Agenda packet — Ukiah City Council, January 21, 2026 (part 5 of 6)

22 VII. MITIGATION MONITORING AND REPORTING PROGRAM
(Cultural/Tribal Cultural Resources revised October 2025) Potential
Impact
Mitigation Measure Implementation
Responsibility
Monitoring &
Reporting
Responsibility
Timing Date
Implemented
Air Quality
Construction and
ground
disturbing
activities could
result in shortterm impacts to
air quality.

AQ-1: Diesel Engines – Stationary and
Portable Equipment and Mobile Vehicles:
a. All stationary onsite diesel IC engines 50
horsepower or greater (i.e. large power
generators or pumps) or any propane or
natural gas engines 250 horsepower or
greater require a permit from the MCAQMD.
b. Portable diesel-powered equipment that
may be used are required to be registered
with the state Portable Equipment
Registration Program (PERP) or obtain
permits from MCAQMD.
c. Heavy duty truck idling and off-road diesel
equipment or other diesel engine idling is
limited to less than 5 minutes.

Applicant or
contractor
Applicant or
contractor;
Mendocino
County Air
Quality
Management
District
Throughout
construction
AQ-2: Grading Projects: All grading activities
must comply with the following fugitive dust
mitigation measures in accordance with
District Regulation 1, Rule 1-430:

Applicant or
contractor
Applicant or
contractor;
Mendocino
County Air
Quality
Throughout
construction

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23 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah

1. All visibly dry disturbed soil road surfaces
shall be watered to minimize fugitive dust
emissions.
a. Open bodied trucks shall be covered when
used for transporting materials likely to give
rise to airborne dust.
b. All unpaved surfaces, unless otherwise
treated with suitable chemicals or oils, shall
have a posted speed limit of 10 mph.
c. Earth or other material that has been
transported by trucking or earth moving
equipment, erosion by water, or other means
onto paved streets shall be promptly
removed.
d. Asphalt, oil, water, or suitable chemicals
shall be applied on materials stockpiles, and
other surfaces that can give rise airborne
dusts.
e. All earthmoving activities shall cease when
sustained winds exceed 15 mph.
f. The operator shall take reasonable
precautions to prevent the entry of
unauthorized vehicles onto the site during
non -work hours.
g. The operator shall keep a daily log of
activities to control fugitive dust.
h. For projects greater than one acre or one
mile of road not located within a Naturally
Occurring Asbestos Area, prior to starting
any construction the applicant is required to:

Management
District

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24 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah
i. Submit a Large Area Grading permit
application to the District.
ii. Obtain a final determination from the Air
Quality Management District as to the need
for an Asbestos Dust Mitigation Plan and/or
Geologic Survey to comply with CCR
sections 93106 and 93105 relating to
Naturally Occurring Asbestos.
iii. Obtain written verification from the District
stating that the project is in compliance with
State and Local regulations relating to
Naturally Occurring Asbestos.
iv. If the project is located within a Naturally
Occurring Asbestos Area, additional
mitigations shall be required.

AQ -3: Asbestos Survey. Demolition of all
commercial buildings are subject to the
requirements of MCAQMD Regulation 1,
Rule 492, National Emission Standards for
Hazardous Air Pollutants (NESHAPS) for
Asbestos. Prior to receiving a demolition
permit from the City, the applicant shall:
a. Have an Asbestos Survey completed by a
licensed Asbestos contractor for the
presence of asbestos containing materials;
b. Submit a completed Asbestos
Demolition/Renovation form, all test results
and applicable notification fees to the District
at least 10 days prior to beginning the
Project;
c. Have asbestos containing materials
abated by a licensed abatement contractor
Applicant or
contractor
Applicant or
contractor;
Mendocino
County Air
Quality
Management
District
Prior to
issuance of
Demolition
Permit

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25 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah
prior to beginning and demolition or
renovation activities, if applicable; and
d. Obtain written authorization from
MCAQMD indicating that all requirements
have been met prior to receiving the
demolition permit.

Cultural/Tribal Cultural Resources
Demolition of the
Dragon’s Lair
building could
result in
significant
impacts to a
historic
resource.

CUL-1: Prior to issuance of the demolition
permit, photo documentation of the subject
structure at 101 S. Main Street shall be
required to catalogue its existence. The
documentation must be approved by the
Community Development Director.

Applicant or
contractor
Applicant or
contractor; City
of Ukiah
Community
Development
Department
Prior to
issuance of
demolition
permit
CUL-2: To mitigate the significant impact
resulting from the demolition of the locally
designated historic resource at 101 S. Main
Street, which the City Council has identified
as having special architectural and historical
value due to its pressed metal “clad” siding
and its role as a service hub for agricultural
commerce, the following measure shall be
implemented:

1. Salvage and Reuse of Historic Siding.

Prior to demolition, the Applicant shall
salvage all pressed metal siding from the
west and north elevations of the building that
is in suitable condition for removal and reuse.

A detailed Salvage Plan shall be submitted to
the Community Development Director for
review and approval. The plan shall:

Applicant or
contractor
Applicant or
contractor; City
of Ukiah
Community
Development
Department
Prior to
demolition;
verification
before
building
permit
issuance and
Certificate of
Occupancy

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26 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah
a. Incorporate findings and recommendations
from the January 17, 2023 “Stamped Metal
Panel Grading” Evaluation by Axia Architects (Attachment B); b. Describe the proposed methodology for
safe removal, cleaning, hazardous materials
testing (e.g., for lead-based paint), storage,
and condition assessment of the siding;
c. Identify which panels (Grades “B” and “C”
from the 2023 Axia Architects evaluation) are
proposed for reuse.

2. Use of Salvaged or Visually Similar
Siding in New Development.

If salvaged siding is deemed unsuitable for
exterior reuse in a weather-resistant manner,
the Applicant shall acquire and install 850
square feet of new pressed metal siding (or
equivalent) that is visually and functionally
similar in design, dimension, and finish.

3. Compliance and Verification.

Proof of acquisition of all siding materials
(salvaged and/or new) shall be submitted to
the Community Development Department
prior to site development activities.

Installation of the siding, consistent with the
approved design and location, shall be a
condition of building permit issuance and
Certificate of Occupancy.

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27 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah
CUL-3 Exterior Public-Facing Mural and
Interpretive Signage
The new student housing building shall
feature an exterior, public-facing mural and
durable interpretive didactic sign(s) that
reflect the specific history of the site,
including its identified role as a "service hub
for agricultural commerce in the region," its
connection to the 1917 fire, and the
important agricultural legacy of the Ukiah
Valley, particularly relating to the Main and
Perkins Street intersection. These elements
shall serve as prominent visual and
educational features that engage the
community and preserve the site’s historical
narrative.

1. Mural Design and Placement Plan, and
Interpretive Signage Plan.
a. The Applicant shall prepare a "Mural
Design and Placement Plan" and
“Interpretive Signage Plan.” Both plans shall
be submitted for review and approval by the
City of Ukiah Design Review Board.
b. The Mural Design and Placement Plan
shall include the proposed theme, artist,
materials, dimensions, specific location on
the building’s public-facing exterior, and
justification for how the design reflects the
site's agricultural commercial function.
c. The Interpretive Signage Plan shall
include proposed content, text, graphics,
dimensions, materials, and specific
Applicant or
contractor
Applicant or
contractor; City
of Ukiah
Community
Development
Department;
Design Review
Board
Mural/signage
plan approval
prior to
installation;
maintenance
agreement
recorded prior
to occupancy

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28 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah
public-facing placement (e.g., near the
corner of Main and Perkins Streets). The
signage narrative shall be concise,
engaging, and designed for public
education. 2. Mural and Interpretive Signage
Maintenance Agreement.

The Applicant shall prepare and record a
legally binding Mural and Interpretive
Signage Maintenance Agreement, to be
executed by the property owner, which shall
remain in effect for a minimum of 20 years.

The agreement shall outline:
a. Routine inspection and cleaning
schedules;
b. Restoration procedures for damage,
weathering, or vandalism;
c. An obligation to consult the original artist
(if available) for any significant alterations or
repairs;
d. A requirement to notify the Community
Development Department of any proposed
removal, relocation, or modification of the
mural.

3. Maintenance Cost Reserve Statement.

The Applicant shall submit a signed letter
from the property owner stating that
adequate private funds have been or will be
set aside in a maintenance reserve account

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29 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah
for ongoing conservation and repair needs.

The City shall bear no responsibility for mural
or interpretive signage maintenance or
replacement.

4. Final Inspection and Cost Certification.

Upon completion of the mural and
interpretive signage, the Applicant shall
submit a final cost certification signed by the
artist or contractor, detailing the total cost of
design, materials, labor, and installation. The
Community Development Department may
request supporting documentation, such as
receipts or invoices, to verify the total cost.

Final approval of the mural shall be required
prior to issuance of the Certificate of
Occupancy.

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30 Demolition Permit for Two Buildings Over 50 Years Old 101 and 105 South Main Street
Addendum to the Initial Study and Mitigated Negative Declaration City of Ukiah

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Findings Approving a Demolition Permit for Two Structures Over 50 Years Old 101 and 105 South Main Street
File No. 21-6155 & 21-6623
1 FINDINGS APPROVING A DEMOLITION PERMIT FOR TWO STRUCTURES OVER THE AGE OF 50 YEARS LOCATED AT 101 AND 105 SOUTH MAIN STREET, UKIAH, CA (APN 002-231-01)
PERMIT NO. PA25-000021; FILE NO. 25-000926

1. The City of Ukiah, as the Lead Agency, prepared an Initial Study and Mitigated Negative Declaration (ISMND) for the Project (SCH No. 2022030389) in compliance with the California Environmental Quality Act (CEQA). The ISMND was adopted by the City Council on May 18, 2022.

2. In connection with preparation of the ISMND, the Lead Agency consulted with all applicable responsible agencies and trustee agencies.

3. The Draft ISMND was circulated for public review from March 14, 2022 through April 15, 2022, in accordance with CEQA Guidelines Section 15073. No public comments were received during the public review period.

4. The ISMND analyzed areas of potential impacts and based on the conclusions reached within it, the Project would not significantly impact any environmental resources for the following reasons:
a. Temporary ground disturbing activities associated with demolition would have an impact on Air Quality and Cultural/Tribal Cultural Resources. However, mitigation measures identified within the Mitigation, Monitoring and Reporting Program (Section VIII of the ISMND) would adequately reduce all impacts to less than significant.
b. The Project would result in a less than significant impact to Aesthetics, Biological Resources, Energy, Geology and Soils, Greenhouse Gases, Hazards Materials, Land Use, Mineral Resources, Noise and Public Services. c. The Project would have no impact on Agriculture and Forestry Resources, Hydrology and Water Quality, and Population and Housing.

5. Based on the analysis and conclusions contained in the ISMND, the City Council previously found that the Project would not have environmental effects that would cause substantial adverse effects on human beings, either directly or indirectly, and that there was no substantial evidence in light of the whole record that the Project would have a significant effect on the environment.

6. Based on the analysis and conclusions contained in the ISMND, the Project would not result in cumulatively considerable impacts.

7. Notice of Availability for the public review period and notice of intent to adopt the ISMND and conduct a public hearing were provided in accordance with the Ukiah City Code and CEQA Guidelines Section 15073, including distribution to property owners within 300 feet of the Project site, responsible and trustee agencies, and interested parties; posting on the City’s CEQA webpage; publication in the Ukiah Daily Journal; posting on the Project site; and posting at the Civic Center prior to the public hearings.

ATTACHMENT 5

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Findings Approving a Demolition Permit for Two Structures Over 50 Years Old 101 and 105 South Main Street
File No. 21-6155 & 21-6623
2 8. The ISMND and record of proceedings of the decision on the Project are available for public review at the City of Ukiah Community Development Department, Ukiah Civic Center, 300 Seminary Avenue, Ukiah, CA.

9. The Mendocino-Lake Community College District (MLCCD) acquired the property in February 2025 with the intent of developing affordable student housing. The MLCCD has demonstrated that the original Mitigation Measure CUL-2, which conditioned demolition on approval of a future development incorporating salvaged materials, is infeasible because applicable state funding requirements require site readiness prior to final design approval.

10. Pursuant to CEQA Guidelines Section 15164, the City has prepared an Addendum to the previously adopted 2022 ISMND to revise Mitigation Measures CUL-2 and CUL-3 in order to maintain enforceable cultural resource protection regardless of future development timing or changes in jurisdictional oversight. The City finds that these revisions do not require preparation of a subsequent or supplemental environmental document under CEQA Guidelines Section 15162.

11. The Demolition Review Committee (DRC) conducted a public meeting on November 20, 2025, and determined that the structure located at 101 South Main Street qualifies as a local historic resource.

12. To strengthen enforceable protection of this resource, the DRC recommended revisions to Mitigation Measures CUL-2 and CUL-3, including increasing the minimum requirement for salvaged or visually similar pressed metal siding from 250 square feet to 850 square feet. This amount reflects the total measurable square footage of decorative cladding identified as a historic feature and is intended to ensure meaningful historic design integration, particularly given that future architectural review may fall under the jurisdiction of the Division of the State Architect (DSA). The DRC also recommended removing consultation requirements with the Mendocino County Historical Society from Measures CUL-1 and CUL-3 to streamline compliance and reduce reliance on a non-formal advisory body.

13. The City Council has considered the Addendum to the previously adopted ISMND and finds, on the basis of the whole record, that the Addendum does not result in any new significant environmental effects or a substantial increase in the severity of previously identified impacts, and that the Project, as conditioned, will continue to avoid or reduce the significant impact associated with demolition of 101 South Main Street to a less-than-significant level.

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RESOLUTION NO. 2026-

RESOLUTION OF THE CITY COUNCIL OF THE CITY OF UKIAH APPROVING A DEMOLITION PERMIT FOR TWO STRUCTURES OVER 50 YEARS OLD
LOCATED AT 101 AND 105 SOUTH MAIN STREET, UKIAH, CA (APN 002-231-01) WHEREAS:

1. The City of Ukiah, as the Lead Agency, prepared and adopted an Initial Study and Mitigated Negative Declaration (ISMND) for the Project (SCH No. 2022030389) under the California Environmental Quality Act (CEQA) on May 18, 2022.

2. The City Council previously determined that the structure located at 101 South Main Street qualifies as a local historic resource.

3. The Mendocino-Lake Community College District (MLCCD) is the current applicant for the Demolition Permit and has demonstrated that the original Mitigation Measure CUL-2, which conditioned demolition on approval of a future development incorporating salvaged materials, is infeasible due to state funding requirements that require site readiness prior to final design approval.

4. Pursuant to CEQA Guidelines Section 15164, the City prepared an Addendum to the previously adopted ISMND to revise Mitigation Measures CUL-2 and CUL-3 in order to maintain enforceable cultural resource protection regardless of future development timing or changes in jurisdictional oversight.

5. The Demolition Review Committee reviewed the Addendum at a public meeting on November 20, 2025, and recommended approval of the demolition permit subject to revisions to Mitigation Measures CUL-2 and CUL-3, including increasing the minimum requirement for salvaged or visually similar pressed metal siding to 850 square feet and removing consultation requirements with the Mendocino County Historical Society.

6. The City Council has independently reviewed and considered the Addendum to the ISMND, the previously adopted Mitigation Monitoring and Reporting Program, the administrative record, and the recommendations of the Demolition Review Committee.

7. The City Council finds, on the basis of the whole record, that the Addendum does not result in any new significant environmental effects or a substantial increase in the severity of previously identified impacts, and that the Project, as mitigated, will continue to reduce the significant environmental impact associated with demolition of 101 South Main Street to a less-than-significant level.

8. The City Council finds that the Addendum reflects the City’s independent judgment and analysis of the environmental effects of the Project and appropriately supports reliance on the previously adopted ISMND pursuant to CEQA Guidelines Sections 15162 and 15164.

ATTACHMENT 6

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NOW, THEREFORE, BE IT RESOLVED that:

1. The City Council hereby has reviewed, considered, and relies upon the Addendum to the previously adopted 2022 Mitigated Negative Declaration (SCH No. 2022030389), prepared pursuant to CEQA Guidelines Section 15164, prior to taking action on the project, and finds that no subsequent or supplemental environmental document is required under CEQA Guidelines Section 15162.

2. The City Council hereby approves the Demolition Permit (Permit No. PA25-000021; File No. 25-000926), in reliance upon the Addendum, subject to the Applicant’s full compliance with the mitigation measures contained in the previously adopted Mitigation Monitoring and Reporting Program, as revised and supplemented by the Addendum.

PASSED AND ADOPTED this day of , 2026, by the following roll call vote:

AYES:

NOES:

ABSENT:

ABSTAIN:

Susan Sher, Mayor
ATTEST:
_______________________________
City Clerk

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January 15, 2026
Re: Demolition of 101 S. Main Street
To Ukiah City Council:

The purpose of this letter is to support Mendocino College and the Mendocino College Foundation in their efforts to build affordable student housing at 101 South Main Street in downtown Ukiah.

We know from student survey data that affordable housing is one of the biggest barriers for students in our community who are looking to further their education and career goals at Mendocino College. I personally have talked with students who are couch surfing or living in their car because they cannot find or afford a place of their own. The college and the community have an obligation to find solutions. Mendocino College students are the future firefighters, teachers, auto mechanics, child care providers and nurses that our local workforce needs to stay healthy and strong.

Additionally, providing housing for 120 students in Ukiah alleviates the tremendous pressure on our local rental market. As more students opt for student housing, previously occupied rental units will be available for the major employers in our area – like Adventist Health, Ukiah Unified School District, Mendocino County and the City of Ukiah – who are looking to fill critical roles and welcome new talent to our community.

The future of this site starts with removing the existing buildings to prepare for critical and necessary housing for 120 of our community’s college students. Approval of the demolition permit is a critical step in this process.

The mitigation measures the College has adopted for the project site honor the history of this location and celebrate the architectural significance of this pivotal Ukiah site.

I support this project moving forward and encourage Council’s approval of demolition without modification or delay.

Sincerely,
Julie McGovern, Executive Director

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January 16, 2026
Re: Demoli5on of 101 S. Main Street
To Ukiah City Council:

The purpose of this letter is to express my support for Mendocino College and the Mendocino College Foundation as they work to develop affordable student housing at 101 South Main Street in downtown Ukiah.

Student survey data shows that affordable housing is one of the greatest barriers facing students in our community who want to pursue their educational and career goals at Mendocino College.

Addressing this challenge is a shared responsibility between the college and the broader community. Mendocino College students are the future workforce professionals who will help our community thrive.

This project represents an important step toward providing housing opportunities for up to 120 students in Ukiah and throughout the county, options that are currently unavailable to many of them while also helping ease pressure on the local rental market. Preparing the site by removing the existing buildings is a necessary first step toward creating this much-needed student housing, and approval of the demolition permit is critical to moving the project forward.

The mitigation measures adopted by the College thoughtfully honor the history of the site while recognizing its architectural significance within downtown Ukiah.

I fully support this project and respectfully encourage the Council to approve the demolition permit without modification or delay.

Sincerely,
Ramon Jimenez
Visit Mendocino County Execu5ve Director
Mendocino College Board of Directors Member

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January 19, 2026
Re: Demolition of 101 S. Main Street
To Ukiah City Council:

The purpose of this letter is to support Mendocino College and the Mendocino College Foundation in their efforts to build affordable student housing at 101 South Main Street in downtown Ukiah.

We know from student survey data that affordable housing is one of the biggest barriers for students in our community who are looking to further their education and career goals at Mendocino College. Many students cannot find or afford a place of their own. The college and the community have an obligation to find solutions. Mendocino College students are the future firefighters, teachers, auto mechanics, child care providers and nurses that our local workforce needs to stay healthy and strong.

The mitigation measures the College has adopted for the project site honor the history of this location and celebrate the architectural significance of this pivotal Ukiah site.

I support this project moving forward and encourage Council’s approval of demolition without modification or delay.

Sincerely,
Linda Chapman
Past Board Member and President of MC Foundation

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MEMORANDUM
March 28, 2025
SH 25-01 | Via Email
Chancellor’s Office, Division Name
1102 Q Street, Sacramento, CA 95811 | 916.445.8752 | www.cccco.edu TO: Chief Executive Officers
Chief Business Officers
Facilities Directors
Other Interested Parties
FROM: Ronnie Slimp, Director
Student Housing Unit
College Finance and Facilities Planning Division
RE: Affordable Student Housing Construction Applications Are Open Background
The California Community Colleges Affordable Student Housing (ASH) Construction Program was established to expand access to low-cost housing for income-qualifying students enrolled at California’s community colleges. Launched in 2021 as part of a broader effort to address student housing insecurity across the state’s public higher education systems, the ASH Construction Program supports the development and expansion of housing projects operated by community colleges.

Initially funded through General Fund appropriations, the ASH Construction Program has since evolved in response to the state’s fiscal landscape. In 2024, the Statewide Lease Revenue Bond (SLRB) framework was established to finance selected ASH construction projects previously approved by California Legislature. Through this structure, the State Public Works Board is authorized to issue bonds to support project delivery, while the California Community Colleges Chancellor’s Office (Chancellor’s Office) provides programmatic oversight.

The Chancellor’s Office is transitioning from accepting applications in individual “rounds” to an annual application cycle to better assess statewide housing needs and maintain a pipeline of eligible project proposals. The ASH Construction applications submitted in this annual cycle will inform the consultative budget process for the 2027-28 California Budget regarding advocacy for additional SLRB funding.

Submission Deadline
The Chancellor’s Office will receive ASH Construction application submissions by the July 1, 2026, deadline to give applicants ample time to plan their projects. This date aligns with the submission of next year’s Five-Year Construction Plans; however, you can begin updating or creating new ASH Construction applications in FUSION now. Again, these applications will inform the consultative budget process for the 2027-28 California Budget.

Continued Advocacy for Affordable Student Housing
Although no new funding is currently available for additional student housing projects, the Chancellor’s Office remains committed to supporting the development of affordable housing and to continue advocating for long-term solutions to meet statewide low-cost student housing A11Y 4/30/25

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Affordable Student Housing Construction Applications Are Open March 28, 2025
Memorandum | Page 2 of 3
needs. The Chancellor’s Office will continue to accept ASH Construction applications to maintain a pipeline of eligible, cost-informed proposals. These applications will help identify the unmet need for student housing across the system and inform state-level budget and policy discussions.

Application Requirements and Submission in FUSION
Applicants must submit complete applications through the FUSION Student Housing module. All components of the application must be entered or uploaded into the platform. Each application will include the following components:
• Approval Page – Student Housing Proposal
• DF-151 Capital Outlay Budget Change Proposal (COBCP)
• Higher Education Student Housing Grant Program Supplemental Application • JCAF 31 – Analysis of Building Space Use
• JCAF 32 – Cost Summary (with supporting quantity and unit cost documentation) • JCAF 33 – Group 2 Equipment Costs
• Pre-schematic plans: campus plot, site and floor plans, and exterior elevations • CEQA documentation or demonstration of exemption under CA Public Resource Code Section 21080.58
• Justification of additional costs, if applicable
All previously unfunded ASH applications in FUSION have had their project statuses set to “Needs Resubmission.” This will allow your team to begin adjusting your housing applications now.

Applications must reflect current project costs using the most recent escalation indices published by the Chancellor’s Office. Consistent with the Chancellor’s Office Facilities Planning Memo FP 25- 04, the California Construction Cost Index (CCCI) of 9876 and the Equipment Price Index (EPI) of 5455 must be used. As noted above, the application submission will align with next year’s FiveYear Construction Plan submission. In a subsequent memo, the Chancellor’s Office will provide the new CCCI and EPI when they are updated.

In accordance with California Education Code Section17201(f)(8)(A), all applications must include a sufficient project contingency. For California Community College projects, the required contingency is 10 percent of total construction costs. Applications must also identify potential fund sources to address any cost increases beyond those identified in the new or updated proposal.

Applicants are strongly encouraged to conduct total cost of ownership analyses and to estimate operational and staffing costs to the extent possible. These estimates should include projected cost-of-living adjustments to reflect anticipated salary and benefit increases over time.

Application Evaluation and Selection Process
The application evaluation method aligns with application scoring and ranking metrics prescribed in California Education Code Section 17201 as well as the administrative entity scoring metrics identified by the California Community Colleges Affordable Student Housing Taskforce. The scoring methodology used for ASH construction applications remains consistent with the

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Affordable Student Housing Construction Applications Are Open March 28, 2025
Memorandum | Page 3 of 3
approach applied in the most recent application round, Round 3. Applications are evaluated using a composite score based on the following metrics:
• State funding per bed for low-income students
• Rental fees for low-income students below statutory threshold • Project readiness to begin construction
• Geographic location
• Unmet demand for housing (highest scoring option selected) o Based on student housing waitlist, or
o Based on county rental vacancy rates
• Intersegmental partnership with a California public postsecondary institution • Local contribution to project construction
• Student services and ancillary services included in the project • Project located in a Region of High Need
• Cost of living burden
Additionally, the Chancellor’s Office strongly encourages community college applicants to connect with California State University and University of California campuses in your region to determine if an intersegmental project may be possible.

