their employment position with the City.

Both Plans are administered by the California Public Employees’ Retirement System (CalPERS) which acts as a common investment and administrative agent for its participating member employers.

CalPERS issues publicly available reports that include a full d escription of the pension plans regarding benefit provisions, a ssumptions, and membership infor mation that can be found on the CalPERS website.

For purposes of measuring the net pension liability and deferre d outflows/inflows of resources related to pensions, and pension expense, information about the fiducia ry net position of the Miscellaneous and Safety Plans and additions to/deductions from the Plans’ fi duciary net position have been determined on the same basis as they are reported by the CalPER S Financial Office. For this purpose, benefit payments (including refunds of employee contri butions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

Below is a summary of the deferred outflows of resources, net p ension liability, and deferred inflows of resources by Plan:

Net Pension
Liability/
Deferred Proportionate Deferred
Outflows of Share of Net Inflows of
Resources Pension Liability Resources
Miscellaneous 15,127,056 $ 53,655,757 $ 1,124,405 $ Safety (Fire and Police) 22,665,118 52,090,299 5,248,353 Total 37,792,174 $ 105,746,056 $ 6,372,758 $

Each Plan is discussed in detail below.

72 NOTE 9 – PENSION PLANS (Continued)

B. Miscellaneous Plan

Benefits Provided – CalPERS provides service ret irement and disab ility benefits, annual cost of living adjustments, and death benefits to Plan members, who mus t be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligib le to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disabil ity benefits after 10 years of service.

The death benefit is one of the following: the Basic Death Bene fit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjust ments for each plan are applied as specified by the Public Employees’ Retirement Law. The Public E mployees Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, i s applicable to employees new to CalPERS and hired after December 31, 2012.

The Plan’s provisions and benefits in effect at June 30, 2024, are summarized as follows:

Tier 1 PEPR A
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 2.7%@55 2.0%@62
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments Monthly for life Monthly for life
Retirement Age 50-67 52-67
Monthly Benefits, as a Percentage
of Eligible Compensation 2.0% to 2.7% 1.0% to 2.5%
Required Employee Contribution Rates 7.690% 7.250%
Required Employer Contribution Rates 10.670% 10.670%
Required UAL Contribution
Miscellaneous
$4,498,768

Beginning in fiscal year 2016, CalPERS collects employer contri butions for the Plan as a percentage of payroll for the normal cost portion as noted in the rates ab ove and as a dollar amount for contributions toward the unfunded accrued liability (UAL). The dollar amounts are billed on a monthly basis or the City can elect a lump sum payment option. The City’s required contribution for the UAL in the Miscellaneous Plan was $4,498,768 for the year-ended June 3 0, 2024, which was made under the lump sum payment option.

Employees Covered – As of the June 30, 2022 actuarial valuation date and the June 30, 2023 measurement date, the following employees were covered by the benefit terms for the Plan:

June 30, 2023 June 30, 2022
Inactive employees or beneficiaries currently receiving benefits 291 282 Inactive employees entitled to but not yet receiving benefits 3 44 341 Active employees 250 207
Total 885 830
Miscellaneous

73 NOTE 9 – PENSION PLANS (Continued)

B. Miscellaneous Plan (Continued)

Contributions – Section 20814(c) of the California Public Employees’ Retireme nt Law requires that the employer contribution rates for all public employers be det ermined on an annual basis by the actuary and shall be effective on the July 1 following notice o f a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS.

The actuarially determined rate is the estimated amount necessa ry to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference be tween the actuarially determined rate and the contribution rate of employees. Employer contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as Plan member contribution requirements a r e c l a s s i f i e d a s P l a n m e m b e r contributions.

Net Pension Liability – The City’s net pension liability for the Miscellaneous Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of the Plan is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022, rolled forward to June 30, 2023, using standard update procedures. A s ummary of principal assumptions and methods used to determine the net pension liability is shown in Note 9D below.

Changes in the Net Pension Liability – The changes in the net p ension liability for the Miscellaneous Plan follows:

Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
Balance at June 30, 2022 173,490,744 $ 120,862,383 $ 52,628,361 $ Changes in the year:

Service cost 2,611,766 - 2,611,766 Interest on the total pension liability 11,886,226 - 11,886,226 Differences between actual and
expected experience 1,636,398 - 1,636,398 Changes in assumptions - - - Changes in benefit terms 181,892 - 181,892 Plan to Plan resource movement - - - Contribution - employer - 6,540,769 (6,540,769) Contribution - employee - 1,282,553 (1,282,553) Net investment income (loss) - 7,554,441 (7,554,441) Administrative expenses - (88,877) 88,877 Benefit payments, including refunds of
employee contributions (8,701,543) (8,701,543) - Other miscellaneous income/expense - - - Net changes 7,614,739 6,587,343 1,027,396 Balance at June 30, 2023 181,105,483 $ 127,449,726 $ 53,655,757 $ Increase (Decrease)

74 NOTE 9 – PENSION PLANS (Continued)

B. Miscellaneous Plan (Continued)

Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability for the Plan, calculated using the di scount rate for the Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

1% Decrease 5.90%
Net Pension Liability 78,599,176 $
Current Discount Rate 6.90%
Net Pension Liability 53,655,757 $
1% Increase 7.90%
Net Pension Liability 33,204,462 $

Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions – For the year ended June 30, 2024, the City recognized pension expense o f $639,112. At June 30, 2024, the City reported deferred outflows/inflows of resources related to pensions for the Plan from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 6,642,408$ - $ Differences between actual and expected experience 1,072,123 (1,124,405) Changes in assumptions 1,819,140 -
Net differences between projected and
actual earnings on Plan investments 5,593,385 - Total 15,127,056 $ (1,124,405) $

$6,642,408 reported as deferred ou tflows of resources related t o contributions subsequent to the measurement date will be recognize d as a reduction of the net p ension liability in the year ended June 30, 2025. Other amounts re ported as deferred outflows of r esources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended Annual
June 30 Amortization
2025 2,206,861 $
2026 1,032,067
2027 3,972,680
2028 148,635
Total 7,360,243 $

Actuarial assumptions and information regarding the discount rate are discussed in Note 9D below.

75 NOTE 9 – PENSION PLANS (Continued)

C. Safety Plan

The City’s Safety Plan is part of the public agency cost-sharin g multiple-employer defined benefit pension plan (PERF C), which is administered by CalPERS. PERF C consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), whic h are comprised of individual employer miscellaneous and safety rate pl ans, respectively. Individual e mployers may sponsor more than one miscellaneous and safety rate plan. The employer participates i n one cost-sharing multiple-employer defined benefit pension plan regardless of the number of rate p lans the employer sponsors. The City sponsors four rate plans (two fire and two police) within the safety risk pool.

Benefits Provided – CalPERS provides service ret irement and disab ility benefits, annual cost of living adjustments, and death benefits to Plan members, who mus t be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full time employment. Members with five years of total service are eligib le to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disabil ity benefits after 10 years of service.

The death benefit is one of the following: the Basic Death Bene fit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjust ments for each plan are applied as specified by the Public Employees’ Retirement Law. PEPRA, Assem bly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012.

The Safety Plan’s provisions and benefits in effect at June 30, 2024, are summarized as follows:

Tier 1 PEPR A
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 3.0%@50 2.7%@57
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments Monthly for life Monthly for life
Retirement Age 50-55 50-57
Monthly Benefits, as a Percentage
of Eligible Compensation 3.0% 2.0% to 2.7%
Required Employee Contribution Rates 8.990% 13.750%
Required Employer Contribution Rates 27.110% 13.540%
Required UAL Contribution $ 1,307,154 $ 4,919 Safety - Fire

Tier 1 PEPR A
Prior to On or after
Hire Date January 1, 2013 January 1, 2013
Benefit Formula 3.0%@50 2.7%@57
Benefit Vesting Schedule 5 years service 5 years service Benefit Payments Monthly for life Monthly for life
Retirement Age 50-55 50-57
Monthly Benefits, as a Percentage
of Eligible Compensation 3.0% 2.0% to 2.7%
Required Employee Contribution Rates 8.990% 13.750%
Required Employer Contribution Rates 27.110% 13.540%
Required UAL Contribution $ 1,936,541 $ 2,262 Safety - Police

76 NOTE 9 – PENSION PLANS (Continued)

C. Safety Plan (Continued)

Beginning in fiscal year 2016, CalPERS collects employer contributions for the cost-sharing plan as a percentage of payroll for the normal cost portion as noted in t he rates above and as a dollar amount for contributions toward the UAL. The dollar amounts are billed on a monthly basis or can be paid in a lump sum at a reduced amount. The City elected to make the lump sum contributions, and the required contribution for the UAL was $3,250,876 in fiscal year 2024, as shown in the table above.

