Turlock City Council
May 26, 2026

78 NOTE 9 – PENSION PLANS (Continued)

C. Safety Plan (Continued)

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, 2025, the City reported a net pension liability for its proportionate share of the net pension liability of the Safety Plan of $51,311,931.

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, 2024, 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, 2023, rolled forward to J une 30, 2024, 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, 2023 and 2024, was as follows:

Safety
(Fire and Police)
Proportion - June 30, 2023 0.62%
Proportion - June 30, 2024 0.63%
Change - Increase (Decrease) 0.01%

For the year ended June 30, 2025, the City recognized pension e xpense of $4,900,232 for the Safety Plan. At June 30, 2025, 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 7,208,703$ - $ Differences between actual and expected experience 4,187,510 (136,154) Differences in actual and proportional contribution 855,570 (568,356) Changes in assumptions 1,264,220 -
Change in employer's proportion and differences
between the employer’s contributions and the
employer’s proportionate share of contributions 701,846 (4,255,360) Net differences between projected and actual earnings
on plan investments 2,480,185 -
Total 16,698,034 $ (4,959,870) $

79 NOTE 9 – PENSION PLANS (Continued)

C. Safety Plan (Continued)

$7,208,703 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, 2026. 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
2026 1,499,300 $
2027 4,358,329
2028 (479,561)
2029 (848,607)
Total 4,529,461 $

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 78,208,721 $
Current Discount Rate 6.90%
Net Pension Liability 51,311,931 $
1% Increase 7.90%
Net Pension Liability 29,314,137 $

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

80 NOTE 9 – PENSION PLANS (Continued)

D. Information Common to the Miscellaneous and Safety Plans

Actuarial Assumptions – For the measurement period ended June 30, 2024, the total pen sion liabilities were determined by rolling forward the June 30, 202 3 total pension liability. The June 30, 2023 total pension liabilities were based on the following actuarial methods and assumptions:

Miscellaneous and Safety (Fire and Police)
Valuation Date June 30, 2023
Measurement Date June 30, 2024
Actuarial Cost Method Entr y-Age Normal Cost Method
Actuarial Assumptions:

Discount Rate 6.900%
Inflation Rate 2.300%
Payroll Growth 2.800%
Projected Salary Increase (1)
Investment Rate of Return 6.80% (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. Mortality rates incorporated full generational mortality improvement using 80% of Scale MP-2020 published by the 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, 2023 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.

81 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.

82 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 emp loyees, 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

83 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, 2025, 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, 2025, based on the following actuarial methods and assumptions:

Valuation Date July 1, 2023
Measurement Date June 30, 2025
Actuarial Cost Method Entry Age
Actuarial Assumptions:

Discount Rate 4.81%
Inflation 3.31%
Payroll Growth 3.00%
Mortality Rate RP 2014 Mortality Table
pro
jected to 2025 with Scale BB
Healthcare Trend Rate 8.0% in 2020 and will decline
to 4.5% in 2026 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 4.81%, 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 4.21% to 4.81% and the infl ation rate was modified from 2.71% to 3.31%.

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

Total OPEB
Liability
Balance at July 1, 2024 8,547,681 $
Changes Recognized for the Measurement Period:

Service cost 473,820
Interest on the total OPEB liability 379,805
Changes in benefit terms -
Differences between expected and actual experience (218,792) Changes of assumptions (844,169)
Contributions from the employer -
Net investment income -
Administrative expenses -
Benefit payments (59,798)
Net changes (269,134)
Balance at June 30, 2025 8,278,547 $

84 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%

3.81% 4.81% 5.81%
9,641,196$ 8,278,547 $ 7,163,427 $
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%
7,098,026$ 8,278,547 $ 9,641,196 $
Total OPEB Liability/(Asset)

OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB – For the year ended June 30, 2025, the City re cognized OPEB expense of $545,4 05. At June 30, 2025, 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 112,505$ (5,487,186) $ Changes in assumptions 1,444,425 (6,476,703) Total 1,556,930 $ (11,963,889) $

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

Year Ended Annual
June 30 Amortization
2026 (1,339,232)$
2027 (1,339,232)
2028 (1,339,232)
2029 (1,339,232)
2030 (1,339,232)
Thereafter (3,710,799)
Total (10,406,959)$

85 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 2024-2025 were as follows:

Plan Contributions
Management/Confidential 154,800 $
Miscellaneous 321,043
Police 432,678
Fire 258,740
Police Management 43,323

86 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.

87 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, 2025, totaled $573,643.

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, 2025, were $258,807, and the City’s deductible under the policy is $1.25 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 $2,265,144 for coverage during the year ended June 30, 2025, and in the amount of $194, 997, 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.

88 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 Payabl e and Changes Claims Claims Payable June 30 July 1 in Estimates Payments June 30
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 2025 3,081,372 10,338,427 (8,364,401) 5,055,398

NOTE 13 – COMMITMENTS AND CONTINGENCIES

A. Litigation

As of June 30, 2025, 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.

89 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 was completed and the WTP went operational in early 2024.

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, 2025, was $38,098,181.

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, 2025:

Projects Amount
Roads - Measure A 3,727,642 $
Stanislaus Regional Water Authority 2,496,021
Water Improvements 1,664,844
Sewer Improvements 475,854
Other Contracts 456,610
Sewer and Water Improvements 50/50 374,410
Improvements - Road Rehabilitation 250,478
Columbia Pool 217,014
Well Rehabilitation Services 211,050
Various Bus, Vehicle, and Equipment Purchases 163,022
Drinking Water Chlorination Project 70,891
Traffic Signals 62,426
Parks and Recreation 61,072
Housing 50,849
Transit Center 23,786

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.

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

A. Redevelopment Dissolution (Continued)

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.

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) to review the propriety of any transfers of assets between redevelopment agencies and other public bodies that occurred after January 1, 2011.

If the public body that received such transfers is not contract ually committed to a third party for the expenditure or encumbrance of those assets, the SCO is required 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

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

A. Redevelopment Dissolution (Continued)

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 5, 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, 2025.

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, 2025, are as follows:

Original Issue Balance Balance Due Within Due in More
Amount June 30, 2024 Retirements June 30, 2025 One Year Than One Yea r General Obligation Revenue Bonds:
2016 Tax Allocation Refunding Bonds 35,740,000$ 28,600,000 $ 1,335,000 $ 27,265,000 $ 1,400,000 $ 25,865,000 $ Add: Unamortized Bond Premium - 2,109,669 137,587 1,972,082 - 1,972,082 Total Successor Agency Debt 35,740,000$ 30,709,669 $ 1,472,587 $ 29,237,082 $ 1,400,000 $ 27,837,082 $

2016 Successor Agency Tax Allocation Refunding Bonds

In November 2016, the Successor A gency issued Tax Allocation Re funding Bonds, Series 2016 (2016 Bonds), 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%. Interest 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 judgment or 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

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

B. Long-Term Obligations (Continued)

2016 Successor Agency Tax Allocation Refunding Bonds (Continued)

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.

Debt Service Requirements

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

For the Year
Ending June 30, Principal Interest
2026 1,400,000 $ 1,047,256 $
2027 1,470,000 975,506
2028 1,545,000 900,131
2029 1,620,000 821,006
2030 1,705,000 737,881
2031-2035 9,755,000 2,470,891
2036-2040 9,770,000 725,325
Total 27,265,000 7,677,996 $
Add: Unamortized
Bond Premium 1,972,082
Net Long-Term Debt 29,237,082$
2016 Tax Allocation
Refunding Bonds

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.

93 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, 2025. The City recognizes a lease liability and an intangible right ‐to-use lease asset (lease asset) in the government‐wide financial statements.

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.

94 NOTE 15 – LEASES (Continued)

A. Policies (Continued)

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.

B. Leases Receivable

The balances related to leases receivable and deferred inflows of resources as of June 30, 2025, were:

Deferred
Leases Inflows of
Leases Receivable (Lessor) Receivable Resources
General Fund
Communication Site Lease 474,393$ 446,094 $
Nonmajor Governmental Funds
Communication Site Lease 192,459 176,688
Total 666,852 $ 622,782 $

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, 2025, 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, 2025, the leases had 10-30 years remaining. The City recognized $32,428 in lease revenue and $10,267 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, 2025, the total value of the lease liability was $1,441,928. The City is required to make mo nthly principal and interest payments ranging from $350 to $8,865. The leases have interest rates tha t 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 ri ght-to-use lease assets as of t he end of the current fiscal year was $1,828,640 and had accumulated amortization of $312,016.

The future principal and interest lease payments as of June 30, 2025, were as follows:

For the Year
Ending June 30, Principal Interest
2026 370,547 $ 42,088 $
2027 343,999 29,115
2028 308,792 18,188
2029 219,532 9,933
2030 199,058 3,158
Total 1,441,928 $ 102,482 $

95 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 o n w i t h a t e r m o f t w o t o f i v e y e a r s . T h e value of the SBITA asset as of the end of the current fiscal ye ar was $2,555,286 and had accumulated amortization of $432,441. As of June 30, 2025, the value the SBITA liability was $1,943,062.

The future principal and interest payments for SBITA as of June 30, 2025, were as follows:

For the Year
Ending June 30, Principal Interest
2026 516,778 $ 57,782 $
2027 496,841 39,613
2028 440,875 23,569
2029 454,390 9,467
2030 34,178 90
Total 1,943,062 $ 130,521 $

NOTE 17 – EXCESS OF EXPENDITURES OVER APPROPRIATIONS

For the year ended June 30, 2025, expenditures exceeded appropriations as follows:

Expenditures Amount
General Fund
Public ways and facilities/transportation 11,572 $
Debt Service:

Principal 147,015
Interest and fiscal charges 311,253

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 April 8, 2026, which is the date of issuance of the City’s independent auditor’s report.

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97 REQUIRED SUPPLEMENTARY INFORMATION

98 CITY OF TURLOCK

SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS MISCELLANEOUS PLAN – AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2025

Measurement Date 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Total Pension Liability
Service cost 2,145,944 $ 2,113,775 $ 2,535,894 $ 2,556,275 $ 2,302,531 $ Interest 8,394,010 8,879,576 9,300,013 9,710,969 10,263,211 Differences between expected and
actual experience (2,796,579) 704,751 188,828 254,403 2,064,432 Changes in assumptions (2,114,962) - 7,890,713 (567,581) - Changes in benefits - - - - - Benefit payments, including refunds of
employee contributions (4,620,913) (5,141,794) (5,431,662) (6,138,941) (6,823,311) Net change in total pension liability 1,007,500 6,556,308 14,483,786 5,815,125 7,806,863 Total pension liability - beginning 115,874,657 116,882,157 123,438,465 137,922,251 143,737,376 Total pension liability - ending (a) 116,882,157$ 123,438,465 $ 137,922,251 $ 143,737,376 $ 151,544,239 $ Plan Fiduciary Net Position
Contributions - employer 2,832,416 $ 3,259,415 $ 3,684,085 $ 3,783,927 $ 4,359,068 $ Contributions - employee 1,042,224 1,027,004 1,109,929 1,133,810 1,157,716 Net investment income (loss) 1,937,886 438,577 9,502,918 7,974,175 6,592,102 Benefit payments, including refunds of
employee contributions (4,620,913) (5,141,794) (5,431,662) (6,138,941) (6,823,311) Plan to Plan resource movement 78,472 622 (25) (230) - Administrative expense (94,994) (51,446) (123,941) (144,433) (70,664) Other miscellaneous income (expense) - - - (274,281) 230 Net change in plan fiduciary net position 1,175,091 (467,622) 8,741,304 6,334,027 5,215,141 Plan fiduciary net position - beginning 83,239,017 84,414,108 83,946,486 92,687,790 99,021,817 Plan fiduciary net position - ending (b) 84,414,108$ 83,946,486 $ 92,687,790 $ 99,021,817 $ 104,236,958 $ Net pension liability (a)-(b) 32,468,049$ 39,491,979 $ 45,234,461 $ 44,715,559 $ 47,307,281 $ Plan fiduciary net position as a percentage
of the total pension liability 72.22% 68.01% 67.20% 68.89% 68.78% Covered payroll 12,730,821 $ 13,052,557 $ 13,771,230 $ 13,489,574 $ 14,631,733 $ Net pension liability as a percentage
of covered payroll 255.03% 302.56% 328.47% 331.48% 323.32%

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, Senate Bill (SB) 1168 increased the standard retiree l ump sum death benefit from $500 to $2,000 for any death occurring on or after July 1, 2023. The i mpact, if any, is included in the changes of benefit terms.

Changes of Assumptions: There were no assumption changes in 20 23 or 2024. Effective with the June 30, 2021 valuation date (June 30, 2022 measurement date), the a ccounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rat e of return, CalPERS took into account long-term market return expectations as well as the expected pe nsion 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 accounting discount rate was

7.15% for measurement dates June 30, 2017, through June 30, 202 1; 7.65% for measurement dates June 30, 2015, through June 30, 2016; and 7.50% for measurement date June 30, 2014.

99 CITY OF TURLOCK
SCHEDULE OF CHANGES IN THE NET PENSION LIABILITY AND RELATED RATIOS (Continued) MISCELLANEOUS PLAN – AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2025

Measurement Date 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 Total Pension Liability
Service cost 2,484,703 $ 2,350,368 $ 2,467,656 $ 2,611,766 $ 3,348,287 $ Interest 10,837,530 11,195,286 11,365,458 11,886,226 12,566,103 Differences between expected and
actual experience 2,271,043 (889,500) (3,623,085) 1,636,398 3,946,228 Changes in assumptions - - 5,861,672 181,892 - Changes in benefits - - - - - Benefit payments, including refunds of
employee contributions (6,967,583) (7,756,380) (7,650,663) (8,701,543) (9,216,848) Net change in total pension liability 8,625,693 4,899,774 8,421,038 7,614,739 10,643,770 Total pension liability - beginning 151,544,239 160,169,932 165,069,706 173,490,744 181,105,483 Total pension liability - ending (a) 160,169,932$ 165,069,706 $ 173,490,744 $ 181,105,483 $ 191,749,253 $ Plan Fiduciary Net Position
Contributions - employer 4,919,630 $ 5,268,466 $ 5,886,502 $ 6,540,769 $ 6,642,408 $ Contributions - employee 1,038,613 1,037,625 1,052,686 1,282,553 1,519,869 Net investment income (loss) 5,279,682 24,922,527 (10,068,430) 7,554,441 12,361,947 Benefit payments, including refunds of
employee contributions (6,967,583) (7,756,380) (7,650,663) (8,701,543) (9,216,848) Plan to Plan resource movement - - - - - Administrative expense (146,949) (108,245) (82,056) (88,877) (103,706) Other miscellaneous income (expense) - - - - - Net change in plan fiduciary net position 4,123,393 23,363,993 (10,861,961) 6,587,343 11,203,670 Plan fiduciary net position - beginning 104,236,958 108,360,351 131,724,344 120,862,383 127,449,726 Plan fiduciary net position - ending (b) 108,360,351$ 131,724,344 $ 120,862,383 $ 127,449,726 $ 138,653,396 $ Net pension liability (a)-(b) 51,809,581$ 33,345,362 $ 52,628,361 $ 53,655,757 $ 53,095,857 $ Plan fiduciary net position as a percentage
of the total pension liability 67.65% 79.80% 69.67% 70.37% 72.31% Covered payroll 14,259,962 $ 14,305,346 $ 13,785,790 $ 14,822,736 $ 19,298,484 $ Net pension liability as a percentage
of covered payroll 363.32% 233.10% 381.76% 361.98% 275.13%

100

CITY OF TURLOCK

SCHEDULE OF CONTRIBUTIONS
MISCELLANEOUS PLAN – AGENT MULTIPLE-EMPLOYER DEFINED BENEFIT PENSION PLAN LAST 10 YEARS
FOR THE YEAR ENDED JUNE 30, 2025

Fiscal year ended June 30 2016 2017 2018 2019 2020
Actuarially determined contribution 3,256,514$ 3,684,324 $ 3,786,340 $ 4,359,068 $ 4,919,630 $ Contributions in relation to the
actuarially determined contribution 3,256,514 3,684,324 3,786,340 4,359,068 4,919,630 Contribution deficiency (excess) - $ - $ - $ - $ - $ Covered payroll 13,052,557 $ 13,771,230 $ 13,489,574 $ 14,631,733 $ 14,259,962 $ Contributions as a percentage
of covered payroll 24.95% 26.75% 28.07% 29.79% 34.50%
Valuation date 6/30/2013 6/30/2014 6/30/2015 6/30/2016 6/30/2017 Fiscal year ended June 30 2021 2022 2023 2024 2025
Actuarially determined contribution 5,268,460$ 5,885,609 $ 6,540,769 $ 6,642,408 $ 7,468,999 $ Contributions in relation to the
actuarially determined contribution 5,268,460 5,885,609 6,540,769 6,642,408 7,468,999 Contribution deficiency (excess) - $ - $ - $ - $ - $ Covered payroll 13,930,302 $ 14,656,798 $ 17,714,628 $ 20,279,270 $ 22,525,875 $ Contributions as a percentage
of covered payroll 37.82% 40.16% 36.92% 32.75% 33.16%
Valuation date 6/30/2018 6/30/2019 6/30/2020 6/30/2021 6/30/2022

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 d ate 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.

101

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, 2025

Measurement Date 6/30/2015 6/30/2016 6/30/2017 6/30/2018 6/30/2019 Proportion of the net pension liability 0.53% 0.55% 0.55% 0.57% 0.58 % Proportionate share of the net pension liability 21,992,658$ 28,313,359 $ 32,763,059 $ 33,256,276 $ 36,264,853 $ Covered payroll 9,440,848 $ 9,870,904 $ 9,994,012 $ 10,781,820 $ 11,959,999 $ Proportionate share of the net pension liability
as a percentage of covered payroll 232.95% 286.84% 327.83% 308.45% 303.22% Plan fiduciary net position as a percentage
of the total pension liability 78.40% 74.06% 73.31% 75.26% 75.26% Measurement Date 6/30/2020 6/30/2021 6/30/2022 6/30/2023 6/30/2024 Proportion of the net pension liability 0.60% 0.67% 0.61% 0.62% 0.63 % Proportionate share of the net pension liability 40,115,075$ 23,663,292 $ 47,369,022 $ 52,090,299 $ 51,311,931 $ Covered payroll 11,776,264 $ 11,203,500 $ 12,110,790 $ 12,942,203 $ 14,059,809 $ Proportionate share of the net pension liability
as a percentage of covered payroll 340.64% 211.21% 391.13% 402.48% 364.95% Plan fiduciary net position as a percentage
of the total pension liability 75.10% 88.29% 72.45% 71.88% 73.94%

102
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103

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, 2025

Fiscal year ended June 30 2016 2017 2018 2019 2020
Actuarially determined contribution 2,633,557$ 2,919,564 $ 3,335,223 $ 3,975,052 $ 4,477,269 $ Contributions in relation to the
actuarially determined contribution 2,633,557 2,919,564 3,335,223 3,975,052 4,477,269 Contribution deficiency (excess) - $ - $ - $ - $ - $ Covered payroll 9,870,904 $ 9,994,012 $ 10,781,820 $ 11,959,999 $ 11,776,264 $ Contributions as a percentage
of covered payroll 26.68% 29.21% 30.93% 33.24% 38.02%
Fiscal year ended June 30 2021 2022 2023 2024 2025
Actuarially determined contribution 4,811,929$ 5,308,585 $ 5,799,503 $ 6,283,678 $ 7,208,703 $ Contributions in relation to the
actuarially determined contribution 4,811,929 5,308,585 5,799,503 6,283,678 7,208,703 Contribution deficiency (excess) - $ - $ - $ - $ - $ Covered payroll 11,203,500 $ 12,110,790 $ 12,942,203 $ 14,059,809 $ 15,709,720 $ Contributions as a percentage
of covered payroll 42.95% 43.83% 44.81% 44.69% 45.89%

104

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 Total OPEB Liability
Service Cost 1,155,061 $ 1,135,358 $ 638,020 $ 797,780 $ Interest 637,175 713,835 716,143 292,875 Changes of Benefit Terms - - - - Difference Between Expected and
Actual Experience (222,909) (55,000) (4,650,595) (105,340) Changes of Assumptions (600,396) 854,724 (3,897,028) 205,992 Benefit Payments (107,347) (231,516) (115,029) (91,631) Net Change in Total OPEB Liability 861,584 2,417,401 (7,308,489) 1,099,676 Total OPEB Liability - Beginning 16,544,233 17,405,817 19,823,218 12,514,729 Total OPEB Liability - Ending 17,405,817$ 19,823,218 $ 12,514,729 $ 13,614,405 $ Covered-Employee Payroll 24,603,348 $ 28,959,337 $ 28,058,863 $ 25,133,575 $ Total OPEB Liability as a Percentage
of Covered-Employee Payroll 70.75% 68.45% 44.60% 54.17%

Notes to Schedule:

Benefit changes: None.