Some scoring metrics are calculated from the data submitted in FUSION, while others require additional review by the Chancellor’s Office Student Housing Unit to complete the scoring and ranking process. Since this cycle of applications will be used to inform the Chancellor’s Office consultative budget process, the overall ranking of applications will be applied later. For more information on how applications are evaluated, please see the attached California Community Colleges Affordable Student Housing Construction Scoring Rubric.

As a reminder about final application selection, the Chancellor’s Office will use scoring and ranking outcomes to develop recommendations to the California Legislature. However, final project selections are determined by California Legislature through the state budget process.

Contact Us
For questions about the Affordable Student Housing application process or program requirements, please contact:

Student Housing Unit
Email: [email protected]
Ronnie Slimp, Director of Student Housing
Email: [email protected]
Phone: (916) 327-4415
Attachments
California Community Colleges Affordable Student Housing Construction Scoring Rubric

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January 20, 2026
Re: Demolition of 101 S. Main Street
Dear Ukiah City Council:

I write this letter in support of Mendocino College and the Mendocino College Foundation in their efforts to build affordable student housing at 101 South Main Street in downtown Ukiah.

Students in our community need safe and affordable housing. This project presents an opportunity to provide this to the students in our community and remove an additional barrier that may prevent up to 120 students from furthering their education.

Having 120 students in downtown housing will not only benefit the students in our community, but will be a benefit to the businesses in the area. These students will be utilizing our public transportation, shopping at our downtown businesses, and looking for jobs near their housing.

To move this project forward, the existing buildings on site must be removed. I ask that the council approve this project, as it will be one more step in the direction of get this housing built for the students in our community. I believe that the college has honored the history and legacy of the existing buildings in their plans, and I look forward to seeing these features added to the new building as it is comes to life.

Thank you for our time and consideration.

Sincerely,
Michelle Goodman
Mendocino College Foundation Board Director

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Edited letter
January 19, 2026
Re: Demolition of 101 S. Main Street
To Ukiah City Council:

I write in strong support of Mendocino College and the Mendocino College Foundation’s proposal to build affordable student housing at 101 South Main Street in downtown Ukiah.

Student survey data show that affordable housing is one of the largest barriers preventing local residents from pursuing education and career advancement at Mendocino College. I have spoken with students who are couch surfing or living in their cars because they cannot find or afford stable housing. The college and the broader community have an obligation to address this need.

Mendocino College students will become the firefighters, teachers, auto mechanics, child care providers, and nurses our local workforce depends on.

Providing housing for 120 students will also relieve pressure on the local rental market. As students move into purpose-built housing, previously occupied rental units will become available to major local employers—such as Adventist Health, Ukiah Unified School District, Mendocino County, and the City of Ukiah—helping them recruit and retain the talent our community needs.

Locating student housing in the heart of downtown will be a catalyst for revitalization. A steady population of students living, studying, and socializing downtown will increase foot traffic for restaurants, shops, and service businesses, extend the hours of activity in the core, and support new small-business startups. Students bring energy, volunteer hours, and consumer spending that help sustain a vibrant downtown economy; they also create opportunities for partnerships with local employers, internships, and community-based learning that strengthen civic ties.

Beyond immediate economic benefits, this project helps bind students to Ukiah and the surrounding area for the long term. When students live and work in the downtown neighborhood, they develop relationships with neighbors, employers, and community organizations that make them more likely to stay after graduation. That retention builds a deeper local talent pool and fosters a stronger sense of place and civic investment among the next generation of Ukiah residents.

Preparing this site for housing requires removal of the existing buildings. Approval of the demolition permit is a necessary and timely step in that process. The mitigation measures the College has adopted honor the site’s history and celebrate its architectural significance.

I support this project moving forward and respectfully urge the Council to approve the demolition permit without modification or delay.

Sincerely,
Mark De Meulenaere

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2024 California Code
Public Resources Code - PRC
DIVISION 13 - ENVIRONMENTAL QUALITY CHAPTER

2.6 – General Section 21080.58.

Universal Citation: CA Pub Res Code § 21080.58 (2024)
21080.58. (a) For purposes of this section, the following definitions apply:
(5) “University housing development project” or “project” means a student housing project or a faculty and staff housing project that is not located, in whole or in part, on a site that is any of the following:
(b) Except as provided in subdivision (d), this division does not apply to a university housing development project carried out by a public university on real property owned by the public university that meets all of the following requirements:
(d) The exemption from this division provided by subdivision (b) does not apply to a university housing development project that meets any of the following criteria:
(1) The project would require the demolition of any of the following:
(D) A historic structure that is listed on a national, state, or local historic register.

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LS Health Properties, Ukiah Valley Athletic Club
203 S. Main St, 590 S. School st, 3101 S. State St.

Ukiah, CA 95482
Date: January 20, 2026
Re: Support for Mendocino College Student Housing / Demolition Permit – 101 & 105 S. Main Street
To: Ukiah City Council
300 Seminary Avenue
Ukiah, CA 95482
Dear Mayor and Members of the Ukiah City Council,
My name is John Strangio, writing on behalf of LS Health Properties and Ukiah Valley Athletic Club, and I’m reaching out to offer my full support for Mendocino College and the Mendocino College Foundation as they take the next steps toward building affordable student housing at 101 and 105 South Main Street in downtown Ukiah.

I’ll keep it plain: this is the kind of project we should be rolling out the red carpet for. This corner of town isn’t just another lot on a map — it’s a gateway into the heart of Ukiah, and what happens here sets the tone for what our community believes in and what we’re willing to build for the next generation.

These buildings have been an eyesore for years. Folks have driven past them, walked past them, and wondered how long they’d sit there looking abandoned and forgotten. And if we leave them alone much longer, they won’t just stay ugly — they’ll eventually become a real safety concern, right in the core of our community where we should be putting our best foot forward.

What I also want to say loud and clear is this: the mitigation measures Mendocino College has adopted go above and beyond what any reputable, community-friendly organization should even be asked to do. They’ve shown respect for the history of the site, while still staying focused on the real need in front of us — housing for students. The mural, the documentation, the pressed metal siding effort, the interpretive signage — that’s not the behavior of someone trying to bulldoze the past. That’s the behavior of an institution trying to do things the right way.

Ukiah needs more positive growth, not more delay. We need to encourage, entice, and pave the way for projects that bring life back into downtown, support local businesses, and help our young people stay rooted here while they build their futures.

For these reasons, LS Health Properties strongly encourages the City Council to approve the demolition permit and allow this project to move forward without modification or delay.

Thank you for your time, your leadership, and your commitment to keeping Ukiah moving in the right direction.

Respectfully,
John Strangio
LS Health Properties, Ukiah Valley Athletic Club

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January 21, 2026
Re: Demolition of 101 S. Main Street
To Ukiah City Council:

The purpose of this letter is to support Mendocino College and the Mendocino College Foundation in their efforts to build affordable student housing at 101 South Main Street in downtown Ukiah.

The mitigation measures the College has adopted for the project site honor the history of this location and celebrate the architectural significance of this pivotal Ukiah site.

I support this project moving forward and encourage Council’s approval of demolition without modification or delay.

Sincerely,
Roberta Lentz

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January 20, 2026
Re: Demolition of 101 S. Main Street
Dear Ukiah City Council:

On behalf of the Greater Ukiah Business and Tourism Alliance (GUBTA) and the Ukiah Main Street Program, I write in support of Mendocino College and the Mendocino College Foundation’s plans to develop affordable student housing at 101 South Main Street in downtown Ukiah.

Providing housing for up to 120 students in the heart of our downtown directly addresses two critical community needs: easing pressure on our limited rental housing market and strengthening the vitality of our downtown. Purpose-built student housing will reduce competition for existing rental units, helping free housing options for the workforce needed by our major local employers, including Adventist Health, Ukiah Unified School District, Mendocino County, and the City of Ukiah, as they recruit and retain essential employees.

Additionally, this housing will provide much needed space for students that are currently living in their vehicles or couch surfing while attempting to attend classes. As someone recently shared with me, “stability promotes success, and housing scarcity is a barrier to that success.” This project represents a thoughtful reinvestment in a key downtown site. This revitalization will also provide vibrant activity for our businesses, galleries, and events. Once the courthouse moves locations, this will be more important than ever.

From what we have learned so far about the project, we understand that Mendocino College has incorporated the existing historical pieces into the new design.

We recognize and appreciate the mitigation measures adopted by Mendocino College, which honor the history of this location while acknowledging the architectural and cultural significance of this prominent South Main Street site. These measures reflect a balanced approach—respecting Ukiah’s past while responsibly planning for its future.

For these reasons, GUBTA/Ukiah Main Street Program supports this project.

Sincerely,
Katrina M. Kessen, Executive Director
Greater Ukiah Business and Tourism Alliance/Ukiah Main Street Program [email protected] | 707.262.2092
www.discoverukiah.com | www.visitukiah.com

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101 & 105 South Main Street
Demolition Permit
CITY COUNCIL INTRODUCTION: 1/21/2026
DEMOLITION REVIEW COMMITTEE: 11/20/2025

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Buildings Subject to Demolition
101 South Main St. 105 South Main St.
(1921) (1947)

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Prior City Council
Action (May 4, 2022)
 105 South Main: Historically non-significant
 101 South Main:
◦ Historic Findings (UCC 3016(e)) of unique
pressed-metal building element along with sole
remaining structure reflecting the block’s
agricultural service industry
◦ No viable market (UCC 3016(g)) found
◦ ISMND: Impacts less than significant with
mitigation
◦ Demolition approved, but tied to future
redevelopment (ISMND CUL-2)

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Subsequent Permitting History
• 2022: City Council Hearing
Mitigation ties
demolition to approval of
a future development
proposal
Original Demolition
Permit and ISMND
Approved 2022
•2023: Axia Architects Evaluation
Recommendation: Potential for
250 sf salvage of original siding
•2023: Planning Commission
Approval
Applicant-initiated 850 sf of
pressed metal siding incorporated
into project design
RCU Site Development
Permit 2023 •2024-25: RCU abandons
project/property sold to
MLCCD/New Demo App. submitted
•Addendum to 2022 ISMND drafted
•2025: Demolition Review
Committee
 Require 850 sf of pressed metal
siding or equivalent into new design
MLCCD Demolition
Permit and ISMND
Addendum (Tonight)

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Addendum
NECESSARY DUE TO:

Ownership change + funding requirements + potential
Department of State Architect Review
Mitigation (CUL-2) no longer enforceable
WHAT THIS ADDENDUM DOES/DOES NOT DO:

DOES
+ Confirms the same demolition action analyzed in
2022
+ Revises CUL-2 and introduces CUL-3 to ensure
historic acknowledgement (and mitigation
enforceability) regardless of future review authority

DOES NOT
x Change demolition scope, location, or physical
activity
x Approve or analyze future redevelopment or use
x Create new or increased environmental impacts

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Mitigation
2022 ISMND ADDENDUM
Mitigation Measures:

AQ-1 (Diesel Engines)
AQ-2 (Grading Projects)
AQ-3 (Asbestos Survey)
• MCAQMD approval for compliance
CUL-1 (Photo Documentation)
• Community Development Director approval for
compliance
CUL-2 (Demolition Timing and Salvage)
Responsibility: City (CDD, PC) upon submittal and
processing of development application
• City enforcement of CUL-2 is dependent on
assumed continued City discretionary review
authority
Mitigation Measures:

AQ-1, AQ-2, AQ-3: Unchanged
CUL-1: Same save for removal of reliance upon Mendocino County Historical Society
CUL-2: (Salvage Plan prior to Demolition)
• Community Development Director approval for compliance • Installation of siding is a condition of building permit issuance/Certificate of Occupancy (regardless of jurisdictional authority – e.g. City of Ukiah or DSA)
CUL-3: (Mural and Interpretive Signage Plan, Maintenance Agreement, Cost Reserve)
• Design Review Board approval of mural/interpretive signage required for issuance of Certificate of Occupancy
(regardless of jurisdictional authority)

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Demolition Review Committee
Meeting: November 20, 2025
Recommendations:
◦ Increase minimum salvageable or visually similar pressed-metal siding to 850 s.f. ◦ Strike official consultation requirements with Mendocino County Historical Society (reduce reliance on non-formal advisory body in certifying mitigation)

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Approval of the Demolition Permit...

WOULD WOULD NOT
 Approve demolition of existing structures
 Rely on the previously approved ISMND
 Update the cultural mitigation measures
(CUL-2; CUL-3) to remain
feasible/enforceable
 Preserve the building and site's historic
acknowledgement independent of a future
design
X Approve redevelopment
X Approve building design or architecture
X Limit or pre-approve any potential future
DSA development review
X Limit or pre-approve any potential future
City development review

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Staff Recommendation
Approve the Demolition Permit for two
structures over 50 years old at 101 and 105
South Main Street; Permit No. PA25-000021, File
No. 25-000926.

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Cultural Mitigation Measures
Original vs. Revised
Original ISMND (2022)
CUL-1: Photo Documentation. Prior to
issuance of the demolition permit, photo
documentation of the Dragon’s Lair building
shall be required in order to catalogue its
existence. The photo documentation shall be
reviewed and approved by the Community
Development Director and submitted to the
Mendocino County Historic Society.

Addendum (Tonight)
CUL-1: Photo Documentation. Prior to
issuance of the demolition permit, photo
documentation of the Dragon’s Lair building
(subject structure) shall be required in order to
catalogue its existence. The photo
documentation shall be reviewed and
approved by the Community Development
Director and submitted to the Mendocino
County Historic Society.

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Cultural Mitigation Measures
Original vs. Revised
Original ISMND (2022)
CUL-2: The 101 South Main Street building shall not be demolished until there is a development proposal approved in accordance with the Ukiah
City Code and, specifically, the Downtown Zoning
Code. At the time of demolition, the pressed
metal siding on the west and north portions of
the building shall be salvaged. If the pressed
metal siding is not able to be salvaged, similar
pressed metal siding may be used. Any new
development will incorporate into the design all,
or a portion, of the pressed metal siding of the
existing building to pay homage to the
agricultural commercial function of the original
building. New development shall require review
by the Design Review Board and the Planning
Commission, in accordance with the Downtown
Zoning Code.

Addendum (Tonight)
CUL-2:
• Salvage all reusable pressed metal siding from
west/north elevations
• Salvage Plan required, incorporating Axia
Architects recommendation for B & C panel reuse
• If reuse not feasible: install 850 sf or visually
similar pressed metal siding
• Proof of siding acquisition is required prior to
site development activity
• Installation required prior to Certificate of
Occupancy
(See full text in Addendum)

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Cultural Mitigation Measures
Original vs. Revised
Original ISMND (2022) Addendum (Tonight)
CUL-3:
• Design Review Board to review a Mural Design
and Placement Plan and Interpretive Signage
Plan reflecting the site’s history
• 20-year Mural and Interpretive Signage Maintenance Agreement executed by property owner, Community Development Department to
be notified of any removal, relocation or
modification
• Private maintenance funding required, final cost
of mural and signage to be submitted to
Community Development Department
(See full text in Addendum)

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101 S. Main - Last Remaining Example of Pressed Metal Siding EXISTING CONDITIONS VS. HISTORICAL APPEARANCE
Images/Descriptions – 101 South Main Historic Resource Evaluation (Incl. in 2022 Final ISMND)

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101 S. Main - Only Remaining Building Tied to Block’s Agricultural Service Industry
AGRICULTURAL FEED STORE 1921-1963
Images/Descriptions – 101
South Main Historic
Resource Evaluation
(Incl. in 2022 Final ISMND)

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Agenda Item No: 13.a.

MEETING DATE/TIME: 1/21/2026

ITEM NO: 2026-47

AGENDA SUMMARY REPORT
SUBJECT: Presentation of City's Audited Annual Comprehensive Financial Report (ACFR) and Audit Reports for the Year Ended June 30, 2025.

DEPARTMENT: Finance PREPARED BY: Dan Buffalo, Finance Director, Oliver MacDonald, Senior Accountant
PRESENTER: Dan Buffalo, Finance Director
ATTACHMENTS:

1. Annual-ACFR-Report-City-June-30-2025

2. ACFR_Presentation_Updated_FY2025

3. Ukiah Audit Communication Conclusion Letter FY 2025
Summary: Finance Department will present to the City Council the audited Annual Comprehensive Financial Report (ACFR) for the year ended June 30, 2025.

Background: Pursuant to City policy and state law, the City has prepared financial statements for the year ended June 30, 2025, in accordance with generally accepted accounting principles (GAAP). Those statements were audited by an independent public accounting firm, Van Lant and Fankhanel, LLP, licensed by the State of California, and knowledgeable of governmental accounting and reporting.

Discussion: Management is pleased to submit the City of Ukiah’s Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2025. This report was prepared by the Accounting Division of the Finance Department in accordance with state law, generally accepted accounting principles (GAAP), and best practices for governmental financial reporting as established by the Government Finance Officers’ Association (GFOA). California law requires that local governments prepare annual financial statements and to have those statements audited by a licensed certified public accountant within a reasonable period following the close of the fiscal year. Accordingly, the City’s financial statements have been prepared in conformity with GAAP and audited in accordance with generally accepted auditing standards.

Responsibility for the accuracy of the data and the fairness of presentation, including all required disclosures, rests with City management. Management believes the information presented is accurate in all material respects and provides a comprehensive depiction of the City’s financial position, results of operations, and cash flows. GAAP further requires that management provide a narrative introduction, overview, and analysis of the basic financial statements in the form of Management’s Discussion and Analysis (MD&A), which is presented immediately following the report of the independent auditor.

The City has established a system of internal controls designed to safeguard assets and ensure the reliability of financial information used in the preparation of the financial statements. Because internal controls are subject to inherent limitations, the City’s internal control framework is designed to provide reasonable, rather than absolute, assurance that the financial statements are free from material misstatement.

While formally addressed to the City Council, the ACFR is intended to serve as a comprehensive financial reference for a broad range of users, including residents, City staff, creditors, investors, and other interested stakeholders. In this capacity, the report supports the City Council’s fiduciary oversight responsibilities by

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providing transparent, audited financial information necessary for informed policy and budgetary decisionmaking.

The City’s financial statements have been audited by Van Lant & Fankhanel, LLP, a firm of certified public accountants. The objective of the independent audit is to provide reasonable assurance that the City’s financial statements for the fiscal year ended June 30, 2025, are free of material misstatement. The audit included examining, on a test basis, evidence supporting the amounts and disclosures, evaluating the accounting principles used and significant estimates made by management, and assessing the overall financial statement presentation.

Based on the audit results, the independent auditors issued an unqualified opinion, concluding that the City’s financial statements for the fiscal year ended June 30, 2025, are presented fairly, in all material respects, in conformity with GAAP. The independent auditor’s report appears as the first component of the Financial Section of the ACFR.

Management will present the Fiscal Year 2025 ACFR (Attachment 1) to the City Council and highlight key elements of the report, including its organization and guidance on how to efficiently navigate the document.

The report can also be found on the City's website at https://cityofukiah.com/finance/ under Financial Reports. A copy of the accompanying presentation is included as Attachment 2. Auditor communications to the City Council, including required governance letters, are included as Attachment 3.

Finance Department staff are available to meet with individual Council members, at their pleasure and upon request, to discuss any aspect of the ACFR in greater detail. Council members are encouraged to meet directly with the Finance Director to review specific elements of the document, ask questions, and receive additional assistance in navigating and reading the financial statements, notes, and supplementary information.

Special Recognition and Appreciation
Management extends its sincere appreciation to the entire Accounting Division of the Finance Department for its professionalism, dedication, and collaborative effort in the preparation of the City of Ukiah’s Annual Comprehensive Financial Report for the fiscal year ended June 30, 2025. The timely and accurate completion of this report reflects a significant commitment to technical excellence, internal coordination, and adherence to generally accepted accounting principles and best practices in governmental financial reporting.

The preparation of the ACFR is a year-round effort that requires extensive coordination across accounting, reporting, audit support, and financial analysis functions. The Accounting Division’s work on this report was completed in addition to its ongoing operational responsibilities, including budget development, financial reporting, accounts payable, payroll, utility billing, enterprise operations, and support to City departments and governing bodies.

Management specifically acknowledges the leadership and contributions of the ACFR team:
• Mary Horger, Assistant Finance Director
• Olga Keough, CPA, Controller – Enterprise & Billing
• Oliver MacDonald, CPA, Controller – Governmental & Proprietary • Erica Valencia, CPA, Controller – Governmental & Fiduciary • Joel Zavala, Financial Services Manager
Their collective expertise, attention to detail, and commitment to transparency were instrumental in producing a comprehensive, high-quality financial report that supports the City Council’s fiduciary oversight responsibilities and provides meaningful information to the public and other stakeholders.

Management also recognizes and thanks the broader accounting and finance staff whose efforts supported

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the preparation, review, and audit of the ACFR. The professionalism and dedication demonstrated by the team continue to strengthen the City’s financial management practices and reporting integrity.

Recommended Action: Receive and file Annual Comprehensive Financial Report (ACFR).

BUDGET AMENDMENT REQUIRED: N/A
CURRENT BUDGET AMOUNT: N/A
PROPOSED BUDGET AMOUNT: N/A
FINANCING SOURCE: N/A
REVENUE: No GRANT: No
PREVIOUS CONTRACT/PURCHASE ORDER NO.: N/A
COORDINATED WITH: N/A
STRATEGIC PLAN (SP): N/A
CLIMATE INITIATIVES (CI): N/A
GENERAL PLAN ELEMENTS (GP): N/A

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ANNUAL

COMPREHENSIVE

FINANCIAL
REPORT

CITY OF UKIAH, CALIFORNIA
Fiscal Year Ended June 30, 2025
Attachment 1

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ANNUAL COMPREHENSIVE FINANCIAL REPORT

CITY OF UKIAH, CALIFORNIA
FISCAL YEAR ENDED JUNE 30, 2025

PREPARED BY
CITY OF UKIAH FINANCE DEPARTMENT | ACCOUNTING DIVISION
ACFR TEAM:

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TABLE OF CONTENTS

INTRODUCTORY SECTION
Letter of Transmittal .......................................................................................................................................................................... i GFOA Certificate of Achievement ............................................................................................................................................. xvi List of Officials ............................................................................................................................................................................... xvii Org Chart ....................................................................................................................................................................................... xviii

FINANCIAL SECTION
Independent Auditor’s Report ......................................................................................................................................................... 1 Management Discussion and Analysis (MD&A) ....................................................................................................................... 4 Introduction and Purpose ........................................................................................................................................................... 4 Financial Highlights ..................................................................................................................................................................... 4 Overview of the Basic Financial Statements ........................................................................................................................... 5 Government-Wide Financial Statements ............................................................................................................................... 5 Fund Financial Statements ......................................................................................................................................................... 6 Condensed Government-Wide Financial Information ........................................................................................................ 7 Analysis of Changes in Net Position and Financial Results ............................................................................................... 9 Analysis of Major Individual Funds ........................................................................................................................................ 14 General Fund Budgetary Highlights ....................................................................................................................................... 16 Capital Assets and Long-Term Debt Activity ....................................................................................................................... 17 Discussion of Material Impacts from Major GASB Implementations ............................................................................ 18 Economic Factors and Next Year’s Budget ........................................................................................................................... 19 Requests for Information ........................................................................................................................................................... 20 Government-Wide Financial Statements .................................................................................................................................. 21 Statement of Net Position ......................................................................................................................................................... 22 Statement of Activities ............................................................................................................................................................... 23 Fund Financial Statements ............................................................................................................................................................24 Governmental Funds .................................................................................................................................................................. 25 Balance Sheet............................................................................................................................................................................ 26 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ............................. 27 Statement of Revenues, Expenditures, and Changes in Fund Balances .................................................................... 28 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Statement of Activities ............................................................................................................................. 29 Proprietary Funds ........................................................................................................................................................................ 30 Statement of Net Position ...................................................................................................................................................... 31 Attachment 1

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Statement of Revenues, Expenses, and Changes in Net Position ............................................................................... 32 Statement of Cash Flows ...................................................................................................................................................... 33 Fiduciary Funds ........................................................................................................................................................................... 34 Statement of Fiduciary Net Position .................................................................................................................................. 35 Statement of Changes in Fiduciary Net Position ............................................................................................................ 36 Notes to the Basic Financial Statements .................................................................................................................................... 37 Note 1 – Summary of Significant Accounting Policies ........................................................................................................ 38 Note 2 – Stewardship, Compliance and Accountability .................................................................................................... 46 Note 3 – Cash and Investments ................................................................................................................................................ 47 Note 4 – Receivables ................................................................................................................................................................... 51 Note 5 – Loans and Notes Receivable .................................................................................................................................... 52 Note 6 – Capital Assets .............................................................................................................................................................. 54 Note 7 – Long-Term Liabilities ................................................................................................................................................ 56 Note 8 – Landfill Closure ........................................................................................................................................................... 62 Note 9 – Interfund Transactions .............................................................................................................................................. 63 Note 10 – Risk Management ..................................................................................................................................................... 65 Note 11 – Public Employee Retirement Plan ......................................................................................................................... 68 Note 12 – Joint Ventures ............................................................................................................................................................ 79 Note 13 – Service Contracts ...................................................................................................................................................... 81 Note 14 – Commitments and Contingencies ........................................................................................................................ 82 Note 15 – New Pronouncements .............................................................................................................................................. 83 Note 16 – Successor Agency Trust ........................................................................................................................................... 84 Required Supplementary Information ........................................................................................................................................ 86 Schedules of Contributions and Proportionate Share of Total Pension Liability ........................................................ 87 Schedules of Contributions and Proportionate Share of Total Pension Liability ........................................................ 91 General Fund Budgetary Comparison Schedule .................................................................................................................. 93 Notes to Required Supplemental Information .....................................................................................................................94 Supplementary Information .......................................................................................................................................................... 95 Major Fund Budget Schedules.................................................................................................................................................. 96 Combining Fund Financial Statements and Schedules ........................................................................................................ 100 Nonmajor Governmental Funds ............................................................................................................................................. 101 Combining Balance Sheet ................................................................................................................................................... 105 Combining Statement of Revenues, Expenditures, and Changes in Fund Balance ............................................... 110 Governmental Funds Budget Comparison ........................................................................................................................... 117 Combining Nonmajor Enterprise Funds ............................................................................................................................. 156 Attachment 1