Contributions – Section 20814(c) of the California Public Employees’ Retireme nt Law requires that the employer contribution rates for all public employers be det ermined on an annual basis by the actuary and shall be effective on the July 1 following notice o f a change in the rate. Funding contributions for the Safety Plan are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amoun t necessary to finance the costs of benefits earned by employees during the year, with an additiona l amount to finance any unfunded accrued liability. The City is required to contribute the diffe rence between the actuarially determined rate and the contribution rate of employees.

For the year ended June 30, 2024, the employer contributions to the Safety Plan were $6,283,679.

Pension Liability, Pension Expens e, and Deferred Outflows/Inflo ws of Resources Related to Pensions – For purposes of measuring the net pension liability and deferre d outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Safety Plan and additions to/deductions from the Safety Pla n’s fiduciary net position have been determined on the same basis as they are reported by the CalPER S Financial Office. For this purpose, benefit payments (including refunds of employee contri butions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.

As of June 30, 2024, the City reported a net pension liability for its proportionate share of the net pension liability of the Safety Plan of $52,090,299.

The City’s net pension liability for the Safety Plan is measure d as the proportionate share of the net pension liability. The net pension liability of the Safety Plan is measured as of June 30, 2023, and the total pension liability for the Safety Plan used to calculate t he net pension liability was determined by an actuarial valuation as of June 30, 2022, rolled forward to J une 30, 2023, using standard update procedures. The City’s proportion of the net pension liability was based on a projection of the City’s long-term share of contributions to the pension plan relative t o the projected contributions of all participating employers, actuaria lly determined. The City’s pro portionate share of the net pension liability for the Safety Plan as of June 30, 2022 and 2023, was as follows:

Safety
(Fire and Police)
Proportion - June 30, 2022 0.61%
Proportion - June 30, 2023 0.62%
Change - Increase (Decrease) 0.01%

77 NOTE 9 – PENSION PLANS (Continued)

C. Safety Plan (Continued)

For the year ended June 30, 2024, the City recognized pension e xpense of $6,977,281 for the Safety Plan. At June 30, 2024, the City r eported deferred outflows of resources and deferred inflows of resources related to pensions for the Safety Plan from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to measurement date 6,283,679$ - $ Differences between actual and expected experience 3,824,388 (327,408) Differences in actual and proportional contribution 360,757 (1,836,067) Changes in assumptions 3,040,059 -
Change in employer's proportion and differences
between the employer’s contributions and the
employer’s proportionate share of contributions 2,027,692 (3,084,878) Net differences between projected and actual earnings
on plan investments 7,128,543 -
Total 22,665,118 $ (5,248,353) $

$6,283,679 reported as deferred ou tflows of resources related t o contributions subsequent to the measurement date will be recognize d as a reduction of the net p ension liability in the year ended June 30, 2025. Other amounts re ported as deferred outflows of r esources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:

Year Ended Annual
June 30 Amortization
2025 3,701,049 $
2026 2,203,134
2027 5,029,932
2028 198,971
Total 11,133,086 $

Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the City’s proportionate share of the net pension liability for the Safety Plan as of the measurement date, calculated using the discount rate for the Safety Plan, as well as what the City’s proportionate share of the net pension liabilit y would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:

Safety
1% Decrease 5.90%
Net Pension Liability 77,498,942 $
Current Discount Rate 6.90%
Net Pension Liability 52,090,299 $
1% Increase 7.90%
Net Pension Liability 31,316,926 $

Actuarial assumptions and information regarding the discount rate are discussed in Note 9D below.

78 NOTE 9 – PENSION PLANS (Continued)

D. Information Common to the Miscellaneous and Safety Plans

Actuarial Assumptions – For the measurement period ended June 30, 2023, the total pen sion liabilities were determined by rolling forward the June 30, 202 2 total pension liability. The June 30, 2022 total pension liabilities were based on the following actuarial methods and assumptions:

Miscellaneous and Safety (Fire and Police)
Valuation Date June 30, 2022
Measurement Date June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.90%
Inflation Rate 2.300%
Payroll Growth 2.750%
Projected Salary Increase (1)
Investment Rate of Return 7.00% (2)
Mortality Derived using CalPERS Membership
Data for all Funds (3)
Post Retirement Benefit Increase The lesser of contract cost of living adjustment or 2.30% until Purchasing Power Protection
Allowance floor on Purchasing Power applies,

2.30% thereafter
(1) Depending on age, service and type of employment.
(2) Net of pension plan investment expenses, including inflation. (3) The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study and Review of Actuarial Assumptions.

Mortatlity rates incorporated full generational mortality improvement using 80% of Scale MP-2020 published by teh Society of Actuaries. For more details on this table, please refer to the 2021 experience study report from November 2021 that can be found on the CalPERS website.

The underlying mortality assumptions and all other actuarial as sumptions used in the June 30, 2022 valuation were based on the results of the 2021 CalPERS experie nce study and review of actuarial assumptions. Further details of the Experience Study can be fou nd on the CalPERS website under Forms and Publications.

Discount Rate – The discount rate used to mea sure the total pension liabiliti es for the Plans was

6.90%. The projection of cash fl ows used to determine the disco unt rate for the Plans assumed that contributions from all plan members in the Public Employees Ret irement Fund (PERF) will be made at the current member contributi on rates and that contributions from employers will be made at statutorily required rates, actua rially determined. Based on th ose assumptions, the Plans’ fiduciary net positions were projected to be available to make all projec ted future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liabilities.

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

79 NOTE 9 – PENSION PLANS (Continued)

D. Information Common to the Miscellaneous and Safety Plans (Co ntinued)

In determining the long-term expected rate of return, CalPERS t ook into account both short-term and long-term market return expecta tions as well as the expected pe nsion fund cash flows. Using historical returns of all the funds’ asset classes, expected co mpound (geometric) returns were calculated over the short-term (first 10 years) and the long-te rm (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same pres ent value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and ad justed to account for assumed administrative expenses.

The table below reflects the expected real rates of return by asset class.

Asset Class (a)
Assumed Asset
Allocation
Real Return
(a,b)
Global Equity - Cap-Weighted 30.00% 4.54%
Global Equity - Non-Cap-Weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortgage-Backed Securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
(a) An expected inflation of 2.30% used for this period. (b) Figures are based on the 2021 Asset Liability Management study.

Pension Plan Fiduciary Net Position – Detailed information about the pension plans’ fiduciary net position is available in the separately issued CalPERS financial reports.

NOTE 10 – POST-EMPLOYMENT HEALTH CARE BENEFITS

A. Defined Benefit Other Post- Employment Benefit (OPEB) Plan

Plan Description – The City administers a single employer defined benefit (implici t subsidy) post- employment health care plan pursuant to negotiated Memoranda of Understanding (MOU) and Schedules of Benefit (Schedule) with its employee bargaining un its. No assets have been accumulated in a trust for the payment of benefits that meets t he criteria in paragraph 4 of GASB Statement No. 75.

80 NOTE 10 – POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)

A. Defined Benefit Other Post-Em ployment Benefit (OPEB) Plan (Continued)

The City offers medical, dental and vision benefits to its empl oyees, retirees, and their dependents.

However, the City does not pay for the cost of retiree health p remiums. The MOUs and Schedule are as follows:

Management/Confidential
Employees covered by the Management and/or Confidential Employees Schedule of Benefits and Employees covered by Turlock Management Association - Public Safety MOU
Miscellaneous Employees covered by Turlock City Employees Associ ation MOU Police Employees covered by Turlock Associated Police Officers M OU Fire Employees covered by Turlock Firefighters Local #2434 MOU

In general, employees are required to retire from the City and be members of their respective covered group for 10-15 years to be eligible to receive a benefit from their respective plan. The retiree has the option to continue on the City’s self-insured health plan (and pay 100% of the premium for continued participation), to become a member of a non-City group plan, or to purchase an individual health insurance policy. For retirees who choose to remain on the City’s health plan, this eligibility terminates when the retiree becomes eligible for Medicare benefits, reache s age 65, is deceased, or chooses to voluntarily leave the plan, whi chever comes first. Spousal elig ibility requirements vary with each employment plan. The City currently has 16 retirees who have ch osen to remain on the City’s health plan post-employment.