Changes in assumptions: The discount rate was modified from 3.8 5% to 3.50% in 2020, from 3.50% to

2.20% in 2021, from 2.20% to 2.10% in 2022, from 2.10% to 4.09 in 2023, from 4.09% to 4.13% in 2024, and 4.13% to 4.81% in 2025. The inflation rate was also modifie d from 1.85% to 1.50% in 2020, from

1.50% to 0.70% in 2021, from 0.70% to 0.6% in 2022, from 0.6% t o 2.59% in 2023, from 2.59% to 2.63% in 2024, and 2.63% to 3.31% in 2025.

* Fiscal year 2018 was the first year of implementation.

105

CITY OF TURLOCK

SCHEDULE OF CHANGES IN THE TOTAL OTHER POST-EMPLOYMENT
BENEFITS (OPEB) LIABILITY AND RELATED RATIOS (Continued) LAST 10 YEARS*
FOR THE MEASUREMENT PERIOD ENDED JUNE 30

Measurement Date 6/30/2022 6/30/2023 6/30/2024 6/30/2025 Total OPEB Liability
Service Cost 581,088 $ 794,568 $ 454,041 $ 473,820 $ Interest 298,105 363,300 390,209 379,805 Changes of Benefit Terms - - - - Difference Between Expected and
Actual Experience (2,661,954) (17,761) (927,345) (218,792) Changes of Assumptions (3,559,711) (53,252) (105,398) (844,169) Benefit Payments (183,856) (180,804) (257,954) (59,798) Net Change in Total OPEB Liability (5,526,328) 906,051 (446,447) (269,134) Total OPEB Liability - Beginning 13,614,405 8,088,077 8,994,128 8,547,681 Total OPEB Liability - Ending 8,088,077$ 8,994,128 $ 8,547,681 $ 8,278,547 $ Covered-Employee Payroll 24,299,988 $ 25,028,988 $ 32,654,513 $ 33,634,148 $ Total OPEB Liability as a Percentage
of Covered-Employee Payroll 33.28% 35.93% 26.18% 24.61%

106
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107

SUPPLEMENTAL INFORMATION

108

CITY OF TURLOCK

COMBINING BALANCE SHEET

GENERAL FUND
JUNE 30, 2025

Total
General General
Purpose Measure A Fund
ASSETS
Cash and investments 39,379,126 $ 8,064,876 $ 47,444,002 $ Restricted cash and investments and
cash and investments with fiscal agent (Note 3) 252,399 31,632,884 31,885,283 Accounts receivable 8,070,116 2,472,973 10,543,089 Interest receivable 692,341 - 692,341 Due from developers 20,041 - 20,041 Due from other funds 568,203 - 568,203 Loans receivable 7,819 - 7,819 Prepaids 41,767 - 41,767 Leases receivable 474,393 - 474,393 Total Assets 49,506,205 $ 42,170,733 $ 91,676,938 $

LIABILITIES
Accounts payable 2,841,700 $ 1,415,253 $ 4,256,953 $ Payroll payable 1,502,876 137,625 1,640,501 Unearned revenue 185,331 - 185,331 Deposits payable 935,732 - 935,732 Total Liabilities 5,465,639 1,552,878 7,018,517

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 193,863 - 193,863 Related to leases 446,094 - 446,094 Total Deferred Inflows of Resources 639,957 - 639,957

FUND BALANCES
Nonspendable 1,112,223 - 1,112,223 Committed 40,651,057 - 40,651,057 Assigned 770,391 - 770,391 Unassigned 866,938 40,617,855 41,484,793 Total Fund Balances 43,400,609 40,617,855 84,018,464 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 49,506,205 $ 42,170,733 $ 91,676,938 $

109

CITY OF TURLOCK

COMBINING SCHEDULE OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

GENERAL FUND
FOR THE YEAR ENDED JUNE 30, 2025

Total
General General
Purpose Measure A Fund

REVENUES
Taxes and assessments 34,913,724 $ - $ 34,913,724$ Measure A sales tax - 14,914,510 14,914,510 Licenses and permits 5,593,670 - 5,593,670 Fines, forfeitures, and penalties 448,230 - 448,230 Use of money and property 3,109,361 405,498 3,514,859 Intergovernmental 10,033,849 - 10,033,849 Charges for current services 10,387,149 - 10,387,149 Other revenue 306,876 - 306,876 Total Revenues 64,792,859 15,320,008 80,112,867

EXPENDITURES
Current:

General government 8,193,733 4,991,838 13,185,571 Public safety 39,615,318 7,019,732 46,635,050 Public ways and facilities/transportation 705,004 24,327 729,331 Parks and recreation 3,540,718 78,590 3,619,308 Community development 5,546,453 4,284 5,550,737 Capital outlay 1,994,476 13,061,341 15,055,817 Debt service:

Principal 434,875 97,916 532,791 Interest and fiscal charges 361,707 53,498 415,205 Total Expenditures 60,392,284 25,331,526 85,723,810

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 4,400,575 (10,011,518) (5,610,943)

OTHER FINANCING SOURCES (USES)
Issuance of debt 1,983,226 31,649,327 33,632,553 Contributions from other funds - - - Contributions from private-purpose trust 65,051 - 65,051 Proceeds from sale of property 3,135 - 3,135 Transfers in 4,339,130 - 4,339,130 Transfers (out) (4,250,343) (621,062) (4,871,405) Total Other Financing Sources (Uses) 2,140,199 31,028,265 33,168,464 NET CHANGE IN FUND BALANCES 6,540,774 21,016,747 27,557,521 BEGINNING FUND BALANCES 36,859,835 19,601,108 56,460,943 ENDING FUND BALANCES 43,400,609 $ 40,617,855 $ 84,018,464 $

110

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.

111

CITY OF TURLOCK

COMBINING BALANCE SHEET

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Integrated
Waste
Asset Management Bicycle Sports
Forfeitures (AB939) Safety Facilities
ASSETS
Cash and investments 96,497 $ 1,233,232 $ 50,607 $ - $ Accounts receivable - - 323 62,664 Interest receivable 695 7,283 298 - Due from developers - - - - Loans receivable - - - - Prepaids - - - - Leases receivable - - - 192,459 Total Assets 97,192 $ 1,240,515 $ 51,228 $ 255,123 $

LIABILITIES
Accounts payable 185 $ - $ - $ 2,377$ Payroll payable - 1,991 528 17,104 Due to other funds - - - 58,954 Unearned revenue - - - - Deposits payable - - - - Total Liabilities 185 1,991 528 78,435

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Related to leases - - - 176,688 Total Deferred Inflows of Resources - - - 176,688

FUND BALANCES
Nonspendable - - - - Restricted - 1,238,524 - - Committed 97,007 - 50,700 - Unassigned - - - - Total Fund Balances 97,007 1,238,524 50,700 - Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 97,192 $ 1,240,515 $ 51,228 $ 255,123 $

SPECIAL REVENUE FUNDS

112

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Development
Animal Fees Impact Equipment NW Triangle
Forfeiture Fees Replacement Plan Fee
ASSETS
Cash and investments 36,144 $ 5,965,767 $ 9,382,281 $ 358,908 $ Accounts receivable 1,531 - 28,158 - Interest receivable 200 32,021 - 1,971 Due from developers - - - - Loans receivable - - - - Prepaids - - 239,680 - Leases receivable - - - - Total Assets 37,875 $ 5,997,788 $ 9,650,119 $ 360,879 $

LIABILITIES
Accounts payable 541 $ 12,709 $ 351,561 $ - $ Payroll payable - - 1,846 - Due to other funds - - - - Unearned revenue - - - - Deposits payable - - - - Total Liabilities 541 12,709 353,407 -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Related to leases - - - - Total Deferred Inflows of Resources - - - -

FUND BALANCES
Nonspendable - - 239,680 - Restricted 37,334 - - - Committed - 5,985,079 9,057,032 360,879 Unassigned - - - - Total Fund Balances 37,334 5,985,079 9,296,712 360,879 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 37,875 $ 5,997,788 $ 9,650,119 $ 360,879 $

SPECIAL REVENUE FUNDS

113

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Lighting and
Landscaping Downtown
Development Assessment Assessment CFD #2
Benefit Districts District Services
ASSETS
Cash and investments 727,691 $ 24,847,139 $ 11,118 $ 78,901 $ Accounts receivable - 86,588 - 8,860 Interest receivable 4,032 128,589 88 2,972 Due from developers - - - - Loans receivable - - - - Prepaids - - - - Leases receivable - - - - Total Assets 731,723 $ 25,062,316 $ 11,206 $ 90,733 $

LIABILITIES
Accounts payable - $ 18,261$ - $ - $ Payroll payable - 27,978 - - Due to other funds - - - - Unearned revenue - - - - Deposits payable - - - - Total Liabilities - 46,239 - -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Related to leases - - - - Total Deferred Inflows of Resources - - - -

FUND BALANCES
Nonspendable - - - - Restricted - 25,016,077 11,206 90,733 Committed 731,723 - - - Unassigned - - - - Total Fund Balances 731,723 25,016,077 11,206 90,733 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 731,723$ 25,062,316 $ 11,206 $ 90,733 $

SPECIAL REVENUE FUNDS

114

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Stanislaus
State County
HOME Housing Housing
CDBG Program Stimulus Consortium
ASSETS
Cash and investments 125,739 $ 4,831,940 $ - $ 125,728$ Accounts receivable 121,607 - 57,756 491,025 Interest receivable - 26,350 10 1,011 Due from developers - - - - Loans receivable 4,814,803 3,475,504 5,500 9,980,950 Prepaids - - - - Leases receivable - - - - Total Assets 5,062,149 $ 8,333,794 $ 63,266 $ 10,598,714$

LIABILITIES
Accounts payable 64,812 $ - $ - $ 38,190$ Payroll payable 9,115 - - 2,764 Due to other funds - - 12,771 - Unearned revenue - - - - Deposits payable 3,600 - - 2,650 Total Liabilities 77,527 - 12,771 43,604

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 4,814,803 3,475,504 5,500 9,980,950 Related to leases - - - - Total Deferred Inflows of Resources 4,814,803 3,475,504 5,500 9,980,950

FUND BALANCES
Nonspendable - - - - Restricted 169,819 4,858,290 44,995 574,160 Committed - - - - Unassigned - - - - Total Fund Balances 169,819 4,858,290 44,995 574,160 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 5,062,149$ 8,333,794 $ 63,266 $ 10,598,714$

SPECIAL REVENUE FUNDS

115

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Grant Traffic
Funds Safety HOME ARP ARPA
ASSETS
Cash and investments 918,093 $ 164,594 $ - $ 4,415,737$ Accounts receivable 297,829 - 128,979 - Interest receivable 5,559 872 - - Due from developers - - - - Loans receivable - - - - Prepaids - - - - Leases receivable - - - - Total Assets 1,221,481 $ 165,466 $ 128,979 $ 4,415,737 $

LIABILITIES
Accounts payable 50,406 $ 529 $ 426 $ 3,610 $ Payroll payable 2,900 - 2,315 - Due to other funds 368,373 - 128,105 - Unearned revenue - - - 4,354,216 Deposits payable - - - - Total Liabilities 421,679 529 130,846 4,357,826

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Related to leases - - - - Total Deferred Inflows of Resources - - - -

FUND BALANCES
Nonspendable - - - - Restricted 799,802 164,937 - 57,911 Committed - - - - Unassigned - - (1,867) - Total Fund Balances 799,802 164,937 (1,867) 57,911 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 1,221,481$ 165,466 $ 128,979 $ 4,415,737 $

SPECIAL REVENUE FUNDS

116

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

CAPITAL

PROJECTS
FUNDS
CFD #3 Capital
PLHA Facility Fees Maintenance Improvement
ASSETS
Cash and investments 490,807 $ 20,298,513 $ 2,355 $ 1,887,705$ Accounts receivable - - - 2,340 Interest receivable 914 105,968 13 19,525 Due from developers - 267,243 - - Loans receivable 362,500 - - - Prepaids - - - - Leases receivable - - - - Total Assets 854,221 $ 20,671,724 $ 2,368 $ 1,909,570$

LIABILITIES
Accounts payable - $ 6,240$ - $ 308,131$ Payroll payable - - - - Due to other funds - - - - Unearned revenue - - - - Deposits payable - - - - Total Liabilities - 6,240 - 308,131

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue 362,500 - - - Related to leases - - - - Total Deferred Inflows of Resources 362,500 - - -

FUND BALANCES
Nonspendable - 267,243 - - Restricted 491,721 20,398,241 2,368 - Committed - - - 1,601,439 Unassigned - - - - Total Fund Balances 491,721 20,665,484 2,368 1,601,439 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 854,221$ 20,671,724 $ 2,368 $ 1,909,570$

SPECIAL REVENUE FUNDS

117

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Street Downtown North North East
Light Improvement Turlock Turlock
Installation Project Master Plan Master Plan
ASSETS
Cash and investments 170,850 $ 238,242 $ 2,081,193 $ 4,125,396 $ Accounts receivable - - - - Interest receivable 916 - 11,680 22,841 Due from developers - - - - Loans receivable - - - - Prepaids - - - - Leases receivable - - - - Total Assets 171,766 $ 238,242 $ 2,092,873 $ 4,148,237 $

LIABILITIES
Accounts payable - $ - $ - $ - $ Payroll payable - - - - Due to other funds - - - - Unearned revenue - - - - Deposits payable - - - - Total Liabilities - - - -

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - - Related to leases - - - - Total Deferred Inflows of Resources - - - -

FUND BALANCES
Nonspendable - - - - Restricted - - - - Committed 171,766 238,242 2,092,873 4,148,237 Unassigned - - - - Total Fund Balances 171,766 238,242 2,092,873 4,148,237 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 171,766 $ 238,242 $ 2,092,873 $ 4,148,237 $

CAPITAL PROJECTS FUNDS

118

CITY OF TURLOCK
COMBINING BALANCE SHEET (Continued)

NONMAJOR GOVERNMENTAL FUNDS
JUNE 30, 2025

Turlock Total
Regional East Nonmajor
Industrial Tuolumne Governmental
Park Master Plan Airport Funds
ASSETS
Cash and investments 2,682,481 $ 154,335 $ 8,485 $ 85,510,478$ Accounts receivable 31,667 - 10,000 1,329,327 Interest receivable 14,739 364 113 389,024 Due from developers - - - 267,243 Loans receivable - - - 18,639,257 Prepaids - - - 239,680 Leases receivable - - - 192,459 Total Assets 2,728,887 $ 154,699 $ 18,598 $ 106,567,468$

LIABILITIES
Accounts payable - $ - $ - $ 857,978$ Payroll payable - - - 66,541 Due to other funds - - - 568,203 Unearned revenue - - - 4,354,216 Deposits payable - - - 6,250 Total Liabilities - - - 5,853,188

DEFERRED INFLOWS OF RESOURCES
Unavailable revenue - - - 18,639,257 Related to leases - - - 176,688 Total Deferred Inflows of Resources - - - 18,815,945

FUND BALANCES
Nonspendable - - - 506,923 Restricted - - - 53,956,118 Committed 2,728,887 154,699 18,598 27,437,161 Unassigned - - - (1,867) Total Fund Balances 2,728,887 154,699 18,598 81,898,335 Total Liabilities, Deferred Inflows of
Resources, and Fund Balances 2,728,887$ 154,699 $ 18,598 $ 106,567,468$

CAPITAL PROJECTS FUNDS

119

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCES

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Integrated
Waste
Asset Management Bicycle Sports
Forfeitures (AB939) Safety Facilities

REVENUES
Taxes and assessments - $ - $ - $ - $ Licenses and permits - - 1,146 - Use of money and property 6,402 64,178 2,818 3,432 Intergovernmental 21,299 18,073 - - Charges for current services - - - 298,441 Other revenue - - - - Total Revenues 27,701 82,251 3,964 301,873

EXPENDITURES
Current:

General government - 206,739 - - Public safety 41,917 - 8,230 - Public ways and facilities/transportation - - - - Parks and recreation - - - 765,471 Community development - - - - Capital outlay - - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total Expenditures 41,917 206,739 8,230 765,471

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES (14,216) (124,488) (4,266) (463,598)

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - - 489,598 Transfers (out) - - - (26,000) Total Other Financing Sources (Uses) - - - 463,598 NET CHANGE IN FUND BALANCES (14,216) (124,488) (4,266) - BEGINNING FUND BALANCES 111,223 1,363,012 54,966 - ENDING FUND BALANCES 97,007 $ 1,238,524 $ 50,700 $ - $

SPECIAL REVENUE FUNDS

120

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Development
Animal Fees Impact Equipment NW Triangle
Forfeiture Fees Replacement Plan Fee

REVENUES
Taxes and assessments - $ - $ 63,590$ - $ Licenses and permits - - - - Use of money and property 1,943 287,698 133,173 17,561 Intergovernmental - - 66,014 - Charges for current services 11,950 489,988 458,555 5,632 Other revenue - - 33,361 - Total Revenues 13,893 777,686 754,693 23,193

EXPENDITURES
Current:

General government - - 116,470 - Public safety 10,336 - 348,370 - Public ways and facilities/transportation - 77,185 24,204 1,251 Parks and recreation - - - - Community development - - 213,302 - Capital outlay - - 135,364 - Debt service:

Principal - - 79,575 - Interest and fiscal charges - - 3,530 - Total Expenditures 10,336 77,185 920,815 1,251

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 3,557 700,501 (166,122) 21,942

OTHER FINANCING SOURCES (USES)
Issuance of debt - - 117,549 - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - 1,990,718 - Transfers (out) - - (57,345) - Total Other Financing Sources (Uses) - - 2,050,922 - NET CHANGE IN FUND BALANCES 3,557 700,501 1,884,800 21,942 BEGINNING FUND BALANCES 33,777 5,284,578 7,411,912 338,937 ENDING FUND BALANCES 37,334 $ 5,985,079 $ 9,296,712 $ 360,879 $