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Combining Statement of Net Position ............................................................................................................................. 157 Combining Statement of Revenues, expenses, and Changes in Net Position ........................................................ 158 Combining Statement of Cash Flows .............................................................................................................................. 159 Combining Internal Service Funds........................................................................................................................................ 160 Combining Statement of Net Position .............................................................................................................................. 161 Combining Statement of Revenues, Expenses, and Changes in Net Position ....................................................... 162 Combining Statement of Cash Flows .............................................................................................................................. 163 Combining Fiduciary Funds ................................................................................................................................................... 164 Combining Fiduciary Net Position ................................................................................................................................... 165 Combining Statement of Changes in Fiduciary Net Position .................................................................................... 166

STATISTICAL SECTION
Net Position by Component ................................................................................................................................................... 170 Changes in Net Position ........................................................................................................................................................... 171 Fund Balances, Governmental Funds .................................................................................................................................... 173 Changes in Fund Balances, Governmental Funds ............................................................................................................. 174 Tax Revenues by Source, Governmental Funds ................................................................................................................. 175 Property Tax Rates ................................................................................................................................................................. 176 Electric Utility Rates ................................................................................................................................................................. 177 Wastewater Utility Rates ....................................................................................................................................................... 178 Water Utility Rates .................................................................................................................................................................. 179 Top Ten Electric Usage Customers ...................................................................................................................................... 180 Ratio of Outstanding Debt by Type ....................................................................................................................................... 181 Ratio of General Bonded Outstanding Debt ....................................................................................................................... 182 Computation of Direct and Overlapping Debt ................................................................................................................... 183 Legal Debt Margin Information ............................................................................................................................................. 184 Demographic and Economic Statistics ................................................................................................................................. 185 Principal Employers .................................................................................................................................................................. 186 Full-time and Part-time City Employees by Function ..................................................................................................... 187

OTHER COMPLIANCE REPORTS
Independent Auditor’s Report on Internal Control .............................................................................................................. 188 Independent Accountant’s Report on Agreed-upon Procedures Applied to Appropriations Limit ......................... 190 Attachment 1

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INTRODUCTORY SECTION
Attachment 1

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LETTER OF TRANSMITTAL
December 29, 2025
Honorable Mayor and Members of the City Council,
City Manager,
Residents and Stakeholders of the City of Ukiah:

It is our pleasure to present the Annual Comprehensive Financial Report (ACFR) of the City of Ukiah for the fiscal year ended June 30, 2025. This report is published in accordance with the requirements of state law and the pronouncements of the Governmental Accounting Standards Board (GASB), and represents the City’s commitment to transparent, accurate, and complete financial reporting. Responsibility for the accuracy, completeness, and fairness of the data presented in this report rests with City management. To the best of our knowledge, the information contained herein is accurate in all material respects and presented in a manner designed to fairly depict the financial position and results of operations of the City.

The ACFR is prepared in accordance with generally accepted accounting principles (GAAP) and includes all disclosures necessary to enable readers to gain an understanding of the City’s financial condition. The report is organized into three major sections: the Introductory Section, the Financial Section (including the independent auditor’s report, management’s discussion and analysis, and the audited financial statements), and the Statistical Section. This year’s ACFR reflects continued enhancements to financial transparency, including refinements to note disclosures, implementation of applicable new GASB standards, and ongoing improvements to internal controls.

Profile of the City of Ukiah
The City of Ukiah is the county seat and largest city in Mendocino County, serving as the primary economic,
governmental, and commercial hub for the greater Ukiah
Valley and surrounding communities. Ukiah has an
estimated population of approximately 16,700
residents1, while its retail trade area extends well beyond city limits, drawing an estimated 100,000 residents from throughout inland Mendocino and portions of Lake
County2. Ukiah’s role as the region’s economic center is supported by its concentration of major employers,
professional services, county and state offices, health care facilities, education providers, and a diverse retail and hospitality sector.
1 Source: U.S. Census Bureau, 2024 Population Estimates for Ukiah City, California. 2 Source: City of Ukiah Economic Development & Retail Trade Area Analysis; updated regional market assessments prepared for economic development planning.

Attachment 1

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ii
Ukiah’s strategic location along the U.S. 101 corridor positions it as a central point for commerce, transportation, tourism, and agricultural processing. The city’s economy benefits from its proximity to key industries—including wine production, cannabis cultivation and compliance services, tourism, renewable energy, and professional services—supporting
both local
employment and
regional economic
activity.

Economic Condition and Outlook
Ukiah continues to demonstrate resilience and steady financial performance amid broader economic fluctuations in California and the nation. Local revenues—including sales tax, transient occupancy tax, and utility revenues— remained stable through FY 2024-25, supported by a diversified local economy, prudent fiscal stewardship, and sustained investment in infrastructure. The City continues to monitor economic indicators such as inflationary pressures, labor market conditions, and housing trends, and incorporates these factors into long-term financial planning.

Ukiah’s disciplined budgeting practices, structural reforms, and ongoing modernization of utility and enterprise operations position the City for continued stability. Current financial trends support a cautiously optimistic outlook for the coming years.

Major Initiatives
During FY 2024-25, the City advanced several significant initiatives aligned with the Council's goals:
• Water and Wastewater Integration and Planning: The City continued work with the Ukiah Valley Water Authority (UVWA) to integrate regional water operations, advance rate-setting processes required by Proposition 218 and AB 2257, and develop long-term capital planning tools to support system reliability and sustainability.
• Infrastructure Investment: Progress continued on critical capital projects across water, sewer, transportation, and electric utilities. The City remains committed to proactive asset management and leveraging state and federal funding opportunities.
• Financial Systems, Controls, and Modernization: The Finance & IT Department expanded work on paperless workflows, strengthened internal control frameworks, enhanced customer service systems, and advanced cybersecurity and network modernization.
• Community and Organizational Development: The City continued to invest in workforce development, employee training, and organizational culture initiatives. These efforts improve service delivery, staff retention, and departmental resiliency.

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Departmental Accomplishments
The following summarizes key accomplishments achieved across City departments during FY 2024–25, reflecting progress toward City Council priorities, operational excellence, and improved service delivery.

City Manager’s Office
 Strategic Communications: Served as a liaison between the community and construction teams during major infrastructure projects, leading communication and mitigation efforts.  Facilitated Regional Collaboration: Coordinated with Mendocino County and neighboring cities to advance master tax-sharing discussions supporting long-range regional planning.  Enhanced Public Transparency: Expanded access to City records and information by adding contract documents and interagency materials to the public portal, improving community visibility into City operations.
 Strengthened Emergency Preparedness & Continuity: Completed the Citywide Continuity of Operations (COOP) Plan and delivered staff trainings to strengthen emergency preparedness and ensure continuity of essential functions during emergencies and disasters.

Human Resources & Risk Management
 Enhanced Employee Development: Expanded training opportunities and leadership development pathways, strengthening internal capacity and supporting succession planning across the organization.  Improved Recruitment & Retention: Modernized hiring processes, implemented targeted outreach strategies, and streamlined onboarding to attract and retain qualified candidates.  Strengthened Risk Management Programs: Advanced workplace safety initiatives, improved incident tracking and reporting, and expanded risk-mitigation efforts across City operations.

Finance & Information Technology
 Modernized Administrative Systems: Automated financial and administrative workflows, implemented electronic efficiencies, and expanded cloud-based file management.  Strengthened Fiscal Stewardship: Supported major capital and grant-funded initiatives, including UVWA integration and utility system upgrades.
 Enhanced Cybersecurity & Network Resilience: Upgraded digital infrastructure, improved data security protocols, and increased system reliability.

Police Department
 Computer-Aided Dispatch System Implementation: The Police Department implemented a new computer-aided dispatch system that improves response times and provides enhanced tools to support more efficient and effective service to the community.
 Police Department Web Page Redesign: A new Police Department web page was developed to provide up-to-date information and improved online tools, increasing public access to police services and enhancing community communication.
 Recruitment and Staffing Improvements: Recruitment was prioritized, resulting in increased staffing levels and the successful filling of previously vacant positions, strengthening operational capacity.

Fire Authority
 Stabilization of the 911 Emergency Medical Services System: UVFA strengthened the regional 911 EMS system by implementing a 24-hour Interfacility Transfer (IFT) Division, reducing pressure on emergency ambulance resources and significantly limiting the need to down-staff fire engines. UVFA continues to operate a dedicated 911 ambulance while working with the County EMS Agency and regional partners to further stabilize and expand the system.

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 Development and Deployment of the Fuels Reduction Crew: UVFA secured a $7.2 million grant to establish a fuels reduction crew focused on reducing wildland fire risk in and around urban areas throughout the Ukiah Valley. The crew became operational in May 2025 and has been actively completing fuel reduction projects and improving trail safety, with staffing and equipment acquisition continuing to support long-term program success.
 Development of the Strategic Master Plan: UVFA is collaborating with the Center for Public Safety Management (CPSM) to develop a comprehensive Strategic Master Plan that provides an independent and objective assessment of the organization’s future needs. While the plan is not yet complete, its development represents a significant and coordinated effort by the City and District leadership and staff, with substantial foundational work completed and finalization anticipated by the end of the fiscal year, with full plan completion expected by June 2025.

Community Services
 Advanced Long-Range Planning: Completed Western Hills recreation feasibility work and advanced the Parks Gap Analysis.
 Expanded Community Programming: Delivered major cultural and recreational events, including Día de los Muertos and expanded youth programs.
 Improved Facilities & Access: Upgraded technology, exhibitions, and amenities across parks, ARRC, aquatics, golf, museum, and recreation facilities.

Community Development
 Implemented Housing Element Programs: Completed all non-ongoing Housing Element tasks, strengthening Ukiah’s long-term housing strategy.
 Modernized Permitting & Inspection: Streamlined processes through CitizenServe, improving transparency, consistency, and public access.
 Secured Major Grant Funding: Obtained over $25 million in competitive grants supporting housing, infrastructure, and community development.

Public Works
 Continuation of Major Infrastructure Projects: Construction continued on Phase II of the Downtown Streetscape Project and replacement of the Orr Street Bridge.  Utility System Upgrades: Completed multiple utility system upgrades.  Enhanced Streets & Infrastructure: Invested in maintenance, accessibility improvements, and multimodal upgrades across the City.

Airport
 Improved Operational Data Systems: Implemented a real-time aircraft tracking system.  Advanced Runway Planning: Completed the Runway Extension Feasibility Study.  Strengthened Airport Services: Modernized payment and operational tracking systems.

Electric Utility
 Improved System Reliability: Undergrounded over a mile of primary wire and completed enhanced vegetation management for 9,400’ of overhead power lines on the westside of Ukiah as part of the Wildfire Mitigation Project.
 Expanded Team Skill Sets: Trained internal crew on invasive pole testing, providing valuable skills to City staff and saving contracting costs for routine maintenance.  Completed Electric Service Center: Completed remodel of the Electric Service Center combining Administration, Technical Services, and Construction divisions, improving department communications and work flow.

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Water & Wastewater Utilities
 Upgraded Treatment Systems: Installed turbidimeters, replaced the belt filter press, and added a new screw-press system.
 Expanded System Resilience: Completed pipeline replacements, thickening improvements, and operational upgrades.
 Advanced Recycled Water Program: Initiated NPDES permit renewal and progressed Phase 4 recycled water infrastructure.

Profile of the Agency
The City of Ukiah is a full-service municipal corporation that provides a broad range of essential public services, utilities, and infrastructure to residents, businesses, and the surrounding Ukiah Valley region. Operating under the council–manager form of government, the City Council establishes policy direction and strategic priorities, while the City Manager oversees
daily operations and
ensures that municipal
programs align with
community needs and longterm goals.

As a full-service agency, the
City delivers police, fire and
emergency response
services, water, wastewater,
and recycled water
operations, a municipally
owned electric utility,
streets and transportation
services, parks and
recreation programs,
community development and housing support, and internal administrative services such as finance, information technology, and human resources. Ukiah’s municipal electric utility is one of the few remaining publicly owned electric systems in California, providing the community with local control over power procurement, system reliability, and customer service.

Ukiah’s organization consists of 13 departments and approximately 60 divisions, reflecting the breadth of operations required to deliver full-service municipal functions.

The City employs approximately 323 full-time equivalent (FTE) positions3 to deliver these services and manages an annual operating and capital budget designed to maintain service quality, ensure regulatory compliance, and invest in long-term infrastructure. The agency emphasizes fiscal responsibility, organizational development, and continuous improvement as core components of its operational philosophy. 3 Source: City of Ukiah FY 2024-25 Adopted Budget, Schedule of Authorized Positions, available at https://stories.opengov.com/ukiahca/published/hYkNNjPQV .

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Activities
City-wide expenditures during FY 2024–25 reflect the scale and diversity of services delivered across governmental and business-type operations. An analysis of expenditures by activity, by department, and by major cost category provides insight into how resources were allocated to support essential public services, utilities, infrastructure, and capital investment.

City-Wide Share of Expenditures by Activity
City operations are balanced across governmental and enterprise functions:
55% of expenditures
supported
Governmental
Activities, including
public safety, streets,
parks, community
development, general
government, and
administrative services.
45% supported
Business-Type
Activities, primarily
Water Resources,
Electric, and Airport.

This distribution reflects Ukiah’s role as a full-service city with substantial utility operations alongside traditional municipal functions.

City-Wide Share of Expenditures by Department
Spending is distributed across all 13 City departments, with several large operational and infrastructure intensive departments comprising the majority of activity:
 Water Resources – water, sewer, and recycled water services  Electric – generation, distribution, and technical services  Public Works – streets and engineering, corporation yard operations, building maintenance  Police – patrol and dispatch services
 Fire Authority – response, prevention, mitigation, and ambulance services  Finance & IT – accounting, budget, procurement, billing, and other financial services, systems and network administration, and cybersecurity administration  Human Resources & Risk Management – recruitment, employee record maintenance, payroll, and other HR services, insurance premiums and claims management, and other risk management services 55%
45%
City-Wide Share of Expenditures by Activity
Governmental Activities Expenses Business-Type Activities Expenses Attachment 1

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 Community Services – recreation programs, parks maintenance, Grace Hudson Museum, Conference Center management, and other related services
 Community Development – planning, building, housing, grant procurement, and other related services  City Manager’s Office – general administration, special projects, parking district administration, and other related services
 Airport – facility and runway maintenance, fuel services, and other related activities  City Attorney – legal advisory services to the City Council, City Manager, and departments  City Council – governance and oversight
This distribution highlights the operational intensity of the City's utilities and infrastructure systems, which together represent more than half of total expenditures.

City-Wide Share of Expenditures by Cost Category
City-wide spending across major cost categories demonstrates the City’s continued investment in essential personnel, operational materials, and long-term capital needs:
 Personnel – Salaries, retirement, health insurance, part-time, and other employment costs  Materials, Supplies & Services – contractual services, supplies, utilities, learning and development, etc.  Debt Service – principal and interest payments, lease payments, and other installments  Capital Outlay – land, buildings and improvements, equipment, vehicles, and other capital Attachment 1

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The significant share of capital outlay illustrates the City’s ongoing commitment to maintaining and upgrading vital infrastructure, including utility systems, public safety facilities, transportation assets, and technology modernization.

Together, these expenditure patterns reflect Ukiah’s operational complexity, commitment to infrastructure stewardship, and the balanced allocation of resources across governmental and enterprise functions.

Measure P
Measure P is a voter-approved ½cent general (unrestricted) transactions and use tax adopted by Ukiah voters in November 2014. It extended the earlier 2005 sales tax measure known as Measure S, which was accompanied by Advisory Measure T expressing the voters’ preference that the revenues be used to support police, fire, and emergency medical services.

Because Measure P is a general tax, its proceeds may legally be used for any municipal purpose at the discretion of the City Council; however, the City has continually prioritized these revenues through resolution for public safety.

Upon adoption, the City Council also established an expenditure plan (Resolution No. 2014-28) specifying that Measure P revenues should be used first to maintain a minimum level of public safety services. This included: (1) maintaining 32 full-time sworn police officers, and (2) sustaining a defined level of fire protection and emergency medical services, including services provided through joint fire and ambulance operations.

Measure P continues to serve as a critical voter-approved public safety funding source designed to maintain and enhance police and fire services within the City of Ukiah. The following summarizes FY 2024–25 performance compared with the 2014–15 baseline, as well as trends in revenues and expenditures over the past decade.

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Revenues and Expenditures: Baseline to FY 2024–25 Actuals Measure P revenues increased from $2.47 million in the 2014–15 baseline year to $3.32 million in FY 2024–25, an increase of $851,832. When combined with growth in general revenues and designated public safety revenues (Prop 172 and fire service charges), total public safety related revenues increased from $11.48 million to $23.52 million, an overall increase of $12.04 million.

Public safety expenditures—both operational and capital—expanded proportionally to support service needs:
 Police current expenditures: increased by $3.31 million from baseline. 2014-15 2024-25 Variance with
Baseline Actual Baseline
REVENUES Note
Measure P $ 2,465,521 $ 3,317,353 $ 851,832
Public safety revenues:

Police (1) 1,001,861 684,869 (316,992)
Fire (4) 37,235 7,454,188 7,416,953
Prop 172 53,471 105,641 52,170
General revenues (general fund) 7,922,006 11,957,201 4,035,195 Total revenues 11,480,094 23,519,252 12,039,158

EXPENDITURES
Current:

Police (2) 8,709,693 12,015,129 (3,305,436)
Fire 2,553,407 9,207,671 (6,654,264)
Total current 11,263,100 21,222,800 (9,959,700)
Capital outlay:

Police 186,594 319,968 (133,374)
Fire 30,400 1,976,484 (1,946,084)
Total capital outlay 216,994 2,296,452 (2,079,458)
Total expenditures 11,480,094 23,519,252 (12,039,158)
Excess (deficiency) of revenues over expenditures $ - $ - $ - PERSONNEL Police:

Sworn 32 25 (7)
Miscellaneous (3) 18 17 (1)
Total police 50 42 (8)
Fire:

City 11 23 12
Ambulance/Misc - 12 12
UVFD 6 - (6)
Total fire 17 35 18
Notes:
(1) Excludes parking enforcement expenditures and associated revenue, dispatch services revenue, and fire prevention services revenue. (4) Fire revenues include ambulance and interfacility transfer revenues. (3) Sworn Police personnel counts are based off actual filled, in service positions as of June 30 of the reporting year. (2) Does not include Emergency Management services, which are included in Public Safety on the Statement of Revenues, Expenditures, and Changes in Fund Balance.

City of Ukiah
Measure P
Schedule of Revenues, Expenditures, and Changes in Fund Balances – Baseline to Current Actual For the Year Ended June 30, 2025
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 Fire current expenditures: increased by $6.65 million from baseline.  Combined current expenditures rose from $11.26 million to $21.22 million.  Capital outlay also increased, rising from $216,994 to $2.30 million, reflecting significant reinvestment in stations, vehicles, equipment, and safety infrastructure.

Overall expenditures grew in alignment with the City’s need to maintain safe staffing, replace aging equipment, modernize facilities, and sustain long-term operational readiness.

Personnel Trends
Measure P has helped maintain sustainable police and fire staffing; however, general revenues have increasingly played a critical role in supporting higher expenditure levels for Police and Fire. While Measure P revenues have grown modestly, they have not kept pace with the rising costs of public safety operations, requiring greater reliance on the City’s general revenue base.

As of June 30, 2025:

Measure P has helped maintain sustainable police and fire staffing. As of June 30, 2025:
 Police personnel: decreased from 50 positions in 2014–15 to 42 in 2024–25 (primarily due to significant recruitment and retention challenges. The City continues to budget for 32 sworn officers, but persistent difficulty hiring and retaining qualified candidates resulted in lower filled staffing levels at year-end).  Fire personnel: increased from 17 to 35, reflecting the transition to the Ukiah Valley Fire Authority (UVFA) and the consolidation of ambulance and fire operations, as well as grant-funded wildfire mitigation efforts.

These staffing levels support efficient service delivery while adapting to regional fire authority consolidation and police recruitment challenges.

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Long-Term Revenue and Expenditure Trends
From FY 2015–16 through FY 2024–25:
 Police and fire expenditures have grown steadily due to service demands, inflationary pressures, and investments in equipment and facilities.
 Measure S/P revenues have grown modestly but consistently over time.  General revenues supporting public safety have increased more significantly, reflecting the City’s broader revenue growth and its prioritization of police and fire services.

The trend chart (2016–2025) illustrates:
 Stable and gradually increasing Measure S/P revenues.  Rising police and fire expenditures over time.
 Growing general revenues dedicated to supporting public safety.

Measure Y
Measure Y is a voter-approved ½cent general (unrestricted) transactions and use tax adopted to support the longterm maintenance, rehabilitation, and preservation of Ukiah’s streets and public rights-of-way. As a general tax, Measure Y revenues may legally be used for any municipal purpose; however, the City Council has consistently prioritized and directed these resources through formal resolution to fund street improvements, roadway reconstruction, and transportation infrastructure. This policy direction ensures that Measure Y proceeds are dedicated to improving pavement conditions, extending roadway life, and enhancing safety throughout the community.

Measure Y continues to be a primary funding source for preserving Ukiah’s roadway network. The following summarizes operating activity, capital investment, and financial trends through FY 2024–25. a primary funding source for preserving Ukiah’s roadway network. The following summarizes operating activity, capital investment, and financial trends through FY 2024–25.

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The chart illustrates the relationship between Measure Y revenues and the City’s street maintenance and capital investment activity over time. While Measure Y revenues have remained relatively stable, annual spending has fluctuated significantly in response to the timing and scale of capital projects. Periods of elevated expenditure— particularly in years with major reconstruction efforts and bond-funded projects—reflect the City’s strategic decision to accelerate pavement rehabilitation and infrastructure improvements.

In recent years, total Measure Y–supported expenditures have outpaced annual Measure Y revenues, primarily due to increased capital outlay and debt service associated with large, multi-year street projects. To manage these timing differences, the City has temporarily borrowed general revenues from the General Fund, with the expectation that future Measure Y revenues will replenish these balances as debt service and capital spending normalize.

Overall, the chart demonstrates that Measure Y has enabled the City to make substantial investments in its street network, while the use of interfund borrowing reflects a planned cash-flow strategy rather than a structural shortfall in the Measure Y program.

Revenues and Available Resources
Measure Y generated $3.32 million in FY 2024–25, consistent with recent years and reflecting the City’s stable sales tax base. Including other financing sources, total revenues for FY 2024–25 were $3.32 million, supporting ongoing maintenance and major reconstruction activities across the street network.

Since inception, Measure Y has produced more than $20.6 million in dedicated streets revenue, allowing the City to significantly expand the scope and frequency of roadway improvements beyond what could be supported through State or General Fund sources alone.

Operating Expenditures
Operating expenditures totaled $854,427 in FY 2024–25 and included:
 General and administrative costs associated with program administration.  Basic maintenance and operations totaling $1.03 million, offset by the General Fund maintenance-of-effort requirement established by City Council Resolution 2016-34.  Enhanced maintenance capacity of $266,491, reflecting reinvestment in improved engineering, project management, and pavement lifecycle planning.

Debt Service and Capital Projects
Measure Y supports both pay-as-you-go projects and long-term capital investments through debt financing.

FY 2024–25 capital-related expenditures totaled $2.45 million, including:
 I-Bank loan debt service of $75,106.
 Series 2022 Lease Revenue Bond debt service of $1.90 million (funding multi-year street rehabilitation packages).
 Capital project expenditures of $480,118, directed toward major roadway reconstruction, overlays, and curb, gutter, and sidewalk improvements.

Cumulative capital outlay funded by Measure Y since 2017 now exceeds $16.6 million, significantly improving pavement condition across City streets.

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Projects in Process
As of June 30, 2025, Measure Y had $37,537 in projects encumbered but not yet completed. These include multi-phase reconstruction projects and engineering design work for future capital cycles.