Funding Policy – The City pays the expenses for the plan on a pay-as-you-go ba sis and the retirees that participate in the plan pay the premiums on a monthly basis.

Employees Covered by Benefit Terms – Membership in the plan consisted of the following at the valuation date of July 1, 2023:

Valuation Date
July 1, 2023
Active employees 378 $
Inactive employees or beneficiaries currently receiving benefit payments 15 Inactive employees entitled to but not yet receiving benefit payments - Total 393$

81 NOTE 10 – POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)

A. Defined Benefit Other Post-Em ployment Benefit (OPEB) Plan (Continued)

Total OPEB Liability Actuarial Methods and Assumptions – The City’s total OPEB liability was measured as of June 30, 2024, and the total OPEB liability used to calculate the total OPEB liability was determined by an actuarial valuation dated July 1, 2023, th at was rolled forward using standard update procedures to determine the total OPEB liability as of J une 30, 2024, based on the following actuarial methods and assumptions:

Valuation Date July 1, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entry Age
Actuarial Assumptions:

Discount Rate 4.21%
Inflation 2.71%
Payroll Growth 3.00%
Mortality Rate RP 2014 Mortality Table projected to 2024 with S cale BB Healthcare Trend Rate 8% in 2020 and will decline to 4.5% in 202 5 and later years

The underlying mortality assumptions were based on the RP 2014 Mortality Table Projected to 2024 with Scale BB and all other actuarial assumptions used in the J uly 1, 2023 valuation were based on the results of a July 1, 2023 actuarial valuation.

Discount Rate – The discount rate used to measure the total OPEB liability was 4.21%, the single rate of return that, when applied to all projected benefit paym ents, results in an actuarial present value of projected benefit payments equal to the total of the a ctuarial present value of projected benefit payments calculated using a yield or index rate for 20- year, tax-exempt general obligation municipal bonds with an average r ating of AA/Aa or higher (S&P Municipal 20 Year High Grade Rate Index).

Changes in Assumptions – The discount rate was modified from 4.13% to 4.21% and the infl ation rate was modified from 2.63% to 2.71%.

Changes in Total OPEB Liability – The changes in the total OPEB liability follows:

Total OPEB
Liability
Balance at July 1, 2023 8,994,128 $
Changes Recognized for the Measurement Period:

Service cost 454,041
Interest on the total OPEB liability 390,209
Changes in benefit terms -
Differences between expected and actual experience (927,345) Changes of assumptions (105,398)
Contributions from the employer -
Net investment income -
Administrative expenses -
Benefit payments (257,954)
Net changes (446,447)
Balance at June 30, 2024 8,547,681 $

82 NOTE 10 – POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)

A. Defined Benefit Other Post-Em ployment Benefit (OPEB) Plan (Continued)

Sensitivity of the Total OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates – The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using a dis count rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:

Discount Rate -1% Discount Rate Discount Rate +1%

3.21% 4.21% 5.21%
9,954,629$ 8,547,681 $ 7,396,308 $ Total OPEB Liability/(Asset)

The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower (7.0% decreasing to 3.50%) or 1-percentage-point higher ( 9.0% decreasing to 5.50%) than the current healthcare cost trend rates:

Healthcare Cost
1% Decrease Trend Rates 1% Increase

7.00% Decreasing
to 3.50%

8.00% Decreasing
to 4.50%

9.00% Decreasing
to 5.50%
7,328,782$ 8,547,681 $ 9,954,629 $ Total OPEB Liability/(Asset)

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB – For the year ended June 30, 2024, the City rec ognized OPEB expense of $(677, 010). At June 30, 2024, the City reported deferred outflows/inflows of resources related to OPEB from the following sources:

Deferred Outflows Deferred Inflows
of Resources of Resources
Differences between actual and expected experience 123,513$ (5,982,257) $ Changes in assumptions 1,663,308 (6,487,794) Total 1,786,821 $ (12,470,051) $

Deferred outflows/inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:

Year Ended Annual
June 30 Amortization
2025 (1,263,306) $
2026 (1,263,306)
2027 (1,263,306)
2028 (1,263,306)
2029 (1,263,306)
Thereafter (4,366,700)
Total (10,683,230) $

83 NOTE 10 – POST-EMPLOYMENT HEALTH CARE BENEFITS (Continued)

B. Defined Contribution OPEB Plans

Plan Description – The City has post-employment healthcare defined contribution pl ans in place pursuant to negotiated Memoranda of Understanding (MOU) and Sch edules of Benefits (Schedule) with its employee bargaining units. The City’s funding obligati on for each plan is defined within the respective MOU or Schedule and is a specified percentage of pay roll. The plans and the City’s funding obligation for each plan are as follows:

Management/Confidential Employees covered by the Management and/ or Confidential Employees Schedule of Benefits

2.5% of base salary
Management/Confidential Employees covered by Turlock Management Association - Public Safety MOU
3% of base salary
Miscellaneous Employees covered by Turlock City
Employees Association MOU

2.0% of base salary
Police Employees covered by Turlock Associated
Police Officers MOU
3% of salary plus
3% of benefits (1)
Fire Employees covered by Turlock Firefighters
Local #2434 MOU
4% of salary plus
4% of benefits
(1) Effective 7/1/2021, benefits are calculated based on 56% of base salary.

The administration of benefits for each plan rests with the ind ividual plan administrators. The administrator for the Management/Confidential, Police Managemen t, and Miscellaneous plans is ICMA. The respective bargaining unit representatives administer the benefits for the Police and Fire plans.

For the Police and Fire plans, the City remits the contribution s as required by the respective MOU to each plan following each pay period. These plans have establish ed irrevocable trusts for their respective plan assets. As noted above, the plans’ trustees are responsible for the development of benefit levels that can be sustai ned from the contributions rec eived as well as the general plan administration. The City does not have any responsibility for nor involvement in these activities. Under the terms of the Police and Fire MOUs, the City is obligated to make current year contributions to the respective trusts based on the 3% and 4% of salary and benefit costs for Police and Fire, respectively. Management believes the City has no obligation to make any additional contributions to the trusts beyond the above amounts, and therefore there is no unfunded actuarial accrued liability the City is obligated to fund.

There are no vesting requirements to be eligible to use these f unds post-employment. The benefit can only be used to purchase post- employment health insurance. The retiree has the option to continue on the City’s self-insured health plan (and pay the 10 0% of the premium for continued participation), to become a member of a non-City group plan, or to purchase an individual health insurance policy. The benefit can then be used to provide assis tance with paying the monthly premium, as discussed in Note 10A above.

Contributions to each plan during fiscal year 2023-2024 were as follows:

Plan Contributions
Management/Confidential 163,259 $
Miscellaneous 285,003
Police 290,199
Fire 245,841

84 NOTE 11 – OTHER POST-EMPLOYMENT BENEFITS

A. Deferred Compensation Plans

City employees may defer a portion of their compensation under a City sponsored Deferred Compensation Plans created in accordance with Internal Revenue Code Sections 401 and 457.

Under the plans, participants are not taxed on the deferred por tion of their compensation until distributed to them; distributions may be made only at terminat ion, retirement, or death, or in an emergency as defined by the plans.

The plans are part of the public agency agent multiple-employer defined contribution plans that are administered by Mission Square Retirement (formerly ICMA RC). B enefit provisions under the plans are established by Cit y resolution. The City has no liability f or any losses incurred by the plans and does not participate in any gains, but does have the duty of du e care that would be required of an ordinary prudent investor. The City has a contract with Mission Square Retirement to manage and invest the assets of the plans. The administrator pools the ass ets of the plans with those of other participants and does not make separate investments for the Cit y. The assets in the plans are the sole property of the participants or their beneficiaries. Since the assets held under the plans are not the City’s property and are not subject to claims by general cr editors of the City, they have been excluded from these financial statements. The plans require inv estments to be stated at fair market value and it requires all gains and losses on plan investments to accrue directly to participant accounts. A summary of eligibility and employer contribution re quirements for the City’s plans are shown below by bargaining unit:

TCEA

Employees with Less than 15 Year s of Service – Match of up to 0 .5% of the employee’s base salary each pay period in which the employee contributes to the 401a Plan.

Employees with More than 15 Years of Service – Match of up to 1 .0% of the employee’s base salary each pay period in which the employee contributes to the 401a Plan. The increase in the City’s match is effective the 1st day of the month following the employee’s 15th anniversary.