SPECIAL REVENUE FUNDS

121

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Lighting and
Landscaping Downtown
Development Assessment Assessment CFD #2
Benefit Districts District Services

REVENUES
Taxes and assessments - $ 3,676,126$ - $ 1,247,112$ Licenses and permits - - - - Use of money and property 35,852 1,155,647 808 48,266 Intergovernmental - - - - Charges for current services - - - - Other revenue - - - - Total Revenues 35,852 4,831,773 808 1,295,378

EXPENDITURES
Current:

General government - - - 38,587 Public safety - - - - Public ways and facilities/transportation - 1,838,148 - - Parks and recreation - 4,999 5,986 - Community development - - - - Capital outlay - - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total Expenditures - 1,843,147 5,986 38,587

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 35,852 2,988,626 (5,178) 1,256,791

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - - - Transfers (out) - (42,000) - (1,237,077) Total Other Financing Sources (Uses) - (42,000) - (1,237,077) NET CHANGE IN FUND BALANCES 35,852 2,946,626 (5,178) 19,714 BEGINNING FUND BALANCES 695,871 22,069,451 16,384 71,019 ENDING FUND BALANCES 731,723 $ 25,016,077 $ 11,206 $ 90,733 $

SPECIAL REVENUE FUNDS

122

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Stanislaus
State County
HOME Housing Housing
CDBG Program Stimulus Consortium

REVENUES
Taxes and assessments - $ - $ - $ - $ Licenses and permits - - - - Use of money and property 950 232,862 224 11,047 Intergovernmental 551,783 - 50,013 660,934 Charges for current services 49,357 - 63,246 5,959 Other revenue 166,183 143,153 - 64,577 Total Revenues 768,273 376,015 113,483 742,517

EXPENDITURES
Current:

General government - - - - Public safety - - - - Public ways and facilities/transportation - - - - Parks and recreation - - - - Community development 651,589 152,789 113,258 653,441 Capital outlay - - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total Expenditures 651,589 152,789 113,258 653,441

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 116,684 223,226 225 89,076

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - - - Transfers (out) (800) - - - Total Other Financing Sources (Uses) (800) - - - NET CHANGE IN FUND BALANCES 115,884 223,226 225 89,076 BEGINNING FUND BALANCES 53,935 4,635,064 44,770 485,084 ENDING FUND BALANCES 169,819 $ 4,858,290 $ 44,995 $ 574,160 $

SPECIAL REVENUE FUNDS

123

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Grant Traffic
Funds Safety HOME ARP ARPA

REVENUES
Taxes and assessments - $ - $ - $ - $ Licenses and permits - - - - Use of money and property 50,904 8,454 - 72,685 Intergovernmental 1,257,609 - - 1,804,906 Charges for current services - 75,700 128,979 - Other revenue 22,700 - - - Total Revenues 1,331,213 84,154 128,979 1,877,591

EXPENDITURES
Current:

General government - - - 1,573,149 Public safety 153,412 37,311 - 58,244 Public ways and facilities/transportation - - - 32,938 Parks and recreation 762,055 - - 109,319 Community development 180,825 - 19,700 - Capital outlay 80,062 - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total Expenditures 1,176,354 37,311 19,700 1,773,650

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 154,859 46,843 109,279 103,941

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in 30,000 - - - Transfers (out) (289,399) - - (22,849) Total Other Financing Sources (Uses) (259,399) - - (22,849) NET CHANGE IN FUND BALANCES (104,540) 46,843 109,279 81,092 BEGINNING FUND BALANCES 904,342 118,094 (111,146) (23,181) ENDING FUND BALANCES 799,802 $ 164,937 $ (1,867) $ 57,911 $

SPECIAL REVENUE FUNDS

124

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

CAPITAL

PROJECTS
FUNDS
CFD #3 Capital
PLHA Facility Fees Maintenance Improvement

REVENUES
Taxes and assessments - $ - $ 2,250$ - $ Licenses and permits - - - 15,684 Use of money and property 12,094 957,479 118 147,017 Intergovernmental 481,610 - - 197,264 Charges for current services - 2,567,354 - - Other revenue - - - - Total Revenues 493,704 3,524,833 2,368 359,965

EXPENDITURES
Current:

General government - 22,660 - - Public safety - 175 - - Public ways and facilities/transportation - 729 - 80,749 Parks and recreation - - - - Community development 15,288 - - - Capital outlay 294,361 51,483 - 4,194,661 Debt service:

Principal - - - - Interest and fiscal charges - - - - Total Expenditures 309,649 75,047 - 4,275,410

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 184,055 3,449,786 2,368 (3,915,445)

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - - 128,686 Transfers (out) - - - - Total Other Financing Sources (Uses) - - - 128,686 NET CHANGE IN FUND BALANCES 184,055 3,449,786 2,368 (3,786,759) BEGINNING FUND BALANCES 307,666 17,215,698 - 5,388,198 ENDING FUND BALANCES 491,721 $ 20,665,484 $ 2,368 $ 1,601,439$

SPECIAL REVENUE FUNDS

125

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Street Downtown North North East
Light Improvement Turlock Turlock
Installation Project Master Plan Master Plan

REVENUES
Taxes and assessments - $ - $ - $ - $ Licenses and permits - - - - Use of money and property 8,208 3,555 103,222 203,211 Intergovernmental - - - - Charges for current services 8,185 - - 33,000 Other revenue - - - - Total Revenues 16,393 3,555 103,222 236,211

EXPENDITURES
Current:

General government - - - - Public safety - - - - Public ways and facilities/transportation - 50 318,207 1,659 Parks and recreation - - - - Community development - - - - Capital outlay - - - - Debt service:

Principal - - - - Interest and fiscal charges - - - - Total Expenditures - 50 318,207 1,659

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 16,393 3,505 (214,985) 234,552

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - - Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - - - Transfers (out) - - - - Total Other Financing Sources (Uses) - - - - NET CHANGE IN FUND BALANCES 16,393 3,505 (214,985) 234,552 BEGINNING FUND BALANCES 155,373 234,737 2,307,858 3,913,685 ENDING FUND BALANCES 171,766 $ 238,242 $ 2,092,873 $ 4,148,237 $

CAPITAL PROJECTS FUNDS

126

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCES (Continued)

NONMAJOR GOVERNMENTAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Turlock Total
Regional East Nonmajor
Industrial Tuolumne Governmental
Park Master Plan Airport Funds

REVENUES
Taxes and assessments - $ - $ - $ 4,989,078$ Licenses and permits - - - 16,830 Use of money and property 131,364 4,337 1,253 3,706,762 Intergovernmental - - 40,000 5,149,505 Charges for current services 58,683 142,700 - 4,397,729 Other revenue - - - 429,974 Total Revenues 190,047 147,037 41,253 18,689,878

EXPENDITURES
Current:

General government - - - 1,957,605 Public safety - - - 657,995 Public ways and facilities/transportation 1,222 1,222 1,202 2,378,766 Parks and recreation - - - 1,647,830 Community development - - - 2,000,192 Capital outlay - - 116,558 4,872,489 Debt service:

Principal - - - 79,575 Interest and fiscal charges - - - 3,530 Total Expenditures 1,222 1,222 117,760 13,597,982

EXCESS (DEFICIENCY) OF REVENUES
OVER (UNDER) EXPENDITURES 188,825 145,815 (76,507) 5,091,896

OTHER FINANCING SOURCES (USES)
Issuance of debt - - - 117,549 Contributions of capital assets - - - - Contributions from private-purpose trust - - - - Proceeds from sale of property - - - - Transfers in - - - 2,639,002 Transfers (out) - - (10,000) (1,685,470) Total Other Financing Sources (Uses) - - (10,000) 1,071,081 NET CHANGE IN FUND BALANCES 188,825 145,815 (86,507) 6,162,977 BEGINNING FUND BALANCES 2,540,062 8,884 105,105 75,735,358 ENDING FUND BALANCES 2,728,887 $ 154,699 $ 18,598 $ 81,898,335$

CAPITAL PROJECTS FUNDS

127

INTERNAL SERVICE FUNDS

Internal Service Funds are used to finance and account for serv ices or activities performed by one City department for the benefit of other City departments on a cost reimbursement basis.

The concept of major funds in accounting principles generally a ccepted in the United States of America does not apply to Internal Service Funds because, in general, t hey do not do business with outside parties. Accounting principles generally accepted in the United States of America require that, for the Statement of Activities, the net r evenues or expenses of each i nternal service fund be eliminated by netting them against the operations of the City department(s) w hich benefit(s) from the services the internal service fund provides. The Balance Sheet items are consolidated with the Governmental Funds in the Statement of Net Position.

The activities of Internal Service Funds continue to be present ed separately in the Fund Financial Statements.

Equipment Pool
This fund accounts for repair and maintenance activities for al l City vehicles and large equipment as well as monies set aside for the replacement of vehicles used by City departments.

Self-Insurance
The Self-Insurance Fund accounts for the activities of the City ’s risk management and workers’ compensation, property/liability, and health (medical, dental, and vision) insurance programs.

Information Technology
This fund accounts for the costs incurred to maintain and enhan ce the City’s information technology systems.

128

CITY OF TURLOCK

COMBINING STATEMENT OF NET POSITION

INTERNAL SERVICE FUNDS
JUNE 30, 2025

Equipment Self- Information
Pool Insurance Technology Total
ASSETS
Current assets:

Cash and investments 10,297,350 $ 8,793,063 $ 782,081 $ 19,872,494$ Accounts receivable 55,526 365,197 - 420,723 Interest receivable 3,399 60,519 6,255 70,173 Due from other funds - - - - Prepaids - 161,385 - 161,385 Total current assets 10,356,275 9,380,164 788,336 20,524,775 Noncurrent assets:

Capital assets not being depreciated - - - - Capital assets being depreciated (net) 6,201,646 - 372,740 6,574,386 Right-to-use subscription assets (net) 234,986 - - 234,986 Total noncurrent assets 6,436,632 - 372,740 6,809,372 Total Assets 16,792,907 9,380,164 1,161,076 27,334,147

DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 316,781 - 434,625 751,406 Related to OPEB 23,012 - 32,871 55,883 Total Deferred Outflows of Resources 339,793 - 467,496 807,289

LIABILITIES
Current liabilities:

Accounts payable 13,412 565,910 71,662 650,984 Payroll payable 19,409 - 37,424 56,833 Claims liability - 808,862 - 808,862 Compensated absences 12,818 - 15,207 28,025 IT subscription liability 51,980 - - 51,980 Total current liabilities 97,619 1,374,772 124,293 1,596,684 Long-term liabilities:

Claims liability - 4,246,536 - 4,246,536 Compensated absences 51,271 - 60,828 112,099 Total OPEB liability 122,367 - 174,785 297,152 Net pension liability 1,347,678 - 1,849,019 3,196,697 IT subscription liability 114,687 - - 114,687 Total long-term liabilities 1,636,003 4,246,536 2,084,632 7,967,171 Total Liabilities 1,733,622 5,621,308 2,208,925 9,563,855

DEFERRED INFLOWS OF RESOURCES
Related to pensions - - - - Related to OPEB 176,841 - 252,599 429,440 Total Deferred Inflows of Resources 176,841 - 252,599 429,440

NET POSITION
Net investment in capital assets 6,269,965 - 372,740 6,642,705 Unrestricted 8,952,272 3,758,856 (1,205,692) 11,505,436 Total Net Position 15,222,237 $ 3,758,856 $ (832,952) $ 18,148,141 $

129

CITY OF TURLOCK

COMBINING STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET POSITION

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Equipment Self- Information
Pool Insurance Technology Total

OPERATING REVENUES
Charges for services 1,488,193 $ 9,740,922 $ 1,719,055 $ 12,948,170 $ Other income 643,679 321,374 - 965,053 Total Operating Revenues 2,131,872 10,062,296 1,719,055 13,913,223

OPERATING EXPENSES
Salaries, benefits, and insurance 1,045,573 13,632,034 1,456,936 16,134,543 Contractual 253,943 76,284 508,042 838,269 Supplies and maintenance 131,663 - 10,318 141,981 Utilities 34,259 - 23,269 57,528 Fleet expense 50,994 - 4,160 55,154 Depreciation and amortization 1,043,314 - 4,106 1,047,420 Other expenses 51,384 3,398 44,953 99,735 Total Operating Expenses 2,611,130 13,711,716 2,051,784 18,374,630 Operating Loss (479,258) (3,649,420) (332,729) (4,461,407)

NONOPERATING REVENUES (EXPENSES)
Interest income 172,817 528,829 55,573 757,219 Interest (expense) (9,093) - - (9,093) Gain on disposal of capital assets 111,267 - 362,132 473,399 Total Nonoperating Revenues (Expenses) 274,991 528,829 417,705 1,221,525 Income (Loss) Before
Contributions and Transfers (204,267) (3,120,591) 84,976 (3,239,882) Capital contributions - connection/impact fees - - - - Transfers in 2,273,232 - - 2,273,232 Transfers (out) - - (1,855) (1,855) Total Contributions and Transfers 2,273,232 - (1,855) 2,271,377 Change in Net Position 2,068,965 (3,120,591) 83,121 (968,505) NET POSITION - BEGINNING 13,153,272 6,879,447 (916,073) 19,116,646 NET POSITION - ENDING 15,222,237 $ 3,758,856 $ (832,952) $ 18,148,141 $

130

CITY OF TURLOCK

COMBINING STATEMENT OF CASH FLOWS

INTERNAL SERVICE FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Equipment Self- Information
Pool Insurance Technology Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers 1,517,039 $ 10,033,063 $ 1,719,055 $ 13,269,157 $ Payments to suppliers (536,368) 1,080,163 (590,981) (47,186) Payments to employees and benefits (746,619) (13,632,034) (1,507,701) (15,886,354) Other 643,679 321,374 - 965,053 Net Cash Flows from Operating Activities 877,731 (2,197,434) (379,627) (1,699,330)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Interfund receipts (payments) - - - - Transfers in 2,273,232 - - 2,273,232 Transfers out - - (1,855) (1,855) Net Cash Flows from Noncapital Financing Activities 2,273,232 - (1,855) 2,271,377

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Acquisition of capital assets, net (3,296,115) - (362,132) (3,658,247) Proceeds from sale of capital assets 111,267 - 362,132 473,399 IT subscription assets - principal (121,071) - - (121,071) IT subscription assets - interest (9,093) - - (9,093) Net Cash Flows from Capital and Related
Financing Activities (3,315,012) - - (3,315,012)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest 177,673 561,611 49,318 788,602 Net Cash Flows from Investing Activities 177,673 561,611 49,318 788,602 Net Cash Flows 13,624 (1,635,823) (332,164) (1,954,363) Cash and Investments at Beginning of Period 10,283,726 10,428,886 1,114,245 21,826,857 Cash and Investments at End of Period 10,297,350 $ 8,793,063 $ 782,081 $ 19,872,494$ Reconciliation of Operating Income (Loss) to Net Cash Flows from Operating Activities:

Operating income (loss) (479,258) $ (3,649,420) $ (332,729) $ (4,461,407) $ Adjustments to reconcile operating income (loss) to net cash flows from operating activities:

Depreciation and amortization 1,043,314 - 4,106 1,047,420 Change in assets and liabilities:

Accounts receivable 28,846 292,141 - 320,987 Prepaids - (161,385) - (161,385) Accounts payable (14,125) (652,796) (239) (667,160) Payroll payable 2,396 - 3,147 5,543 Compensated absences 20,226 - (18,070) 2,156 Claims liability - 1,974,026 - 1,974,026 Deferred outflows/inflows and total OPEB liability 36,667 - (30,059) 6,608 Deferred outflows/inflows and net pension liability 239,665 - (5,783) 233,882 Net Cash Flows from Operating Activities 877,731 $ (2,197,434)$ (379,627) $ (1,699,330) $

131

CUSTODIAL FUNDS

Custodial 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 Government-Wide Financial Statem ents, but are presented in a se parate Fiduciary Fund Financial Statement. For the City of Turlock, the following agent activit ies are accounted for within the Custodial Funds:

Northwest Triangle Mello Roos Assessment District
This district was established as a funding mechanism to partial ly pay for the infrastructure improvements installed in the Monte Vista Cros sings shopping area. These imp rovements were in part funded with the proceeds of a bond issuance which is being retired through annu al assessments to the owners of the parcels within the district’s boundaries.

Turlock Property and Business Improvement District (PBID) #2 This is a successor district to one originally established to f und maintenance efforts in downtown Turlock.

The current district was established in June 2003 via a vote of the affected property owners. The district has a ten year life and extended annually, through annual asses sments, funds prescribed maintenance efforts within the district’s boundaries as well as promotional activities for the downtown area.

132

CITY OF TURLOCK

COMBINING STATEMENT OF FIDUCIARY NET POSITION

CUSTODIAL FUNDS
JUNE 30, 2025

Northwest Turlock
Triangle Property and
Mello Roos Business
Assessment Improvement
District District #2 Total
ASSETS
Cash and investments 178,185 $ 158,770 $ 336,955 $ Cash and investments with fiscal agent - - - Accounts receivable - 4,340 4,340 Interest receivable - 502 502 Total Assets 178,185 163,612 341,797

LIABILITIES
Accounts payable - 65,275 65,275 Total Liabilities - 65,275 65,275

NET POSITION
Restricted for:

Other organizations 178,185 98,337 276,522 Total Net Position 178,185 $ 98,337 $ 276,522 $

133

CITY OF TURLOCK

COMBINING STATEMENT OF CHANGES IN FIDUCIARY NET POSITION

CUSTODIAL FUNDS
FOR THE YEAR ENDED JUNE 30, 2025

Northwest Turlock
Triangle Property and
Mello Roos Business
Assessment Improvement
District District #2 Total

ADDITIONS
Assessments - $ 238,086$ 238,086 $ Net investment income 4,584 5,588 10,172 Total Additions 4,584 243,674 248,258

DEDUCTIONS
Administration expense 26,763 - 26,763 Recipient payments - 213,274 213,274 Payments to bondholders 259,513 - 259,513 Total Deductions 286,276 213,274 499,550 NET CHANGE IN NET POSITION (281,692) 30,400 (251,292)

NET POSITION
Beginning of year 459,877 67,937 527,814 End of year 178,185 $ 98,337 $ 276,522 $

134
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CITY OF TURLOCK, CALIFORNIA

SINGLE AUDIT REPORTS

FOR THE YEAR ENDED
JUNE 30, 2025

CITY OF TURLOCK, CALIFORNIA

SINGLE AUDIT REPORTS
FOR THE YEAR ENDED JUNE 30, 2025

TABLE OF CONTENTS

Page

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ................................. 1

Independent Auditor’s Report on Compliance for Each Major Federal Program and on Internal Control over Compliance Required by the Uniform Guidance ................................ 3

Schedule of Expenditures of Federal Awards .................................................................................... 6

Notes to Schedule of Expenditures of Federal Awards ..................................................................... 8

Schedule of Findings and Questioned Costs ..................................................................................... 9

1 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Honorable Members of the City Council
City of Turlock, California

We have audited, in accordance with the auditing standards gene rally 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, the fin ancial 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, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements, and have issued our report thereon dated April 8, 2026.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) as a basis for desi gning audit procedures that are appropriate in the circumstances for the purpo se of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Ci ty’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allo w management or employees, in the normal course of performing the ir assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that the re is a reasonable possibility that a material misstatement of the City’s financial statements will not be pre vented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combinati on of deficiencies, in internal control that is less severe than a material weakness, yet important eno ugh to merit attention by those charged with governance.