Change in Measure Y Resources
Measure Y ended FY 2024–25 with a resources balance of $(2,237,702), reflecting the planned use of accumulated reserves to complete major multi-year capital projects financed through the 2022 bond issuance. This negative year-end balance represents timing differences between expenditures and the inflow of future revenue streams dedicated to completed and ongoing projects and debt service.

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Note 2025 2024 2023 2022 2021 2020 2019 2018 2017 Total

OPERATING REVENUES
Measure Y 1/2 % transaction and use tax $ 3,315,697 $ 3,339,036 $ 3,450,586 $3,620,957 $3,862,145 $3,368,450 $3,016,205 $2,729,797 $ 528,057 $20,576,197 Other financing sources - 1,577,801 176,917 - - - - - - 176,917 Total revenues 3,315,697 4,916,837 3,627,503 3,620,957 3,862,145 3,368,450 3,016,205 2,729,797 528,057 13,504,654

OPERATING EXPENSES
General and administrative 30,228 37,883 37,088 80,857 10,251 17,733 10,150 5,444 9,134 170,657 Basic maintenance and operations 1,032,658 1,059,023 969,256 757,760 598,296 644,771 387,449 306,143 294,084 3,957,758 Enhanced capacity for maintenance and operations (3) 266,491 255,973 471,827 156,370 158,500 154,479 60,260 1,979 - 1,003,414 Less: general fund maintenance of effort (1) (474,950) (448,957) (448,957) (406,477) (399,840) (385,086) (375,597) (373,870) (350,000) (2,739,827) Total operating expenditures 854,427 903,922 1,029,213 588,510 367,207 431,897 82,262 (60,304) (46,782) 774,279

DEBT SERVICE AND CAPITAL PROJECTS
Debt service:

I-Bank 75,106 75,219 75,329 75,435 75,538 75,638 75,638 75,638 - 453,216 Series 2022 Lease Revenue Bonds (Street Projects) 1,895,800 1,899,200 1,896,522 - - - - - - 1,896,522 Projects 480,118 3,981,158 815,762 3,616,594 2,688,687 2,689,759 4,526,294 1,841,113 38,460 16,216,669 Total debt service and capital projects 2,451,024 5,955,577 2,787,613 3,692,029 2,764,225 2,765,397 4,601,932 1,916,751 38,460 16,669,886 Total expenditures, Measure Y 3,305,451 6,859,499 3,816,826 4,280,540 3,131,432 3,197,294 4,684,194 1,856,446 (8,322) 17,444,164 Change in Measure Y resources 10,246 (1,942,662) (189,324) (659,583) 730,714 171,156 (1,667,989) 873,351 536,379 (205,296) Measure Y resources - beginning as restated (2,247,948) (305,286) (15,972) 643,610 (87,103) (258,259) 1,409,729 536,379 - Measure Y resources - ending $ (2,237,702) $ (2,247,948) $ (205,296) $ (15,972) $ 643,610 $ (87,103) $ (258,259) $1,409,729 $ 536,379 PROJECTS IN PROCESS (see Note 2)
Reconstruction (2) $ 37,537 $ 83,288 $ 4,365,651
Maintenance - 173 22,369
Total projects in process $ 37,537 $ 83,461 $ 4,388,020 City of Ukiah
Comparative Schedule of Resources and Uses
Measure Y
For the Years Ended June 30, 2025, 2024, 2023, 2022, 2021, 2020, 2019, 2018, and 2017 Notes:
(1) This is the amount established by the City Council, per Resolution 2016-34, committing a minimum of $350,000 per year from the general fund on street maintenance and repair. That amount is to be adjusted annually by changes to the Construction Cost Index, as reported by the Engineering News-Record. (2) Projects in process are projects and activities that are in contract (encumbered) but which have not incurred expenditures as of June 30, 2025. (3) Measure Y resources for Public Works Engineering Services were enhanced in FY 2020 to support basic maintenance and operations due to increased focus on Measure Y activities.

Measure Y
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Internal Controls
Management is responsible for establishing and maintaining an internal control structure designed to ensure that the City’s assets are protected from loss, theft, or misuse and that financial transactions are properly recorded to allow for the preparation of financial statements in accordance with GAAP. Because the cost of internal controls should not outweigh their benefits, the City’s framework of internal controls is designed to provide reasonable, rather than absolute, assurance that the financial statements are free of material misstatement.

Independent Audit
State law requires that the City’s financial statements undergo an annual audit by an independent certified public accountant. The City engaged Van Lant & Fankhanel, LLP, a licensed independent public accounting firm, to perform this year’s audit. The auditor’s responsibility is to express an opinion on the fairness of the financial statements based on their audit. The auditor has issued an unmodified ("clean") opinion, which is included in the Financial Section.

Certificate of Achievement for Excellence in Financial Reporting The City of Ukiah has historically participated in the Government Finance Officers Association’s (GFOA) Certificate of Achievement for Excellence in Financial Reporting program. The City received the Certificate for its FY 2023-24 ACFR, reflecting the organization’s commitment to high-quality financial disclosure. This report has been prepared to meet the program’s standards, and the City will submit the FY 2024-25 ACFR for consideration.

Acknowledgements
The preparation of this ACFR reflects the dedicated efforts of the Finance & IT Department, particularly the Accounting Division, and the collaboration of departments citywide. We wish to recognize the professionalism, commitment, and teamwork of the entire Finance staff. Their work ensures that the City’s financial information is presented accurately, responsibly, and transparently.

We also extend our appreciation to the City’s independent auditors, Van Lant & Fankhanel, LLP, for their professionalism, responsiveness, and assistance throughout the audit process. Their expertise and collaboration were instrumental in the timely completion of this report.

We further thank the Mayor and City Council for your leadership and continued support of sound financial management and long-term fiscal sustainability.

Respectfully submitted,

SAGE SANGIACOMO, ICMA-CM
City Manager

DANIEL BUFFALO, MPA, CPA, CGMA
Finance Director
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GFOA CERTIFICATE OF ACHIEVEMENT
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LIST OF OFFICIALS
City of Ukiah, California
List of Officials
June 30, 2025

CITY COUNCIL
Doug Crane Mayor
Susan Sher Vice Mayor
Mari Rodin Council Member
Juan Orozco Council Member
Heather Criss Council Member

EXECUTIVE MANAGEMENT TEAM
Sage Sangiacomo City Manager
Shannon Riley Deputy City Manager
David Rapport City Attorney
Kristine Lawler City Clerk
Thomas Corning Chief of Police
Doug Hutchison Fire Authority Chief
Daniel Buffalo Finance Director
Sheri Mannion Human Resources/Risk Management Director
Tim Eriksen Public Works Director/City Engineer
Craig Schlatter Community Development Director
Cindy Sauers Electric Utility Director
Sean White Water Resources Director
Neil Davis Community Services Director
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ORG CHART
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FINANCIAL SECTION
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Independent Auditor’s Report
The Honorable City Council
City of Ukiah, California
Report on the Financial Statements
Opinions
We have audited the accompanying financial statements of the governmental activities, business-type activities, each major fund, and the aggregate remaining fund information of the City of Ukiah (City), as of and for the year ended June 30, 2025, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.

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

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

Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to error or fraud.

In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter.
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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 accordance with generally accepted auditing standards and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements.

In performing an audit in accordance with generally accepted auditing standards and Government Auditing Standards, we:
 Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time.

We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit.

Required Supplementary Information
Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis and other required supplementary information, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the 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 do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance.

Supplementary Information
Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The accompanying combining statements and budget schedules, as listed in the table of contents, are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In 2 Attachment 1

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our opinion, the combining statements, as listed in the table of contents, are fairly stated, in all material respects, in relation to the basic financial statements as a whole.

Other Information
Management is responsible for the other information included in the annual report. The other information comprises the introductory and statistical sections but does not include the basic financial statements and our auditor’s report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon.

In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report.

Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued a report dated December 29, 2025, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the City’s internal control over financial reporting and compliance.

December 29, 2025
Murrieta, CA
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MANAGEMENT DISCUSSION AND ANALYSIS (MD&A)

INTRODUCTION AND PURPOSE
Management’s Discussion and Analysis (MD&A) is required supplementary information that accompanies the basic financial statements of the City of Ukiah (the City) for the fiscal year ended June 30, 2025. This narrative is intended to provide readers with an objective and easily readable analysis of the City’s financial activities, based on currently known facts, decisions, and conditions.

The MD&A should be read in conjunction with the City’s basic financial statements and the accompanying notes, which together provide a comprehensive presentation of the City’s financial position and results of operations in conformity with accounting principles generally accepted in the United States of America (GAAP) for governmental entities.

This discussion focuses on the City’s overall financial position, changes in net position, significant financial trends, major fund activity, budgetary results, capital asset and long-term debt activity, and other factors that may affect the City’s future financial condition. While the MD&A includes forward-looking statements based on management’s current expectations, actual results may differ due to changes in economic conditions, legislative actions, and other external factors beyond the City’s control.

FINANCIAL HIGHLIGHTS
The following financial highlights summarize the City’s overall financial performance and position for the fiscal year ended June 30, 2025. These highlights are intended to provide a high-level overview and should be read in conjunction with the detailed analysis and financial statements that follow.  The City’s total net position increased by $30.5 million, from $208.8 million at June 30, 2024 to $239.3 million at June 30, 2025, reflecting overall operating results for the year and the impact of capital investment, depreciation, and long-term obligations.
 Governmental activities reported an increase in net position of $6.9 million during the fiscal year, primarily driven by operating surpluses supported by tax revenues and intergovernmental funding, partially offset by continued investment in public safety, public works, and debt service.  Business-type activities reported an increase in net position of $23.6 million, reflecting strong operating results across the City’s enterprise operations, significant capital contributions and investment in utility infrastructure, and the ongoing management of debt service obligations.  The General Fund reported an ending fund balance of $10.7 million at June 30, 2025, reflecting a decrease of approximately $0.9 million from the prior year. Actual results were modestly below the final amended budget, primarily due to revenue shortfalls in taxes, fees, and intergovernmental revenues, partially offset by expenditure savings in several functional areas.
 The City continued to invest significantly in capital assets during the fiscal year, with total capital assets (net of accumulated depreciation) increasing by $36.4 million to $333.0 million at June 30, 2025. This increase was driven primarily by continued investment in utility infrastructure, construction in progress, and infrastructure and network assets across both governmental and business-type activities.  Known economic and operational factors expected to affect future periods include a mixed regional and statewide economic outlook. The Ukiah area and broader Mendocino County continue to experience labor market tightness in certain sectors and elevated operating costs, while economic growth remains 4 Attachment 1

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moderate4
. Statewide, California is experiencing slower employment growth, persistent cost pressures related to inflation, and ongoing uncertainty surrounding state revenues and budgetary priorities. These conditions may affect consumer behavior, taxable sales, intergovernmental funding levels, and the cost of delivering municipal services, and will be monitored closely as the City develops future budgets and longterm financial plans.

OVERVIEW OF THE BASIC FINANCIAL STATEMENTS
This Annual Comprehensive Financial Report (ACFR) is presented in three major sections:

1. Introductory Section, which includes the Letter of Transmittal and general information about the City;

2. Financial Section, which includes Management’s Discussion and Analysis (MD&A), the Basic Financial Statements (government-wide and fund financial statements), the notes to the financial statements, and combining and individual fund financial statements and schedules; and

3. Statistical Section, which provides financial, demographic, and economic information about the City and surrounding community, including assessed valuation, tax rates, outstanding debt, population, and per capita income data.

Management’s Discussion and Analysis is intended to serve as an introduction to the financial section. This section includes financial highlights, an overview of the government-wide and fund financial statements, a discussion of General Fund budgetary results, and an analysis of the City’s financial condition and operating results.

GOVERNMENT-WIDE FINANCIAL STATEMENTS
The government-wide financial statements provide a broad overview of the City’s operations and are comprised of the Statement of Net Position and the Statement of Activities. These statements are prepared using the economic resources measurement focus and the accrual basis of accounting, similar to private-sector accounting, and therefore include all assets, capital assets, liabilities, and long-term obligations.

The Statement of Net Position presents the financial position of the City as a whole, while the Statement of Activities presents the change in net position for the fiscal year. The Statement of Activities reports expenses by function or activity and demonstrates how those activities were financed through program revenues, such as charges for services and operating or capital grants, versus general revenues. This presentation allows readers to evaluate the degree to which each activity was self-supporting during the year.

City activities are reported as either governmental activities or business-type activities. Governmental activities include general government, public safety, housing and community development, public works, parks, buildings, and grounds, recreation and culture, and economic development and redevelopment. These activities are generally supported by taxes and intergovernmental revenues.
4 Economic Conditions Reference: This discussion is informed by publicly available economic data and forecasts, including regional labor market statistics published by the California Employment Development Department (EDD) for Mendocino County and statewide economic outlooks and fiscal analyses published by the California Department of Finance, the Legislative Analyst’s Office (LAO), and the UCLA Anderson Forecast. 5 Attachment 1

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Business-type activities include airport, ambulance, conference center, electric, golf course, landfill, parking district, street lighting, wastewater, and water operations. These activities are intended to recover all or a significant portion of their costs through user charges.

The City’s governmental activities also include the housing activities of the former Ukiah Redevelopment Agency.

Upon dissolution of the redevelopment agency on February 1, 2012, the City elected to serve as the successor agency. The assets and liabilities of the former agency are reported in a private-purpose trust fund and are not included in the government-wide financial statements.

FUND FINANCIAL STATEMENTS
The fund financial statements provide more detailed information than the government-wide statements and focus on the City’s major funds and short-term financial activities. Governmental fund statements report the City’s operations using the current financial resources measurement focus and the modified accrual basis of accounting and include the Balance Sheet and the Statement of Revenues, Expenditures, and Changes in Fund Balances.

Because governmental fund statements focus on near-term resources, reconciliations are provided to explain differences between governmental fund results and governmental activities reported in the government-wide financial statements.

Proprietary fund financial statements report business-type activities using the accrual basis of accounting and include the Statement of Net Position, Statement of Revenues, Expenses, and Changes in Net Position, and Statement of Cash Flows. The City’s enterprise funds are reported as proprietary funds.

For the fiscal year ended June 30, 2025, the City’s major funds were as follows:

Governmental Funds: General Fund; Streets Capital Projects Fund; General Capital Projects Fund; Pension Debt Service Fund.

Proprietary Funds: Landfill Fund (closure and post-closure); Electric Enterprise Fund; Water Enterprise Fund; Wastewater Enterprise Fund.

The City adopts an annual appropriated budget for all governmental and proprietary funds. Budgetary comparison statements for the General Fund and major governmental funds are presented as required supplementary information. Budgetary comparison statements for proprietary funds are not required and are not presented.

Fiduciary Financial Statements
The City’s fiduciary activities are reported in the Statement of Fiduciary Net Position and include custodial and private-purpose trust funds. These activities are excluded from the government-wide financial statements because the resources are not available to support the City’s own programs. The City has adopted the provisions of GASB Statement No. 84, Fiduciary Activities, in reporting these funds.

Notes and Other Supplementary Information
The notes to the financial statements provide information essential to understanding the government-wide and fund financial statements and follow the basic financial statements. In addition, this report includes combining and individual fund statements for non-major funds, which are presented after the notes section. 6 Attachment 1

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CONDENSED GOVERNMENT-WIDE FINANCIAL INFORMATION
This section presents condensed government-wide financial information for governmental activities, business-type activities, and the City as a whole for the fiscal years ended June 30, 2025 and 2024. The condensed information is intended to highlight changes in the City’s overall financial position and operating results.

During fiscal year 2025, the City’s total net position increased by approximately $30.5 million, from $208.8 million at June 30, 2024 to $239.3 million at June 30, 2025. This increase reflects a combination of positive operating results, significant capital grant activity, and continued investment in long-term infrastructure across both governmental and business-type activities.

Total assets increased by approximately $24.8 million. Capital assets, net of accumulated depreciation, increased by $36.4 million, driven primarily by substantial additions within business-type activities. Construction in progress increased significantly, reflecting active capital programs in the electric, water, wastewater, and recycled water utilities. These increases were partially offset by a $11.7 million decrease in current and other assets, reflecting the planned use of cash and short-term investments to fund operations, capital projects, and debt service.

Deferred outflows of resources decreased by $7.8 million, while deferred inflows of resources declined by $3.2 million. These changes were largely attributable to pension-related actuarial experience, assumption updates, and amortization of prior-year deferrals. Total liabilities declined by approximately $10.4 million, reflecting scheduled principal repayments on long-term debt, reductions in pension liabilities, and continued amortization of lease and bond premiums.
2025 2024 2025 2024 2025 2024 Current and other assets $ 55,981,538 $ 65,967,706 $ 38,205,937 $ 39,877,811 $ 94,187,475 $ 105,845,517 Capital assets(net) 88,551,759 74,825,422 244,471,674 221,779,856 333,023,433 296,605,278 Total assets 144,533,297 140,793,128 282,677,611 261,657,667 427,210,908 402,450,795 Deferred outflows of resources 9,181,813 16,395,423 2,485,192 3,081,900 11,667,005 19,477,323 Total assets and deferred outflows of resources 153,715,110 $ $ 157,188,551 $ 285,162,803 $ 264,739,567 $ 438,877,913 $ 421,928,118 Current and other liabilities $ 4,921,205 $ 7,482,818 $ 6,950,056 $ 8,432,107 $ 11,871,261 $ 15,914,925 Long-term liabilities 78,952,081 83,770,596 105,610,456 107,109,274 184,562,537 190,879,870 Total liabilities 83,873,286 91,253,414 112,560,512 115,541,381 196,433,798 206,794,795 Deferred inflows of resources 3,049,355 6,111,998 100,050 260,503 3,149,405 6,372,501 Total Liability and deferred inflows of resources 86,922,641 $ $ 97,365,412 $ 112,660,562 $ 115,801,884 $ 199,583,203 $ 213,167,296 NET POSITION Net investment in capital assets $ 47,675,326 $ 57,847,372 $ 184,184,355 $ 161,367,208 $ 231,859,681 $ 219,214,580 Restricted 35,319,615 42,596,682 1,103,258 876,480 36,422,873 43,473,162 Unrestricted (16,202,472) (40,620,915) (12,785,372) (13,306,005) (28,987,844) (53,926,920) Total net position $ 66,792,469 $ 59,823,139 $ 172,502,241 $ 148,937,683 $ 239,294,710 $ 208,760,822 Governmental Activities Business-type Activities Total
City of Ukiah, California
Net Position
June 30, 2024 and 2025
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Governmental activities reported an increase in net position of $7 million during fiscal year 2025. Total governmental revenues increased by approximately $6.2 million compared to the prior year, driven primarily by higher operating and capital grants, increased franchise fee revenues, and improved investment earnings. These gains were partially offset by modest declines in tax revenues, including sales tax and property tax, reflecting broader economic moderation. Governmental expenses increased by approximately $1.2 million, largely attributable to higher public safety costs and increased interest expense on long-term debt. Overall, governmental activities continued to demonstrate stable operating performance supported by a diversified revenue base.

Business-type activities reported an increase in net position of $23.6 million. Total business-type revenues declined by approximately $7.8 million compared to the prior year, primarily due to a reduction in capital grants and contributions following exceptionally high grant activity in fiscal year 2024. Despite this decline, business-type activities continued to generate strong operating revenues from charges for services. Total expenses increased by approximately $4.9 million, reflecting higher operating costs, depreciation, and expanded utility operations. 2025 2024 2025 2024 2025 2024

REVENUES
Program revenues:

Charges for Services $ 6,406,670 $ 6,636,393 $ 52,851,289 $ 45,161,614 $ 59,257,959 $ 51,798,007 Operating Grants and Contributions 8,477,365 5,317,289 4,203,038 1,816,385 12,680,403 7,133,674 Capital Grants and Contributions 4,193,350 1,980,842 19,185,413 36,912,950 23,378,763 38,893,792 General revenues: Taxes 18,806,003 19,078,432 8,129 17,515 18,814,132 19,095,947 Franchise fees 2,729,411 2,307,901 - - 2,729,411 2,307,901 Use of money and property 1,427,439 553,104 916,853 811,963 2,344,292 1,365,067 Other revenue 338,777 286,078 109,262 322,302 448,039 608,380 Total revenues 42,379,015 36,160,039 77,273,984 85,042,729 119,652,999 121,202,768

EXPENSES
Governmental activities:

General government 6,272,993 4,690,322 - - 6,272,993 4,690,322 Public safety 14,609,188 13,937,325 - - 14,609,188 13,937,325 Housing and community development 2,289,459 1,926,206 - - 2,289,459 1,926,206 Public works 2,105,123 3,305,509 - - 2,105,123 3,305,509 Parks, buildings, and grounds 2,125,997 2,274,407 - - 2,125,997 2,274,407 Recreation and culture 4,818,729 5,801,543 - - 4,818,729 5,801,543 Economic development and redevelopment 193,684 207,310 - - 193,684 207,310 Interest on long-term debt 4,389,293 3,479,002 - - 4,389,293 3,479,002 Business-type activities:

Parking District - - 138,626 125,590 138,626 125,590
Landfill - - 1,268,936 1,630,530 1,268,936 1,630,530
Ambulance Services - - 3,185,496 1,860,404 3,185,496 1,860,404 Golf - - 218,229 228,916 218,229 228,916
Conference Center - - 589,884 557,924 589,884 557,924
Airport - - 1,982,932 1,926,596 1,982,932 1,926,596
Electric - - 24,389,929 23,062,949 24,389,929 23,062,949 Street Lighting - - 253,247 157,324 253,247 157,324 Water - - 10,025,713 8,438,575 10,025,713 8,438,575 Wastewater - - 10,261,653 9,471,702 10,261,653 9,471,702 Total expenses 36,804,466 35,621,624 52,314,645 47,460,510 89,119,111 83,082,134 Change in net position before special items and transfers 5,574,549 538,415 24,959,339 37,582,219 30,533,888 38,120,634 Transfers 1,394,781 (836,695) (1,394,781) 836,695 - - Change in net position 6,969,330 (298,280) 23,564,558 38,418,914 30,533,888 38,120,634 Net position - beginning, as previously reported 59,823,139 60,268,627 148,937,683 111,146,188 208,760,822 171,414,815 Restatement for correction of an error - (147,208) - (627,419) (774,627) Net position - beginning, as restated 59,823,139 60,121,419 148,937,683 110,518,769 208,760,822 170,640,188 Total net position - ending $ 66,792,469 $ 59,823,139 $ 172,502,241 $ 148,937,683 $ 239,294,710 $ 208,760,822 City of Ukiah
Comparative Changes in Net Position
June 30, 2024 and 2025
Governmental Activities Business-type Activities Total
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Significant capital contributions and ongoing rate-supported operations contributed to the overall growth in net position.

A substantial portion of the increase in business-type net position was attributable to capital investment associated with major infrastructure initiatives, including continued activity related to Phase 4 of the City’s Recycled Water Project. These investments increased the City’s net investment in capital assets while strengthening long-term service capacity and regulatory compliance.

Overall, the condensed government-wide financial information reflects continued strengthening of the City’s financial position during fiscal year 2025, supported by sustained operating performance, disciplined financial management, and significant long-term capital investment.

ANALYSIS OF CHANGES IN NET POSITION AND FINANCIAL RESULTS This section provides management’s analysis of changes in net position for governmental activities and businesstype activities, including significant revenue and expenditure trends, major drivers of operating results, and other factors affecting the City’s overall financial performance.

The City’s change in net position during fiscal year 2025 reflects how resources were generated and applied across major governmental and enterprise functions, as presented in the accompanying schedules of program revenues and expenses and revenues by source.

Functions/Programs Expenses % of Total
Program
Revenues % of Total
Net (Expense)
Revenue
General government $ 6,272,993 17.04% 853,802 $ 4.48% (5,419,191) $ Public safety 14,609,188 39.69% 5,254,969 27.55% (9,354,219) Housing and community development 2,289,459 6.22% 2,534,424 13.28% 244,965 Public works 2,105,123 5.72% 5,679,118 29.77% 3,573,995 Parks, buildings, and grounds 2,125,997 5.78% 352,729 1.85% (1,773,268) Recreation and culture 4,818,729 13.09% 4,152,343 21.77% (666,386) Economic development and redevelopment 193,684 0.53% 250,000 1.31% 56,316 Interest on long-term debt 4,389,293 11.93% - 0.00% (4,389,293) Total $ 36,804,466 100.00% 19,077,385 $ 100.01% (17,727,081) $ City of Ukiah
Expenses and Program Revenues
Governmental Activities
June 30, 2025
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Governmental activities reported total expenses of $36.8 million. Public safety remained the largest functional area, accounting for approximately 40 percent of total governmental expenditures, reflecting personnel-driven costs associated with police and fire services. General government activities represented approximately 17 percent of total expenses, supporting administrative, financial, and internal service functions. Recreation and culture, interest on long-term debt, and parks, buildings, and grounds also represented notable expenditure categories.