Employees that waive the City’s medical insurance receive $475 per month to the RHS 457 Plan.

TAPO

Employees that waive the City’s medical insurance receive $475 per month to the RHS 457 Plan.

Fire

Employees that waive the City’s medical insurance receive $475 per month to the RHS 457 Plan.

TMAPS

2.5% of base salary for each pay period, provided the employee contributes 6.0% of base salary to the 401a Plan. Employees that waive the City’s medical insuranc e receive $475 per month to the RHS 457 Plan.

Confidential (Unrepresented)

0.5% of base salary for each pay period, provided the employee contributes 0.5% of base salary to the 401a Plan. Employees that waive the City’s medical insuranc e receive $475 per month to the RHS 457 Plan.

85 NOTE 11 – OTHER POST-EMPLOYMENT BENEFITS (Continued)

A. Deferred Compensati on Plans (Continued)

Management (Unrepresented)

Directors – 3.5% of base salary for each pay period, provided t he employee contributes 3.5% of base salary to the 401a Plan.

Managers – 2.5% of base salary for each pay period, provided th e employee contributes 2.5% to the 401a Plan.

Employees that waive the City’s medical insurance receive $475 per month.

The City’s required contributions for the year ended June 30, 2024, totaled $547,111.

NOTE 12 – RISK MANAGEMENT

The City maintains the Self-Insurance Internal Service Fund to account for and finance its risks of loss.

Under this program, the City is self-insured for workers’ compensation and employee health care.

The City uses a reinsurance agreement to reduce its exposure to large losses under the workers’ compensation program. Reinsurance permits recovery of a portion of losses from reinsurers, although it does not discharge the primary li ability of the City as direct insurer of the risks reinsured. The City does not report reinsured risks as liabilities unless it is probable that those risks will not be covered by reinsurers. Premiums paid to rei nsurers during the year ended J une 30, 2024, were $255,364, and the City’s deductible under the policy is $1.250 million, with coverage up to the statutory limit.

The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disast ers. The City participates in the Central San Joaquin Valley Risk Management Authority (CSJVRMA), a publi c entity risk pool currently operating as a common risk management and insurance program for 54 cities . The purpose of CSJVRMA is to spread the adverse effect of losses among the members and to pu rchase excess insurance as a group, thereby reducing its expense. The City participates in the following pooled coverages through CSJVRMA:

Type of Coverage (Deductible) Coverage Limits
Liability ($100,000) 29,500,000 $
Automobile - for vehicles with values less than $25,000 ($500) 2 5,000

Effective July 1, 2021, the liability coverage declined from $39,000,000 to $29,500,000.

The City contributes its pro rata share of anticipated losses t o a pool administered by CSJVRMA. Should actual losses among participants be greater than the anticipate d losses, the City will be assessed its pro rata share of that deficiency. Conversely, if the actual losses are less than anticipated, the City will be refunded its pro rata share of t he excess. The City paid CSJVRMA premiums of $1,988,827 for coverage during the year ended June 30, 2024, and in the amount of $101, 272, which the City elected to remain with CSJVRMA to offset future premiums. Settled claims have not exceeded commercial excess liability coverage in any of the past three fiscal years.

86 NOTE 12 – RISK MANAGEMENT (Continued)

In addition to the coverage through CSJVRMA, the City has purch ased the commercial policy coverage for property, vehicles, and contractors equipment with various sublimits up to $100,000,000:

Type of Coverage (Deductible)
Property, excluding flood ($25,000)
Property, flood ($100,000)
Vehicles ($5,000)
Fire Engines ($10,000)
Equipment ($2,500)

All unpaid claims that were probable liabilities that occurred prior to the year end and that were estimated based on actuarial studies or hist orical data were recorded in accordance with accounting principles generally accepted in the United States of America.

Fiscal Year Claims
For the Year Ended Claims Payable and Changes Claims Claims Payable June 30 July 1 in Estimates Payments June 30
2022 2,497,192$ 5,792,618 $ (5,759,151) $ 2,530,659 $ 2023 2,530,659 6,295,030 (6,309,637) 2,516,052 2024 2,516,052 7,879,421 (7,314,101) 3,081,372

NOTE 13 – COMMITMENTS AND CONTINGENCIES

A. Litigation

As of June 30, 2024, the City is a party to various lawsuits. T here are certain personal injury lawsuits that have been denied by the City Council. The outcome and even tual liability to the City, if any, in these cases is not known at this time. After reviewing these la wsuits with legal counsel, management estimates that the potential claims against the City, not cover ed by insurance, resulting from such litigation would not materially affect the financial statements of the City.

B. Federal and State Grant Programs

The City participates in several Federal and State grant progra ms. These programs are subject to audit by the City’s independent accountants in accordance with the provisions of the federal Single Audit Act, as amended and applicable State requirements. No cos t disallowances have been proposed as a result of audits completed to date; however, thes e programs are still subject to further examination by the grantors and the amount, if any, of expendit ures which may be disallowed by the granting agencies cannot be determined at this time. The City e xpects such amounts, if any, to be immaterial.

C. Stanislaus Regional Water Authority

The City of Turlock and City of Ceres formed a joint powers aut hority, the Stanislaus Regional Water Authority (SRWA), in order to develop and finance the Regional Surface Water Supply Project (RSWSP). The project consists of the construction of a water tr eatment plant (WTP) and associated facilities with the capacity to treat up to 30 million gallons per day (MGD) of surface water from the Tuolumne River, of which 20 MGD would be available to the City of Turlock. The water will be provided by Turlock Irrigation District (TID). The RSWSP is als o expected to include a system of pipelines to transport the water to the project participants. T he environmental review process for the RSWSP and related terminal facilities for each Project Participant is complete.

87 NOTE 13 – COMMITMENTS AND CONTINGENCIES (Continued)

C. Stanislaus Regional Wat er Authority (Continued)

On June 29, 2020, the SRWA awarded a design-build contract for the project to CH2M Hill Engineers, Inc., for an amount not to exceed $195,400,357, which includes all project components except the individual Project Participants’ terminal facilities. The RSWSP will be constructed in phases with the first phase anticipated to begin in the Fall of 2020. Construct ion is anticipated to be completed and the WTP operational in mid to late 2023.

In furtherance of the RSWSP, on February 2, 2020, the SRWA, the Project Participants, and TID entered into a Regional Surface Water Supply Phase 3 Project De sign and Construction Funding Agreement. Pursuant to the agreement, the City of Turlock will be entitled to 66.7% of the capacity of the RSWSP and the City of Ceres will be entitled to the remaining 33.3%.

The RSWSP project is expected to cost a total of $266,949,332. The City’s share of the total project is expected to be $180,448,813. The City expects $23,278,615 in grant funds and $157,170,198 of State Revolving Loan Funds or other outside financing for its s hare of the project. The City’s investment in the project at June 30, 2024, was $39,589,428.

Additional information regarding this project can be found at www.stanrwa.com. Financial statements for the SRWA can be obtained from the City at 156 South Broadway, Suite 270, Turlock, CA 95380.

D. Construction and Other Commitments

The City had the following outstanding significant commitments at June 30, 2024:

Stanislaus Regional Water Authority 2,049,026 $
Water Improvements 2,939,359
Sewer Improvements 379,673
Other Contracts 3,329,750
Well Rehabilitation Services 94,082
Improvements - Road Rehabilitation 1,452,873
Housing 94,780
Roads - Measure A 2,372,942
Drinking Water Chlorination Project 13,498
Various Bus, Vehicle, and Equipment Purchases 43,888
Transit Center 165,762
Columbia Pool 4,008,503

NOTE 14 – REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES

A. Redevelopment Dissolution

On December 29, 2011, the Californi a Supreme Court upheld Assem bly Bill x1 26 (the Bill) that provides for the dissolution of all redevelopment agencies in t he State of California. This action impacted the reporting entity of the City that previously had r eported a redevelopment agency within the reporting entity of the City as a blended component unit.

The Bill provides that upon diss olution of a redevelopment agen cy, either the entity creating the redevelopment agency or another unit of local government will a gree to serve as the “successor agency” to hold the assets until they are distributed to other units of state and/or local government. By Resolution No. 2012-009 adopted on January 10, 2012, pursuant t o Health and Safety Code Section 34173, the City Council declared that the City would act in a s pecial limited capacity as Successor Agency for the dissolved Turlock Redevelopment Agency, effective February 1, 2012.