Our consideration of internal c ontrol was for the limited purpo se described in the first paragraph of this section and was not designed to i dentify all deficiencies in in ternal control that might be material weaknesses or significant deficiencies. Given these limitations , during our audit we did not identify any deficiencies in internal control that we consider to be materia l weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Cit y’s financial statements are free from material misstatement, we performed tests of its compliance wit h certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on complian ce with those provisions was not an

2 objective of our audit and, accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that a re required to be reported under Government Auditing Standards.

City’s Response to Findings

Government Auditing Standards requires the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in our se parately issued Memorandum on Internal Control dated April 8, 2026, which is an integral part of our a udit and should be read in conjunction with this report. The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance. Acc ordingly, this report is not suitable for any other purpose.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
April 8, 2026

3 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR

EACH MAJOR FEDERAL PROGRAM AND ON INTERNAL CONTROL

OVER COMPLIANCE REQUIRED BY THE UNIFORM GUIDANCE

To the Honorable Members of the City Council
City of Turlock, California

Report on Compliance for Each Major Federal Program

Opinion on Each Major Federal Program

We have audited the City of Turlock’s (the City) compliance wit h the types of compliance requirements identified as subject to audit in the U.S. Office of Management and Budget (OMB) Compliance Supplement that could have a direct and material effect on each of the Ci ty’s major federal programs for the year ended June 30, 2025. The City’s major federal programs are identified in the summary of auditor’s results section of the accompanying schedule of findings and questioned costs.

In our opinion, the City complied, in all material respects, wi th the types of compliance requirements referred to above that could have a direct and material effect on each of its major federal programs identified in the summary of auditor’s results section of the a ccompanying schedule of findings and questioned costs for the year ended June 30, 2025.

Basis for Opinion on Each Major Federal Program

We conducted our audit of compliance in accordance with auditin g standards generally accepted in the United States of America; the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States; and t he audit requirements of Title 2 U.S. Code of Federal Regulations Part 200, Uniform Administrative Requirements, Cost Principles, and Audit Requirements for Federal Awards (Uniform Guidance).

Our responsibilities under those standards
and the Uniform Guidance are further described in the Auditor’s Responsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our o ther ethical responsibilities, in accordance with 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 opinion on compliance for each major federal program. Our audit does not provide a legal deter mination of the City’s compliance with the compliance requirements referred to above.

Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control o ver compliance with the requirements of laws, statutes, regulations, rules, and provisions of contracts or grant agreements applicable to the City’s federal programs.

4 Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance based on our audit. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accept ed in the United States of A merica, Government Auditing Standards, and the Uniform Guidance will always detect material noncomplia nce when it exists. The risk of not detecting material noncompliance resulting from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepre sentations, or the override of internal control. Noncompliance with the compliance requirements referre d to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City ’s compliance with the requirements of each major federal program as a whole.

In performing an audit in accordance with auditing standards ge nerally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, we:

• Exercise professional judgment and maintain professional skept icism throughout the audit. • Identify and assess the risks of material noncompliance, wheth er due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compl iance with the compliance requirements referred to above and performing such other proced ures as we considered necessary in the circumstances.
• Obtain an understanding of the Ci ty’s internal control over co mpliance relevant to the audit in order to design audit procedures that are appropriate in the ci rcumstances and to test and report on internal control over compliance in accordance with the Unif orm Guidance, but not for the purpose of expressing an opinion on the effectiveness of the Ci ty’s internal control over compliance. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governan ce regarding, among other matters, the planned scope and timing of the audit and any significant d eficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Report on Internal Control over Compliance

A deficiency in internal control over compliance exists when the design or o peration of a control over compliance does not allow management or employees, in the norma l course of performing their assigned functions, to prevent, or detect and correct, noncompliance wit h a type of compliance requirement of a federal program on a timely basis. A material weakness in internal control over compliance i s a deficiency, or a combination of deficiencies, in internal contr ol over compliance, such that there is a reasonable possibility that material noncompliance with a type of compliance requirement of a federal program will not be prevented, or detected and corrected, on a timely basis. A significant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, in internal control over compliance with a type of compliance requirement of a federal program that is less severe than a material weakness in internal control over compliance, yet important eno ugh to merit attention by those charged with governance.

Our consideration of internal cont rol over compliance was for t he limited purpose described in the Auditor’s Responsibilities for t he Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these l imitations, during our audit we did not identify any deficiencies in internal control over compliance t hat we consider to be material weaknesses, as defined above. However, material weaknesses or significant d eficiencies in internal control over compliance may exist that were not identified.

5 Our audit was not designed for the purpose of expressing an opi nion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Uniform Guidance. Accordingly, this report is not suitable for any other purpose.

Report on Schedule of Expenditures of Federal Awards Required by the Uniform Guidance

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate rema ining fund information of the City, as of and for the year ended June 30, 2025, and the related notes to the financial statements, wh ich collectively comprise the City’s basic financial statements. We issued our report thereon dated April 8, 2026, which contained unmodified opinions on those financial statem ents. Our audit was conducted for the purpose of forming opinions on the financial statements that co llectively comprise the basic f inancial statements. The accompanying schedule of expenditures of federal awards is presented for pur poses of additional analysis as required by the Uniform Guidance and is not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relat es directly to the underlying accounting and other records used to prepare the basic financial statement s. The information has been subjected to the auditing procedures applied in the audit of the financial s tatements and certain additional procedures, including comparing and reconc iling such information directly t o the underlying accounting and other records used to prepare the basic financial statements or to th e basic financial statements themselves, and other additional procedures in accordance with auditing sta ndards generally accepted in the United States of America. In our opini on, the schedule of expenditures of federal awards is fairly stated in all material respects in relation to the basic financial statements as a whole.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
April 8, 2026

The accompanying notes are an integral part of this schedule. 6 CITY OF TURLOCK, CALIFORNIA

SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2025

Federal Grantor/ Assistance Pass-Through
Pass-Through Grantor/ Listing Grant Identifying Passed Through Fede ral Program Title Number Number to Subrecipients Expenditures U.S. Department of Housing and Urban Development:

Direct Programs:

Community Development Block Grants/State's Program
Program Expenditures 14.228 53,777 $ 356,610 $ Program Expenditures (Program Income) 14.228 - 215,540 Program Subtotal 53,777 572,150
Community Development Block Grants/Entitlment
Communities Program
Program Expenditures 14.218 - 107,770 Program Subtotal - 107,770
HOME Investment Partnerships Program
Program Expenditures 14.239 - 660,934 Program Subtotal - 660,934
Total U.S. Department of Housing and Urban Development 53,777 1,340,854 U.S. Department of Justice:

Direct Programs:

Edward Byrne Memorial Justice Assistance Grant Program 16.738 15P BJA-21-GG-01259-JAGX - 32,388 Total U.S. Department of Justice - 32,388 U.S. Department of Transportation:

Direct Programs:

Federal Transit Cluster (Note 4)
Federal Transit - Formula Grants
(Urbanized Area Formula Program) 20.507 - 4,304,881 Cluster Subtotal - 4,304,881
Passed through California Department of Transportation:

Highway Planning and Construction (Federal-Aid Highway Program) Congestion Mitigation and Air Quality Improvement
Program (CMAQ) 20.205 CML-5165 - 49,570 Surface Transportation Program (STP) 20.205 RSTP-5165 - 337,987 Program Subtotal - 387,557
Federal Aviation Administration
Airport Improvement Program, Infrastructure Investment and Jobs Act Programs, and COVID-19 Airports Programs 20.106 30,602,650,132,021 - 30,000 Passed through State of California Office of Traffic Safety:

Highway Safety Cluster
State and Community Highway Safety
Selective Traffic Enforcement Program (STEP) 20.600 PT25083 - 11,746 Selective Traffic Enforcement Program (STEP) 20.600 PT24207 - 9,182 Cluster Subtotal - 20,928

The accompanying notes are an integral part of this schedule. 7 CITY OF TURLOCK, CALIFORNIA
SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS (Continued)
FOR THE YEAR ENDED JUNE 30, 2025

Federal Grantor/ Assistance Pass-Through
Pass-Through Grantor/ Listing Grant Identifying Passed Through Fede ral Program Title Number Number to Subrecipients Expenditures U.S. Department of Transportation: (Continued)
Passed through State of California Office of Traffic Safety: (Continued) Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT25083 - 11,490 Minimum Penalties for Repeat Offenders for
Driving While Intoxicated 20.608 PT24207 - 12,994 Program Subtotal - 24,484
Total U.S. Department of Transportation - 4,767,850 U.S. Department of Treasury
Direct Program:

COVID-19: Coronavirus State and Local
Fiscal Recovery Funds 21.027 - 1,796,499 Total U.S. Department of Treasury - 1,796,499 Total Expenditures of Federal Awards 53,777$ 7,937,591$

8 CITY OF TURLOCK, CALIFORNIA

NOTES TO SCHEDULE OF EXPENDITURES OF FEDERAL AWARDS
FOR THE YEAR ENDED JUNE 30, 2025

NOTE 1 – REPORTING ENTITY

The Schedule of Expenditure of Federal Awards (the Schedule) includes expenditures of federal awards for the City of Turlock, Californi a, (the City) and its component u nits as disclosed in the notes to the Basic Financial Statements.

NOTE 2 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis of accounting refers to when revenues and expenditures or expenses are recognized in the accounts and reported in the financial statements, regardless of the mea surement focus applied. All governmental funds are accounted for using the modified accrual basis of accounting. All proprietary funds and fiduciary funds are accounted for using the accrual basis of accounting. Expenditures of federal awards reported on the Schedule are recognized when incurred.

NOTE 3 – INDIRECT COST ELECTION

The City has elected not to use the 10% de minimis indirect cos t rate allowed under the Uniform Guidance.

9 CITY OF TURLOCK, CALIFORNIA

SCHEDULE OF FINDINGS AND QUESTIONED COSTS
JUNE 30, 2025

SECTION I – SUMMARY OF AUDITOR’S RESULTS

Financial Statements:

Type of auditor's report issued Unmodified

Internal control over financial reporting:
• Material weakness (es) identified? Yes X No
• S ignificant deficiencies identified
not considered to be material weaknesses? Yes X No

Noncompliance material to financial statements noted? Yes X No

Federal Awards:

Internal control over major programs:
• Material weakness (es) identified? Yes X No
• S ignificant deficiencies identified
not considered to be material weaknesses? Yes X No

Type of auditor's report issued on compliance for
major programs: Unmodified

Any audit findings disclosed that are required to be

reported in accordance with the Uniform Guidance,
under 2 CFR §200.516? Yes X No

Identification of major programs:

Assistance Listing
Number(s) Name of Federal Program or Cluster

20.507

Federal Transit – Formula Grants

Dollar threshold used to distinguish between Type A
and Type B programs: $750,000

Auditee qualified as low-risk auditee? Yes X No

10 SECTION II – FINANCIAL STATEMENT FINDINGS

None.

SECTION III – FEDERAL AWARD FINDINGS AND QUESTIONED COSTS

None.

SECTION IV – STATUS OF PRIOR YEAR FINDINGS AND QUESTIONED COSTS

None.

CITY OF TURLOCK

MEMORANDUM ON INTERNAL CONTROL

FOR THE YEAR ENDED JUNE 30, 2025

CITY OF TURLOCK

MEMORANDUM ON INTERNAL CONTROL
FOR THE YEAR ENDED JUNE 30, 2025

Table of Contents

Page

Memorandum on Internal Control .................................................................................................. 1

Schedule of Material Weaknesses ..................................................................................................... 2

Schedule of Other Matters ................................................................................................................. 3

Status of Prior Year Material Weaknesses ........................................................................................ 6

Status of Prior Significant Deficiencies .............................................................................................. 7

1 MEMORANDUM ON INTERNAL CONTROL

To the City Council of the
City of Turlock, California

In planning and performing our audit of the basic financial statements of the City of Turlock (the City) as of and for the year ended June 30, 2025, in accordance with auditi ng standards generally accepted in the United States of America, we considered the City’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not fo r the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control.

A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combi nation of deficiencies, in internal control, such that ther e is a reasonable possibility t hat a material misstatement of the entity’s financial statements will not be prevented, or detected and cor rected, on a timely basis. A significant deficiency is a deficiency, or a combinati on of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance.

Our consideration of internal c ontrol was for the limited purpo se described in the first paragraph and was not designed to identify all deficiencies in internal control t hat might be material weaknesses or significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses or significant defic iencies. However, material weaknesses or significant deficiencies may exist that were not identified.

Government Auditing Standards require the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the accompanying Schedule of Material Weaknesses.

The City’s response was not subjected to the other auditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

This communication is intended solely for the information and use of management, the City Council, others within the City, and agencies and pass-through entities requiri ng compliance with Government Auditing Standards and is not intended to be, and should not be, used by anyone other than these specified parties.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
April 8, 2026

2 CITY OF TURLOCK

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF MATERIAL WEAKNESSES

None.

3 CITY OF TURLOCK

MEMORANDUM ON INTERNAL CONTROL

SCHEDULE OF OTHER MATTERS

NEW GASB PRONOUNCEMENTS OR PRONOUNCEMENTS NOT YET EFFECTIVE

The following comment represents new pronouncements taking affect in the next two years. We cite them here to keep you informed of developments:

EFFECTIVE FISCAL YEAR 2024/25:

GASB Statement No. 101 – Compensated Absences

The objective of this statement is to better meet the informati on needs of financial statement users by updating the recognition and measurement guidance for compensat ed absences. That objective is achieved by aligning the recognition and measurement guidance u nder a unified model and by amending certain previously required disclosures.

GASB Statement No. 102 – Certain Risk Disclosures

State and local governments face a variety of risks that could negatively affect the level of service they provide or their ability to meet obligations as they come due. Although governments are required to disclose information about their exposure to some of those risks, essent ial information about other risks that are prevalent among state and local governments is not routinely disclosed because it is not explicitly required.

The objective of this statement is to provide users of governme nt financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints.

EFFECTIVE FISCAL YEAR 2025/26:

GASB Statement No. 103 – Financial Reporting Model Improvements

The objective of this statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. This statement also addresses certain application issues.

GASB Statement No. 104 – Disclosure of Certain Capital Assets

State and local governments are required to provide detailed information about capital assets in the notes to financial statements. Statement No. 34, Basic Financial Statements—and Management’s Discussion and Analysis—for State and Local Governments , requires certain information regarding capital assets to be presented by major class. The objective of this statement is to provide users of government financial statements with essential information about certain types of capital assets.

This statement also requires additional disclosures for capital assets held for sale. A capital asset is a capital asset held for sale if (a) the government has decided to pursue the sale of the capital asset and (b) it is probable that the sale w ill be finalized within one year of the financial statement date. Governments should consider relevant factors to evaluate the likelihood of the capital asset being sold within the established time frame. This statement requires that capital assets held for sale be evaluated each reporting period. Governments should disclose (1) the ending balance of c apital assets held for sale, with separate disclosure for historical cost and accumulated depreciation by major class of asset, and (2) the carrying amount of debt for which the capital assets held for sale are p ledged as collateral for each major class of asset.

4 EFFECTIVE FISCAL YEAR 2026/27:

GASB Statement No. 105 – Subsequent Events

The objective of this statement is to improve the financial rep orting requirements for subsequent events, thereby enhancing consistency in their application and better m eeting the information needs of financial statement users.

This Statement defines subsequent events as transactions or other events that occur after the date of the financial statements but before the date the financial statements are available to be issued. This Statement describes the date the financial statements are available to be issued as the date at which (1) the financial statements are complete in a form and format that complies with generally accepted accounting principles and (2) approvals necessary for issuance have been obtained. Th at definition modifies the subsequent events time frame throughout the GASB literature. This Statemen t also requires the date through which subsequent events have been evaluated to be disclosed.

This Statement clarifies the subsequent events that constitute recognized and nonrecognized events and establishes specific note disclosure requirements for nonrecognized events.

5 CITY OF TURLOCK

MEMORANDUM ON INTERNAL CONTROL

STATUS OF PRIOR YEAR MATERIAL WEAKNESSES

2022-001 Timely and Accurate Year-End Close

As noted in prior year comment 2021-001, the year-end financial closing and preparation of the general ledger data should be completed timely and accurately. In addit ion, organizations should have a contingency plan in the event of staff turnover. Part of this p lan is ensuring there are staff resources available on short notice to fill in key functions. In the Fina nce Department, these resources need to be in place throughout the fiscal year to ensure accounting functions continue and allow time for analysis of account balances and activities.

During fiscal year 2021-22, the City experienced significant staff shortages due to staff departures and long- term leaves of absence that continued from fiscal year 2020-21. This put a strain on the City’s ability to maintain good internal controls, and to produce accurate and ti mely financial data. As a result, the year- end audit was adversely affected. The trial balance we received from the City for the audit was submitted to us in September 2023, which had been delayed due to the leng th of time it took to complete the fiscal year 2020-21 audit. In addition, during the audit, we discovere d and/or City staff proposed eighteen additional post-closing journal entries, including a number of material post-closing adjustment entries for audit for areas including fiscal agent cash and investments, lo ng-term debt refunding and issuance transactions, unearned revenue, as well as a restatement that affected utility revenue.

The above condition delayed the completion of the year-end closing process, which increased the risk that material errors or misstatements may go undetected by staff and corrections may not be made in a timely manner. Audit effort was substantially increased in response to these increased risks.

The City should analyze staff resources to determine what plans can or should be made to ensure that the financial data is processed properly and timely during staffing transitions. In addition, the City must develop procedures to ensure that accounts are analyzed throughout the fiscal year and after the year-end close to ensure that additional closing entries are not required prior to providing the general ledger for audit.

Current Year Status:

The City of Turlock has continued to make significant progress in improving the timeliness and accuracy of its year-end financial closing process. The fiscal year 2024–2025 reports were completed near the required deadline of March 31, 2026 and were submitted only a few days later than scheduled, reflecting continued improvement over prior years.

Additionally, the City is on track to achieve full compliance w ith reporting deadlines for fiscal year 2025– 2026. Management remains committed to strengthening internal pr ocesses and sustain ing this positive trajectory going forward.

To the Honorable Members of the City Council
City of Turlock, California

We have audited the financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Turlock (the City) as of and for the year ended June 30, 2025. Professional standards require that w e provide you with information about our responsibilities under auditing standards generally accepted in the United States of America, Government Auditing Standards, and the Uniform Guidance, as well as certain information related to the planned scope and timing of our audit. We have communicated such information in our letter to you dated March 30, 2026.

Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Findings

Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropri ate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. During the year ended June 30, 2025, the City adopted Governmental Accounting Standards Board (GASB) Statement No. 101, Compensated Absences, and GASB Statement No. 102, Certain Risk Disclosures. We noted no transactions entered into by the City during the year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the financial statements in the proper period.

Accounting estimates are an integral part of the financial stat ements prepared by management and are based on management’s knowledge and experience about past and current events and assumptions about future events. Certain accounting estimates are particularly se nsitive because of their significance to the financial statements and because of the possibility that future events affecting them may differ significantly from those expected. The most sensitive estimates affecting the City’s financial statements were:

Management’s estimates used in establishing the fair value for investments, the useful lives of capital assets, the accrued compensated absences, the self-insu rance liability, the net pension liability and related deferred ou tflows and inflows of resource s, the total other post-employment benefit liabilities and related def erred outflows and inflows o f resources, and discount rate for the purpose of calculating the right-to-use lease and subscription- based information technology arrangement (SBITA) assets and t he related liabilities. We eval uated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole.