Program revenues for governmental activities totaled $19.1 million, offsetting approximately 52 percent of total expenses. Public works and housing and community development activities generated program revenues in excess of direct expenses, primarily due to operating and capital grant funding supporting infrastructure, transportation, and housing-related programs. In contrast, public safety and general government functions relied heavily on general revenues, resulting in net program costs of approximately $9.4 million and $5.4 million, respectively. 10 Attachment 1

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Total governmental revenues were $42.4 million. Sales tax was the largest single revenue source, representing approximately 31 percent of total revenues, followed by operating grants and contributions at 20 percent and charges for services at 15 percent. Franchise fees, transient occupancy taxes, property taxes, and other revenues provided additional diversification within the City’s general revenue structure.

Revenues Source Revenue % of Total
Charges for Services $ 6,406,670 15.12%
Operating Grants and Contributions 8,477,365 20.00%
Capital Grants and Contributions 4,193,350 9.89%
Property tax 4,190,036 9.89%
Sales tax 12,985,608 30.64%
Franchises 2,729,411 6.44%
Transient occupancy 1,140,527 2.69%
Business license 489,157 1.15%
Other taxes 675 0.00%
Use of money and property 1,427,439 3.37%
Other revenue 338,777 0.80%
Total $ 42,379,015 100.00%
City of Ukiah
Revenues by Source
Governmental Activities
For the Year Ended June 30, 2025
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Business-type activities reported total expenses of $52.3 million and total program revenues of $76.2 million, resulting in net program revenues of approximately $23.9 million. Charges for services represented the primary revenue source for enterprise operations, accounting for more than 68 percent of total business-type revenues, supplemented by significant capital grants and contributions associated with major utility and infrastructure projects.

Business-type Activities Expenses % of Total
Program
Revenues % of Total
Net (Expense)
Revenue
Parking District $ 138,626 0.26% 120,396 $ 0.16% (18,230) $ Landfill 1,268,936 2.43% 616,313 0.81% (652,623)
Ambulance Services 3,185,496 6.09% 3,175,593 4.17% (9,903) Golf 218,229 0.42% 40,000 0.05% (178,229)
Conference Center 589,884 1.13% 479,648 0.63% (110,236) Airport 1,982,932 3.79% 1,909,732 2.50% (73,200)
Electric 24,389,929 46.62% 32,814,390 43.04% 8,424,461
Street Lighting 253,247 0.48% 193,948 0.25% (59,299)
Water 10,025,713 19.16% 27,019,244 35.44% 16,993,531 Wastewater 10,261,653 19.62% 9,870,476 12.95% (391,177) Total $ 52,314,645 100.00% 76,239,740 $ 100.00% 23,925,095 $ City of Ukiah
Expenses and Program Revenues
Business-Type Activities
June 30, 2025
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The electric utility was the City’s largest enterprise activity, accounting for approximately 47 percent of total business-type expenses and generating net program revenues of approximately $8.4 million. Water and wastewater utilities together represented approximately 39 percent of total enterprise expenses and generated combined net program revenues of approximately $16.6 million, reflecting rate-supported operations and continued investment in utility infrastructure. Smaller enterprise activities, including airport, conference center, parking, landfill, and ambulance services, operated with modest net costs or near break-even results that are managed within the broader enterprise fund structure.

Revenues Source Revenue % of Total
Charges for Services $ 52,851,289 68.39%
Operating Grants and Contributions 4,203,038 5.44%
Capital Grants and Contributions 19,185,413 24.83%
Taxes 8,129 0.01%
Use of money and property 916,852 1.19%
Other revenue 109,262 0.14%
Total $ 77,273,983 100.00%
City of Ukiah
Revenues by Source
Business-Type Activities
For the Year Ended June 30, 2025
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Overall, these results demonstrate that governmental activities continue to rely primarily on general revenues to fund core municipal services, while business-type activities are largely self-supporting through user charges and capital contributions and were a significant contributor to the City’s overall increase in net position during fiscal year 2025.

ANALYSIS OF MAJOR INDIVIDUAL FUNDS
This section provides an overview and analysis of the City’s major governmental and proprietary funds, focusing on significant changes in fund balances or net position and the reasons for those changes.

Major Governmental Funds
The City’s major governmental funds include the General Fund, Streets Capital Projects Fund, General Capital Projects Fund, and Pension Debt Service Fund.

The General Fund is the City’s primary operating fund and accounts for core municipal services, including public safety, general government, and community services. For the fiscal year ended June 30, 2025, the General Fund reported total revenues of approximately $33.1 million and total expenditures of approximately $32.3 million, resulting in an excess of revenues over expenditures of approximately $0.8 million. After accounting for net transfers out of $1.7 million, the General Fund reported a net decrease in fund balance of $0.9 million and an ending fund balance of $10.7 million. The ending fund balance included approximately $7.2 million in unassigned fund balance, providing flexibility to address operating needs and contingencies.

The Streets Capital Projects Fund accounts principally for expenditures related to Measure Y, which is a voterapproved general transaction and use tax that has been prioritized by the City Council for the maintenance and improvement of streets and public rights-of-way. During fiscal year 2025, the fund reported a modest increase in fund balance - although it still reports a negative fund balance, reflecting the timing of Measure Y revenues relative to project expenditures. Fund activity was driven primarily by capital outlay for street and right-of-way improvements.
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The General Capital Projects Fund accounts for the acquisition and construction of major governmental capital facilities and infrastructure projects. During fiscal year 2025, this fund reported an increase in fund balance of approximately $1.5 million, reflecting grant revenues and transfers in excess of capital expenditures incurred during the year. Fund balances remained restricted for capital project purposes at year-end.

The Pension Debt Service Fund is used to account for the repayment of pension-related debt obligations. During fiscal year 2025, the fund reported a positive change in fund balance of approximately $0.1 million, with revenues and transfers sufficient to cover scheduled principal and interest payments. The ending fund balance of $4.4 million was assigned for pension debt service purposes.

Major Proprietary Funds
The City’s major proprietary funds include the Landfill Fund (closure and post-closure), Electric Enterprise Fund, Water Enterprise Fund, and Wastewater Enterprise Fund.

The Landfill Fund accounts for closure and post-closure care activities associated with the City’s landfill operations. At June 30, 2025, the Landfill Fund reported a net position deficit of $11.0 million, reflecting the longterm nature of closure and post-closure liabilities. During the year, the fund reported an operating loss of approximately $0.6 million; however, nonoperating revenues and transfers resulted in a modest increase in net position. Cash flows were primarily associated with regulatory compliance, monitoring activities, and payments to reduce landfill closure liabilities.

The Electric Enterprise Fund is the City’s largest proprietary fund and accounts for the operation and maintenance of the municipal electric utility. For fiscal year 2025, the Electric Fund reported operating income of approximately $5.0 million and total net position of $44.7 million. Operating revenues were driven by charges for services, while nonoperating revenues, including grants and interest earnings, further strengthened financial results. The fund generated positive cash flows from operating activities of approximately $6.3 million, supporting ongoing capital investment and debt service.

The Water Enterprise Fund accounts for the City’s water utility operations, including treatment, distribution, and capital investment. During fiscal year 2025, the Water Fund reported near break-even operating results, followed by a significant increase in net position of approximately $17.1 million, driven primarily by capital grants and contributions associated with major infrastructure projects. The fund’s net position at year-end totaled approximately $82.3 million. Capital investment and construction in progress remained significant during the year.

The Wastewater Enterprise Fund accounts for wastewater collection, treatment, and disposal services. For fiscal year 2025, the Wastewater Fund reported a decrease in net position of approximately $1.8 million, reflecting operating and nonoperating costs partially offset by capital contributions. The fund’s financial activity was influenced by continued capital investment, including significant activity related to Phase 4 of the City’s Recycled Water Project, and by debt service requirements associated with prior capital improvements. 15 Attachment 1

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GENERAL FUND BUDGETARY HIGHLIGHTS
This section presents an analysis of the General Fund’s budgetary performance for the fiscal year ended June 30, 2025, including comparisons of original and final budgets to actual results and explanations of significant variances.

The General Fund’s final amended budget for fiscal year 2025 anticipated total revenues of $34.9 million and total expenditures of $33.4 million, resulting in a budgeted excess of revenues over expenditures of $1.6 million. Actual General Fund revenues totaled $33.1 million, which was $1.8 million below the final amended budget, primarily due to shortfalls in taxes, fees, and intergovernmental revenues. Sales and other economically sensitive revenues were below projections, reflecting broader economic conditions during the fiscal year.

Actual General Fund expenditures totaled $32.3 million, which was $1.1 million below the final amended budget.

Savings were realized across several functional areas, including public safety, general government, and recreation and culture, partially offset by higher-than-budgeted costs in housing and community development and parks, buildings, and grounds. Capital outlay expenditures were also below budget due to project timing.

After accounting for transfers out of $1.7 million, the General Fund reported a net decrease in fund balance of $0.9 million for the year, compared to a budgeted decrease of $0.7 million. The General Fund ended the fiscal year with a fund balance of $10.7 million, which remains sufficient to support ongoing operations, address contingencies, and provide financial flexibility as the City plans for future budgetary and operational needs. 16 Attachment 1

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CAPITAL ASSETS AND LONG-TERM DEBT ACTIVITY
This section summarizes the City’s capital asset activity and long-term debt obligations, including significant additions, disposals, depreciation, new debt issuances, retirements, and other relevant financing activities.

During fiscal year ended June 30, 2025, the City continued to make substantial investments in capital assets, reflecting its ongoing commitment to maintaining and expanding core infrastructure and utility systems. Total capital assets, net of accumulated depreciation, increased by $36.4 million, from $296.6 million at June 30, 2024 to $333.0 million at June 30, 2025. The majority of this growth occurred within business-type activities, driven by continued investment in water, wastewater, electric, and recycled water infrastructure.

Construction in progress increased significantly, reflecting active capital programs across multiple enterprise funds.

Notable activity included continued progress on Phase 4 of the City’s Recycled Water Project, as well as ongoing utility system upgrades and infrastructure expansion. Infrastructure and network assets also increased during the year, reflecting completed projects placed into service. Governmental activities experienced more modest growth in capital assets, primarily related to transportation infrastructure, facilities, and equipment acquisitions.

At June 30, 2025, the City reported total long-term obligations of $184.6 million, a decrease of approximately $6.3 million from the prior year. Business-type activities accounted for $105.6 million of total long-term obligations, primarily related to revenue bonds, state revolving fund loans, and lease revenue bonds issued to finance utility and infrastructure projects. Governmental activities reported long-term obligations of $79.0 million, consisting primarily of lease revenue bonds, pension-related liabilities, and equipment leases.

During the fiscal year, the City continued to reduce outstanding debt through scheduled principal repayments on bonds, loans, and leases. Reductions were also reflected in the City’s total pension liability, which declined during the year as a result of actuarial experience and contributions made in excess of required amounts. Landfill closure and post-closure liabilities increased modestly, consistent with updated cost estimates and regulatory requirements.
2025 2024 2025 2024 2025 2024
Land $ 5,675,250 $ 4,596,065 $ 8,051,152 $ 8,051,152 $ 13,726,402 $ 12,647,217 Intangible assets - - 720,000 270,000 720,000 270,000
Construction in progress 15,999,967 7,547,345 70,523,375 51,265,537 86,523,342 58,812,882 Buildings and improvements 22,311,378 21,938,365 63,462,681 63,789,794 85,774,059 85,728,159 Technology subscriptions 1,980,270 1,382,407 - - 1,980,270 1,382,407 Machinery equipment and vehicles 13,193,975 11,487,723 16,597,530 15,701,245 29,791,505 27,188,968 Infrastructure and network 78,999,387 74,070,077 187,899,476 179,913,589 266,898,863 253,983,666 138,160,227 121,021,982 347,254,214 318,991,317 485,414,441 440,013,299 Less: accumulated depreciation and amortizations (49,608,468) (46,196,560) (102,782,540) (97,211,461) (152,391,008) (143,408,021) Capital assets, net $ 88,551,759 $ 74,825,422 $ 244,471,674 $ 221,779,856 $ 333,023,433 $ 296,605,278 City of Ukiah, California
Comparative Statement of Capital Assets
June 30, 2025 and 2024
Governmental Activities Business-type Activities Total
17 Attachment 1

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Overall, the City’s capital and long-term debt activity during fiscal year 2025 reflects a balanced approach to infrastructure investment and debt management, with continued reliance on grants, capital contributions, and ratesupported financing to fund major projects while maintaining a manageable long-term obligation profile.

DISCUSSION OF MATERIAL IMPACTS FROM MAJOR GASB IMPLEMENTATIONS This section summarizes the material financial reporting impacts of recently implemented or newly effective GASB statements, including their effects on the City’s financial statements and net position.

The Governmental Accounting Standards Board (GASB) periodically issues statements to enhance the financial reporting of governmental entities. The City has implemented, or is currently evaluating, the impact of the following GASB statements on its financial statements and related disclosures.

Recently Implemented Pronouncements
GASB Statement No. 101 – Compensated Absences. GASB Statement No. 101, effective for fiscal years beginning after December 15, 2023, updates the accounting and financial reporting guidance for compensated absences. The City evaluated its existing compensated absence policies, including vacation and other leave benefits, and determined that the application of GASB 101 did not result in a material change to the City’s financial statements.

Accordingly, implementation of this standard did not have a significant impact on the City’s net position or fund balances for fiscal year 2025.

GASB Statement No. 102 – Certain Risk Disclosures. GASB Statement No. 102, effective for fiscal years beginning after June 15, 2024, requires enhanced disclosures related to concentrations and constraints that could result in vulnerability to the risk of a substantial impact. As of June 30, 2025, management evaluated the applicability of this 2025 2024 2025 2024 2025 2024
2017 CalTrans Aeronautics Loan - Airport $ 115,503 - $ $ 126,920 $ 115,503 $ 126,920 Electric Revenue Bonds - - - - 2016 Water Revenue Refunding Bonds - 6,745,000 7,205,000 6,745,000 7,205,000 2016 unamortized premium - 1,047,453 1,142,676 1,047,453 1,142,676 2006 Wastewater Revenue Bonds - - - - 2006 unamortized premium - - - - Lawsuit settlement liability - - - - Landfill closure and post-closure - 22,483,193 21,936,738 22,483,193 21,936,738 2017 SWRCB recycled water loan - 16,108,633 16,648,813 16,108,633 16,648,813 Series 2020 Wastewater Refunding Bonds - 17,663,000 19,206,000 17,663,000 19,206,000 Series 2022 Lease Revenue Bonds (Utilities Projects) - 8,770,000 8,770,000 8,770,000 8,770,000 2022 Utilities unamortized premium - Utilities Projects - 951,786 1,011,272 951,786 1,011,272 Series 2022 Electric Revenue Bonds - 8,550,000 8,880,000 8,550,000 8,880,000 2022 Electric unamortized premium - 883,209 938,409 883,209 938,409 2024 Ambulance and emergency equipment lease (direct borrowing) 658,888 - 658,888 2017 fire engine lease 308,262 426,313 - 308,262 426,313 2017 computer equipment lease - - - - 2017 I-Bank financing lease 3,380,867 3,478,158 - 3,380,867 3,478,158 Technology subscription liability 809,530 613,386 - 809,530 613,386 2020 fire brush truck equipment lease 120,598 143,035 - 120,598 143,035 2020 fire self-contained breathing apparatus equipment 199,190 232,675 - 199,190 232,675 Series 2020A Community Facilities Lease Revenue Bonds 2,010,000 2,105,000 - 2,010,000 2,105,000 2020A unamortized premium 280,904 298,460 - 280,904 298,460 Series 2020B CalPERS Taxable Lease Revenue Bonds 29,468,382 30,333,090 15,856,618 16,321,910 45,325,000 46,655,000 Series 2022 Lease Revenue Bonds (Street Projects) 11,385,000 12,770,000 - 11,385,000 12,770,000 2022 unamortized premium- Streets Projects 1,006,419 1,174,156 - 1,006,419 1,174,156 Series 2022 Lease Revenue Bonds (Corporation Yard Projects) 14,045,000 14,335,000 - 14,045,000 14,335,000 2022 unamortized premium-Corp Yard Projects 1,052,773 1,093,264 - 1,052,773 1,093,264 Claims payable - - - - Total pension liability 13,434,818 15,501,374 5,021,254 4,219,844 18,456,072 19,721,218 Compensated absences 1,450,338 1,266,685 755,919 701,692 2,206,257 1,968,377 Total $ 78,952,081 $ 83,770,596 $ 105,610,456 $ 107,109,274 $ 184,562,537 $ 190,879,870 Activities Activities Total Long-term Obligations
Two-Year Comparison Governmental Business-type
18 Attachment 1

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standard and determined that no material concentrations or constraints meeting the disclosure threshold were identified. As a result, no additional disclosures were required under GASB 102 for fiscal year 2025.

Upcoming Pronouncements
GASB Statement No. 103 – Financial Reporting Model Improvements. GASB Statement No. 103, effective for fiscal years beginning after June 15, 2025, introduces targeted improvements to the financial reporting model, including revisions to Management’s Discussion and Analysis (MD&A) and the presentation of certain financial information. The City is in the process of evaluating the impact of GASB 103 on future financial reporting, particularly with respect to the structure and content of the MD&A. While implementation is not expected to materially affect the City’s financial position, it may result in changes to the organization and presentation of future reports.

GASB Statement No. 104 – Disclosure of Certain Capital Assets. GASB Statement No. 104, effective for fiscal years beginning after June 15, 2025, requires enhanced disclosures for certain types of capital assets within the notes to the financial statements. The City is currently evaluating the applicability of this standard and does not anticipate a material impact on the reported amounts of capital assets; however, additional note disclosures may be required in future fiscal years.

The City will continue to monitor the impact of these and other GASB pronouncements and will implement applicable standards as required to ensure continued compliance with generally accepted accounting principles.

ECONOMIC FACTORS AND NEXT YEAR’S BUDGET
The City of Ukiah continues to benefit from a diverse economic base and its role as a regional service, employment, and commercial center for Mendocino County and the surrounding area. As a result, the City’s revenue performance remains closely linked to the financial health and stability of local residents, businesses, and visitors. City management continues to apply a conservative and disciplined approach to revenue forecasting and expenditure planning, an approach that proved effective during fiscal year 2025 and remains central to the development of the fiscal year 2026 budget.

In preparing the upcoming fiscal year budget, management evaluated a number of economic and operational factors that are expected to influence the City’s financial condition:
 Sales Tax and Transient Occupancy Tax (TOT). Sales tax and TOT revenues are expected to experience modest growth, reflecting steady local economic activity and continued normalization of travel and tourism-related spending. While these revenues remain among the City’s most economically sensitive sources, budgeted General Fund expenditures have been structured conservatively to maintain operating flexibility and adequate reserves in the event of revenue volatility.  Water and Wastewater Rates. Fiscal year 2025 represented the fifth year of the City’s established fiveyear rate adjustment program for water and wastewater services. These adjustments were designed to address increasing operating costs and fund planned capital improvements. The City Council approved rate adjustments effective July 1, 2025 for sewer, to ensure continued cost recovery, regulatory compliance, and long-term system sustainability. The Ukiah Valley Water Authority, to which the City Council has deferred its water rate setting authority, has approved adjustments to water rates, which are currently going through the Prop 218 protest period.
 Electric Utility Rates. Electric enterprise revenues are projected to increase as a result of the ongoing implementation of a multi-year rate adjustment strategy. In addition, power purchase surcharges, which are reviewed and adopted on a quarterly basis, are expected to continue. Volatility in wholesale energy 19 Attachment 1

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markets and upward pressure on operating costs may necessitate future rate adjustments to preserve the financial stability of the electric utility.
 Property Tax Growth. Property tax revenues are projected to grow by approximately 2 percent, reflecting stable assessed valuation trends and continued strength in the local real estate market.  Fee Schedule Adjustments. Updates to the City’s fee schedule are expected to improve cost recovery for services provided and generate incremental revenues, consistent with applicable legal requirements and City Council policy direction.
 Personnel Costs. Personnel-related expenditures, including wages, health insurance premiums, and pension contributions, continue to represent a significant and growing portion of the City’s operating costs. Existing labor agreements are expected to result in an approximate 5 percent increase in personnel expenditures in the upcoming fiscal year.
 Inflationary Pressures. Although inflationary pressures have moderated relative to prior years, the City continues to monitor impacts on operating costs, construction pricing, and the affordability of services for residents and businesses.

Maintaining long-term fiscal sustainability remains a key objective of City management. While the City benefits from relatively stable core revenue sources, rising personnel costs, utility operating expenses, and capital infrastructure needs require ongoing financial discipline and strategic planning. Management remains committed to identifying efficiencies, monitoring economic trends, and diversifying revenue sources where appropriate to support continued service delivery.

The City will continue to balance the provision of high-quality municipal services with prudent financial management practices to ensure flexibility and resilience in the face of changing economic conditions.

REQUESTS FOR INFORMATION
This Annual Comprehensive Financial Report is intended to provide citizens, taxpayers, investors, and creditors with a general overview of the City’s finances. Questions regarding this report, or requests for additional information, should be directed to the Finance Department, City of Ukiah, California 95482. 20 Attachment 1

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GOVERNMENT-WIDE FINANCIAL STATEMENTS
21 Attachment 1

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Governmental Activities Business-type Activities Total
ASSETS
Current assets:

Cash and investments $ 11,249,311 $ 25,750,543 $ 36,999,854 Restricted cash and investments 10,447,098 2,214,874 12,661,972 Receivables (net allowance for uncollectibles) 5,700,632 12,313,880 18,014,512 Grants and intergovernmental receivable 1,504,844 6,240,710 7,745,554 Notes and loans receivable 1,242,765 - 1,242,765
Lease receivable 140,616 48,852 189,468
Internal balances 10,861,477 (10,861,477) -
Inventories and prepaids 289,067 2,498,555 2,787,622
Land held for resale 2,435,114 - 2,435,114
Total current assets 43,870,924 38,205,937 82,076,861
Noncurrent assets:

Notes and loans receivable 12,110,614 - 12,110,614
Land 5,675,250 8,051,152 13,726,402
Capacity rights - 720,000 720,000
Construction in progress 15,999,967 70,523,375 86,523,342 Buildings and improvements 11,542,736 23,985,115 35,527,851 Technology subscription 815,825 - 815,825
Machinery equipment and vehicles 5,242,971 6,024,289 11,267,260 Infrastructure and network 49,275,010 135,167,743 184,442,753 Total noncurrent assets 100,662,373 244,471,674 345,134,047 Total assets 144,533,297 282,677,611 427,210,908

DEFERRED OUTFLOWS OF RESOURCES
Pension related 9,181,813 2,485,192 11,667,005
Total deferred outflows of resources 9,181,813 2,485,192 11,667,005 Total assets and deferred outflows of resources 153,715,110 285,162,803 438,877,913

LIABILITIES
Current liabilities:

Accounts payable 2,894,962 5,626,279 8,521,241
Accrued payroll liabilities 1,230,927 322,316 1,553,243 Interest payable 588,583 723,180 1,311,763
Unearned revenue 206,733 - 206,733
Deposits payable - 278,281 278,281
Long-term liabilities due within one year 3,838,956 3,861,969 7,700,925 Total current liabilities 8,760,161 10,812,025 19,572,186 Noncurrent liabilities:

Due in more than one year 75,113,125 101,748,487 176,861,612 Total noncurrent liabilities 75,113,125 101,748,487 176,861,612 Total liabilities 83,873,286 112,560,512 196,433,798

DEFERRED INFLOWS OF RESOURCES
Lease related 140,616 48,852 189,468
Pension related 2,908,739 51,198 2,959,937
Total deferred inflows of resources 3,049,355 100,050 3,149,405 Total liabilities and deferred inflows of resources 86,922,641 112,660,562 199,583,203

NET POSITION
Net investment in capital assets 47,675,326 184,184,355 231,859,681 Restricted for:

Capital projects 13,071,400 - 13,071,400
Certifications and training 61,063 - 61,063
Community events 83,094 - 83,094
Debt service reserve 2,447,286 706,668 3,153,954
Governmental services 1,487,815 - 1,487,815
Housing and community development 15,548,633 - 15,548,633 NCPA Projects - 396,590 396,590
Public health services 302,037 - 302,037
Public safety 446,676 - 446,676
Public works 1,488,832 - 1,488,832
Solid waste abatement 123,917 - 123,917
Parks and recreation:

Expendable 12,333 - 12,333
Nonexpendable 246,529 - 246,529
Unrestricted (16,202,472) (12,785,372) (28,987,844)
Total net position $ 66,792,469 $ 172,502,241 $ 239,294,710 The accompanying notes are an integral part of these financial statements.