88 NOTE 14 – REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued)

A. Redevelopment Dissolution (Continued)

On July 1, 2018, the duties of the Turlock Oversight Board tran sferred to a new Stanislaus Countywide Consolidated Oversi ght Board, which will now be resp onsible for overseeing the winddown affairs of all successo r agencies in the County, inclu ding the Successor Agency to the Turlock Redevelopment Agency (the Successor Agency).

After enactment of the law, which occurred on June 28, 2011, re development agencies in California could not enter into new projects, obligations, or commitments. Subject to the control of a newly established oversight board, rem aining assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments).

The Bill directs the California State Controller Office (SCO) t o review the proprietary of any transfers of assets between redevelopment agencies and other public bodie s that occurred after January 1, 2011. If the public body that received such transfers is not co ntractually committed to a third party for the expenditure or encumbrance of those assets, the SCO is requ ired to order the available assets to be transferred to the public body designated as the successor agency by the Bill.

In accordance with the timeline set forth in the Bill (as modif ied by the California Supreme Court on December 29, 2011) all redevelopment agencies in California wer e dissolved and ceased to operate as legal entities on February 1, 2012. Prior to that date, the final seven months of activity of the Turlock Redevelopment Agency continued to be reported in the go vernmental funds of the City. After the date of dissolution, the assets and activities of the disso lved Turlock Redevelopment Agency are reported in a fiduciary fund (private-purpose trust fund) in th e City’s financial statements. Included in prior year Turlock Redevelopment Agency financial statements wa s the Downtown Improvement Project Fund. This fund was originally established to account f or the construction of infrastructure improvements in the City’s downtown core. This project was fund ed with the proceeds of the 1999 Revenue Bonds along with sewer, water, and street funds. The re sidual monies in this fund after the completion of the project represented excess funds contributed by the sewer, water, and street funds.

Management decided to leave these residual funds in this fund t o provide a source of funds for future repairs. This fund is presented as a nonmajor fund in the governmental fund combining statements.

The activities of the Successor Agency are reported in the Succ essor Agency to the Redevelopment Agency Private-Purpose Trust Fund as the activities are under t he control of the Oversight Board.

The City provides administrative services to the Successor Agen cy to wind down the affairs of the former Turlock Redevelopment Agency.

Assembly Bill (AB) 1484 required the Successor Agency to complete two due diligence reviews – one for the low and moderate income housing assets of the Successor Agency (Housing DDR), and a second for all other balances of the Successor Agency (Non-Hous ing DDR). The due diligence reviews are to calculate the balance of unencumbered balances a s of June 30, 2012, available to be remitted to the County for disbursement to taxing entities. The Successor Agency submitted both due diligence reviews to the State Department of Finance for review and approval. The Department of Finance did not initially approve the Housing DDR, which indicated that the Successor Agency had no funds available for distributi on, and the State made adjustment s to the Housing DDR and instead made a demand for the return of funds totaling $1,001,062, which were held by the City’s Former LMI Housing Fund. The City remitted that amount to the County in De cember 2012. The Department of Finance did not initially approve the Non-Housing DDR, which in dicated that the Successor Agency had no funds available for distribution, and although the State made adjustments to the Non-Housing DDR, the adjusted balance still i ndicated that there were no fu nds available for distribution. The
Successor Agency received its Finding of Completion in April 20 13, which means it can now utilize bond proceeds for projects consistent with the original bond covenants.

Cash and investments of the Successor Agency as of June 30, 202 4, are discussed in Note 3.

Information presented in the following footnotes represents oth er assets and liabilities of the Successor Agency as of June 30, 2024.

89 NOTE 14 – REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued)

B. Long-Term Obligations

Current Year Transactions and Balances

The following bonds are obligations of the Authority payable fr om and secured by loan payments made by the former Turlock Redevelopment Agency. The bonds are secured by the tax increment revenues of the former Turlock Redevelopment Agency and have be en transferred to the Successor Agency. With the dissolution of the Turlock Redevelopment Agenc y discussed above, tax increment is no longer distributed, and instead the Successor Agency rece ives payments from the County’s Redevelopment Property Tax Trust Fund (RPTTF) that are to be us ed to fund debt service on the bonds, with no distinction betwe en housing and non-housing reve nues. In addition, under the provisions of the laws dissolving the Turlock Redevelopment Age ncy, the Successor Agency only receives the funds necessary to fulfill its approved enforceable obligations.

The outstanding balances as of June 30, 2024, are as follows:

Original Issue Balance Balance Due Within Due in More
Amount June 30, 2023 Retirements June 30, 2024 One Year Than One Yea r General Obligation Revenue Bonds:
2016 Tax Allocation Refunding Bonds 35,740,000$ 29,870,000 $ 1,270,000 $ 28,600,000 $ 1,335,000 $ 27,265,000 $ Add: Unamortized Bond Premium - 2,247,256 137,587 2,109,669 - 2,109,669 Total Successor Agency Debt 35,740,000 $ 32,117,256 $ 1,407,587 $ 30,709,669 $ 1,335,000 $ 29,374,669 $

2016 Successor Agency Tax Allocation Refunding Bonds

In November 2016, the Successor A gency issued Tax Allocation Re funding Bonds, Series 2016, in the amount of $35,740,000. The proceeds from the bonds were to be used to refund the outstanding balance of the 1999 Revenue Bonds, 2006 Tax Allocation Revenue Bonds, and 2011 Tax Allocation Revenue Bonds. The bonds bear interest rates of 2.0 – 5.0%. Int erest on the bonds is payable semi- annually March 1 and September 1 and principal is due annually on each September 1 through 2039.

Events of default on the 2016 Bonds include failure to make any debt service payment by the due date or failure to perform the other agreements or covenants re quired in the Indenture of Trust not cured within 30 days’ notice to the Successor Agency. Under suc h event of default, as defined by the bond documents, the Trustee may, upon the written request of th e bondholders, of not less than a majority in aggregate principal amount of the outstanding 2016 Bonds at the time, shall, by notice in writing to the Successor Agency, declare the principal of all o f the 2016 Bonds then outstanding, and the interest accrued thereon, to be due and payable immediately . This provision is subject to the condition that if, at any time after the principal of the 2016 Bonds have been declared due and payable, and before any judgement o r decree has been entered or obtained the Successor Agency can remedy the default by paying all amounts due and payable. A t that time, the bondholders of at least a majority in aggregate principal amount of the 2016 Bond s, then outstanding, can by written notice to the Successor Agency and to the Trustee, rescind and annul such declaration and its consequences. The Successor Agency can prepay the 2016 Bonds at any time by paying the prescribed prepayment premium as for in the 2016 Bond documents.

Bond Issuance Costs, Original I ssue Discounts, and Premiums and Deferred Charge on Refunding

For private-purpose trust fund types, bond premiums and discoun ts are deferred and amortized over the life of the bonds using the effective interest method. Bond s payable are reported net of the applicable bond premium or discount. Any differences between pr oprietary refunded debt and the debt issued to refund it, called a gain or loss on refunding, i s amortized over the remaining life of either the refunded debt or the refunding debt, whichever is sh orter. The gain or loss is reported as a deferred inflow or outflow of resources, as applicable. Bond is suance costs, other than prepaid insurance, are expensed in the year incurred.

90 NOTE 14 – REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (Continued)

B. Long-Term Obligations (Continued)

Debt Service Requirements

Debt service requirements are shown below for all long-term debt:

For the Year
Ending June 30, Principal Interest
2025 1,335,000 $ 1,115,632 $
2026 1,400,000 1,047,257
2027 1,470,000 975,506
2028 1,545,000 900,131
2029 1,620,000 821,006
2030-2034 9,365,000 2,851,788
2035-2039 11,165,000 1,070,497
2040 700,000 11,813
Total 28,600,000 8,793,630 $
Add: Unamortized
Bond Premium 2,109,669
Net Long-Term Debt 30,709,669$
Refunding Bonds
2016 Tax Allocation

C. Commitments and Contingencies

State Approval of Enforceable Obligations

The Successor Agency prepares a Recognized Obligation Payment S chedule (ROPS) annually that contains all proposed expenditures for the subsequent twelve-mo nth period. The ROPS is subject to the review and approval of the Oversight Board as well as the State Department of Finance. Although the State Department of Finance may not question items included on the ROPS in one period, they may question the same items in a future period and disallow associated activities. The amount, if any, of current obligations that may be denied by the State Departme nt of Finance cannot be determined at this time. The City expects such amounts, if any, to be immaterial.