Certain financial statement disclosures are particularly sensit ive because of their significance to financial statement users. The most sensitive disclosures affecting the financial statements were:

• Note 9 – Pension Plans
• Note 10 – Post-Employm ent Healthcare Benefits
• Note 13 – Commitments and Contingencies

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with mana gement in performing and completing our audit.

Corrected and Uncorrected Misstatements

Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are clearly trivial, and communica te them to the appropriate level of management. We detected no such misstatements during our audit.

Disagreements with Management

For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the financial statements or the auditor’s report. We are pleased to report that no such dis agreements arose during the course of our audit.

Management Representations

We have requested certain representations from management that are included in the management representation letter dated April 8, 2026.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain sit uations. If a consultation involves application of an accounting principle to City’s financial statements or a determination of the type of auditor’s opinion that may be expressed on those statements, our professional standards require the consulting accountant to check with us to determine t hat the consultant has all the r elevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the applic ation of accounting principles and auditing standards, with management each year prior to retention as City ’s auditors. However, these discussions occurred in the normal course of our professional relationship and our responses were not a condition to our retention.

Other Matters

We applied certain limited procedures to the Management’s and Discussion Analysis, Schedule of Changes in the Net Pension Liability and Related Ratios – Miscellaneous Plan – Agent Multiple-Employer Defined Benefit Pension Plan, Schedule of the City’s Proportionate Share of the Net Pension Liability – Safety Plan – Cost- Sharing Multiple-Employer Defined Benefit Pension Plan, Schedules of the City’s Pension Contributions, and Schedule of Changes in the City’s Total Other Post-Employment B enefits (OPEB) Liability and Related Ratios, which are required supplementary information (RSI) that supplement the basic financial statements.

Our procedures consisted of inquiries of management regarding the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements.

We did not audit the RSI and do not express an opinion or provide any assurance on the RSI.

We were engaged to report on the combining and individual nonma jor fund financial statements and schedules, which accompany the financial statements but are not RSI. With respect to this supplementary information, we made certain inquiries of management and evalua ted the form, content, and methods of preparing the information to determine that the information com plies with accounting principles generally accepted in the United States of America, the method of preparing it has not changed from the prior period, and the information is appropriate and complete in relation to our audit of the financial statements. We compared and reconciled the supplementary information to the un derlying accounting records used to prepare the financial statements or to the financial statements themselves.

Restriction on Use

This information is intended solely for the information and use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
April 8, 2026

INDEPENDENT ACCOUNTANT’S REPORT

ON APPLYING AGREED-UPON PROCEDURES

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

We have performed the procedures enumerated below on the Approp riations Limit Worksheet (Worksheet) of the City of Turlo ck, California, (the City) in d etermining the City’s compliance with the requirements of Section 1.5 of Article XIII-B of the California Constitution for the fiscal year ended June 30, 2025. The City’s management is responsible for the Worksheet.

The City has agreed to and acknowledged that the procedures per formed are appropriate to meet the intended purpose of these procedu res, which were suggested by t he league of California Cities and presented in their Article XIII-B Appropriations Limitation Uni form Guidelines, performed solely to assist you in meeting the r equirements of Section 1.5 of Article XIII- B of the California Constitution. This report may not be suitable for any other purpose. The procedures perfo rmed may not address all the items of interest to a user of this report and may not meet the needs of all users of this report and, as such, users are responsible for determining whether the procedures performed are appropriate for their purposes.

The procedures and associated results are as follows:

A. We obtained the Worksheet (Exhibit A to the Resolution) and determined that the 2024-2025 Appropriations Limit of $77,948,457 and annual adjustment facto rs were adopted by the Resolution of the City Council. We also determined that the pop ulation and inflation options were selected by a recorded vote of the City Council.

B. We recomputed the 2024-2025 Appropriations Limit by multiply ing the 2023-2024 Prior Year Appropriations Limit by the Tota l Growth Factor. We recomputed the Total Growth Factor by multiplying the population option by the inflation option.

C. For the Worksheet, we agreed the Per Capita Income Factor an d County Population Factor to California State Department of Finance Worksheets. The Workshee t did not include the City Population Factor.

We were engaged by the City to perform this agreed-upon procedu res engagement and conducted our engagement in accordance with attestation standards established by the American Institute of Certified Public Accountants. We were not engaged to, and did not, conduc t an examination or review engagement, the objective of which would be the expression of an opinion or conclusion, respectively, on the Appropriations Limit Worksheet. Accordingly, we do not expr ess such an opinion or conclusion. Had we performed additional procedures, other matters might have co me to our attention that would have been reported to you.

We are required to be independent of the City and to meet our o ther ethical responsibilities, in accordance with the relevant ethical requirements related to our agreed-upon procedures engagement.

This report is intended solely for the information and use of m anagement and the City Council and is not intended to be, and should not be, used by anyone other than those specified parties.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

TURLOCK PUBLIC FINANCING AUTHORITY

BASIC FINANCIAL STATEMENTS
AND
INDEPENDENT AUDITOR’S REPORT

FOR THE FISCAL YEAR ENDED
JUNE 30, 2025

TURLOCK PUBLIC FINANCING AUTHORITY
JUNE 30, 2025

TABLE OF CONTENTS

Page

Financial Section:

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

Basic Financial Statements:

Government-Wide Financial Statements:

Statement of N et Position ............................................................................................................... 5

Statement of Activities ...................................... .............................................................................. 6

Fund Financial Statements:

Proprietary Fund Financial Statements:

Statement of N et Position ............................................................................................................... 8

Statement of Revenues, Expense s, and Changes in Fund Net Position ....................................... 9

Statement of C ash Flows ............................................................................................................... 10

Notes to the Basic Financial Statements ...................... ..................................................................... 11

Other Report:

Independent Auditor’s Report on Internal Control over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards........................................................ 17

FINANCIAL SECTION

1 INDEPENDENT AUDITOR’S REPORT

Honorable Members of the Board of Directors
Turlock Public Financing Authority
Turlock, California

Report on the Audit of the Financial Statements

Opinions

We have audited the accompanying financial statements of the bu siness-type activities and the major fund of the Turlock Public Finan cing Authority (the Authority), a component unit of the City of Turlock, California (the City), as of and for the fiscal year ended June 30, 2025, and the related notes to the basic financial statements, which collectively comprise the Authority’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 business-type activities and the major fund of the Authority, as of June 30, 2025, and the respective changes in financial position and, where applicable, cash flows thereof for the fiscal year then ended in accordance with accounting princi ples generally accepted in the United States of America.

Basis for Opinions

We conducted our audit in accordance with auditing standards ge nerally accepted in the United States of America and the standards applicable to financial audits contai ned in Government Auditing Standards , issued by the Comptroller Genera l of the United States. Our res ponsibilities under those 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 Authority and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating t o 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 prin ciples generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control rel evant to the preparation and fair presentation of financial statem ents 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 Authority’s ability to continue as a going concern for twelve months beyond the financial state ment 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 exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal 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 rel ating to the Authority. Accordingly, 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 Authority’s ability to c ontinue 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.

Emphasis of a Matter
As discussed in Note 1, the component unit financial statements present only the Authority and are not intended to present fairly the financial position and the resul ts of operations of the City of Turlock in accordance with accounting principles generally accepted in the United States of America.

Required Supplementary Information

Management has omitted the Management’s Discussion and Analysis that accounting principles generally accepted in the United States of America require to be presente d to supplement the basic financial statements. Such missing inform ation, although not a part of t he basic financial statements, is required by the Governmental Accounting Standards Board, who considers i t to be an essential part of financial reporting for placing the basic financial statements in an appr opriate operational, economic, or historical context. Our opinion on the basic financial statements is not affected by this missing information.

3 Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 5, 2026, on our consideration of the City’s internal control over financ ial reporting relating to the Authority and on our tests of its compliance with certain provisions of laws, re gulations, contracts, and grant agreements and other matters. The purpose of that report is solely to desc ribe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance relating to the Authority. That report is an integral part of an audit p erformed in accordance with Government Auditing Standards in considering the City’s internal control over financial repo rting and compliance relating to the Authority.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

BASIC FINANCIAL STATEMENTS

GOVERNMENT-WIDE FINANCIAL STATEMENTS

4 TURLOCK PUBLIC FINANCING AUTHORITY

STATEMENT OF NET POSITION

AND STATEMENT OF ACTIVITIES

The Statement of Net Position and the Statement of Activities s ummarize the Authority’s entire financial activities and financial position. They are prepared on the sam e basis as is used by most businesses, which means they include all the Authority’s assets, all its de ferred inflows/outflows of resources, and all its liabilities, as well as all its revenues and expenses.

The Statement of Net Position reports the difference between th e Authority’s total assets and deferred outflows of resources and the Authority’s total liabilities and deferred inflows of resources, including all the Authority’s long-term debt. The Statement of Net Position summa rizes the financial position of all the Authority’s activities in a single column.

The Statement of Activities repo rts increases and decreases in the Authority’s net position. It is also prepared on the full accrual basis of accounting, which means i t includes all the Authority’s revenues and all its expenses, regardless of when cash changes hands.

See accompanying notes to the basic financial statements. 5 TURLOCK PUBLIC FINANCING AUTHORITY

STATEMENT OF NET POSITION
JUNE 30, 2025

Business-Type
Activ ities
ASSETS
Investments with fiscal agent (Note 2) 9,090 $
Interest receivable 235,239
Leases receivable (Note 3) 18,096,398
Total Assets 18,340,727

LIABILITIES
Interest payable 235,239
Long-term debt (Note 4):

Due within one year 920,000
Due in more than one year 17,185,488
Total Liabilities 18,340,727
NET POSITION (Note 5)
Restricted -
Total Net Position -$

See accompanying notes to the basic financial statements. 6 TURLOCK PUBLIC FINANCING AUTHORITY

STATEMENT OF ACTIVITIES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Program Net (Expense)
Revenues Revenue and
Charges for Changes in
Functions/Programs Expenses Services Position
Business-Type Activities:

Water 744,970 $ 744,940 $ (30) $
Total 744,970 $ 744,940 $ (30)
General Revenues:

Interest income 30
Total general revenues 30
Change in net position -
Net Position:

Beginning of year -
End of year -$

FUND FINANCIAL STATEMENTS

7 TURLOCK PUBLIC FINANCING AUTHORITY

FUND FINANCIAL STATEMENTS

Major funds are defined generally as having significant activities or balances in the current year. All of the Authority’s funds are major funds.

See accompanying notes to the basic financial statements. 8 TURLOCK PUBLIC FINANCING AUTHORITY

PROPRIETARY FUNDS

STATEMENT OF NET POSITION
JUNE 30, 2025

2017
Water Bonds Total
ASSETS
Investments with fiscal agent (Note 2) 9,090 $ 9,090 $ Interest receivable 235,239 235,239
Leases receivable (Note 3) 18,096,398 18,096,398
Total Assets 18,340,727 18,340,727

LIABILITIES
Current liabilities:

Interest payable 235,239 235,239
Bonds payable (Note 4) 920,000 920,000
Total Current Liabilities 1,155,239 1,155,239
Long-term liabilities:

Bonds payable (Note 4) 17,185,488 17,185,488
Total Liabilities 18,340,727 18,340,727
NET POSITION (Note 5)
Restricted - -
Total Net Position - $ - $

See accompanying notes to the basic financial statements. 9 TURLOCK PUBLIC FINANCING AUTHORITY

PROPRIETARY FUNDS

STATEMENT OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET POSITION
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

2017
Water Bonds Total

OPERATING REVENUES
Lease revenue 744,940 $ 744,940 $
Total Operating Revenues 744,940 744,940

OPERATING EX PENSES
Interest expense 744,970 744,970
Total Operating Expenses 744,970 744,970
Operating Loss (30) (30)

NONOPERATING REVENUES (EX PENSES)
Interest income 30 30
Total Nonoperating Revenues (Expenses) 30 30 Change in Net Position - -

BEGINNING NET POSITION - -
ENDING NET POSITION - $ - $

See accompanying notes to the basic financial statements. 10 TURLOCK PUBLIC FINANCING AUTHORITY

PROPRIETARY FUNDS

STATEMENT OF CASH FLOWS
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

2017
Water Bonds Total

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from City of Turlock 1,802,363 $ 1,802,363 $ Long-term debt payment - interest (916,338) (916,338) Cash Flows from Operating Activities 886,025 886,025

CASH FLOWS FROM NONCAPITAL AND

RELATED FINANCING ACTIVITIES
Long-term debt payment - principal (880,000) (880,000) Cash Flows from Noncapital and
Related Financing Activities (880,000) (880,000)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest 30 30
Cash Flows from Inv esting Activ ities 30 30 Net Cash Flows 6,055 6,055
Cash and Investments at Beginning of Year 3,035 3,035 Cash and Investments at End of Year 9,090 $ 9,090 $ Reconciliation of Operating Loss to Cash Flows
from Operating Activities:

Operating loss (30) $ (30) $
Amortization of bond premium (156,901) (156,901) Change in assets and liabilities:

Interest receivable 14,467 14,467
Interest payable (14,467) (14,467)
Leases receivable 1,042,956 1,042,956
Cash Flows from Operating Activities 886,025 $ 886,025 $ NONCASH TRANSACTIONS:

Amortization of bond premium (156,901) $ (156,901) $

NOTES TO BASIC FINANCIAL STATEMENTS

11 TURLOCK PUBLIC FINANCING AUTHORITY

NOTES TO THE BASIC FINANCIAL STATEMENTS
FOR THE YEAR ENDED JUNE 30, 2025

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. Organization and Purpose

The Turlock Public Financing Authority (the Authority) is a separate government entity whose purpose is to assist with the financing or refinancing of certain publi c capital improvements within the City of Turlock, California (the City). The Authority has the power to purchase bonds issued by any local agency at public or negotiated sale and may sell such bonds to public or private purchasers at public or negotiated sale. The Authority is controlled by the City and has the same governing body as the City, which also performs all accounting and administrative fun ctions for the Authority. The Authority was created on December 15, 1998, pursuant to Article 1, Chapte r 5, of Division 7 of Title 1 of the Government Code of the State of California as a Joint Powers Au thority between the City and the former Turlock Redevelopment Agency.

The Authority is an integral part of the City, and the accompan ying financial statements are included as a component of the basic financial statements prepared by th e City. A component unit is a separate governmental unit, agency, or nonprofit corporation wh ich, when combined with all other component units, constitutes the reporting entity as defined in the City’s basic financial statements.

The component unit financial statements present only the Author ity and are not intended to present fairly the financial position and the results of operations of the City of Turlock in accordance with accounting principles generally accepted in the United States of America.

B. Basis of Presentation

The Authority’s Basic Component Unit Financial Statements are p repared in conformity with accounting principles generally accepted in the United States o f America. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.

These standards require that the financial statements described below be presented.

Authority-Wide Statements

The Statement of Net Position and the Statement of Activities i nclude the financial activities of the overall Authority government. Eliminations have been made to mi nimize the double counting of internal activities.

The Statement of Activities presents a comparison between direc t expenses and program revenues for each function of the Authorit y’s governmental and business- type activities. Direct expenses are those that are specifically associated with a program or function and, therefore, are clearly identifiable to a particular function. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs; (b) grants and contributions that are restricted to meeting the operational needs of a particular program; and (c) fees, grants, and contributions that are restricted to financing the acquisition or construction of capital assets. Re venues that are not classified as program revenues, including interest income, are presented as general revenues.

The Authority-wide financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are re corded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.

12 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

B. Basis of Presentation (Continued)

Fund Financial Statements

The fund financial statements provide information about the Aut hority’s funds. Separate statements for each proprietary fund are presented. The emphasis of fund f inancial statements is on major individual governmental and enter prise funds, each of which is displayed in a separate column. The Authority considers all its funds to be major funds.

Proprietary Fund Financial Statements – Proprietary fund financial statements include a Statement of Net Position; a Statement of Revenues, Expenses, and Changes in Fund Net Position; and a Statement of Cash Flows. Proprie tary funds are accounted for us ing the economic resources measurement focus and the full ac crual basis of accounting. Acc ordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement o f Net Position. The Statement of Revenues, Expenses, and Changes in Fund Net Position presents i ncreases (revenues) and decreases (expenses) in total net position.

Operating revenues in the propri etary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nono perating revenues. Operating expenses are those expenses that are essential to the primary o perations of the fund. All other expenses are reported as nonoperating expenses.

C. Fair Value Measurements

Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measu rement date. The Authority categorizes its fair value measurements within the fair value h ierarchy established by accounting principles generally accepted in the United States of America. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value i nto three levels based on the extent to which inputs used in measuring fair value are observable in the market.

Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.

Level 2 inputs are inputs – other than quoted prices included 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.

D. Estimates and Assumptions

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 an d liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of re venues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 – INVESTMENTS HELD BY FISCAL AGENT

The Authority invests in individual investments and in investme nt pools. Individual investments are evidenced by specific identifiable pieces of paper called securities instruments, or by an electronic entry registering the owner in the records of the institution issuing the security, called the book entry system.

13 NOTE 2 – INVESTMENTS HELD BY FISCAL AGENT (Continued)

The Authority’s investments are carried at fair value, as requi red by accounting principles generally accepted in the United States of America. The Authority 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.

In accordance with accounting principles generally accepted in the United States of America, highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost.

All other investments are stated at fair value. Market value is used as fair value for those securities for which market quotations are readily available.

A. Investments Authorized by Debt Agreements

In accordance with the Lease Revenue Bond Indentures of Trust, a trustee holds the portion of bond proceeds established as reserves for debt service on these bond s. The California Government Code requires these funds to be invested in accordance with bond ind entures or State statutes. The table below identifies the investment types and their minimum credit ratings that are authorized for investments held by the trustee and certain provisions of these debt agreements. The bond indentures contain no limitations for the maximum investment in any one issuer or the maximum percentage of the portfolio that may be invested in any one investment type.

Authorized Investment Type
Maximum
Maturity
Minimum
Credit
Quality
Maximum
Percentage
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 Local Agency Investment Fund N/A N/A LAIF limits
Repurchase Agreements 270 days A No maximum
Guaranteed Investment Contracts N/A AAA 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

B. Interest Rate Risk

Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment , the greater the sensitivity of its fair value to changes in market interest rates.

Information about the sensitivity of the fair values of the Aut hority’s investments to market interest rate fluctuations is provided by the following table that shows the distribution of the Authority’s investments by maturity:

12 Months
Investment Type or Less
Held by Fiscal Agent:

Money Market Mutual Funds (U.S. Securities) 9,090 $
9,090$

14 NOTE 2 – INVESTMENTS HELD BY FISCAL AGENT (Continued)

C. 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. The actual rating as of June 30, 2025, for the Money Market Mutual Funds was AAAm as provided by Standard & Poor’s investment rating system. Money market mutual funds are available for withdrawal on demand.

D. Fair Value Hierarchy

The Authority categorizes its fair value measurements within th e fair value hierarchy established by accounting principles generally accepted in the United States o f America. The hierarchy is based on the valuation inputs used to meas ure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are signific ant other observable inputs; and Level 3 inputs are significant unobservable inputs.

The Authority’s investment in money market funds is measured at amortized cost as of June 30, 2025.