Primary Government
City of Ukiah, California
Statement of Net Position
June 30, 2025
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Functions/Programs Expenses Charges for Services
Operating Grants and
Contributions
Capital Grants and
Contributions Governmental Activities Business-type Activities Total Primary government:

Governmental activities:

General government $ 6,272,993 $ 439,490 $ 392,111 $ 22,201 $ (5,419,191) $ - $ (5,419,191) Public safety 14,609,188 201,416 5,053,553 - (9,354,219) - (9,354,219) Housing and community development 2,289,459 1,048,344 1,486,080 - 244,965 - 244,965 Public works 2,105,123 323,394 1,255,080 4,100,644 3,573,995 - 3,573,995 Parks, buildings, and grounds 2,125,997 101,143 181,081 70,505 (1,773,268) - (1,773,268) Recreation and culture 4,818,729 4,042,883 109,460 - (666,386) - (666,386) Economic development and redevelopment 193,684 250,000 - 56,316 - 56,316 Interest on long-term debt 4,389,293 - - - (4,389,293) - (4,389,293) Total governmental activities 36,804,466 6,406,670 8,477,365 4,193,350 (17,727,081) - (17,727,081) Business-type activities:

Parking District 138,626 120,396 - - - (18,230) (18,230) Landfill 1,268,936 616,313 - - - (652,623) (652,623)
Ambulance Services 3,185,496 3,175,106 487 - - (9,903) (9,903) Golf 218,229 40,000 - - - (178,229) (178,229)
Conference Center 589,884 479,648 - - - (110,236) (110,236) Airport 1,982,932 1,883,609 - 26,123 - (73,200) (73,200) Electric 24,389,929 27,950,707 4,184,243 679,440 - 8,424,461 8,424,461 Street Lighting 253,247 193,948 - - - (59,299) (59,299) Water 10,025,713 9,444,792 12,246 17,562,206 - 16,993,531 16,993,531 Wastewater 10,261,653 8,946,770 6,062 917,644 - (391,177) (391,177) Total business-type activities 52,314,645 52,851,289 4,203,038 19,185,413 - 23,925,095 23,925,095 Total primary government $ 89,119,111 $ 59,257,959 $ 12,680,403 $ 23,378,763 $ (17,727,081) $ 23,925,095 $ 6,198,014 4,190,036 8,129 4,198,165
12,985,608 - 12,985,608
2,729,411 - 2,729,411
1,140,527 - 1,140,527
489,157 - 489,157
675 - 675
1,427,439 916,853 2,344,292
338,777 109,262 448,039
1,394,781 (1,394,781) -
24,696,411 (360,537) 24,335,874
6,969,330 23,564,558 30,533,888
59,823,139 148,937,683 208,760,822
$ 66,792,469 $ 172,502,241 $ 239,294,710
- -
City of Ukiah, California
Statement of Activities
For the Year Ended June 30, 2025
Net (Expense) Revenue and Changes in Net Position
Program Revenues Primary Government
Sales tax
Franchises
General revenues:

Property tax
The accompanying notes are an integral part of these financial statements.

Transfers
Total general revenues, special items, and transfers
Change in net position
Net position - beginning
Net position - ending
Transient occupancy
Business license
Other taxes
Use of money and property
Other revenue
23 Attachment 1

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FUND FINANCIAL STATEMENTS
24 Attachment 1

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GOVERNMENTAL FUNDS
Major funds are defined generally as having significant activities or balances in the current year. The funds described below were determined to be Major Governmental Funds by the City for fiscal 2025. Individual nonmajor funds may be found in the Supplemental section.

General Fund
The General Fund is used for all the general revenues of the City not specifically levied or collected for other City funds, and the related expenditures. The major revenue sources for this Fund are property taxes, sales taxes, franchise fees, business licenses, unrestricted revenues from the state, fines and forfeitures and interest income.

Expenditures are made for community development, public safety, public works, and other services.

Streets Capital Improvement
This capital project fund accounts for street and right-of-way capital projects supported primarily by Measure Y resources, committed by the City Council through resolution.

General Capital Projects
This general capital projects fund was created in 2025 to account for bond proceeds and other resources for street and rights-of-way projects.

Pension Debt Service
This debt service fund was created in 2025 to account for resources accumulated, used, and reserved for the retirement of lease revenue bonds.
25 Attachment 1

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General Fund
Streets Capital
Improvements
General Capital
Projects
Pension Debt
Service
Total Nonmajor
Funds
Total Governmental
Funds
ASSETS
Cash and investments $ 1,996,796 $ 46,557 $ 448,829 $ 432,674 $ 8,516,385 $ 11,441,241 Accounts receivable 4,706,502 - - - 779,865 5,486,367
Lease receivable 140,616 - - - - 140,616
Notes receivable 2,040,281 - - - 11,313,098 13,353,379
Interest receivable 15,094 - 8,260 6,891 14,971 45,216
Grants and subventions receivable 165,968 - - - 963,978 1,129,946 Inventories and prepaids 43,224 - - - - 43,224
Due from other funds 209,820 - 2,000,000 1,000,000 1,281,906 4,491,726 Advances to other funds 3,119,946 - 2,981,372 3,000,000 - 9,101,318 Land held for resale - - - - 2,435,114 2,435,114
Capital grants, contributions, and subventions - - 319,788 - - 319,788 Total assets 12,438,247 46,557 5,758,249 4,439,565 25,305,317 47,987,935

LIABILITIES
Accounts payable 394,186 - 685,116 - 1,300,432 2,379,734 Accrued payroll liabilities 979,068 2,353 - - 2,780 984,201 Unearned revenues 206,733 - - - - 206,733
Due to other funds - 2,281,906 - - 34,556 2,316,462
Advance from other funds - - - - 445,106 445,106
Total liabilities 1,579,987 2,284,259 685,116 - 1,782,874 6,332,236

DEFERRED INFLOWS OF RESOURCES
Lease related 140,616 - - - - 140,616
Unavailable revenues - grants and subventions 61,381 - 70,946 - 2,390,650 2,522,977 Total deferred inflows of resources 201,997 - 70,946 - 2,390,650 2,663,593 Total liabilities and deferred inflows of resources 1,781,984 2,284,259 756,062 - 4,173,524 8,995,829

FUND BALANCES (DEFICITS)
Nonspendable:

Interfund loans 3,119,946 - - - - 3,119,946
Inventories and prepaids 43,224 - - - - 43,224
Riparian corridor management - - - - 137,576 137,576
Restricted:

Capital projects - - 5,002,187 - 4,528 5,006,715
CDBG activities - - - - 997,685 997,685
Certifications and training - - - - 61,063 61,063
Clean-up and solid waste remediation - - - - 123,917 123,917 Debt service reserve - - - - 2,447,286 2,447,286
Downtown business improvements - - - - 1,579 1,579
Housing activities - - - - 14,549,369 14,549,369
Opioid settlement - - - - 302,037 302,037
Project reserve - - - - 14,803 14,803
Public safety - - - - 446,676 446,676
Riparian corridor management - - - - 12,333 12,333
Special recreation events - - - - 83,094 83,094
Streets and rights-of-way - - - - 1,488,832 1,488,832
Wildfire mitigation 246,529 - - - - 246,529
Committed:

Park development - - - - 43,849 43,849
Planning activities - - - - 363,802 363,802
Solid waste management - - - - 10,934 10,934
Assigned:

Capital projects - - - - 70,370 70,370
Equipment reserve - - - - 389,558 389,558
Park development - - - - 24,852 24,852
Pension reserve - - - 4,439,565 - 4,439,565
Special projects - - - - 459,061 459,061
Unassigned 7,246,564 (2,237,702) - - (901,411) 4,107,451 Total fund balances (deficits) 10,656,263 (2,237,702) 5,002,187 4,439,565 21,131,793 38,992,106 Total liabilities and fund balances (deficits) $ 12,438,247 $ 46,557 $ 5,758,249 $ 4,439,565 $ 25,305,317 $ 47,987,935 The accompanying notes are an integral part of these financial statements.

City of Ukiah, California
Balance Sheet
Governmental Funds
June 30, 2025
26 Attachment 1

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$ 38,992,106
Capital assets 125,623,468
Accumulated depreciation (48,216,039)
77,407,429
Compensated absences (825,859)
Technology subscriptions (809,530)
2017 fire engine lease (308,262)
2017 I-Bank financing lease (3,380,867)
2020 Fire brush truck (120,598)
Fire aparatus (199,190)
2020B CalPERS Taxable Lease Revenue Bonds (29,468,382)
2022 Lease Revenue Bonds (12,391,419)
Net pension liability (13,434,818)
(60,938,925)
Deferred outflows - pension related items 9,181,813
Deferred inflows - pension related items (2,908,739)
6,273,074
2,978,554
2,978,554
(442,746)
2,522,977 2,080,231
$ 66,792,469
The accompanying notes are an integral part of these financial statements.

Net position of governmental activities
Accrued interest on long-term debt is not due and payable in the current period and is not reported in the funds.

Internal service funds are used by management to charge the costs of certain activities, such as insurance and vehicle maintenance, to individual funds.

The assets and liabilities of the internal service funds are included in governmental activities in the statement of net position.

Long-term revenues and expenses:

Other long-term assets are not available to pay for current period expenditures and, therefore, are reported as unavailable revenues in the fund
Long-term liabilities are not due and payable in the current period and therefore are not reported in the funds:

Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability are not reported in the funds:

Fund balances of governmental funds
Amounts reported for governmental activities in the statement of net position are different because:

Capital assets used in governmental activities are not financial resources and therefore, are not reported in the funds:

City of Ukiah, California
Reconciliation of Balance Sheet
To the Statement of Net Position
June 30, 2025
27 Attachment 1

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General Fund
Streets Capital
Improvements
General Capital
Projects
Pension Debt
Service
Total Nonmajor
Funds Total Governmental Funds

REVENUES
Property tax $ 4,190,036 $ - $ - $ - $ - $ 4,190,036
Sales tax 12,985,608 - - - - 12,985,608
Transient occupancy 1,140,527 - - - - 1,140,527
Business license tax 472,756 - - - 16,401 489,157
Other taxes 675 - - - - 675
Franchise fees 2,729,411 - - - - 2,729,411
Charges for service 5,356,185 - - - 351,261 5,707,446
Licenses and permits 409,518 - - - - 409,518
Grants, contributions, and subventions 5,323,091 - 3,529,634 - 3,717,198 12,569,923 Use of money and property 315,733 22 104,161 69,792 888,528 1,378,236 Miscellaneous 44,568 - - - 31,001 75,569
Fines penalties and forfeitures 122,683 - - - - 122,683 Total revenues 33,090,791 22 3,633,795 69,792 5,004,389 41,798,789

EXPENDITURES
Current:

General government 135,453 - - 5,826 7,072 148,351
Public safety 18,165,499 - - - 134,068 18,299,567
Housing and community development 1,743,454 - - - 737,554 2,481,008 Public works 1,236,279 287,591 2,504,365 - 1,133,191 5,161,426 Parks, buildings, and grounds 2,022,478 - - - - 2,022,478 Recreation and culture 5,143,253 - - - 330,991 5,474,244 Economic development and redevelopment 168,300 - - - 15,908 184,208 Debt service:

Interest 825,085 558,040 - - 5,935 1,389,060
Principal 625,733 1,422,016 - - 33,892 2,081,641
Lease principal 140,488 - - - - 140,488
Lease interest 13,215 - - - - 13,215
Capital outlay:

Public safety 1,577,381 - - - - 1,577,381
Housing and community development 58,965 - - - - 58,965 Public works 225,000 480,118 1,045,804 - 930,573 2,681,495 Parks, buildings, and grounds 212,545 - - - - 212,545
Recreation and culture - - - - - -
Total expenditures 32,293,128 2,747,765 3,550,169 5,826 3,329,184 41,926,072 Excess (deficiency) of revenues over expenditures 797,663 (2,747,743) 83,626 63,966 1,675,205 (127,283)

OTHER FINANCING SOURCES (USES)
Transfers in 1,101,769 2,757,989 1,447,211 - 6,209 5,313,178 Transfers out (2,760,487) - - - (1,535,480) (4,295,967) Total other financing sources (uses) (1,658,718) 2,757,989 1,447,211 - (1,529,271) 1,017,211 Net change in fund balances (861,055) 10,246 1,530,837 63,966 145,934 889,928 Fund balances - beginning 11,517,318 (2,247,948) 3,471,350 4,375,599 20,985,859 38,102,178 Fund balances - ending $ 10,656,263 $ (2,237,702) $ 5,002,187 $ 4,439,565 $ 21,131,793 $ 38,992,106 The accompanying notes are an integral part of these financial statements.

City of Ukiah, California
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2025
28 Attachment 1

Page 704 of 895 ends

$ 889,928
Capital outlay 8,624,396
Depreciation expense (2,917,890)
5,706,506
Change to unavailable revenues 98,336
Change to net pension liability 2,066,554
Compensated absence expense 15,960
2,180,850
Changes to deferred outflows: pension-related items (7,213,610) Changes to deferred inflows: pension-related items 3,132,868 (4,080,742)
Principal paid on loans and leases 2,922,690
Amortization of debt premium 184,414
Subscription liability increase (597,861)
2,509,243
Net revenue(loss) of internal service funds (236,455)
$ 6,969,330
Amounts reported for governmental activities in the statement of activities are different because:

Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of these assets is allocated over their estimated useful lives as depreciation expense.

City of Ukiah, California
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances to the Statement of Activities
For the Year Ended June 30, 2025
Net change in fund balances - total government funds
The accompanying notes are an integral part of these financial statements.

Change in net position of governmental activities
Internal service funds are used by management to charge the costs of certain activities, such as insurance and vehicle maintenance, to individual funds. The net revenue (expense) of the internal services funds is reported with governmental activities.

The amounts below included in the Statement of Activities do not provide (require) the use of current financial resources and, therefore, are not reported as revenues or expenditures in governmental funds (net change):

Amounts for deferred inflows and deferred outflows related to the City's Net Pension Liability are not reported in the funds. This is the net change in deferred inflows and deferred outflows related to the net pension liability:

The issuance of long-term debt provides current financial resources to governmental funds, while the repayment of principal of long-term debt consumes the current financial resources of governmnetal funds.

Neither transaction, however, has any effect on net position. Also, government funds report the effect of premiums, discounts and similar items when debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities. The effect of these differences are as follows:
29 Attachment 1

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PROPRIETARY FUNDS
Proprietary funds account for City operations financed and operated in a manner like a private business enterprise.

The intent of the City is that the cost of providing goods and services be financed primarily through user charges.

The City maintains four primary enterprise funds: electric, water, sewer, and landfill.

Landfill
This is the fund used to account for activities related to the closure, post-closure, and corrective action plan of the City of Ukiah landfill.

Electric Enterprise Fund
The Electric Utility provides electrical services to the citizens of Ukiah, including 24-hour, 365-day response to emergency service calls for customer power problems, and outages. Additionally, the enterprise is responsible for making high voltage power lines safe for Fire & Police personnel at structure fires, automobile accidents and to make other situations where electric lines are near emergency crews.

Water Enterprise Fund
Chapter 13.04 of the Ukiah Municipal Code provides the authority for City to operate water system. Revenues (fees and charges) are collected to pay for service (water) received.

Wastewater Enterprise Fund
Chapter 13.20 of the Ukiah Municipal Code provides the authority for the City to operate sewer system. Revenues (fees and charges) are collected to pay for availability of collection, transportation, treatment, and disposal system.

In addition, grazing lease payments, LACOSAN payments for flows, tax revenues, FEMA storm damage reimbursement, OES storm damage reimbursement, and insurance rebates have been credited to this fund.

The City also employs the use of internal service funds.

Internal Service Funds
Established to account for the costs of activities primarily serving multiple department and funds. Such funds may also provide services to external users, such as other governmental entities. 30 Attachment 1

Page 706 of 895 ends

Governmental
Activities
Landfill Electric Water Wastewater
Total Nonmajor
Funds Total Enterprise Funds
Internal Service
Funds
ASSETS
Current assets:

Cash and investments $ 11,100,607 $ 13,044,533 $ 770,799 $ 601,040 $ 240,031 $ 25,757,010 $ 2,205,274 Restricted cash and investments - 2,208,407 - - - 2,208,407 8,049,882 Accounts receivable 45,929 5,446,799 2,203,134 2,306,721 2,266,903 12,269,486 164,187 Lease receivable - - - - 48,851 48,851 -
Interest receivable 16,531 18,826 5,025 2,963 1,050 44,395 4,867 Grants and subventions receivable - 732,220 5,014,853 393,917 99,720 6,240,710 55,110 Prepaids - - - - - - 245,843
Inventories and prepaids - 2,353,889 125,792 18,874 - 2,498,555 - Due from other funds - - 293,243 - - 293,243 -
Total current assets 11,163,067 23,804,674 8,412,846 3,323,515 2,656,555 49,360,657 10,725,163 Noncurrent assets:

Advances to other funds - 321,621 - - 425,707 747,328 30,000 Land 699,654 2,316,013 2,571,192 670,431 1,793,862 8,051,152 1,841,747 Intangible assets - - 720,000 - - 720,000 -
Construction in progress 116,840 7,315,382 54,988,868 8,102,285 - 70,523,375 7,346,230 Buildings and improvements 26,700 26,261,659 22,248,066 10,540,745 4,385,511 63,462,681 1,606,557 Machinery equipment and vehicles 516,075 5,818,191 3,608,048 4,382,424 2,272,791 16,597,529 1,742,227 Infrastructure and network - 32,950,910 51,536,946 93,848,054 9,563,567 187,899,477 - Less accumulated depreciation (472,984) (36,813,811) (22,418,905) (37,279,137) (5,797,703) (102,782,540) (1,392,429) Total noncurrent assets 886,285 38,169,965 113,254,215 80,264,802 12,643,735 245,219,002 11,174,332 Total assets 12,049,352 61,974,639 121,667,061 83,588,317 15,300,290 294,579,659 21,899,495

DEFERRED OUTFLOWS OF RESOURCES
Pension related 55,843 700,537 613,885 610,803 504,124 2,485,192 - Total deferred outflows of resources 55,843 700,537 613,885 610,803 504,124 2,485,192 - Total assets and deferred outflows of resources 12,105,195 62,675,176 122,280,946 84,199,120 15,804,414 297,064,851 21,899,495

LIABILITIES
Current liabilities:

Accounts payable 54,654 324,289 4,327,933 628,823 290,580 5,626,279 515,228 Accrued payroll liabilities 5,137 98,135 86,087 53,738 79,219 322,316 246,725 Due to other funds - - 1,000,000 1,293,243 175,264 2,468,507 - Deposits payable - 271,749 308 - 6,224 278,281 -
Interest payable 4,334 170,382 309,902 223,061 15,501 723,180 145,837 Compensated absences - current 1,577 27,275 21,358 12,120 13,259 75,589 62,445 Pension-related bonds - current 14,268 182,919 115,884 131,283 38,426 482,780 - Capital project installment obligations - current - - 545,581 - 11,683 557,264 - Capital project bonds - current - 400,200 607,610 1,608,099 130,426 2,746,335 463,047 Total current liabilities 79,970 1,474,949 7,014,663 3,950,367 760,582 13,280,531 1,433,282 Noncurrent liabilities:

Advance from other funds - - 425,707 4,681,372 4,326,461 9,433,540 - Landfill closure/post-closure 22,483,193 - - - - 22,483,193 - Compensated absences 14,195 245,477 192,238 109,083 119,340 680,333 562,034 Net pension liability 112,828 1,415,413 1,240,335 1,234,109 1,018,567 5,021,252 - Capital project installment obligations - - 15,563,052 - 103,820 15,666,872 - Pension-related bonds 454,374 5,824,917 3,690,250 4,180,601 1,223,696 15,373,838 - Capital project bonds - 9,033,009 11,858,277 21,103,253 - 41,994,539 16,925,630 Capital leases - - - - 528,462 528,462 -
Total noncurrent liabilities 23,064,590 16,518,816 32,969,859 31,308,418 7,320,346 111,182,029 17,487,664 Total liabilities 23,144,560 17,993,765 39,984,522 35,258,785 8,080,928 124,462,560 18,920,946

DEFERRED INFLOWS OF RESOURCES
Lease related - - - - 48,852 48,852 -
Pension related 1,150 14,432 12,647 12,583 10,386 51,198 - Total deferred inflows of resources 1,150 14,432 12,647 12,583 59,238 100,050 - Total liabilities and deferred inflows of resources 23,145,710 18,008,197 39,997,169 35,271,368 8,140,166 124,562,610 18,920,946

NET POSITION
Net investment in capital assets 886,285 30,508,718 83,979,284 57,370,264 11,439,804 184,184,355 1,659,700 Restricted for:

Debt service reserve - - 706,668 - - 706,668 -
NCPA Projects - 396,590 - - - 396,590 -
Unrestricted (11,926,800) 13,761,671 (2,402,175) (8,442,512) (3,775,556) (12,785,372) 1,318,849 Total net position $ (11,040,515) $ 44,666,979 $ 82,283,777 $ 48,927,752 $ 7,664,248 172,502,241 $ 2,978,549 -
$ 172,502,241
Difference between business-type adjustments to assets and liabilities.

The accompanying notes are an integral part of these financial statements.

Net position of business-type activities
Business-type Activities
City of Ukiah, California
Statement of Net Position
Proprietary Funds
June 30, 2025
31 Attachment 1

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Governmental
Activities
Landfill Electric Water Wastewater
Total Nonmajor
Funds Total Enterprise Funds
Internal Service
Funds

OPERATING REVENUES
Charges for service $ 607,075 $ 27,964,237 $ 9,440,811 $ 9,243,112 $ 3,568,892 $ 50,824,127 $ 21,286,987 Cap and trade - 866,867 - - - 866,867 -
Facility rental 9,238 - - - 968,617 977,855 -
Fuel sales - - - - 1,308,387 1,308,387 -
Miscellaneous - - - - - - 163,673
Fines penalties and forfeitures - - - - 46,811 46,811 - Connection fees - - - 227,385 - 227,385 -
Total operating revenues 616,313 28,831,104 9,440,811 9,470,497 5,892,707 54,251,432 21,450,660

OPERATING EXPENSES
General and administrative 101,594 3,653,064 2,110,447 2,316,591 951,690 9,133,386 3,068,782 Maintenance and operations 1,134,519 18,684,000 5,394,792 4,901,295 4,227,514 34,342,120 17,801,784 Fuel - - - - 668,147 668,147 -
Depreciation 14,681 1,507,958 1,866,161 2,273,091 407,023 6,068,914 135,923 Total operating expenses 1,250,794 23,845,022 9,371,400 9,490,977 6,254,374 50,212,567 21,006,489 Operating income (loss) (634,481) 4,986,082 69,411 (20,480) (361,667) 4,038,865 444,171

NONOPERATING REVENUES (EXPENSES)
Property tax refund - - - - (18,682) (18,682) -
Property tax - - - - 8,129 8,129 -
Grants, contributions, and subventions - 3,317,376 12,246 6,062 487 3,336,171 100,647 Interest, rent, and concessions 201,478 427,387 122,000 46,494 119,493 916,852 49,207 Miscellaneous 88,019 - 3,982 7,713 - 99,714 -
Interest and fiscal charges (18,142) (544,907) (654,313) (770,676) (95,359) (2,083,397) (949,303) Debt Issuance Costs - - - - - - (25,000)
Total nonoperating revenues (expenses) 271,355 3,199,856 (516,085) (710,407) 14,068 2,258,787 (824,449) Income (loss) before contributions and transfers (363,126) 8,185,938 (446,674) (730,887) (347,599) 6,297,652 (380,278) Capital grants, contributions, and subventions $ - $ 679,440 $ 17,562,206 $ 393,917 $ 26,123 $ 18,661,686 $ 22,201 Transfers in 430,000 - 300,000 - - 730,000 -
Transfers out - - (305,563) (1,441,648) - (1,747,211) - Change in net position 66,874 8,865,378 17,109,969 (1,778,618) (321,476) 23,942,127 (358,077) Net position - beginning (11,107,389) 35,801,601 65,173,808 50,706,370 7,985,724 148,560,114 3,336,626 Total net position - ending $ (11,040,515) $ 44,666,979 $ 82,283,777 $ 48,927,752 $ 7,664,248 $ 172,502,241 $ 2,978,549 (377,569)
$ 23,564,558
City of Ukiah, California
Statement of Revenues, Expenses, and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2025
Business-type Activities
The accompanying notes are an integral part of these financial statements.