NOTE 15 – LEASES

A. Policies

A lease is defined as a contract that conveys control of the ri ght to use another entity’s nonfinancial asset (the underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. Examples of nonfinancial assets incl ude buildings, land, vehicles, and equipment. The City recognizes lease receivables or liabilities with an initial, individual value of $100,000 or more.

Lessee – The City has noncancellable leases of nonfinancial assets as of June 30, 2024. The City recognize a lease liability and an intangible right ‐to-use lease asset (lease asset) in the government‐wide financial statements.

91 NOTE 15 – LEASES (Continued)

A. Policies (Continued)

At the commencement of a lease, t he City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequentl y, the lease liability is reduced by the principal portion of lease payments made. The lease asset i s initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, the lease asset is amortized on a straight‐line basis over its useful life.

Key estimates and judgments related to leases include how the C ity determines (1) the discount rate it uses to discount the expected lease payments to present valu e, (2) lease term, and (3) lease payments as follows:

• The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancellable period of the leas e. • Lease payments included in the measurement of the lease liabi lity are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.

The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occu r that are expected to significantly affect the amount of the lease liability.

Lease assets are reported with other capital assets and lease l iabilities are reported with long-term debt on the Statement of Net Position.

Lessor – The City is a lessor for noncancellable leases of communicati on sites. The City recognizes a lease receivable and a deferred inflow of resources in the go vernment‐wide and fund financial statements.

At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subs equently, the lease receivable is reduced by the principal portion of lease payments received. Th e deferred inflow of resources is initially measured as the initial amount of the lease receivabl e, adjusted for lease payments received at or before the lease commencement date. Subsequently, the def erred inflow of resources is recognized as revenue over the life of the lease term.

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

• The City uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the leas e. • Lease receipts included in the measurement of the lease recei vable is composed of fixed payments from the lessee.

The City monitors changes in circumstances that would require a remeasurement of its lease, and will remeasure the lease receivable and deferred inflows of resource s if certain changes occur that are expected to significantly affect the amount of the lease receivable.

92 NOTE 15 – LEASES (Continued)

B. Leases Receivable

The balances related to leases receivable and deferred inflows of resources as of June 30, 2024, were:

Deferred
Leases Inflows of
Leases Receivable (Lessor) Receivable Resources
General Fund
Communication Site Lease 484,703 $ 463,251 $
Nonmajor Governmental Funds
Communication Site Lease 214,577 200,247
Total 699,280 $ 663,498 $

Communication Site Leases – The City leases various locations to third parties for the pr ovisions of mobile/wireless communications services. During the year ended June 30, 2024, the City had two leases with original lease terms ranging from 10 to 30 years, including the optional extension periods, and as of June 30, 2024, the leases had 10-30 years remaining. The City recognized $40,717 in lease revenue and $10,742 in interest revenue during the curren t fiscal year related to these leases.

Also, the City has deferred infl ows of resources associated wit h these leases that will be recognized as revenue over the lease term.

C. Leases Payable

The City has entered into various three-year lease agreements a s lessee for the acquisition of vehicles and vehicle license plate reader camera system. As of June 30, 2024, the value of the lease liability was $555,909. The City is required to make monthly pr incipal and interest payments ranging from $350 to $8,865. The leases have interest rates that range from 0.2% to 5%. The equipment has a three-year estimated useful life while the license plate reader system has a five-year useful life. The value of the right-to-use assets as of the end of the current f iscal year was $779,568 and had accumulated amortization of $144,090.

The future principal and interest lease payments as of June 30, 2024, were as follows:

For the Year
Ending June 30, Principal Interest
2025 144,890 $ 19,142 $
2026 151,326 12,705
2027 146,202 6,313
2028 104,651 1,729
2029 8,840 19
Total 555,909 $ 39,908 $

NOTE 16 – SUBSCRIPTIONS

The City has adopted GASB Statement No. 96 which introduced cha nges in the recognition, measurement and reporting of Subsc ription-Based Information Tec hnology Arrangements (SBITA). The City identified one SBITA for a Transit Data Tracking applicati on with a term of three years. The value of the SBITA asset as of the end of the current fiscal year was $1 66,773 and had accumulated amortization of $4,633. As of June 30, 2024, the value the SBITA liability was $107,830.

93 NOTE 16 – SUBSCRIPTIONS (Continued)

The future principal and interest payments for SBITA as of June 30, 2024, were as follows:

For the Year
Ending June 30, Principal Interest
2025 33,554 $ 7,257 $
2026 38,389 4,463
2027 35,887 1,299
Total 107,830 $ 13,019 $

NOTE 17 – EXCESS OF EXPENDITURES OVER APPROPRIATIONS

For the year ended June 30, 2024, expenditures exceeded appropriations as follows:

Expenditures Amount
General Fund
Debt Service:

Principal 86,455 $
Interest and fiscal charges 11,060

NOTE 18 – SUBSEQUENT EVENTS

In compliance with accounting standards, management has evaluat ed events that have occurred after year-end to determine if these events are required to be disclo sed in the basic financial statements.

Events were considered through September 22, 2025, which is the date of issuance of the City’s independent auditor’s report.

94 This page intentionally left blank.

95 REQUIRED SUPPLEMENTARY INFORMATION

96 CITY OF TURLOCK

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS

MISCELLANEOUS AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2024

Measurement Date 6/30/2014 6/30/2015 6/30/2016 6/30/2017 6/30/2018 Total Pension Liability
Service cost 2,252,227 $ 2,145,944 $ 2,113,775 $ 2,535,894 $ 2,556,275 $ Interest 8,152,132 8,394,010 8,879,576 9,300,013 9,710,969 Differences between expected and
actual experience - (2,796,579) 704,751 188,828 254,403 Changes in assumptions - (2,114,962) - 7,890,713 (567,581) Changes in benefits - - - - - Benefit payments, including refunds of
employee contributions (4,197,372) (4,620,913) (5,141,794) (5,431,662) (6,138,941) Net change in total pension liability 6,206,987 1,007,500 6,556,308 14,483,786 5,815,125 Total pension liability - beginning 109,667,670 115,874,657 116,882,157 123,438,465 137,922,251 Total pension liability - ending (a) 115,874,657$ 116,882,157 $ 123,438,465 $ 137,922,251 $ 143,737,376 $ Plan Fiduciary Net Position
Contributions - employer 2,650,159 $ 2,832,416 $ 3,259,415 $ 3,684,085 $ 3,783,927 $ Contributions - employee 1,031,498 1,042,224 1,027,004 1,109,929 1,133,810 Net investment income (loss) 12,514,268 1,937,886 438,577 9,502,918 7,974,175 Benefit payments, including refunds of
employee contributions (4,197,372) (4,620,913) (5,141,794) (5,431,662) (6,138,941) Plan to Plan resource movement - 78,472 622 (25) (230) Administrative expense - (94,994) (51,446) (123,941) (144,433) Other miscellaneous income/expense - - - - (274,281) Net change in plan fiduciary net position 11,998,553 1,175,091 (467,622) 8,741,304 6,334,027 Plan fiduciary net position - beginning 71,240,464 83,239,017 84,414,108 83,946,486 92,687,790 Plan fiduciary net position - ending (b) 83,239,017$ 84,414,108 $ 83,946,486 $ 92,687,790 $ 99,021,817 $ Net pension liability (a)-(b) 32,635,640$ 32,468,049 $ 39,491,979 $ 45,234,461 $ 44,715,559 $ Plan fiduciary net position as a percentage
of the total pension liability 71.84% 72.22% 68.01% 67.20% 68.89% Covered payroll 13,044,287 $ 12,730,821 $ 13,052,557 $ 13,771,230 $ 13,489,574 $ Net pension liability as a percentage of
covered payroll 250.19% 255.03% 302.56% 328.47% 331.48%

Notes to Schedule:

Changes of Benefit Terms: The figures above generally include any liability impact that may have resulted from voluntary benefit c hanges that occurred on or bef ore the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Ha ndshakes) that occurred after the Valuation Date are not included in the figures above, unless th e liability impact is deemed to be material by the plan actuary.

In 2022, SB 1168 increased the standard retiree lump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The impact, if any, is included in the changes of benefit terms.