NOTE 3 – LEASES RECEIVABLE FROM THE CITY OF TURLOCK

The Authority has recorded leases receivable pursuant to the le ase agreements between the Authority and the City in relation to the bonded indebtedness. The leases receivable along with investments held by fiscal agents secure the repayment of the different debt issues . The lease revenue is equal to the Authority’s debt service requirements and is used for that purpose. At June 30, 2025, the lease receivable was $18,096,398.

NOTE 4 – LONG-TERM DEBT

A. Current Year Activity

Following is a summary of the Authority’s long-term debt transa ctions during the fiscal year ended June 30, 2025:

Original Issue Balance Balance Current More Than
Amount June 30, 2024 Retirements June 30, 2025 Portion One Year Business-Type Activ ities Debt:

Revenue Refunding Bonds:
2017 Water 22,405,000 $ 16,985,000 $ (880,000) $ 16,105,000 $ 920,000 $ 15,185,000$ Add: Unamortized bond premium - 2,157,389 (156,901) 2,000,488 - 2,000,488 Total Business Type Activ ities 22,405,000$ 19,142,389 $ (1,036,901) $ 18,105,488 $ 920,000 $ 17,185,488$

B. 2017 Water Revenue Refunding Bonds

In June 2017, the Authority issued $22,405,000 in Water Revenue Refunding Bonds Series 2017 to finance improvements to the Water System, to advance refund the series 2008 Water Revenue Bonds, and to pay costs of issuance of the 2017 Water Revenue R efunding Bonds. The defeased 2008 Water Revenue Bonds were called on April 30, 2018. The 201 7 Water Revenue Refunding Bonds, which carry coupon interest rates ranging from 4.00% - 5 .25%, have semi-annual principal and interest payments on the first of March through March 2038. Events of default on the 2017 Water Revenue Refunding Bonds include failure to make any debt servic e payment by the due date or failure to perform the other agreements or covenants required i n the Master Installment Purchase Agreement (MIPA) between the Authority and the City not cured within sixty days of notice to the City, which would accelerate repayment of the bonds. The Authority ca n prepay the bonds at any time by paying the prescribed prepayment premium as set forth in the bond documents.

15 NOTE 4 – LONG-TERM DEBT (Continued)

B. 2017 Water Revenue Refunding Bonds (Continued)

The annual debt service requirements are as follows:

Year Ending
June 30 Principal Interest Total
2026 920,000$ 715,437 $ 1,635,437 $
2027 970,000 669,437 1,639,437
2028 1,015,000 620,937 1,635,937
2029 1,070,000 570,187 1,640,187
2030 1,125,000 514,012 1,639,012
2031-2035 6,465,000 1,720,150 8,185,150
2036-2038 4,540,000 368,000 4,908,000
Total 16,105,000$ 5,178,160 $ 21,283,160 $

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.

C. Bond Issuance Costs, Original Is sue Discounts and Premiums, and Deferred Charge on Refunding

For proprietary fund types, bond premiums and discounts are def erred and amortized over the life of the bonds using the effective interest method. Bonds payable ar e reported net of the applicable bond premium or discount. Any differences between proprietary refund ed debt and the debt issued to refund it, called a gain or loss on refunding, is amortized ove r the remaining life of either the refunded debt or the refunding debt, whichever is shorter. The gain or l oss on refunding 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.

D. Pledged Revenues

The 2017 Water Revenue Refunding Bonds are secured by a pledge of lease revenues from the City of Turlock. The approximate amount of pledged revenues is the remaining debt service on the bonds, totaling $21,283,160 as of June 30, 2025. The pledge extends fo r the life of the bonds, until final maturity in 2038. For the year ended June 30, 2025, pledged lea se revenues recognized were $744,940, and principal and interest payments were $1,639,438.

NOTE 5 – NET POSITION

Net position is measured on the full accrual basis of accountin g and is the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources. Net position is divided into two captions. These captions apply only to net position, w hich is determined only for proprietary funds and at the Authority-wide level, and are described below:

Restricted for Debt Service – This amount represents funds required by bond covenants to be held by the Authority’s third-party trustee for future debt service payments.

Restricted for Capital Projects – This amount represents the un expended portion of debt which was issued to finance capital improvement projects.

16 NOTE 6 – SUBSEQUENT EVENTS

The Authority’s management has evaluated all events and transactions that occurred after June 30, 2025, and through May 5, 2026, the date the basic financial statement s and accompanying notes to the basic financial statements were available to be issued. During this period, no events or transactions occurred that would require adjustment of the basic financial statements or disclosure in the accompanying notes.

OTHER REPORT

17 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS

BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN

ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

Honorable Members of the Board of Directors
Turlock Public Financing Authority
Turlock, California

We have audited, in accordance with the auditing standards gene rally 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, the fin ancial statements of the business-type activities and the major fund of the Turlock Public Financing Authority (the Authority), a component unit of the City of Turlock, California (the City), as of and for the fiscal year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the Authority’s basic financial statements, and have issued our report thereon dated May 5, 2026.

Report on Internal Control Over Financial Reporting

In planning and performing our audit of the basic financial sta tements, we considered the City’s internal control over financial reporting (internal control) relating to the Authority as a basis for designing audit procedures that are appropriate in the circumstances for the pu rpose of expressing our opinions on the financial statements, but not f or the purpose of expressing an opinion on the effectiveness of the City’s internal control relating to the Authority. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control relating to the Authority.

A deficiency in internal control exists when the design or oper ation of a control does not allo w management or employees, in the normal course of performing the ir assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that the re is a reasonable possi bility that a material misstatement of the Authority’s basic financial statements will not be prevented or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet impor tant enough to merit attention by those charged with governance.

Our consideration of internal c ontrol was for the limited purpo se described in the first paragraph of this section and was not designed to i dentify all deficiencies in in ternal control that might be material weaknesses or significant deficie ncies. Given these limitation s, during our audit we did not identify any deficiencies in internal control that we consider to be materia l weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

18 Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the Aut hority’s basic financial statements are free from material misstatement, we performed tests of the City ’s compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncomplian ce with which could have a direct and material effect on the basic financial statements. However, pr oviding an opinion on compliance with those provisions was not an objective of our audit and, accordi ngly, we do not express such an opinion.

The results of our tests disclosed no instances of noncomplianc e or other matters that are required to be reported under Government Auditing Standards.

Purpose of this Report

The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance relating to the Authority. This repor t is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance relating to the Authority. Accordingly, this communication is not suitable for any other purpose.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

Honorable Members of the Board of Directors
Turlock Public Financing Authority
Turlock, California

We have audited the basic financial statements of the business- type activities and the major fund of the Turlock Public Financing Author ity (the Authority) as of and fo r the fiscal year ended June 30, 2025.

Professional standards require that we provide you with informa tion about our responsibilities under auditing standards generally accepted in the United States of A merica and Government Auditing Standards, as well as certain information related to the planned scope a nd timing of our audit. We have communicated such information in our letter to you dated March 30, 2026. Professional standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters

Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropri ate accounting policies. The significant accounting policies used by the Authority are described in Note 1 to the financial statements. We noted no transactions entered into by the Authority during the fiscal year for which there is a lack of authoritative guidance or consensus. All signifi cant transactions have been r ecognized in the basic financial statements in the proper period.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with mana gement in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are clearly trivial, and communica te them to the appropriate level of management. We identified no such misstatements during our audit.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not resolved to our satisfaction, that could be significant to the basic financial statements or the auditor’s report. We are pleased to report that no such disagreements arose during the course of our audit.

Management Representations
We have requested certain representations from management that are included in the management representation letter dated May 5, 2026.

Management Consultations with Other Independent Accountants In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain sit uations. If a consultation involves application of an accounting principle to the Authority’s basic financial s tatements or a determination of the type of auditor’s opinion that may be expr essed on those statements, ou r professional standards require the consulting accountant to check with us to determine that the co nsultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the applic ation of accounting principles and auditing standards, with management each fi scal year prior to retention as the Authority’s auditors. However, these discussions occurred in the normal course of our professi onal relationship and our responses were not a condition to our retention.

Restriction on Use

This information is intended solely for the information and use of the Board of Directors and Management of the Turlock Public Financing Authority, as well as the City Council and management of the City of Turlock, and is not intended to be, and should not be, used by anyone other than these specified parties.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

FINANCIAL STATEMENTS

FOR THE FISCAL YEARS ENDED
JUNE 30, 2025 AND 2024

CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

FOR THE FISCAL YEARS ENDED
JUNE 30, 2025 AND 2024

TABLE OF CONTENTS

Page

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

Basic Financial Statements

Balance Sheets – Streets Special Revenue Fund ............................................................................. 4

Statements of Revenues, Expenditures, and Changes in Fund Balance – Streets Special Revenue Fund ........................................................................................................ 5

Statements of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual – Streets Special Revenue Fund ....................................................................... 6

Statements of Net Position – Transportation Enterprise Fund .......................................................... 8

Statements of Revenues, Expenses, and Changes in Fund Net Position – Transportation Enterprise Fund ....................................................................................................... 9

Statements of Cash Flows – Transportation Enterprise Fund ........................................................... 10

Notes to Basic Financial Statements ................................................................................................. 12

Other Reports

Independent Auditor’s Report on Internal Control Over Financial Reporting and on Compliance with the Transportation Development Act and Other Matters Based on an Audit of Financial Statements Performed in Accordance With Government Auditing Standards ...................................................................................................... 21

Independent Auditor’s Report on Compliance for TDA Program Funds and on Internal Control Over Compliance in Accordance With Sections 6666 and 6667 of the Rules and Regulations of the California Administrative Code in the Transportation Development Act Statutes and Administrative Code of 1987 and the Allocation Instructions and Resolutions of the Stanislaus Council of Governments .......... 23

Schedule of Findings and Responses ............................................................................................... 26

Status of Prior Year Findings and Responses ................................................................................... 27

1 INDEPENDENT AUDITOR’S REPORT

To the Honorable Members of the City Council
of the City of Turlock
Turlock, California

Report on the Audit of the Financial Statements

Opinions

We have audited the accompanying financial statements of the Tr ansportation Development Act Funds (TDA Funds) which are included in the Streets Special Revenue F und and the Transportation Enterprise Fund of the City of Turlock (City), California, as of and for the fiscal years ended June 30, 2025 and 2024, and the related notes to the basic financial statements, which collectively comprise the TDA Funds’ 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 TDA Funds as of June 30, 2025 and 2024, and the respective changes in financial position, and, where applicable, cash flows thereo f, and the respective budgetary comparison for the Streets Special Revenue Fund, for the fiscal years then ended in accordance with accounting principles generally accepted in the United States of America.

Basis for Opinions

We conducted our audits in a ccordance with auditing standards g enerally accepted in the United States of America and the standards applicable to financial audits con tained in Government Auditing Standards, issued by the Comptroller Genera l 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.

Emphasis of a Matter

As discussed in Note 1, these fi nancial statements present only the TDA Funds and do not purport to, and do not, present fairly the financial position of the City a s of June 30, 2025 and 2024, the changes in its financial position, or, where applicable, its cash flows fo r the fiscal years then ended in accordance with accounting principles generally accepted in the United States of America. Our opinion is not modified with respect to this matter.

Responsibilities of Management for the Financial Statements

Management is responsible for the preparation and fair presenta tion of the financial statements in accordance with accounting prin ciples 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 statem ents that are free from materia l misstatement, whether due to fraud or error.

2 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 TDA Funds’ ability to continue as a going concern for twelve months beyond the financial state ment date, including any currently known information that may raise substantial doubt shortly thereafter.

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 judgmen t and maintain professional skepticism throughout the audit. • Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures 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 inte rnal control relevant to the au dit in order to design audit procedures that are appropriate i n the circumstances, but not f or the purpose of expressing an opinion on the effectiveness of the City’s internal control rel ating to the TDA Funds. Accordingly, 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 TDA Funds’ ability to co ntinue 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

Management has omitted the Managem ent’s Discussion and Analysis , the Schedule of the City Transportation Enterprise Fund’s Proportionate Share of the Cit y’s Net Pension Liability, the Schedule of
Pension Contributions, and the Schedule of Changes in Total Oth er Post-Employment Benefit (OPEB) Liability and Related Ratios that accounting principles generally accepted in the United States of America require to be presented to supplement the basic financial state ments. Such missing information, although not a part of the basic financial statements, is required by th e Governmental Accounting Standards Board who considers it to be an essent ial part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. Ou r opinion on the basic financial statements is not affected by this missing information.

3 Other Reporting Required by Government Auditing Standards

In accordance with Government Auditing Standards, we have also issued our report dated May 5, 2026, on our consideration of the City’s internal control over financial reporting relating to the TDA Funds and on our tests of its compliance with certain provisions of laws, re gulations, contracts, and grant agreements and other matters. The purpose of that report is solely to desc ribe the scope of our testing of internal control over financial reporting and compliance relating to the TDA Funds and the results of that testing, and not to provide an opinion on t he effectiveness of the City’ s internal control over financial reporting or on compliance relating to the TDA Funds. That report is an inte gral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance relating to the TDA Funds.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

See accompanying notes to the financial statements.
4 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

STREETS SPECIAL REVENUE FUND

BALANCE SHEETS
JUNE 30, 2025 AND 2024

2025 2024
ASSETS
Cash and investments (Note 2) 979,562 $ 1,052,905 $ Accounts receivable 500 -
Interest receivable 5,205 9,466
TOTAL ASSETS 985,267 $ 1,062,371 $

LIABILITIES
Accounts and salaries payable 56,238 $ 140,943 $ Deposits payable - -
TOTAL LIABILITIES 56,238 140,943
FUND BALANCE (Note 5)
Restricted 929,029 921,428
TOTAL FUND BALANCE 929,029 921,428
TOTAL LIABILITIES AND FUND BALANCE 985,267$ 1,062,371 $

See accompanying notes to the financial statements.
5 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

STREETS SPECIAL REVENUE FUND

STATEMENTS OF REVENUES, EXPENDITURES,

AND CHANGES IN FUND BALANCE
FOR THE FISCAL YEARS ENDED JUNE 30, 2025 AND 2024

2025 2024

REVENUES
Charges for services 90,233 $ 23,767 $
Interest income and other 46,583 45,765
TOTAL REVENUES 136,816 69,532

EXPENDITURES
Public ways and facilities/transportation 982,215 854,818 Capital outlay 12,000 49,932
TOTAL EXPENDITURES 994,215 904,750
Deficiency of revenues under expenditures (857,399) (835,218)

OTHER FINANCING SOURCES
Transfers in from other City funds 865,000 825,000 Total other financing sources 865,000 825,000 Net change in fund balance 7,601 (10,218) Fund balance, beginning of year 921,428 931,646 Fund balance, end of year 929,029 $ 921,428 $

See accompanying notes to the financial statements.
6 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

STREETS SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

Original Final Actual
Variance with
Final Budget

REVENUES
Charges for services 43,200 $ 43,200 $ 90,233 $ 47,033 $ Intergovernmental - - - - Interest income and other 25,500 25,500 46,583 21,083 TOTAL REVENUES 68,700 68,700 136,816 68,116

EXPENDITURES
Public ways and facilities/transportation 1,160,200 1,160,200 982,215 177,985 Capital outlay 356,210 356,210 12,000 344,210 TOTAL EXPENDITURES 1,516,410 1,516,410 994,215 522,195 Deficiency of revenue under expenditures (1,447,710) (1,447,710) (857,399) 590,311

OTHER FINANCING SOURCES
Transfers in from other City funds 865,000 865,000 865,000 - Total other financing sources 865,000 865,000 865,000 - Net change in fund balance (582,710) $ (582,710) $ 7,601 590,311 $ Fund balance, beginning of year 921,428
Fund balance, end of year 929,029 $
Budgeted Amounts

See accompanying notes to the financial statements.
7 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

STREETS SPECIAL REVENUE FUND

STATEMENT OF REVENUES, EXPENDITURES,
AND CHANGES IN FUND BALANCE – BUDGET AND ACTUAL
FOR THE FISCAL YEAR ENDED JUNE 30, 2024

Original Final Actual
Variance with
Final Budget

REVENUES
Charges for services 41,700 $ 41,700 $ 23,767 $ (17,933) $ Intergovernmental 55,000 55,000 - (55,000) Interest income and other 8,500 8,500 45,765 37,265 TOTAL REVENUES 105,200 105,200 69,532 (35,668)

EXPENDITURES
Public ways and facilities/transportation 830,662 855,662 854,818 844 Capital outlay 205,000 205,000 49,932 155,068 TOTAL EXPENDITURES 1,035,662 1,060,662 904,750 155,912 Deficiency of revenue under expenditures (930,462) (955,462) (835,218) 120,244

OTHER FINANCING SOURCES
Transfers in from other City funds 825,000 825,000 825,000 - Total other financing sources 825,000 825,000 825,000 - Net change in fund balance (105,462) $ (130,462) $ (10,218) 120,244 $ Fund balance, beginning of year 931,646
Fund balance, end of year 921,428 $
Budgeted Amounts

See accompanying notes to the financial statements.
8 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

TRANSPORTATION ENTERPRISE FUND

STATEMENTS OF NET POSITION
JUNE 30, 2025 AND 2024

2025 2024
ASSETS
Current assets
Cash and investments (Note 2) 1,581,957 $ 3,196,632 $ Accounts receivable, grants 11,803,703 6,602,784
Accounts receivable, other 22,850 -
Interest receivable 10,708 22,672
Prepaids 35,415 33,728
Total Current Assets 13,454,633 9,855,816
Noncurrent assets
Capital assets (Note 3)
Capital assets not being depreciated 3,687,842 4,073,098 Capital assets being depreciated (net) 13,384,259 13,833,198 Right-to-use subscription assets (net) 106,549 162,140 Total Noncurrent Assets 17,178,650 18,068,436
Total Assets 30,633,283 27,924,252

DEFERRED OUTFLOWS OF RESOURCES
Deferred outflows related to pensions (Note 8) 364,808 417,233 Deferred outflows related to OPEB (Note 9) 26,342 30,868 Total Deferred Outflows of Resources 391,150 448,101

LIABILITIES
Current liabilities
Accounts payable and accruals 1,259,695 340,236 Salaries payable 29,441 27,486
Unearned revenue (Note 4) 11,287,881 8,652,415
Compensated absences - due in one year 78,067 17,293 IT subscription liability (Note 12) 36,081 33,554 Total Current Liabilities 12,691,165 9,070,984
Long-term liabilities
Compensated absences 19,517 69,172
Net pension liability (Note 8) 1,551,995 1,479,930 Total OPEB liability (Note 9) 140,064 147,665 IT subscription liability (Note 12) 38,195 74,276 Total Long-Term Liabilities 1,749,771 1,771,043 Total Liabilities 14,440,936 10,842,027

DEFERRED INFLOWS OF RESOURCES
Deferred inflows related to pensions (Note 8) - 31,013 Deferred inflows related to OPEB (Note 9) 202,416 215,426 Total Deferred Inflows of Resources 202,416 246,439 NET POSITION (Note 5)
Net investment in capital assets 17,104,374 17,960,606 Unrestricted (723,293) (676,719)
Total Net Position 16,381,081 $ 17,283,887 $

See accompanying notes to the financial statements.
9 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