Adjustment to reflect the consolidation of internal service fund activities related to enterprise funds Changes in net position of business-type activities
32 Attachment 1

Page 708 of 895 ends

Governmental Activities
Landfill Electric Water Wastewater
Total Nonmajor
Enterprise Funds Total Enterprise Funds Internal Service Funds

CASH FLOWS FROM OPERATING ACTIVITIES
Cash receipts from customers $ 669,787 $ 28,725,467 $ 8,428,543 $ 9,847,573 $ 4,034,617 $ 51,705,987 $ 332,466 Receipts from interfund services provided - - 649,289 - - 649,289 21,452,032 Payments to employees (192,377) (3,719,663) (2,943,481) (2,193,549) (2,200,320) (11,249,390) (9,065,180) Payments to suppliers (434,538) (15,012,822) (2,610,586) (3,557,387) (2,521,014) (24,136,347) (9,342,733) Payments for interfund services used (101,594) (3,653,064) (2,110,447) (2,316,591) (951,690) (9,133,386) (2,844,790) Receipts (payments) to other governmental agencies - 1,661 (115,408) 734,070 - 620,323 526,378 Other operating cash receipts (payments) - (32,417) - (36,000) - (68,417) (30,000) Net cash provided (used) by operating activities (58,722) 6,309,162 1,297,910 2,478,116 (1,638,407) 8,388,059 1,028,173

CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES
Principal paid on lease revenue bonds (13,752) (176,292) (111,686) (126,527) (37,035) (465,292) - Cash received (paid) to other funds 6,432,698 (32,500) (5,084,834) 2,558,352 1,371,260 5,244,976 (90,000) Property taxes received - - - - 8,129 8,129 -
Property taxes refunded - - - - (18,682) (18,682) -
Lawsuit settlement payments 88,019 - - - - 88,019 -
Interest paid (18,142) (232,574) (147,342) (166,920) (66,632) (631,610) (377,924) Grants and contributions - 3,317,376 12,246 6,062 487 3,336,171 23,419 Net cash provided (used) by noncapital financing activities 6,488,823 2,876,010 (5,331,616) 2,270,967 1,257,527 7,561,711 (444,505)

CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES Capital grants and contributions - 920,128 24,061,763 393,917 261,786 25,637,594 322,640 Proceeds from capital loans - - - - 711,225 711,225 -
Interest paid (66) (373,703) (647,646) (643,604) (26,187) (1,691,206) (658,063) Principal paid on capital and related debt - (330,000) (1,000,181) (1,543,000) (63,753) (2,936,934) (385,000) Acquisition and construction of capital assets - (2,991,346) (21,098,149) (2,997,965) (740,251) (27,827,711) (8,125,227) Proceeds from sale of property - - 3,982 7,713 - 11,695 - Amounts paid to reduce landfill closure liability (116,840) - - - - (116,840) - Net cash provided (used) by capital and related financing activities (116,906) (2,774,921) 1,319,769 (4,782,939) 142,820 (6,212,177) (8,845,650)

CASH FLOWS FROM INVESTING ACTIVITIES
Interest received 209,265 430,937 127,578 50,777 29,119 847,676 48,398 Net cash provided (used) by investing activities 209,265 430,937 127,578 50,777 29,119 847,676 48,398 Net increase (decrease) in cash and cash equivalents 6,522,460 6,841,188 (2,586,359) 16,921 (208,941) 10,585,269 (8,213,584) Balances - beginning of year 4,578,147 8,411,752 3,357,158 584,119 448,972 17,380,148 18,468,740 Balances - end of the year $ 11,100,607 $ 15,252,940 $ 770,799 $ 601,040 $ 240,031 $ 27,965,417 $ 10,255,156 Reconciliation of operating income (loss) to net cash provided (used) by operating activities:

Operating Income $ (634,481) $ 4,986,082 $ 69,411 $ (20,480) $ (361,667) $ 4,038,865 $ 444,171 Adjustments to reconcile operating income (loss) to net cash provided (used) by operating activities:

Depreciation 14,681 1,507,958 1,866,161 2,273,091 407,023 6,068,914 135,923 Changes in assets and liabilities:

Decrease (increase) in accounts receivable 53,474 (159,205) (364,694) 1,123,000 (1,821,183) (1,168,608) 100,754 Decrease (increase) in prepaids - 50,734 (256,633) (102,909) - (308,808) (50,378) Decrease (increase) in inventory - (95,346) (3,309) (7,599) - (106,254) - Decrease (increase) in deferred outflows 17,963 135,933 171,413 131,687 37,987 494,983 - Increase (decrease) in accounts payable (71,373) (404,473) (438,050) (1,118,030) (165,417) (2,197,343) 218,446 Increase (decrease) in accrued salaries and benefits 1,252 (3,409) 33,662 6,453 159,279 197,237 70,904 Increase (decrease) in compensated absences 4,555 4,284 86,581 4,794 45,274 145,488 108,353 Increase (decrease) in deferrred inflows (3,019) (32,815) (31,710) (29,356) (14,064) (110,964) - Increase (decrease) in net pension liability/(asset) 11,770 270,090 165,078 217,465 74,361 738,764 - Increase (decrease) in landfill liability 546,456 - - - - 546,456 - Increase (decrease) in customer deposits - 49,329 - - - 49,329 - Net cash provided (used) by operating activities $ (58,722) $ 6,309,162 $ 1,297,910 $ 2,478,116 $ (1,638,407) $ 8,388,059 $ 1,028,173 Noncash investing, capital and financing activities
Amortization related to long-term debt $ - $ (55,200) $ (127,610) $ (27,099) $ - $ (209,909) $ (58,047) Total noncash investing, capital and financing activities - (55,200) (127,610) (27,099) - (209,909) (58,047) The accompanying notes are an integral part of these financial statements.

Business-type Activities - Enterprise Funds
City of Ukiah, California
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2025
33 Attachment 1

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FIDUCIARY FUNDS
These funds 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 statements but are presented in the separate Fiduciary Fund financial statements.

Private Purpose Trust Fund
Redevelopment Non-Housing Housing Successor Private Purpose Trust Fund Resources held for the benefit of the state from the dissolution of the Ukiah Redevelopment Agency’s non-housing functions.

Custodial Funds
The City accounts for activities on behalf of external entities, including other governments. 34 Attachment 1

Page 710 of 895 ends

Private-Purpose Trust
Funds Custodial Funds
ASSETS
Cash and investments $ 6,300,093 $ 6,977,777
Accounts receivable - 1,752,740
Interest receivable 9,613 55,355
Inventories and prepaids - 1,364
Land held for resale 5,443 -
Total assets 6,315,149 8,787,236

LIABILITIES
Accounts payable 2,822 938,253
Accrued payroll liabilities 109 21,484
Deposits payable - 846,180
Interest payable 4,527 -
Due to other agencies - 154,790
Intergovernmental payable - 36,158
Due to City of Ukiah - 2,239,237
Due within one year 748,446 -
Due in more than one year 1,369,054 -
Total liabilities 2,124,958 4,236,102

NET POSITION
Restricted for:

Held for the benefit of the state 4,190,191
Individuals, organizations, and other governments - 4,551,134 Total net position $ 4,190,191 $ 4,551,134
The accompanying notes are an integral part of these financial statements.

City of Ukiah, California
Statement of Fiduciary Net Position
June 30, 2025
35 Attachment 1

Page 711 of 895 ends

Private-Purpose Trust
Funds Custodial Funds

ADDITIONS
Contributions:

Operating grants, contributions, and subventions $ - $ 111,364 Capital grants, contributions, and subventions - 463,760 Taxes and assessments collected for other governments 1,087,124 2,210,588 Service charges collected for other governments - 292,480 Service charges collected for other agencies - 5,570,848 Intergovernmental - 1,246,442
Insurance proceeds from capital asset damage - 69,440
Miscellaneous - 6,727
Members - 458,993
Other Additions - 6,142,468
Total contributions 1,087,124 16,573,110
Investment earnings:

Use of money and property - 6,000
Interest, rent, and concessions 113,308 248,860
Total investment earnings 113,308 254,860
Total additions 1,200,432 16,827,970

DEDUCTIONS
General and administrative 250,000 156,479
Maintenance and operations 15,543 5,059,958
Principal on behalf of beneficiaries - 41,056
Interest and fiscal charges on behalf of beneficiaries 71,760 30,411 Distributions to other governments - 672,286
Payments to other agencies for service charges collected - 789,133 Payments to City for services provided - 5,045,970
Total deductions 337,303 11,795,293
Net increase (decrease) in fiduciary net position 863,129 5,032,677 Total net position - beginning 3,327,062 (481,543)
Total net position - ending $ 4,190,191 $ 4,551,134
The accompanying notes are an integral part of these financial statements.

City of Ukiah, California
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2025
36 Attachment 1

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NOTES TO THE BASIC FINANCIAL STATEMENTS
City of Ukiah, California
June 30, 2025
The notes to the financial statements include a summary of significant accounting policies and other notes considered essential to fully disclose and fairly present the transactions and financial position of the City as follows:

Note 1 – Summary of Significant Accounting Policies ........................................................................................................ 38 Note 2 – Stewardship, Compliance and Accountability .................................................................................................... 46 Note 3 – Cash and Investments ................................................................................................................................................ 47 Note 4 – Receivables ................................................................................................................................................................... 51 Note 5 – Loans and Notes Receivable .................................................................................................................................... 52 Note 6 – Capital Assets .............................................................................................................................................................. 54 Note 7 – Long-Term Liabilities ................................................................................................................................................ 56 Note 8 – Landfill Closure ........................................................................................................................................................... 62 Note 9 – Interfund Transactions .............................................................................................................................................. 63 Note 10 – Risk Management ..................................................................................................................................................... 65 Note 11 – Public Employee Retirement Plan ......................................................................................................................... 68 Note 12 – Joint Ventures ............................................................................................................................................................ 79 Note 13 – Service Contracts ...................................................................................................................................................... 81 Note 14 – Commitments and Contingencies ........................................................................................................................ 82 Note 15 – New Pronouncements .............................................................................................................................................. 83 Note 16 – Successor Agency Trust ........................................................................................................................................... 84 37 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
The accounting policies of the City conform to accounting principles generally accepted in the United States of America as applied to government agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The accompanying financial statements present the City of Ukiah and its component units. Component units are legally separate entities for which the City is considered to be financially accountable. Blended component units, although legally separate entities, are, in substance, part of the City’s operations due the exclusive benefit to the City, and the nature of its governance.

The more significant accounting policies of the City are described below:

A. Defining the reporting entity
The City of Ukiah was incorporated March 8, 1876 under the laws of the State of California. Ukiah operates under a Council-Manager form of government. The City Manager serves as the chief executive for day-to-day operations and long-term planning, including executing the policies and directives of the City Council. Department heads report directly to the City Manager and serve at his or her pleasure.

The City provides a range of municipal services to its citizens including public safety (fire and police), public works; planning and building regulation; recreation and parks; airport, golf; and water, sewer, and electric utilities.

The Redevelopment Agency of the City of Ukiah (the Agency) was established by the City as a separate legal entity in accordance with state law. The purpose of the Agency was to encourage new investment and reinvestment within legally designated redevelopment areas in partnership with property owners. The Agency was dissolved on February 1, 2012 by the State Legislature and California Governor, Jerry Brown.

Component Units
Component units are legally separate entities for which the City is financially accountable. The blended component units presented within the City’s financial statements are:
 City of Ukiah Public Financing Authority — a Joint Exercise of Powers Authority formed by the City and the Industrial Development Authority of the City of Ukiah. Its purpose is to issue bonds and enter into lease agreements for the benefit of the City. The City appoints the voting majority of the board and can impose its will on the Authority. No separate financial statements are issued for this entity.
 City of Ukiah Industrial Development Authority — a legally separate entity whose governing board issubstantively the same as the City Council. The Authority exists to provide financing and development support exclusively or almost exclusively for City purposes. Because its activities are in substance part of the City’s operations and its debt is expected to be repaid from City resources, it is reported as a blended component unit. No separate financial statements are issued for this entity.

B. Government-wide and Fund Financial Statement
The City’s basic financial statements include both government-wide and fund financial statements.

Government-Wide Financial Statements:
 The government-wide financial statements include the Statement of Net Position and the Statement of Activities, which report information on all non-fiduciary activities of the City. These statements focus on the primary government and its blended component unit.
38 Attachment 1

Page 714 of 895 ends

NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED)  The statements are presented using the economic resources measurement focus and the accrual basis of accounting, where revenues are recorded when earned, and expenses are recognized when incurred.

Fund Financial Statements:
 The fund financial statements provide detailed information about the City’s funds, focusing on major funds.
 Governmental funds are presented using the current financial resources measurement focus and the modified accrual basis of accounting. Proprietary and fiduciary funds are reported using the economic resources measurement focus and the accrual basis of accounting.

C. Basis of Accounting and Measurement focus
Governmental Funds:
 Revenues are recognized when they are both measurable and available. Revenues are considered available if they are collectible within the current period or soon enough thereafter (typically 60 days) to pay liabilities. Some revenues due to the City by other governmental entities but were delayed due to administrative reasons were considered available within 90 days or longer.  Expenditures are recorded when the related fund liability is incurred, except for principal and interest on long-term debt, claims, and judgments, which are recorded as expenditures when due.

Proprietary and Fiduciary Funds:
 Revenues are recognized when earned, and expenses are recognized when liabilities are incurred, regardless of the timing of cash flows.

D. Use of Estimates
Financial statement preparation, in conformity with accounting principles generally accepted in the United States of America, requires the use of estimates and assumptions that affect the reported amount of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenue and expenditures/expenses during the reporting period. Actual results could differ from those estimates.

E. Cash and Investments
The City follows GASB Statement No. 72 for fair value measurement of investments. Cash and investments include demand deposits, certificates of deposit, and investments in government securities. The City maintains an investment policy in compliance with California Government Code requirements, emphasizing safety, liquidity, and return on investment. All investments are carried at fair value based on quoted market prices.

F. Receivable and Payables
Balances representing lending/borrowing transactions between funds outstanding at the end of the fiscal year are reported as either:
 Due to/Due from Other Funds: Amounts due within one year.  Advances to/From Other Funds: Non-current portions of interfund lending/borrowing transactions.  Loans to/From Other Funds: Long-term lending/borrowing transactions as evidenced by loan agreements.

Advances and loans to other funds are offset by a fund balance reserve in applicable governmental funds to indicate they are not available for appropriation and are not expendable available financial resources. 39 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Property, Sales, Use, and Utility User Taxes: Taxes related to the current fiscal year are accrued as revenue and accounts receivable when measurable and available. The City considers these revenues available if received within 60 days of year-end, consistent with the modified accrual basis of accounting.

Federal and State Grants:
 Under the accrual basis of accounting (used in the government-wide financial statements), federal and state grants are considered receivable and accrued as revenue when reimbursable costs are incurred, and all eligibility criteria are met.
 Under the modified accrual basis of accounting (used in fund-level statements), grant revenues are recognized only when measurable and available. The City considers grant revenues available if received within 60 days of year-end.

Notes Receivables: Notes receivables represent individual loans secured by property liens in favor of the City and the Redevelopment Successor Agency, made through various sources, including the Community Development Block Grant (CDBG) and federal HOME housing programs. When repaid, these amounts are designated for purposes allowed under the reuse guidelines.

G. Allowance for Doubtful Accounts
Management has elected to record bad debts using the allowance method.

H. Prepaid Items and Inventory
The City utilizes the consumption method for recoding inventories and prepaid items in governmental funds. All inventories are valued at cost using the first-in/first-out (FIFO) method. An annual charge is made to various City funds to assist in the financing of warehouse operations in addition to being billed as inventory is issued. Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both government-wide and fund financial statements.

I. Capital Assets
Government-Wide Statements
Public domain (infrastructure) capital assets include roads, bridges, curbs and gutters, streets, sidewalks, drainage systems, and lighting systems. The accounting treatment of property, plant and equipment (capital assets) depends on whether the assets are used in governmental fund operations or proprietary fund operations and whether they are reported in the government-wide or fund financial statements. Prior to July 1, 2003, governmental funds’ infrastructure assets were not capitalized, since then these assets have been valued at estimated historical cost.

Depreciation of all exhaustible capital assets is recorded as an allocated expense in the Statement of Activities, with accumulated depreciation reflected in the Statement of Net Position. Depreciation is provided over the assets’ estimated useful lives using the straight-line method of depreciation. The City capitalizes assets with an original cost greater than $30,000 and with a useful lifespan longer than five years. 40 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) The range of estimated useful lives by type of asset is as follows:

Buildings and improvements 30 – 60 years
Roadway improvements 50 years
Sidewalks, curbs and gutters 50 years
Storm drain pipes/structures 50 years
Traffic signal devices 5 – 40 years
Landscaping 30 years
Signage 25 years
Leasehold improvements 5 years
Machinery and equipment 5 – 20 years
Vehicles 5 – 10 years
Fund Financial Statements
In the fund financial statements, capital assets used in governmental fund operations are accounted for as capital outlay expenditures of the governmental fund upon acquisition. Capital assets used in proprietary fund operations are accounted for the same way as in the government-wide statements.

J. Compensated Absences
Compensated absences represent the vested portion of accumulated vacation and sick leave. In governmental funds, the cost of vacation and sick leave benefits is recognized when payments are made to employees. Upon separation, all accrued vacation and accrued comp time is paid and in proprietary funds, a long-term liability for such benefits has been recorded.

K. Deferred Outflows/Inflows of Resources
Deferred outflows and inflows of resources represent the consumption or acquisition of net assets applicable to future periods. The City reports deferred outflows related to pensions, leases, and bond refunding costs under GASB Statements No. 68, 87, and 63. Deferred inflows are recorded for resources received after the eligibility requirements are met but the revenues are not received within the availability period, or are amounts arising from actuarial assumptions.

L. Net Position Flow Assumptions
Sometimes the City will fund outlays for a particular purpose from both restricted (e.g. restricted bond or grant proceeds) and unrestricted resources. In order to calculate the amounts to report as restricted net position and unrestricted net position in the statement of net position, a flow assumption must be made about the order in which the resources are applied.

It is the City’s policy to consider restricted net position to have been depleted before unrestricted net position.

M. Long-term Liabilities
In both the governmental-wide financial statements and proprietary fund financial statements, long-term debt and other long-term liabilities are reported as liabilities in the applicable statement of net position. Bond premiums and discounts are deferred and amortized over the life of the bond.

In the fund financial statements, governmental fund types recognized bond premiums and discounts, as well as bond issuance costs, during the current period. The face amount of debt issued is reported as other financing sources. 41 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) N. Equity Classification
Government-Wide Statements
Equity is classified as net position and is displayed in three components:

Net investment in capital assets – consists of capital assets, including restricted capital assets, net of accumulated depreciation and reduced by the outstanding balances of any bonds, mortgages, notes, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets.

Restricted net position – consists of net position with constraints placed on the use by external groups such as creditors, grantors, contributors, or by laws or regulations of other governments or law through constitutional provisions or enabling legislation.

Unrestricted net position – all other net position that do not meet the definition of “restricted” or “net investment in capital assets debt.”
Fund Financial Statements
Governmental fund equity is classified as fund balance. Fund balance is classified as nonspendable, restricted, committed, assigned or unassigned. Proprietary fund equity is classified the same as in the government-wide statements.

The classifications for governmental funds are defined as follows for the City:

Fund balances for governmental funds are reported in categories that reflect the extent to which the City is bound to honor constraints on spending:
• Nonspendable: Includes amounts not in spendable form or legally required to be maintained intact. (e.g., inventory).
• Restricted: Amounts constrained by external parties or enabling legislation. • Committed: Amounts designated for specific purposes by formal action (ordinance or resolution) of the City Council.
• Assigned: Amounts the City intends to use for specific purposes. • Unassigned: Residual amounts in the General Fund not classified elsewhere.

The General Fund is the only fund that reports a positive unassigned fund balance. In other governmental funds it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund.

It is the City’s policy to consider restricted fund balance to have been depleted before using any of the components of unrestricted fund balance. Further, when the components of unrestricted fund balance can be used for the same purpose, committed fund balance is depleted first, followed by assigned fund balance. Unassigned fund balance is applied last.

An additional safeguard to the City’s fiscal sustainability lies in the General Fund’s strategic reserve. The Council created this reserve in FY 2013 at 25 percent of operating expenditures for the year. The reserve is to be used to ensure adequate resources are available to manage cash flow and economic uncertainties, minimizing the impact to our employees and the Ukiah citizenry to the greatest extent possible. 42 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) O. Property Taxes
Property taxes in the State of California are administered for all local agencies at the county level and consist of secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes:

Property Valuations are established by the Mendocino County Assessor for the secured and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization. Under the provision of Article XIII-A of the State Constitution (Proposition 13, adopted by the voters on June 6, 1978), properties are assessed at 100 percent of full value. From this base assessment, subsequent annual increases in valuation are limited to a maximum of two percent.

However, an increase to full value is allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations and is subject to annual reappraisal.

Tax Levies are limited to one percent of full assessed value which results in a tax rate of one percent assessed valuation under the provisions of Proposition 13. Tax rates for voter-approved indebtedness are excluded from this limitation.

Tax Levy Dates are attached annually on January 1, preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property as it exists at that time. Liens against real estate, as well as the tax on personal property are not relieved by subsequent renewal or change in ownership.

Tax Collections are the responsibility of the Mendocino County Treasurer-Tax Collector. Taxes and assessments on secured and utility rolls, which constitute a lien against the property, may be paid in two installments.

The First is due on November 1 of the fiscal year and is delinquent if not paid by December 10; the second is due on March 1 of the fiscal year and is delinquent if not paid by April 10.

Unsecured personal property taxes do not constitute a lien against property unless the taxes become delinquent.

Payments must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the county for late payments. The City has elected to receive the City’s portion of the property taxes from the county under the county Teeter Bill program. Under this program, the City receives 100 percent of the City’s share of the levied property taxes in periodic payments with the county assuming the responsibility for the delinquencies.

Property Tax Administration Fees – the state of California FY 90-91 Budget Act authorized counties to collect an administrative fee for collection and distribution of property taxes.

Tax Levy Apportionments – due to the nature of the City-wide maximum levy, it is not possible to identify general-purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of Proposition 13, apportionments to local agencies are made by the county’s auditor-controller based primarily on the ratio that each agency represented of the total City-wide levy for the three fiscal years prior to fiscal year 1979.

P. Interfund Transfers
Resources are reallocated between funds by reporting them as interfund transfers. For the purposes of the Statement of Activities, all interfund transfers between individual governmental funds have been eliminated. 43 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Q. Pensions
The City participates in the California Public Employees' Retirement System (CalPERS) and accounts for its pension obligations under GASB Statement No. 68. Pension liabilities, expenses, and deferred inflows/outflows are based on actuarial valuations. Pension contributions are recognized as expenditures when due in governmental funds and are deferred I the government-wide and proprietary funds.

R. New or Closed Funds
The City closed four funds:
 1998 STIP Augmentation
 Museum Grant
 Trans-Traffic Congest Relief
 Skate Park
S. Leases
Lessor Accounting
The City acts as a lessor for noncancellable leases of City-owned land. In accordance with GASB Statement No. 87, the City recognizes a lease receivable and a deferred inflow of resources in both the government-wide and governmental fund financial statements at the commencement of the lease.

Initial Measurement
At the commencement of the lease, the lease receivable is measured at the present value of expected lease payments to be received during the lease term. The deferred inflow of resources is measured at the same amount as the lease receivable, adjusted for any lease payments received at or before the lease commencement date.

Subsequent Measurement
 The lease receivable is subsequently reduced by the principal portion of lease payments as they are received.
 The deferred inflow of resources is recognized as revenue over the lease term in a systematic and rational manner that aligns with the pattern of benefit provided to the lessee.

Key Estimates and Judgments
Significant estimates and judgments are required in determining key inputs for lease accounting. These include:

1. Discount Rate:
 The City uses its incremental borrowing rate as the discount rate to calculate the present value of expected lease payments.

2. Lease Term:
 The lease term includes the noncancellable period of the lease, along with any optional renewal periods that the lessee is reasonably certain to exercise.

3. Lease Receipts:
 Lease receipts are composed of fixed payments specified in the lease agreement. 44 Attachment 1

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NOTE 1 – SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) Monitoring and Remeasurement
The City monitors changes in circumstances that may require remeasurement of the lease receivable and deferred inflows of resources. Remeasurement is performed when changes occur that are expected to significantly affect:
 The lease term.
 The amount of expected lease receipts.

Such changes include modifications to the lease agreement or significant changes in lessee payments or conditions affecting the lessee’s ability to meet payment obligations. [THIS AREA LEFT BLANK INTENTIONALLY]
45 Attachment 1

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NOTE 2 – STEWARDSHIP, COMPLIANCE AND ACCOUNTABILITY
State and federal laws, as well as sound financial management practices, require governments to manage resources responsibly and ensure compliance with adopted budgets and other financial policies. In certain instances, fund balances or net positions may report deficits, which reflect timing differences, operational challenges, or other financial circumstances.

The following schedule provides information on major and non-major funds that reported deficit fund balances or net positions as of June 30, 2025. For each deficit, an explanation of its cause and the steps being taken to address the deficit is provided. The City is committed to resolving these deficits through various measures, including the use of specific revenue sources, operational adjustments, or financial planning strategies.

This disclosure ensures transparency and accountability while providing users of the financial statements with a clear understanding of the financial condition of these funds.

The following major and non-major funds had deficit fund balances/net positions as of June 30, 2025, Major and Non-major Governmental Funds
Fund Name
Deficit
Amount Discussion/Explanation
Streets Capital Improvement
Fund
$(2,237,702) Deficit amount is the result of capital projects funded by a specific general revenue source (Measure Y) and will be eliminated with revenues received in 2026.

ARRC (28,109) Deficit amount is the result of prior capital projects and operational deficiencies. The deficit is being eliminated with future revenues generated by ARRC operations.

Winter Special Events (210,907) Deficit amount is the result of a capital acquisition using an interfund loan with the general fund and losses in the reporting year. The loan will be repaid with current available revenues annually, with full payoff expected in five years.

Rail Trail (662,395) Deficit amount is the result of capital funded by a specific revenue sources and will be eliminated when future and unavailable revenues are made available.

Major and Non-major Proprietary Funds
Fund Name
Deficit
Amount Discussion/Explanation
Landfill (11,040,515) Total estimated costs for closure, post-closure, and corrective action plan based on most recent engineering study exceed available resources. Recently enacted surcharges collected at the Ukiah Transfer Station are expected to fund the difference.