Changes of Assumptions: There were no assumption changes in 20 23. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return , CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. In addition, demographic assumptions and the price inflation assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The acco unting discount rate was 7.15% for measurement dates June 30, 2017, through June 30, 2021; 7.65% f or measurement dates June 30, 2015, through June 30, 2016; and 7.50% for measurement date June 30, 2014.

97 CITY OF TURLOCK
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS (Continued)

MISCELLANEOUS AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2024

Measurement Date 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 Total Pension Liability
Service cost 2,302,531 $ 2,484,703 $ 2,350,368 $ 2,467,656 $ 2,611,766 $ Interest 10,263,211 10,837,530 11,195,286 11,365,458 11,886,226 Differences between expected and
actual experience 2,064,432 2,271,043 (889,500) (3,623,085) 1,636,398 Changes in assumptions - - - 5,861,672 181,892 Changes in benefits - - - - - Benefit payments, including refunds of
employee contributions (6,823,311) (6,967,583) (7,756,380) (7,650,663) (8,701,543) Net change in total pension liability 7,806,863 8,625,693 4,899,774 8,421,038 7,614,739 Total pension liability - beginning 143,737,376 151,544,239 160,169,932 165,069,706 173,490,744 Total pension liability - ending (a) 151,544,239$ 160,169,932 $ 165,069,706 $ 173,490,744 $ 181,105,483 $ Plan Fiduciary Net Position
Contributions - employer 4,359,068 $ 4,919,630 $ 5,268,466 $ 5,886,502 $ 6,540,769 $ Contributions - employee 1,157,716 1,038,613 1,037,625 1,052,686 1,282,553 Net investment income (loss) 6,592,102 5,279,682 24,922,527 (10,068,430) 7,554,441 Benefit payments, including refunds of
employee contributions (6,823,311) (6,967,583) (7,756,380) (7,650,663) (8,701,543) Plan to Plan resource movement - - - - - Administrative expense (70,664) (146,949) (108,245) (82,056) (88,877) Other miscellaneous income/expense 230 - - - - Net change in plan fiduciary net position 5,215,141 4,123,393 23,363,993 (10,861,961) 6,587,343 Plan fiduciary net position - beginning 99,021,817 104,236,958 108,360,351 131,724,344 120,862,383 Plan fiduciary net position - ending (b) 104,236,958$ 108,360,351 $ 131,724,344 $ 120,862,383 $ 127,449,726 $ Net pension liability (a)-(b) 47,307,281$ 51,809,581 $ 33,345,362 $ 52,628,361 $ 53,655,757 $ Plan fiduciary net position as a percentage
of the total pension liability 68.78% 67.65% 79.80% 69.67% 70.37% Covered payroll 14,631,733 $ 14,259,962 $ 14,305,346 $ 13,785,790 $ 14,822,736 $ Net pension liability as a percentage of
covered payroll 323.32% 363.32% 233.10% 381.76% 361.98%

98 CITY OF TURLOCK

SCHEDULE OF CONTRIBUTIONS

MISCELLANEOUS AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2024

Fiscal yar ended June 30 2015 2016 2017 2018 2019
Actuarially determined contribution 3,847,884$ 3,256,514 $ 3,684,324 $ 3,786,340 $ 4,359,068 $ Contributions in relation to the
actuarially determined contribution 3,847,884 3,256,514 3,684,324 3,786,340 4,359,068 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 12,730,821$ 13,052,557 $ 13,771,230 $ 13,489,574 $ 14,631,733 $ Contributions as a percentage
of covered payroll 30.22% 24.95% 26.75% 28.07% 29.79%
Valuation date 6/30/2012 6/30/2013 6/30/2014 6/30/2015 6/30/2016 Fiscal yar ended June 30 2020 2021 2022 2023 2024
Actuarially determined contribution 4,919,630$ 5,268,460 $ 5,885,609 $ 6,540,769 $ 6,642,408 $ Contributions in relation to the
actuarially determined contribution 4,919,630 5,268,460 5,885,609 6,540,769 6,642,408 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 14,259,962$ 13,930,302 $ 14,656,798 $ 17,714,628 $ 20,279,270 $ Contributions as a percentage
of covered payroll 34.50% 37.82% 40.16% 36.92% 32.75%
Valuation date 6/30/2017 6/30/2018 6/30/2019 6/30/2020 6/30/2021

Notes to Schedule:

Methods and assumptions used to determine contribution rates:

Actuarial cost method Entry age normal
Amortization method Level percentage of payroll, closed Average remaining amortization period 15 years as of valuation date Asset valuation method Market value of assets
Inflation 2.75% for 2015 to 2019; 2.625% for 2020;

2.50% for 2021 to 2023; and 2.75% for 2024
Salary increases Varies by Entry Age and Service
Investment rate of return 7.50% for 2015 to 2018; 7.375% for 201 9; 7.25% for 2020; and

7.00% for 2021 to 2024, net of pension plan investment
and administrative expenses, includes inflation.

Retirement age The probabilities of retirement are based on the CalPERS Experience Study.

Mortality rate table The probabilities of mortality are based on the CalPERS Experience Study. Pre-retirement and post-retirement mortality rates include 20 years of projected mortality improvement using Scale AA published by the Society of Actuaries for 2015 to 2018. For 2019 to 2023, pre-retirement and post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries.

99 CITY OF TURLOCK
SCHEDULE OF THE CITY’S PROPORTIONATE SHARE OF THE NET PENSION LIABILITY SAFETY PLAN – COST-SHARING MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2024

Measurement Date 6/30/2014 6/30/2015 6/30/ 2016 6/30/2017 6/30/2018 Proportion of the net pension liability 0.39% 0.53% 0.55% 0.55% 0.57% Proportionate share of the net pension liability 24,494,695$ 21,992,658 $ 28,313,359 $ 32,763,059 $ 33,256,276 $ Covered payroll 10,003,385$ 9,440,848 $ 9,870,904 $ 9,994,012 $ 10,781,820 $ Proportionate share of the net pension liability
as a percentage of covered payroll 244.86% 232.95% 286.84% 327.83% 308.45% Plan fiduciary net position as a percentage of
the total pension liability 79.82% 78.40% 74.06% 73.31% 75.26% Measurement Date 6/30/2019 6/30/2020 6/30/ 2021 6/30/2022 6/30/2023 Proportion of the net pension liability 0.58% 0.60% 0.67% 0.61% 0.62% Proportionate share of the net pension liability 36,264,853$ 40,115,075 $ 23,663,292 $ 47,369,022 $ 52,090,299 $ Covered payroll 11,959,999$ 11,776,264 $ 11,203,500 $ 12,110,790 $ 12,942,203 $ Proportionate share of the net pension liability
as a percentage of covered payroll 303.22% 340.64% 211.21% 391.13% 402.48% Plan fiduciary net position as a percentage of
the total pension liability 75.26% 75.10% 88.29% 72.45% 71.88%

100

CITY OF TURLOCK

SCHEDULE OF CONTRIBUTIONS
SAFETY PLAN – COST-SHARING MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2024

Fiscal year ended June 30 2015 2016 2017 2018 2019
Actuarially determined contribution 3,951,824$ 2,633,557 $ 2,919,564 $ 3,335,223 $ 3,975,052 $ Contributions in relation to the
actuarially determined contribution 3,951,824 2,633,557 2,919,564 3,335,223 3,975,052 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 9,440,848$ 9,870,904 $ 9,994,012 $ 10,781,820 $ 11,959,999 $ Contributions as a percentage
of covered payroll 41.86% 26.68% 29.21% 30.93% 33.24%
Fiscal year ended June 30 2020 2021 2022 2023 2024
Actuarially determined contribution 4,477,269$ 4,811,929 $ 5,308,585 $ 5,799,503 $ 6,283,678 $ Contributions in relation to the
actuarially determined contribution 4,477,269 4,811,929 5,308,585 5,799,503 6,283,678 Contribution deficiency (excess) -$ - $ - $ - $ - $ Covered payroll 11,776,264$ 11,203,500 $ 12,110,790 $ 12,942,203 $ 14,059,809 $ Contributions as a percentage
of covered payroll 38.02% 42.95% 43.83% 44.81% 44.69%