TRANSPORTATION ENTERPRISE FUND

STATEMENTS OF REVENUES, EXPENSES,

AND CHANGES IN FUND NET POSITION
FOR THE FISCAL YEARS ENDED JUNE 30, 2025 AND 2024

2025 2024

OPERATING REVENUES
Charges for services 174,669 $ 163,781 $
Other income 82,120 11,175
Total Operating Revenues 256,789 174,956

OPERATING EXPENSES
Salaries, benefits, and insurance 1,279,341 1,176,659 Contractual 5,147,162 2,764,996
Supplies and maintenance 121,698 442,880
Utilities 28,833 33,840
Fleet expense 300,730 327,048
Depreciation and amortization (Note 3) 1,154,945 1,062,038 Other expenses 543,339 90,902
Total Operating Expenses 8,576,048 5,898,363
Operating Loss (8,319,259) (5,723,407)

NONOPERATING REVENUES (EXPENSES)
Operating grants 6,912,099 4,367,252
Income (loss) from retirement of capital assets (20,137) 391 Investment income 92,576 31,174
Interest expense (7,257) (1,458)
Total Nonoperating Revenues (Expenses) 6,977,281 4,397,359 LOSS BEFORE CAPITAL GRANTS AND TRANSFERS (1,341,978) (1,326,048) Capital grants - 80,053
Transfers in from other City funds 585,106 411,925 Transfers out to other City funds (145,934) (78,005) Net Capital Grants and Transfers 439,172 413,973 Change in Net Position (902,806) (912,075)
Net Position - Beginning 17,283,887 18,195,962
Net Position - Ending 16,381,081 $ 17,283,887 $

See accompanying notes to the financial statements.
10 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

TRANSPORTATION ENTERPRISE FUND

STATEMENTS OF CASH FLOWS
FOR THE FISCAL YEARS ENDED JUNE 30, 2025 AND 2024

2025 2024

CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers (5,049,100) $ 177,901 $
Payments to suppliers (5,223,990) (3,624,475)
Payments to employees (1,188,875) (1,179,531)
Other 82,120 -
Net Cash Flows from Operating Activities (11,379,845) (4,626,105)

CASH FLOWS FROM NONCAPITAL

FINANCING ACTIVITIES
Transfers in 585,106 411,925
Transfers out (145,934) (78,005)
Intergovernmental receipts - operations 9,547,565 8,290,811 Net Cash Flows from Noncapital Financing Activities 9,986,737 8,624,731

CASH FLOWS FROM CAPITAL AND RELATED

FINANCING ACTIVITIES
Intergovernmental receipts - capital program - (1,596,578) Purchases of capital assets (265,159) (74,263) Proceeds from sale of capital assets (20,137) 391 IT subscription assets - principal (33,554) (58,943) IT subscription assets - interest (7,257) (1,458) Net Cash Flows from Capital and Related Financing Activities (32 6,107) (1,730,851)

CASH FLOWS FROM INVESTING ACTIVITIES
Investment income 104,540 13,124
Net Cash Flows from Investing Activities 104,540 13,124 Net Cash Flows (1,614,675) 2,280,899

CASH AND INVESTMENTS
Beginning of Year 3,196,632 915,733
End of Year 1,581,957 $ 3,196,632 $

See accompanying notes to the financial statements.
11 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

TRANSPORTATION ENTERPRISE FUND
STATEMENTS OF CASH FLOWS (Continued)
FOR THE FISCAL YEARS ENDED JUNE 30, 2025 AND 2024

2025 2024

RECONCILIATION OF OPERATING LOSS TO NET CASH
FLOWS FROM OPERATING ACTIVITIES:

Operating loss (8,319,259) $ (5,723,407) $
Adjustments to reconcile operating loss to net cash
flows from operating activities:

Depreciation and amortization 1,154,945 1,062,038 Changes in assets and liabilities:

Accounts receivable (5,223,769) 2,945
Prepaids (1,687) (33,728)
Accounts payable 919,459 68,919
Salaries payable 1,955 10,456
Compensated absences 11,119 4,123
Deferred outflows/inflows related to total OPEB liability 93,477 (21,394) Deferred outflows/inflows related to net pension liability (16,0 85) 3,943 Net Cash Flows from Operating Activities (11,379,845) $ (4,626,105) $

NONCASH TRANSACTIONS
Retirement of capital assets - $ - $ Acquisition of right-to-use subscription assets - 166,773 Total Noncash Capital and Related Financing Activities - $ 166,773$

12 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

NOTES TO BASIC FINANCIAL STATEMENTS
FOR THE FISCAL YEARS ENDED JUNE 30, 2025 AND 2024

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

A. The Reporting Entity

The financial statements of the Transportation Development Act (TDA) Funds are intended to present the financial position, changes in financial position, and cash f l o w s f o r o n l y t h o s e t r a n s a c t i o n s attributable to the Streets Special Revenue Fund and the Transp ortation Enterprise Fund (TDA Funds) administered and disbursed by the City of Turlock, California (City).

The accounting policies of the TDA Funds of the City are in con formity with accounting principles generally accepted in the United States of America (GAAP) appli cable to governmental units. The Governmental Accounting Standards B oard (GASB) is the accepted standard-setting body for establishing accounting principles. The following is a summary of the more significant accounting policies.

B. Fund Accounting

The operations of the TDA Funds are accounted for in separate s ets of self-balancing accounts that comprise their assets, deferred outflows of resources, liabilit ies, deferred inflows of resources, fund balance or net position, revenues, and expenditures or expenses . Governmental resources are allocated to and for individual funds based upon the purpose fo r which they are to be spent and the means by which spending activities are controlled. The TDA Fund s are presented in the accompanying financial statements as follows

Governmental Fund Type

Streets Special Revenue Fund – The Streets Special Revenue Fund is used to account for the City’s share of the TDA allocations that are legally restricted for st reet maintenance and capital improvements.

Proprietary Fund Type

Transportation Enterprise Fund – The Transportation Enterprise Fund is used to account for the operation and management of the Ci ty’s transit operations. TDA and Federal Transit Administration (FTA) allocations for transit operations are accounted for in this fund

C. Basis of Accounting and Measurement Focus

Streets Special Revenue Fund

The Streets Special Revenue Fund’s financial statements include a Balance Sheet and a Statement of Revenue, Expenditures, and Changes in Fund Balance. The Spec ial Revenue Fund is accounted for on a spending or current financial resources measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and deferred outflows of resources, and current liabilities and deferred inflows of resource s, are included on the Balance Sheet. The Statement of Revenues, Expenditures, and Changes in Fund Balance presents increases (r evenues and other financing sources) and decreases (expenditures and other financing uses) in fund balance. Under the modified accrual basis of accounting, rev enues are recognized in the acc ounting period in which they become both measurable and available to finance expenditures of the cu rrent period. Available means

13 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

C. Basis of Accounting and M easurement Focus (Continued)

Streets Special Revenue Fund (Continued)

collectible within the current period or soon enough thereafter to be used to pay liabilities of the current period. The City’s accrual period is generally 90 days after the fiscal year end. Expenditures are generally recognized under the modified accrual basis of ac counting when the related fund liability is incurred.

The Streets Special Revenue Fund is used to account for the Cit y’s share of the TDA allocations that are legally restricted for street maintenance and projects supp orting bicycle and pedestrian activity adjacent to and on City streets/ro ads (non-motorized). In addit ion, this fund accounts for user fees collected related to permitted trenching activity and transport ation permits within the City streets/roads and related right-of-way.

Transportation Enterprise Fund

The Transportation Enterprise Fund financial statements include a Statement of Net Position; a Statement of Revenues, Expenses, and Changes in Fund Net Positi on; and a Statement of Cash Flows.

The Transportation Enterprise Fund is accounted for using the e conomic resources measurement focus and the accrual basis of accounting. Accordingly, all ass ets, deferred outflows of resources, liabilities, and deferred inflow s of resources ( whether current or noncurrent) are included on the Statement of Net Position. The St atement of Revenues, Expenses, and Change in Fund Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in w hich they are earned while expenses are recognized in the period in which the liability is incurred.

The Transportation Enterprise Fund is used to account for the o peration and management of the City’s transit operations. TDA and FTA allocations for transit operations and capital projects are accounted for in this fund.

Operating revenues in the Transp ortation Enterprise Fund include fare, Measure L Transit, and other revenues generated from the pr imary operations of the fund, exc luding grants. All other revenues, including operating grants, are reported as nonoperating revenu es. Operating expenses are those expenses that are essential to the primary operations of the fu nd. All other expenses are reported as nonoperating expenses

D. Deferred Inflows and De ferred Outflows of Resources

In addition to assets, the Statement of Net Position or Balance Sheet reports a separate section for deferred outflows of resources. This separate financial stateme nt element, deferred outflows of resources, represents a consum ption of net ass ets or fund balan ce that applies to a future period(s) and so will not be recognized 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 (revenue) until that time.

E. 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 GAAP. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.

14 NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Continued)

E. Fair Value Measur ements (Continued)

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.

F. Cash Equivalents

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.

G. Use of Estimates

The preparation of financial statements in conformity with GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilitie s at the date of the financial statements and the r eported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.

NOTE 2 – CASH AND INVESTMENTS

The TDA Funds participate in the City’s cash and investment poo l. The City pools surplus cash from all sources and all funds, except cas h with fiscal agents, so that it can be invested at the maximum yield, consistent with safety and liquidity. Investment income is allo cated among funds on the basis of the average month-end cash and invest ment balances in these funds. As of June 30, 2025 and 2024, the TDA Funds had cash and investment balances of $2,561,519 and $4,249,537, respectively.

Investments Authorized by the California Government Code and the City’s Investment Policy

The City’s Investment Policy and the California Government Code permit the following investments, provided the credit ratings of the issuers are acceptable and approved percentages and maturities are not exceeded. The table below also id entifies certain provisions of the California Government Code, or the Investment Policy if more restrictive, that address interest rate risk, credit risk, and concentration of credit risk.

15 NOTE 2 – CASH AND INVESTMENTS (Continued)

Investments Authorized by the California Government Code and the City’s Investment Policy (Continued)

The City’s investment policy authorizes the following investments.

Minimum Maximum Maximum
Maximum Credit Percentage Investment
Authorized Investment Type Maturity Quality of Portfolio In One Is suer U.S. Treasury Notes, Bonds, and/or Bills 5 years A Unlimited N/A U.S. Government Agency Securities 5 years A Unlimited 25% Negotiable Certificates of Deposit 5 years N/A 30% N/A
Certificates of Deposit 5 years A Unlimited N/A
Bankers' Acceptances 180 days A 40% 30%
Commercial Paper 270 days A-1 or Higher 25% 10%
State of California Local Agency
Investment Fund (LAIF) N/A N/A
Equal to maximum
limit set by LAIF N/A
Repurchase Agreement 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

Fair Value Hierarchy

The TDA Funds categorizes its fair value measurements within th e fair value hierarchy established by GAAP. The hierarchy is based on the valuation inputs used to me asure fair value of the assets. Level 1 inputs are quoted prices in an active market for identical asse ts; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.

The TDA Funds’ investment in the City’s investment pool is not subject to the fair value hierarchy.

NOTE 3 – CAPITAL ASSETS

Capital assets acquired by the Streets Special Revenue Fund are recorded as expenditures in the special revenue fund and capitalized at cost and recorded as part of th e City’s Statement of Net Position in the government-wide financial statements. The costs of infrastructu re (roads, curbs, gutters, streets, bridges, sidewalks, drainage systems, right-of-ways, and land related to such assets) are recorded as expenditures in the special revenue fund and are also capitaliz ed and recorded in the City’s Statement of Net Position in the government-wide financial statements. These infrastructure assets become the property of the City and are maintained by the City.

Capital assets acquired by the Transportation Enterprise Fund a re recorded at cost in the Transportation Enterprise Fund and are depreciated/amortized using the straight-line method over estimated useful lives.

Operating expenses include depreciation/amortization on all dep reciable/amortizable capital assets.

Repairs and maintenance are charged to expense when the services are rendered.

City policy has set the capitalization thresholds for reporting capital assets at the following:

General Capital Assets $10,000
Infrastructure Capital Assets 50,000

16 NOTE 3 – CAPITAL ASSETS (Continued)

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

Transportation Enterprise Fund

The following is a summary of capital assets for the Transportation Enterprise Fund at June 30, 2025 and 2024:

June 30, 2024 Additions
Retirements/
Adjustments Transfers June 30, 2025
Capital assets not being
depreciated/amortized:

Land 3,382,459 $ - $ - $ - $ 3,382,459$ Construction in progress 690,639 244,975 (630,231) - 305,383 Total capital assets not being
depreciated/amortized: 4,073,098 244,975 (630,231) - 3,687,842 Capital assets being
depreciated/amortized:

Land improvements 2,559,491 - - - 2,559,491 Buildings 9,207,507 594,329 - - 9,801,836 Furniture and equipment 1,571,600 40,320 - - 1,611,920 Vehicles 8,235,346 15,765 - - 8,251,111 Infrastructure 231,051 - - - 231,051 Right-to-use subscription assets 166,773 - - - 166,773 Total capital assets being
depreciated/amortized: 21,971,768 650,414 - - 22,622,182 Less accumulated
depreciation/amortization for:

Land improvements (848,247) (86,539) - - (934,786) Buildings (2,068,368) (341,013) - - (2,409,381) Furniture and equipment (990,367) (85,668) - - (1,076,035) Vehicles (4,030,478) (582,282) - - (4,612,760) Infrastructure (34,337) (3,851) - - (38,188) Right-to-use subscription assets (4,633) (55,591) - - (60,224) Total accumulated
depreciation/amortization (7,976,430) (1,154,944) - - (9,131,374) Net capital assets being
depreciated/amortized 13,995,338 (504,530) - - 13,490,808 Capital assets, net 18,068,436 $ (259,555) $ (630,231) $ - $ 17,178,650$

17 NOTE 3 – CAPITAL ASSETS (Continued)

Transportation Enterprise Fund (Continued)

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

Land 3,382,459 $ - $ - $ - $ 3,382,459$ Construction in progress 669,830 20,809 - - 690,639 Total capital assets not being
depreciated/amortized: 4,052,289 20,809 - - 4,073,098 Capital assets being
depreciated/amortized:

Land improvements 2,559,491 - - - 2,559,491 Buildings 9,207,507 - - - 9,207,507 Furniture and equipment 1,533,789 37,811 - - 1,571,600 Vehicles 8,219,703 15,643 - - 8,235,346 Infrastructure 231,051 - - - 231,051 Right-to-use subscription assets - 166,773 - - 166,773 Total capital assets being
depreciated/amortized: 21,751,541 220,227 - - 21,971,768 Less accumulated
depreciation/amortization for:

Land improvements (761,708) (86,539) - - (848,247) Buildings (1,763,675) (304,693) - - (2,068,368) Furniture and equipment (908,543) (81,824) - - (990,367) Vehicles (3,449,980) (580,498) - - (4,030,478) Infrastructure (30,486) (3,851) - - (34,337) Right-to-use subscription assets - (4,633) - - (4,633) Total accumulated
depreciation/amortization (6,914,392) (1,062,038) - - (7,976,430) Net capital assets being
depreciated/amortized 14,837,149 (841,811) - - 13,995,338 Capital assets, net 18,889,438 $ (821,002) $ - $ - $ 18,068,436$

NOTE 4 – UNEARNED REVENUE – CAPITAL PROGRAMS

The TDA Funds received grants from the Local Transportation Fund and State Transit Assistance Fund in advance of costs being incurred. As of June 30, 2025 and 2024, unearned revenue related to those programs is as follows:

2025 2024
Transportation Enterprise Fund:

State Transit Assistance Fund and Local Transportation Fund 11,2 87,881$ 8,652,415 $

Included in the Transportation Enterprise Fund’s unearned reven ue balance is State of Good Repair (SGR) funding in the amount of $374,469 and $411,941 for the fi scal years ended June 30, 2025 and 2024, respectively.

18 NOTE 5 – NET POSITION AND FUND BALANCES

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 for the TDA Funds i s divided into three categories. These captions apply only to net position, which is determined only f or 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 t he current netbook value of the c apital assets, less depreciation/ amortization and the outstanding 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 parti es, governmental regulations, l aws, or other restrictions which the City cannot unilaterally alter.

Unrestricted describes the portion of net pos ition that does not meet the d efinition of “net investment in capital assets” or “restricted net position.”

B. Fund Balances

Governmental fund balance represe nts 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.

The Streets Special Revenue Fund ’s fund balance is classified b ased on spending constraints imposed on the use of resources. The use of the funds accounted for in these statements is restricted by law; therefore, these funds will never have committed or ass igned balances. 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 represe nt available, spendable resources even though they are a component of assets. Assets not expected to be converted to cash, such as prepaids, notes receivabl e, 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 which requires the resourc es to be used only for a specific purpose. Encumbrances and nonspendable amounts subject to restr ictions are included along with spendable resources.

Committed fund balances have constraints imposed by resolution of the Ci ty Council which 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 be used for a specific purpose but are neither restric ted nor committed. Intent is exp r e s s e d b y t h e C i t y C o u n c i l o r i t s 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 which have not been restricted or committed.

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

19 NOTE 6 – TRANSPORTATION DEVELOPMENT ACT

The State of California establis hed the TDA to provide funds fo r public transportat ion. The funds are administered by the Stanislaus Council of Governments (StanCOG) . The TDA created a Local Transportation Fund in each county for the transportation purpo ses specified in the Transportation Development Act Statutes and Administrative Code. Revenues of t he Local Transportation Fund are derived from a 1/4 of one percent sales tax rate levied in each county.

NOTE 7 – RISK MANAGEMENT

The TDA Funds are exposed to various risks of loss related to t orts; theft of, damage to, and destruction of assets; and natural disaster. The TDA Funds participate in t he Central San Joaquin Valley Risk Management Authority (CSJVRMA), as a part of the City. The purp ose of CSJVRMA is to spread the adverse effect of losses among th e members and to purchase exce ss insurance as a group, thereby reducing its expense. The funds, through cost allocation from t he City, contribute their pro rata share of anticipated losses to pools administered by CSJVRMA. More infor mation regarding the City’s risk management program can be found in the basic financial statements of the City of Turlock.

NOTE 8 – PENSION PLAN

Personnel costs accounted for under TDA and FTA funding include costs associated with the City’s pension benefit plan. The costs attributed to TDA and FTA fundi ng are part of the City’s Miscellaneous Plan, an Agent-Multiple Employer Plan administered by the Calif ornia Public Employees’ Retirement System (CalPERS), and are allocated to the TDA Funds in the sam e manner as they are allocated to other City funds which have personnel expenditures. More information regarding the plan can be found in the basic financial statements for the City of Turlock.

NOTE 9 – OTHER EMPLOYEE BENEFITS

Personnel costs accounted for under TDA and FTA funding include costs associated with the City’s compensated absences and retiree healthcare benefit plans. The costs attributed to TDA and FTA funding are part of the City-wide plans and are allocated to th e TDA Funds in the same manner as they are allocated to other City funds which have personnel expendit ures. More information regarding these plans can be found in the basic financial statements for the City of Turlock.

NOTE 10 – MAJOR CONTRACTOR

On March 26, 2024, the City enter ed into a new contract agreeme nt with Storer Transit Systems to operate and maintain the DART and BLAST programs. The term is f rom July 1, 2024, to June 30, 2029, with an option to extend for an additional two, one-year terms, on the same terms and conditions. Storer Transit Systems is paid monthly based on a fixed fee plus a fee calculated at a fixed rate per vehicle multiplied by the number of service hours. Expenses incurred under this contract amounted to $4,389,149 and $2,280,610 for the fiscal years ended June 30, 2025 and 2024, respectively.