101

CITY OF TURLOCK

SCHEDULE OF CHANGES IN THE TOTAL OTHER POST-EMPLOYMENT

BENEFITS (OPEB) LIABILITY AND RELATED RATIOS
LAST 10 YEARS*
FOR THE MEASUREMENT PERIOD ENDED JUNE 30

Measurement Date 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 Total OPEB Liability
Service Cost 1,155,061 $ 1,135,358 $ 638,020 $ 797,780 $ 581,088 $ 794,568 $ 454,041 $ Interest 637,175 713,835 716,143 292,875 298,105 363,300 390,209 Changes of Benefit Terms - - - - - - - Difference Between Expected and
Actual Experience (222,909) (55,000) (4,650,595) (105,340) (2,661,954) (17,761) (927,345) Changes of Assumptions (600,396) 854,724 (3,897,028) 205,992 (3,559,711) (53,252) (105,398) Benefit Payments (107,347) (231,516) (115,029) (91,631) (183,856) (180,804) (257,954) Net Change in Total OPEB Liability 861,584 2,417,401 (7,308,489) 1,099,676 (5,526,328) 906,051 (446,447) Total OPEB Liability - Beginning 16,544,233 17,405,817 19,823,218 12,514,729 13,614,405 8,088,077 8,994,128 Total OPEB Liability - Ending 17,405,817$ 19,823,218 $ 12,514,729 $ 13,614,405 $ 8,088,077 $ 8,994,128 $ 8,547,681 $ Covered-Employee Payroll 24,603,348 $ 28,959,337 $ 28,058,863 $ 25,133,575 $ 24,299,988 $ 25,028,988 $ 32,654,513 $ Total OPEB Liability as a Percentage of
Covered-Employee Payroll 70.75% 68.45% 44.60% 54.17% 33.28% 35.93% 26.18%

Notes to Schedule:

Benefit changes: None.

Changes in assumptions: The discount rate was modified from 3.8 5% to 3.50% in 2019, from 3.50% to

2.20% in 2020, from 2.20% to 2.10% in 2021, from 2.10% to 4.09 in 2022, and from 4.09% to 4.13% in 2023. The inflation rate was also modified from 1.85% to 1.50% in 2019, from 1.50% to 0.70% in 2020, from 0.70% to 0.6% in 2021, from 0.6% to 2.59% in 2022, and from 2.59% to 2.63% in 2023.

* Fiscal year 2018 was the first year of implementation.

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103

SUPPLEMENTAL INFORMATION

104

CITY OF TURLOCK

COMBINING BALANCE SHEET

GENERAL FUND
JUNE 30, 2024

Total
General General
Purpose Measure A Fund
ASSETS
Cash and investments 32,961,382 $ 16,541,677 $ 49,503,059 $ Accounts receivable 8,610,053 2,557,258 11,167,311 Interest receivable 948,407 - 948,407 Due from developers 20,041 - 20,041 Due from other funds 506,933 - 506,933 Loans receivable 7,487 - 7,487 Prepaids 13,517 1,755,110 1,768,627 Leases receivable 484,703 - 484,703 Total Assets 43,552,523 $ 20,854,045 $ 64,406,568 $

LIABILITIES
Accounts payable 3,223,607 $ 1,155,656 $ 4,379,263 $ Payroll payable 1,568,838 97,281 1,666,119 Unearned revenue 162,120 - 162,120 Deposits payable 1,081,009 - 1,081,009 Total Liabilities 6,035,574 1,252,937 7,288,511

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 193,863 - 193,863 Related to leases 463,251 - 463,251 Total Deferred Inflows of Resources 657,114 - 657,114

FUND BALANCES
Nonspendable 569,430 1,755,110 2,324,540 Committed 18,106,809 - 18,106,809 Assigned 724,625 - 724,625 Unassigned 17,458,971 17,845,998 35,304,969 Total Fund Balances 36,859,835 19,601,108 56,460,943 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 43,552,523 $ 20,854,045 $ 64,406,568 $

105

CITY OF TURLOCK

COMBINING SCHEDULE OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2024

Total
General Intrafund General
Purpose Measure A Eliminations Fund

REVENUES
Taxes and assessments 34,598,491 $ - $ - $ 34,598,491$ Measure A sales tax - 15,233,905 - 15,233,905 Licenses and permits 5,614,646 - - 5,614,646 Fines, forfeitures, and penalties 158,052 - - 158,052 Use of money and property 3,559,395 - - 3,559,395 Intergovernmental 9,388,952 - - 9,388,952 Charges for current services 9,898,306 - - 9,898,306 Other revenue 254,506 - - 254,506 Total Revenues 63,472,348 15,233,905 - 78,706,253

EXPENDITURES
Current:

General government 6,156,785 4,088,827 - 10,245,612 Public safety 37,054,668 3,753,936 - 40,808,604 Public ways and facilities/transportation 386,176 94,244 - 480,420 Parks and recreation 2,397,582 302,892 - 2,700,474 Community development 5,162,309 144,983 - 5,307,292 Capital outlay 1,078,684 10,037,468 - 11,116,152 Debt service:

Principal 362,924 94,687 - 457,611 Interest and fiscal charges 72,903 56,727 - 129,630 Total Expenditures 52,672,031 18,573,764 - 71,245,795

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 10,800,317 (3,339,859) - 7,460,458

OTHER FINANCING SOURCES (USES)
Issuance of debt 497,902 - - 497,902 Contributions from private-purpose trust 58,274 - - 58,274 Proceeds from sale of property 6,205 - - 6,205 Transfers in 3,285,917 6,000,000 (6,000,000) 3,285,917 Transfers (out) (12,117,385) (545,000) 6,000,000 (6,662,385) Total Other Financing Sources (Uses) (8,269,087) 5,455,000 - (2,814,087) NET CHANGE IN FUND BALANCES 2,531,230 2,115,141 - 4,646,371 BEGINNING FUND BALANCES 34,328,605 17,485,967 - 51,814,572 ENDING FUND BALANCES 36,859,835 $ 19,601,108 $ - $ 56,460,943$

106

NONMAJOR GOVERNMENTAL FUNDS

The following provides a brief narrative for some the City’s mo re substantial nonmajor governmental funds.

Integrated Waste Management (AB939)
This fund is used to account for revenues received from recycli ng-related efforts. These revenues are used to fund recycling education programs as well as the City’s “Take-Pride-In-Turlock” community cleanup.

Development Impact Fees
Various development impact fee programs are accounted for in th is fund. These revenues are collected for and expended on infrastructure improvements designed to mit igate the effects of development throughout the City. These fees are separate and, in most cases , in addition to the impact fees described in the Facility Fee Fund. Not included in this fund are impact fees collected for sewer and/or water infrastructure improvements.

Equipment Replacement
The fund accounts for monies set aside to fund the replacement of existing equipment (including computer related equipment) used by various City departments.

Lighting and Landscaping Assessment Districts
This fund accounts for the expenditure of revenues collected un der either the Landscaping and Lighting Act of 1972 or the Benefit Assessment Act of 1982. These acts p rovide a funding mechanism for the maintenance costs associated wi th various lighting, landscaping , and street improvements within the assessment districts formed under the respective act.

CDBG, State HOME Program, and Housing Stimulus Funds
This group of funds, when combined with the Stanislaus County H ousing Consortium, accounts for the federal funding the City receives from various sources on an an nual basis to assist in the preservation and production of affordable housing within the City.

Stanislaus County Housing Consortium
When combined with the CDBG, State HOME Program, and Housing St imulus Funds, this fund accounts for the federal funding the City receives from various sources on an annual basis to assist in the preservation and production of affordable housing within the Ci ty. The consortium specifically is a collaboration of six cities in Stanislaus County and the County who together use federal HOME monies to provide assistance for affordable housing within the County and the participating city jurisdictions.

ARPA
The fund accounts for American Rescue Plan Act (ARPA) funding.

Facility Fees Fund
The fund accounts for the revenue and related expenditures as outlined in the City’s Capital Facilities Fee Improvement Program. These fees, which are charged to new developments, are designed to finance the roadway, police, fire, and genera l government infrastructure, f acilities, and equipment needs throughout town which are the result of development within town.

North Turlock Master Plan
The fund accounts for the collection and expenditure of develop ment impact fees collected specifically within the master plan boundaries. Fees are collected to fund t he cost of infrastructu re – transportation, sewer, and storm drainage – improvements necessary due to development within the master plan area.

Airport
This fund accounts for grant revenues received from the state a nd federal governments which are being expended to fund capital improvements at the Turlock Municipal Airport. The day-to-day operations of the airport and the capital improvement projects are under the cont rol of the Turlock Regional Aviation Association under a Facilities Management Agreement with the City of Turlock.