NOTE 11 – CONTINGENT LIABILITIES

The City receives FTA monies for the purchase of buses, constru ction of related main tenance facilities, and for partial funding of its t ransit operations. State and fe deral grants received by the City for specific purposes are subject to review and audit by the grantor agencie s. Such audits could lead to request for reimbursement for expenditures disallowed under the terms of th e grants. The amount, if any, of expenditures that may be disallowed by the granting agencies ca nnot be determined at this time, although the City expects such amounts, if any, to be immaterial.

20 NOTE 12 – SUBSCRIPTIONS

The City has adopted GASB Statem ent No. 96 which introduced cha nges in the recognition, measurement, and reporting of Subscription-Based Information Te chnology Arrangements (SBITA). The City identified one SBITA for a Tra nsit Data Tracking applicati on with a term of three years. The value of the SBITA asset as of June 30, 2 025 and 2024, was $166,773 and $166,773, respectively, and had accumulated amortization of $60, 224 and $4,633, respectively. A s of June 30, 2025 and 2024, the value of SBITA liability was $74,276 and $107,830, respectively.

The future principal and interest payments for SBITA as of June 30, 2025, were as follows:

For the Fiscal Year
Ending June 30, Principal Interest
2026 38,389 $ 4,463 $
2027 35,887 1,299
Total 74,276 $ 5,762 $

NOTE 13 – SUBSEQUENT EVENTS

The TDA Funds’ management has evaluated all events and transact ions that occurred after June 30, 2025, and through May 5, 2026, the date the basic financial sta tements and accompanying notes to the basic financial statements were available to be issued. During this period, no events or transactions occurred that would require adjustment of the basic financial s tatements or disclosure in the accompanying notes.

21 INDEPENDENT AUDITOR’S REPORT ON INTERNAL CONTROL OVER

FINANCIAL REPORTING AND ON COMPLIANCE WITH THE

TRANSPORTATION DEVELOPMENT ACT AND OTHER MATTERS BASED

ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED

IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS

To the Honorable Members of the City Council
of the City of Turlock
Turlock, California

We have audited, in accordance with the auditing standards gene rally 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, the fin ancial statements of the Transportation Development Act Funds (TDA Funds) which are included in the Str eets Special Revenue Fund and the Transportation Enterprise Fund of the City of Turlock (City), C alifornia, as of and for the fiscal year ended June 30, 2025, and the related notes to the basic financial sta tements, which collectively comprise the TDA Funds’ basic financial statements, and have issued our report thereon dated May 5, 2026.

Report on Internal Control over Financial Reporting

In planning and performing our audit of the financial statement s, we considered the City’s internal control over financial reporting (internal control) relating to the TDA Funds as a basis for designing audit procedures that are appropriate in the circumstances for the pu rpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control relating to the TDA Funds. Accordingly, we do not express an opinion on the effectiveness of the City’s internal control relating to the TDA Funds.

A deficiency in internal control exists when the design or operation of a control does not allo w management or employees, in the normal course of performing the ir assigned functions, to prevent, or detect and correct, misstatements on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that the re is a reasonable possi bility that a material misstatement of the entity’s financial statements will not be p revented, or detected and corrected on a timely basis. A significant deficiency is a deficiency, or a combinati on of deficiencies, in internal control that is less severe than a materi al weakness, yet important eno ugh to merit attention by those charged with governance.

Our consideration of internal c ontrol was for the limited purpo se described in the first paragraph of this section and was not designed to i dentify all deficiencies in in ternal control that might be material weaknesses or significant deficiencies. Given these limitations , during our audit we did not identify any deficiencies in internal control that we consider to be materia l weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified.

22 Report on Compliance and Other Matters

As part of obtaining reasonable assurance about whether the TDA Funds’ financial statements are free from material misstatement, we p erformed tests of the City’s co mpliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. Our audit was further made to determine that TDA funds allocated to and received by the City were expended in conformance with appl icable statutes, rules, and regulations of the Transportation Development Act and the allocation instru ctions and resolutions of the Stanislaus Council of Governments (StanCOG) as required by Sections 6666 a nd 6667 of Title 21 of the California Code of Regulations. However, providing an opinion on complianc e with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed instances of noncompliance or other matters that are required to be reported under Government Auditing Standards and which are described in the accompanying Schedule of Finding s and Responses as item TDA2025-01.

City’s Response to Findings

Government Auditing Standards require the auditor to perform limited procedures on the City’s response to the findings identified in our audit and described in the ac companying Schedule of Findings and Responses. The City’s response was not subjected to the other a uditing procedures applied in the audit of the financial statements and, accordingly, we express no opinion on the response.

Purpose of this Report

The purpose of this report is solely to describe the scope of o ur testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control or on compliance relating to the TDA Funds. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control and compliance relating to the TDA Funds. Accordingly, this communication is not suitable for any other purpose.

This report is intended solely for the information and use of S tanCOG, management, the City Council, others within the City, and federal awarding agencies and pass-through entities and is not intended to be, and should not be, used by anyone other than these specified pa rties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

23 INDEPENDENT AUDITOR’S REPORT ON COMPLIANCE FOR TDA PROGRAM

FUNDS AND ON INTERNAL CONTROL OVER COMPLIANCE IN ACCORDANCE WITH SECTIONS 6666 AND 6667 OF THE RULES AND REGULATIONS OF THE

CALIFORNIA ADMINISTRATIVE CODE IN THE TRANSPORTATION DEVELOPMENT ACT STATUTES AND ADMINISTRATIVE CODE OF 1987 AND THE ALLOCATION

INSTRUCTIONS AND RESOLUTIONS OF THE STANISLAUS COUNCIL OF GOVERNMENTS

To the Honorable Members of the City Council
of the City of Turlock
Turlock, California

Report on Compliance for Transportation Development Act (TDA) Funds

Opinion on Compliance for TDA Funds

We have audited the City of Turloc k, California’s (City) compli ance relating to the Streets Special Revenue Fund and the Transportation Enterprise Fund (TDA Funds) with the types of compliance requirements described in Sections 6666 and 6667 of the Rules a nd Regulations of the California Administrative Code in the Transportation Development Act Statu tes and Administrative Code of 1987 (the Act) and the allocation instructions and resolutions of th e Stanislaus Council of Governments (StanCOG) that could have a direc t and material effect on the T DA Funds for the fiscal year ended June 30, 2025.

In our opinion, the City complied, in all material respects, wi th the types of compliance requirements referred to above that could have a direct and material effect on the TDA Funds for the fiscal year ended June 30, 2025.

Basis for Opinion on Compliance

We conducted our audit of compliance in accordance with auditin g standards generally accepted in the United States of America (GAAS) ; the standards applicable to fi nancial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States ( Government Auditing Standards); the Act; and the allocation instructions and resolutions of StanCOG. Our responsibilities under those standards are further described in the Auditor’s Re sponsibilities for the Audit of Compliance section of our report.

We are required to be independent of the City and to meet our o ther ethical responsibilities, in accordance with 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 opinion on compliance for the City relating to the TDA Funds. Our audit does not provide a legal d etermination of the City’s compliance with the compliance requirements referred to above relating to the TDA Funds.

24 Responsibilities of Management for Compliance

Management is responsible for compliance with the requirements referred to above and for the design, implementation, and maintenance of effective internal control o ver compliance with the requirements of laws, statutes, regulations, rule s, and provisions of contracts or grant agreements applicable to the TDA Funds.

Auditor’s Responsibilities for the Audit of Compliance

Our objectives are to obtain reasonable assurance about whether material noncompliance with the compliance requirements referred to above occurred, whether due to fraud or error, and express an opinion on the City’s compliance relating to the TDA Funds base d on our audit. Reasonable assurance is a high level of assurance but i s not absolute assurance and the refore is not a guarantee that an audit conducted in accordance with GAAS, Government Auditing Standards, requirements of the Act, and the allocation instructions and reso lutions of StanCOG will always detect material noncompliance when it exists. The risk of not detecting material noncompliance result ing from fraud is higher than for that resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Noncompliance with the compli ance requirements referred to above is considered material if there is a substantial likelihood that, individually or in the aggregate, it would influence the judgment made by a reasonable user of the report on compliance about the City’s compliance with the requirements of the TDA Funds as a whole.

In performing an audit in accordance with GAAS, Government Auditing Standards, the Act, and the allocation instructions and resolutions of StanCOG, we:

• Exercise professional judgment and maintain professional skept icism throughout the audit. • Identify and assess the risks of material noncompliance, wheth er due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the City’s compl iance with the compliance requirements referred to above relating to the TDA Funds and pe rforming such other procedures as we considered necessary in the circumstances.
• Obtain an understanding of the Ci ty’s internal control over co mpliance relevant to the audit in order to design audit procedures that are appropriate in the ci rcumstances and to test and report on internal control over compliance in accordance with the requ irements referred to above, but not for the purpose of expressing an opinion on the effectivene ss of the City’s internal control over compliance relating to the TDA Funds. Accordingly, no such opinion is expressed.

We are required to communicate with those charged with governan ce regarding, among other matters, the planned scope and timing of the audit and any significant d eficiencies and material weaknesses in internal control over compliance that we identified during the audit.

Other Matters

The results of our auditing procedures disclosed instances of n oncompliance which are required to be reported in accordance with the compliance requirements referre d to above and which are described in the accompanying Schedule of Findings and Responses as item TDA 2025-01. Our opinion on the City’s compliance relating to the TDA Funds is not modified with respect to these matters.

Government Auditing Standards requires the auditor to perform limited procedures on the City ’s response to the noncompliance findings identified in our compliance audi t and described in the accompanying Schedule of Findings and Responses. The City’s response was not subjected to the auditing procedures applied in the audit of compliance and, accordingly, we express no opinion on the response.

25 Report on Internal Control Over Compliance

A deficiency in internal control over compliance exists when th e design or operation of a control over compliance does not allow management or employees, in the norma l course of performing their assigned functions, to prevent, or detect and correct, noncompliance wit h a type of compliance requirement of the TDA Funds on a timely basis. A m aterial weakness in internal co ntrol over compliance is a deficiency, or a combination of deficiencies, in internal control over complia nce, such that there is a reasonable possibility that material noncomp liance with a type of complian ce requirement of the TDA Funds will not be prevented, or detected and corrected, on a timely basis. A s ignificant deficiency in internal control over compliance is a deficiency, or a combination of deficiencies, i n internal control over compliance with a type of compliance requirement of the TDA Funds that is less se vere than a material weakness in internal control over compliance, yet important enough to merit attention by those charged with governance.

Our consideration of internal cont rol over compliance was for t he limited purpose described in the Auditor’s Responsibilities for t he Audit of Compliance section above and was not designed to identify all deficiencies in internal control over compliance that might be material weaknesses or significant deficiencies in internal control over compliance. Given these l imitations, during our audit we did not identify any deficiencies in inte rnal control over compliance t hat we consider to be material weaknesses, as defined above. However, material weaknesses or significant d eficiencies in internal control over compliance may exist that were not identified.

Our audit was not designed for the purpose of expressing an opi nion on the effectiveness of internal control over compliance. Accordingly, no such opinion is expressed.

Purpose of this Report

The purpose of this report on internal control over compliance is solely to describe the scope of our testing of internal control over compliance and the results of that testing based on the requirements of the Act and the allocation instructions and resolutions of StanCOG. Accordingly, this report is not suitable for any other purpose.

This report is intended solely for the information and use of S tanCOG, management, the City Council, others within the City, and feder al awarding agencies and pass- through entities and is not intended to be and should not be used by anyone other than these specified par ties; however, this restriction is not intended to limit the distribution of this report, which is a matter of public record.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026

26 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

SCHEDULE OF FINDINGS AND RESPONSES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

TDA2025-01 – Late Filing of Required Financial Reports

Criteria: The Transportation Development Act (TDA) Funds are subject to a nnual reporting requirements as follows:

• California Code of Regulations (CCR) § 6663, Entities Responsible for Fiscal and Performance Audits of Claimants, requires that a copy of the annual audit report be sent to the State Controller.

• CCR § 6664, Fiscal and Compliance Audits of All Claimants, requ ires that in accordance with Public Utilities Code Section 99245, the annual audit report be submitted within 180 days after the end of the fiscal year, except that the Stani slaus Council of Governments (StanCOG) may grant an extension of up to 90 days as it deems necessary.

• CCR § 6665, State Controller Re ports, requires that the annual Streets Report be filed with the State Controller on or before October 1 or within 90 days after the close of the fiscal year.

Condition: Although the City of Turlock (the City) received an extension f rom StanCOG moving the reporting deadline to March 31, 2026, the annual audit report was not filed with StanCOG until May 2026.

Cause: We understand that staff turnover led to delays in the general ledger closing process, which impacted the timely filing of the reports.

Effect: The City is not in compliance with the annual reporting require ments of the California Code of Regulations for the TDA Funds.

Recommendation: The City should develop procedures to ensure the annual audit r eport and annual Streets Report are filed with S tanCOG and the State Controller’ s Office prior to the annual reporting deadlines.

Management’s Response: Management acknowledges the auditor’s finding and, in order to address the issue, management has developed an estimated timeline to ge t the City of Turlock’s Financial Reporting completed and up to date for remaining outstanding reporting cycles of the TDA:

• The Fiscal Year 2025-2026 report is estimated to be completed by the end of December 2026, pending the auditor’s availability.

The City is expected to submit its Fiscal Year 2025-2026 report prior to the required submission deadline.

27 CITY OF TURLOCK

TRANSPORTATION DEVELOPMENT ACT FUNDS

STATUS OF PRIOR YEAR FINDINGS AND RESPONSES
FOR THE FISCAL YEAR ENDED JUNE 30, 2025

TDA2024-01 – Late Filing of Required Financial Reports

Criteria: The Transportation Development Act (TDA) Funds are subject to a nnual reporting requirements as follows:

• California Code of Regulations (CCR) § 6663, Entities Responsible for Fiscal and Performance Audits of Claimants, requires that a copy of the annual audit report be sent to the State Controller.

• CCR § 6664, Fiscal and Compliance Audits of All Claimants, requ ires that in accordance with Public Utilities Code Section 99245, the annual audit report be submitted within 180 days after the end of the fiscal year, except that the Stani slaus Council of Governments (StanCOG) may grant an extension of up to 90 days as it deems necessary.

• CCR § 6665, State Controller Re ports, requires that the annual Streets Report be filed with the State Controller on or before October 1 or within 90 days after the close of the fiscal year.

Condition: Although the City of Turlock (the City) received an extension f rom StanCOG moving the reporting deadline to March 31, 2025, the annual audit report w as not filed with StanCOG until November 2025. City staff cannot find docum entation of when the report w as filed with the State Controller’s Office.

In addition, the 2024 annual Streets Report was not filed with the State Controller’s Office before its due date.

Cause: We understand that staff turnover led to delays in the general ledger closing process, which impacted the timely filing of the reports.

Effect: The City is not in compliance with the annual reporting require ments of the California Code of Regulations for the TDA Funds.

Recommendation: The City should develop procedures to ensure the annual audit r eport and annual Streets Report are filed with S tanCOG and the State Controller’ s Office prior to the annual reporting deadlines.

Management’s Response: Management acknowledges the auditor’s finding and, in order to address the issue, management has developed an estimated timeline to ge t the City of Turlock’s Financial Reporting completed and up to date for remaining outstanding reporting cycles of the TDA:

• The Fiscal Year 2023-2024 report is estimated to be completed b y the end of November 2025, pending the auditor’s availability.

The City is expected to submit its Fiscal Year 2024-2025 report prior to the required submission deadline.

Current Year Status: The Fiscal Year 2025-2026 report is estimated to be completed by the end of December 2026, pending the auditor’s availability.

To the Honorable Members of the City Council
of the City of Turlock
Turlock, California

We have audited the basic financi al statements of the Transport ation Development Act (TDA) Funds which are included in the Street Special Revenue Fund and the T ransportation Enterprise Fund of the City of Turlock, California (t he City), for the fiscal year end ed June 30, 2025. Professional standards require that we provide you with information about our responsi bilities under auditing standards generally accepted in the United States of America and Government Auditing Standards , as well as certain information related to the planned scope and timing of our audi t. We have communicated such information in our letter to you dated May 5, 2026. Professiona l standards also require that we communicate to you the following information related to our audit.

Significant Audit Matters

Qualitative Aspects of Accounting Practices
Management is responsible for the selection and use of appropri ate accounting policies. The significant accounting policies used by the City are described in Note 1 to the financial statements. During the year ended June 30, 2025, the City adopted Governmental Accounting S tandards Board (GASB) Statement No. 99, Omnibus 2022, and GASB Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62 . We noted no transactions entered into by the City during the fiscal year for which there is a lack of authoritative guidance or consensus. All significant transactions have been recognized in the basic financial statements in the proper period.

Accounting estimates are an integral part of the basic financia l statements prepared by management and are based on management’s knowledge and experience about past a nd current events and assumptions about future events. Certain acc ounting estimates are particula rly sensitive because of their significance to the basic financial statement s and because of the possibilit y that future events affecting them may differ significantly from those expected. The most sensitive es timates affecting the TDA Funds’ basic financial statements were:

Management’s estimates used in establishing the fair value for investments, the useful lives of capital assets, the accrued compensated absences, the self-insu rance liability, the net pension liability and related deferred ou tflows and inflows of resource s, the net other post-employment benefit liabilities and related def erred outflows and inflows o f resources, and discount rate for the purpose of calculating the right-t o-use lease and subscription based information technology arrangement (SBITA) assets and t he related liabilities. We eval uated the key factors and assumptions used to develop these estimates in determining that they are reasonable in relation to the financial statements taken as a whole.

The financial statement disclosures are neutral, consistent, and clear.

Difficulties Encountered in Performing the Audit
We encountered no significant difficulties in dealing with mana gement in performing and completing our audit.

Corrected and Uncorrected Misstatements
Professional standards require u s to accumulate all known and l ikely misstatements identified during the audit, other than those that are clearly trivial, and communica te them to the appropriate level of management. No such misstatements were identified.

Disagreements with Management
For purposes of this letter, a disagreement with management is a financial accounting, reporting, or auditing matter, whether or not res olved to our satisfaction, t hat could be significant to the basic financial statements or the auditor’s report. We are pleased to report th at no such disagreements arose during the course of our audit.

Management Representations

We have requested certain representations from management that are included in the management representation letter dated May 5, 2026.

Management Consultations with Other Independent Accountants

In some cases, management may decide to consult with other accountants about auditing and accounting matters, similar to obtaining a “second opinion” on certain sit uations. If a consultation involves application of an accounting principle to the TDA Funds’ basic financial st atements or a determination of the type of auditor’s opinion that may be expr essed on those statements, ou r professional standards require the consulting accountant to check with us to determine that the co nsultant has all the relevant facts. To our knowledge, there were no such consultations with other accountants.

Other Audit Findings or Issues
We generally discuss a variety of matters, including the applic ation of accounting principles and auditing standards, with management each year prior to retention as the City’s auditors. However, these discussions occurred in the normal course of our professional r elationship and our responses were not a condition to our retention.

Restriction on Use

This information is intended solely for the information and use of the City Council and management of the City and is not intended to be, and should not be, used by anyone other than these specified parties.

BROWN ARMSTRONG

ACCOUNTANCY CORPORATION

Bakersfield, California
May 5, 2026