Those amounts are reported as transfers into the landfill enterprise fund.

Ambulance Services (527,020) Resulted from startup costs, including capital acquisitions. Paid for by an internal loan from the general fund. Will be repaid by fees collected for ambulance services.

Street Lighting (328,691) Resulted from past operational deficits and will be repaid by enhanced service fees. 46 Attachment 1

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NOTE 3 – CASH AND INVESTMENTS
The City follows the practice of pooling cash and investments of all funds except for the restricted funds required to be held by outside custodians, fiscal agents or trustees under the provisions of bond indentures. Cash and investments as of June 30, 2025 are classified in the accompanying financial statements as follows:

Collateral and Categorization Requirements
At the fiscal year end, the City’s carrying amount of demand deposits was $14,981,046 and the bank account balance was $23,383,329. The difference of $8,402,283 represented outstanding checks and deposits in transit. All deposits not insured by Federal Depository Insurance Corporation (FDIC) would be covered by collateralized securities in accordance with California Government Code Section 53600-53609.

Investment Policy
The table below identifies the investment types that are authorized under provisions of the City’s investment policy adopted August 16, 2005 (subsequently updated July 5, 2017), and in accordance with Section 53601 of the California Government Code. The table also identifies certain provisions of the investment policy that address interest rate risk, credit risk, and concentration of credit risk. The City’s investment policy also limits the weighted average of the City’s investment portfolio to 2.5 years and except for obligations of the U.S. government and its agencies, no more than 10 percent of the portfolio may be invested in the securities of any single issuer.

C ash and Invest ment s Total Cash equivalents and investments Pooled cash and investments, at fair value Cash in bank $ 14,981,046 Cash in investment portfolio, excluding LAIF 19,995,802 Cash with LAIF 644,885 Total pooled investment balances 20,640,687
Non pooled cash and investments, at fair value
Petty cash 12,996
Total non pooled cash, at fair value 12,996
Cash with fiscal agent 27,304,967
Total non pooled investments, at fair value 27,304,967
Total cash equivalents and investments $ 62,939,696
Investment Portfolio Analysis PAR % of Portfolio Permitted by Policy
In compliance with investment policy <1 1 to 2 >2
$ 8,545,000 US treasury obligations 41.54% 100% Yes $ 4,508,398 - $ $ 4,096,408 $ 8,604,806 Federal agency: $ - 250,000 Bank note 1.22% 100% Yes - 253,944 - $ 253,944 2,276,159 Commercial M ortgage-Backed Security 11.07% 100% Yes 95,680 435,904 1,699,308 $ 2,230,892 85,000 M unicipal obligations 0.41% 100% Yes - - 85,758 $ 85,758 4,475,000 Corporate notes 21.76% 30% Yes 221,533 2,100,423 2,171,821 $ 4,493,777 400,000 Certificates of deposit 1.94% 30% Yes - 406,124 - $ 406,124 3,855,154 Asset-backed securities 18.74% 20% Yes - 299,511 3,583,424 $ 3,882,935 644,885 Local agency investment fund 3.14% $75M Yes 644,885 - - $ 644,885 37,552 M oney market 0.18% 20% Yes 37,566 - - $ 37,566
$ 20,568,750 Total pooled investments 100.00% $ 999,664 $ 8,004,304 $ 11,636,719 $ 20,640,687 27,150,507 M oney market 99.43% 20% Yes 27,150,507 - - 27,150,507 154,460 County of M endocino treasury 0.57% 100% Yes 154,460 154,460 Total non-pooled investments 100.00% $ 27,304,967 $ - $ 27,304,967 - $ M aturities (in years)
47 Attachment 1

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NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Authorized Investment Type Maximum
Maturity
Maximum
Percentage of
Portfolio
Maximum
Investment in One
Issuer
City of Ukiah Bonds 5 Years None 10%
U.S. treasury obligations 5 Years Unlimited None
State of California obligations 5 Years None 10%
Non-California state obligations 5 Years None 10%
Local agency obligations 5 Years None 10%
Federal agency or government
sponsored enterprise obligations 5 Years None 10%
Bankers' acceptances 180 Days 40% 5%
U.S. Commercial paper (highest rating) 270 Days 25% 5%
Negotiable certificates of deposit 5 Years 30% 5%
Repurchase agreements (1) 365 Days None 10%
Reverse repurchase agreements (2) 92 Days 20% 10%
Medium-term notes-corporate or
depository institutions (3) 5 Years 30% 5%
Money market funds (highest rating) n/a 20% 10%
Local Agency Investment Fund (LAIF) N/A $75m $75m
Time deposits 5 Years 25% 10%
Mortgage-backed and Asset-backed
Securities (rated "AA" or better) 5 Years 20% 10%
(1) Market value of collateral shall be valued at 102 percent and monitored daily. (2) Requires prior City Council approval.
(3) Five years or less.

Disclosures Relating to Interest Rate Risk
Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City of Ukiah manages its exposure to interest rate risk is by investing in the State of California’s Local Agency Investment Fund (LAIF), whose underlying securities have staggered maturities and are generally due on demand, which provides cash flow and liquidity needed for operations.

Disclosures Relating to Credit Risk
Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by nationally recognized statistical rating organization.

The City’s investment policy limits credit risk by requiring compliance with the California Government Code for investment of public funds, as described in detail above.

Concentration of Credit Risk
48 Attachment 1

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NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
Except for securities of the U.S. Government and its agencies, the investment policy of the City limits the amount that can be invested in any one issuer to no more than 10 percent of the total portfolio. As of June 30, 2025, holdings in any one issuer did not exceed 5 percent of the total portfolio.

Custodial Credit Risk
The credit risk for deposits is the risk that, in the event of failure of a depository financial institution, a government will not be able recover its deposits or will not be able to recover collateral securities that are in the possession on an outside party. The California government code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits, other than the following provision for deposits:

The California government code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The fair value of the pledged securities in the collateral pool must be equal at least 110 percent of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150 percent of the secured public deposits.

On June 30, 2025, the City had $13,731,046 in financial institutions that were not covered by the FDIC but were covered by collateralized securities of the financial institutions where the deposits were maintained.

The credit risk for investments is the risk that, in the event of the failure of counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of investment or collateral securities that are in the possession of another party. The California government code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial risk for investments. With respect to investments, custodial credit risk generally applies only to direct investments in marketable securities. Custodial credit risk does not apply to a local government’s indirect investment in securities using mutual funds or government investment pools (such as LAIF).

Fair Value
The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The hierarchy is based on the valuation inputs used to measure the fair value of the asset.

Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are other than quoted process Credit Risk Schedule
Investment Type AAA AA+ to A- BBB+ Unrated
US Treasury obligations $ 8,604,806 N/A $ 8,604,806 - $ $ - $ - Federal agency/GSE 2,230,892 N/A - 2,230,892 - - Bank note 253,944 N/A - 253,944 - - Municipal obligations 85,758 N/A - - - 85,758 Corporate notes 4,493,777 N/A - 4,285,867 207,910 - Negotiable certificates of deposit 406,124 N/A - 406,124 - - Asset-backed securities 3,882,935 N/A 2,856,698 - - 1,026,237 LAIF 644,885 N/A - - - 644,885
Money market 37,566 N/A - - - 37,566
County of Mendocino treasury 154,460 N/A - - - 154,460
Held by fiscal agent:

Money market 27,150,507 N/A - - - 27,150,507 Total $ 47,945,654 $ 2,856,698 $ 15,781,633 $ 207,910 $ 29,099,413 Total Investment
Minimum
Legal Rating
Rating as of Fiscal Year End
49 Attachment 1

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NOTE 3 – CASH AND INVESTMENTS (CONTINUED)
included in Level 1 and are valued using a matrix pricing model using either directly or indirectly observable inputs; Level 3 inputs are significant unobservable inputs.

Fair Value Schedule
Investment Type 1 2
US Treasury obligations $ 8,604,806 $ - $ 8,604,806 - $ Federal agency/GSE 2,230,892 - 2,230,892 - Bank note 253,944 - 253,944 - Municipal obligations 85,758 - 85,758 - Corporate notes 4,493,777 - 4,493,777 - Negotiable certificates of deposit 406,124 - 406,124 - Asset-backed securities 3,882,935 - 3,882,935 - LAIF 644,885 644,885 - - Money market 37,566 37,566 - - County of Mendocino treasury 154,460 154,460 - - Held by fiscal agent:

Money market 27,150,507 27,150,507 - - Total $ 47,945,654 $ 27,987,418 $ 19,958,236 - $ Total
Investment
Investments
Not Measured
at Fair Value
Level
Participation in an External Investment Pool
The City is a voluntary participant in the California Local Agency Investment Fund (LAIF), which is regulated by California Government Code Section under the oversight of the Local Investment Advisory Board (Board). The Board consists of five members as designated by state statue and is chaired by the State Treasurer who is responsible for the day-to-day administration of LAIF. The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis, which is different from the fair value of the City’s position in the LAIF pool. The State Treasurer determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available. As of June 30, 2025, the City’s investment in LAIF was $644,885. The total amount invested by all public agencies at that time was $24.48 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which on June 30, 2025, has a balance of $178.1 billion. Financial Statements of LAIF and PMIA may be obtained from the California Treasurer’s web site at www.treasurer.ca.gov.
50 Attachment 1

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NOTE 4 – RECEIVABLES
The City’s accounts receivable represent amounts due from a variety of sources as of June 30, 2025. These receivables include balances from grants and subventions, leases, loans, customer accounts, and other accounts related to the City’s operations. The amounts are categorized by governmental and business-type activities and are presented net of any allowance for doubtful accounts.

The receivables reflect the City’s ongoing efforts to recover amounts due for services rendered, grant-funded projects, lease agreements, and loan programs. The allowance for doubtful accounts is based on management’s assessment of the collectability of certain receivables, considering historical trends, economic conditions, and the creditworthiness of the counterparties.

The following schedule summarizes receivables by activity, type, and net amounts. A breakdown of the concentration of receivables is also provided, highlighting the proportion due from other governments versus individuals and businesses.

Accounts receivable consisted of the following at June 30, 2025:

Receivables Allowance Net
Governmental activities
Interest $ 50,083 $ - $ 50,083
Accounts receivable:

Customers 5,650,549 - 5,650,549
Total Governmental activities 5,700,632 - 5,700,632
Business-type activities
Interest 44,408 - 44,408
Accounts receivable:

Customers 14,919,319 (2,649,847) 12,269,472
Total Business-type activities 14,963,727 (2,649,847) 12,313,880 Total receivables $ 20,664,359 $ (2,649,847) $ 18,014,512 As of June 30, 2025, the City’s receivables are composed of 19.7% from other governments and 80.3% from individuals and businesses. Receivables from other governments primarily include amounts due from state and federal grant reimbursements for infrastructure projects and operational programs. Receivables from individuals and businesses consist of utility charges, lease payments, and housing and economic development loans.

No single individual, business, or government entity accounts for more than 25% of the total receivables. As a result, the City does not consider its receivables to be subject to significant concentration risk. 51 Attachment 1

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NOTE 5 – LOANS AND NOTES RECEIVABLE
Through the City's various housing rehabilitation funds, first-time homebuyer funds, and business/economic development loan programs, the City provides loans to qualifying individuals and businesses to support affordable housing, community development, and economic growth. Interest rates vary depending on the terms of the loan, ranging from 0% to market, and interest accrues on loans that bear interest. Loans are typically secured by property liens to ensure repayment.

Loans and notes receivable for the year ended June 30, 2025, consisted of the following:

Loans and Notes Receivable
Beginning Ending
7/1/2024 Additions Deletions 6/30/2025
Major governmental funds:

Other Agencies 1,817,466 245,000 (22,990) 2,039,476
Miscellaneous 1,818 (1,013) 805
Nonmajor governmental funds:

Special revenue funds:

LMIHF Housing Asset Fund 1,505,348 462,291 - 1,967,639
CDBG Program Income 353,276 131,938 (134,747) 350,467
Home Program Income 8,671,726 471,457 (148,191) 8,994,992 Total governmental funds 12,349,634 1,310,686 (306,941) 13,353,379 Total loans/notes receivable $ 12,349,634 $ 1,310,686 $ (306,941) $ 13,353,379 Loan Terms and Policies
Loan Terms:
 Loan terms typically range from 1 to 30 years, depending on the specific program or fund requirements.  Fixed interest rates are applied, ranging from 0% to market, as determined by individual loan agreements.

Default and Delinquency:
 The City monitors loans for delinquency and default. Delinquent loans are subject to collection procedures as outlined in the loan agreements.
 Loans in default may be subject to foreclosure or other legal remedies based on the lien agreements.

Allowance for Doubtful Accounts:
 As of June 30, 2025, the City has determined that all loans are collectible, and no allowance for doubtful accounts has been recorded.

Notes Receivable:
 Notes receivable represent individual loans secured by property liens in favor of the City and the Redevelopment Successor Agency. These loans are funded through various programs, including Community Development Block Grants (CDBG) and federal HOME housing programs. When repaid, the funds are designated for purposes allowed under reuse guidelines. 52 Attachment 1

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NOTE 5 – LOANS AND NOTES RECEIVABLE (CONTINUED)
Program Descriptions
Other Agencies:
 Includes loans provided to the Ukiah Valley Fire Protection District and the Mendocino Solid Waste Management Authority (MSWMA). These loans are typically offered interest-free to honor the partnership nature of the relationship between the City and these agencies. The loans are intended to support operational needs and are structured to be repaid as quickly as possible.

LMHIF Housing Asset Fund:
 Supports low- and moderate-income housing initiatives, consistent with state and federal guidelines.

CDBG Program Income:
 Provides loans for community and economic development activities, primarily for low- and moderateincome households.

HOME Program Income:
 Funds affordable housing activities, including first-time homebuyer assistance and housing rehabilitation projects.
[THIS AREA LEFT BLANK INTENTIONALLY]
53 Attachment 1

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NOTE 6 – CAPITAL ASSETS
Governmental capital asset activity for the year ended June 30, 2025, was as follows:

Capital Assets - Governmental
Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Governmental activities:

Nondepreciable assets:

Land $ 4,596,065 $ 1,079,185 - - $ 5,675,250
Construction in progress 7,547,345 12,724,176 (183,323) (4,088,231) 15,999,967 Total nondepreciable assets 12,143,410 13,803,361 (183,323) (4,088,231) 21,675,217 Depreciable assets:

Buildings and improvements 21,938,365 45,900 - 327,113 22,311,378 Technology subscriptions 1,382,407 597,863 - - 1,980,270 Machinery, equipment, and vehicles 11,487,723 1,456,032 (139,740) 389,960 13,193,975 Infrastructure and network 74,070,077 846,467 - 4,082,843 78,999,387 Total depreciable assets 108,878,572 2,946,262 (139,740) 4,799,916 116,485,010 Total 121,021,982 20,837,854 (323,063) (3,376,546) 138,160,227 Accumulated depreciation and amortization:

Buildings and improvements (9,826,841) (729,178) - (212,623) (10,768,642) Technology subscriptions (616,671) (547,774) - - (1,164,445) Machinery, equipment, and vehicles (7,257,399) (548,133) 139,740 (285,212) (7,951,004) Infrastructure and network (28,495,649) (1,228,728) - - (29,724,377) Total accumulated depreciation (46,196,560) (3,053,813) 139,740 (497,835) (49,608,468) Net depreciable assets 62,682,012 (107,551) - 4,302,081 66,876,542 Total governmental capital assets, net 74,825,422 13,695,810 (183,323) 213,850 88,551,759 Allocation of Depreciation and Amortization Expense
Governmental Activities:

General government $ 834,913
Housing and community development 491
Public works 1,555,961
Public safety 185,613
Recreation and culture 193,602
Parks, buildings, and grounds $283,233
Total Depreciation Expense $ 3,053,813
54 Attachment 1

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NOTE 6 – CAPITAL ASSETS (CONTINUED)
Business-type capital asset activity for the year ended June 30, 2025, was as follows:

Capital Assets - Business-type
Balance Balance
July 1, 2024 Additions Deletions Transfers June 30, 2025 Business-type activities:

Nondepreciable assets:

Land $ 8,051,152 $ - $ - $ - $ 8,051,152
Capacity rights 270,000 450,000 - - 720,000
Construction in progress 51,265,537 27,031,234 (4,615) (7,768,781) 70,523,375 Total nondepreciable assets 59,586,689 27,481,234 (4,615) (7,768,781) 79,294,527 Depreciable assets:

Buildings and improvements 63,789,794 - - (327,113) 63,462,681 Machinery, equipment, and vehicles 15,701,245 1,137,037 - (240,752) 16,597,530 Infrastructure and network 179,913,589 360,926 - 7,624,961 187,899,477 Total depreciable assets 259,404,628 1,497,963 - 7,057,096 267,959,688 Total 318,991,317 28,979,197 (4,615) (711,685) 347,254,215 Accumulated depreciation:

Buildings and improvements (38,298,692) (1,391,498) - 212,624 (39,477,566) Machinery, equipment, and vehicles (10,084,505) (773,948) - 285,212 (10,573,241) Infrastructure and network (48,828,264) (3,903,469) - - (52,731,733) Total accumulated depreciation (97,211,461) (6,068,914) - 497,836 (102,782,540) Net depreciable assets 162,193,167 (4,570,952) - 7,554,932 165,177,148 Total business-type capital assets, net $ 221,779,856 $ 22,910,282 $ (4,615) $ (213,850) $ 244,471,674 Business-type Activities:

Water $ 1,866,161
Sewer 2,273,091
Electric 1,507,958
Landfill 14,681
Parking 1,195
Airport 234,060
Conference Center 50,979
Golf 5,706
Ambulance 115,083
Total Depreciation Expense $ 6,068,914
55 Attachment 1

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NOTE 7 – LONG-TERM LIABILITIES
The following is a summary of changes in long-term liabilities for the year ended June 30, 2025.

Long-term Obligations
Beginning
Balance Ending Balance
Governmental Activities July 1, 2024 Additions Reductions Transfers June 30, 2025 2017 fire engine lease (direct borrowing) $ 426,313 $ 118,051 - $ -$ 308,262 $ $ 121,016 2017 I-Bank financing lease (direct borrowing) 3,478,158 - 97,291 - 3,380,867 100,501 Technology subscription liability 613,386 597,861 401,717 - 809,531 447,131 2020 fire brush truck equipment lease (direct borrowing) 143,035 - 22,437 - 120,598 22,980 2020 fire self-contained breathing apparatus equipment lease (direct borrowing) 232,675 - 33,485 - 199,190 34,295 Series 2020A Community Facilities Lease Revenue Bonds 2,105,000 - 95,000 - 2,010,000 100,000 2020A unamortized premium 298,460 - 17,556 - 280,904 17,556 Series 2020B CalPERS Taxable Lease Revenue Bonds 30,333,090 - 864,708 - 29,468,382 897,216 Series 2022 Lease Revenue Bonds (Street Projects) 12,770,000 - 1,385,000 - 11,385,000 1,440,000 2022 unamortized premium- Streets Projects 1,174,156 - 167,737 - 1,006,419 167,737 Series 2022 Lease Revenue Bonds (Corporation Yard Projects) 14,335,000 - 290,000 - 14,045,000 305,000 2022 unamortized premium-Corp Yard Projects 1,093,264 - 40,491 - 1,052,773 40,491 Net pension liability 15,501,374 - 2,066,554 - 13,434,818 - Compensated absences 1,266,685 73,159 - 110,494 1,450,338 145,034 Total $ 83,770,596 $ 671,020 $ 5,600,027 110,494$ $ 78,952,081 $ 3,838,956 Business-Type Activities
2017 CalTrans Aeronautics Loan - Airport (direct borrowing) $ 126,920 $ - $ 11,417 -$ 115,503 $ $ 11,683 2016 Water Revenue Refunding Bonds 7,205,000 - 460,000 - 6,745,000 480,000 2016 unamortized premium 1,142,676 - 95,223 - 1,047,453 95,223 Landfill closure and post-closure 21,936,738 546,455 - - 22,483,193 - 2017 SWRCB recycled water loan (direct borrowing) 16,648,813 - 540,179 - 16,108,633 545,581 Series 2020 Wastewater Refunding Bonds 19,206,000 - 1,543,000 - 17,663,000 1,581,000 Series 2020B CalPERS Taxable Lease Revenue Bonds 16,321,910 - 465,292 - 15,856,618 482,778 Series 2022 Lease Revenue Bonds (Utilities Projects) 8,770,000 - - - 8,770,000 - 2022 Utilities unamortized premium - Utilities Projects 1,011,272 - 59,486 - 951,786 59,486 Series 2022 Electric Revenue Bonds 8,880,000 - 330,000 - 8,550,000 345,000 2022 Electric unamortized premium 938,409 - 55,200 - 883,209 55,200 2024 Ambulance and emergency equipment lease (direct borrowing) - 711,225 52,337 - 658,888 130,426 Net pension liability 4,219,844 801,410 - - 5,021,254 - Compensated absences 701,692 164,721 - (110,494) 755,918 75,592 Total $ 107,109,274 $ 2,223,810 $ 3,612,134 (110,494)$ $ 105,610,456 $ 3,861,969 Due within One Year
The general fund is primarily responsible for liquidating the net pension liability and compensated absences of governmental activities.

GOVERNMENTAL ACTIVITIES
2017 Fire Engine Lease (direct borrowing)
In October 2017, the City entered into a finance purchase agreement with Umpqua Bank for the purchase of two Type-1 fire engines totaling $1,125,731. Principal and interest payments are due semi-annually on May 1 and November 1 of each year with an interest rate of 2.45 percent. Lease payments are made by the General Fund. The total combined amount of accumulated depreciation on both fire engines is $408,993. The agreement contains a provision that if a default occurs then the City shall pay to the lessor the entire outstanding balance of all progress payments advanced by lessor plus all interim rent due through the commitment termination date. Interest shall accrue on the total amount due hereunder at the lesser of eighteen percent (18 %) per annum or the maximum rate permitted by law from the commitment termination date to the date of actual payment. 56 Attachment 1

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NOTE 7 – LONG-TERM LIABILITIES (CONTINUED)
2017 I-Bank Financing Lease (direct borrowing)
In August 2017, the City entered into an agreement for $4,000,000 with the California Infrastructure and Economic Development Bank (I-Bank) to finance roadway and other right-of-way improvements related to the Redwood Business Park. Principal is paid annually commencing on August 1, 2018, and interest payments are made semiannually on August 1 and February 1 at an interest rate of 3.30 percent. Lease payments are made primarily by the General Fund. The total combined amount of accumulated depreciation on the roadway improvements is $400,000.

The funds are secured with collateral of a leased asset located at 300 Seminary Avenue, Ukiah. The note contains a provision that in the event of default, and to terminate the financing lease, the City will surrender the possession of the leased asset. The City may elect not to terminate the lease, and to continue to pay each installment. There contain no acceleration clauses.

Subscription-Based Information Technology Arrangements (SBITAs) The City has entered into three subscription-based information technology arrangements (SBITAs) subject to GASB Statement No. 96, which require the recognition of a right-to-use intangible asset and a corresponding liability for the subscription term. These arrangements support essential City operations. During the fiscal year ended June 30, 2025, the City recorded a principal reduction of $40,250 on its SBITA liability. Payments under these agreements are budgeted annually and allocated to the respective operating funds benefiting from the arrangements. The liability reflects the present value of future payments discounted at the City’s incremental borrowing rate of 3.5%.
2020 Fire Brush Truck Lease (direct borrowing)
In February 2020, the City entered into a finance purchase agreement with Umpqua Bank for the purchase of one Skeeter fire brush truck totaling $227,606. Principal and interest payments are due semi-annually on March 1 and September 1 of each year with an interest rate of 2.8 percent. Lease payments are made by the General Fund. The total combined amount of accumulated depreciation on this truck is $34,141. The agreement contains a provision that if a default occurs then the City shall pay to the lessor the entire outstanding balance of all progress payments advanced by lessor plus all interim rent due through the commitment termination date. Interest shall accrue on the total amount due hereunder at the lesser of eighteen percent (18%) per annum or the maximum rate permitted by law from the commitment termination date to the date of actual payment. 2020 Self-Contained Breathing Apparatus Lease (direct borrowing) In November 2020, the City entered an equipment lease with Umpqua Bank for the purchase of one self-contained breathing apparatus system totaling $343,762.85. Principal and interest payments are due on June 1 and December 1 of each year with an interest rate of 2.39 percent. Lease payments are made by both the General Fund and the Ukiah Valley Fire District at an even 50 percent split. The agreement contains a provision that if a default occurs then the City shall pay to the lessor the entire outstanding balance of all progress payments advanced by lessor plus all interim rent due through the commitment termination date. Interest shall accrue on the total amount due hereunder at the lesser of eighteen percent (18%) per annum or the maximum rate permitted by law from the commitment termination date to the date of actual payment.

Series 2020A Lease Revenue Bonds (Community Facilities Improvement Project) The Series 2020A Lease Revenue Bonds (Community Facilities Improvement Project), dated December 1, 2020, were issued in the original amount of $2,530,000 and are secured with a pledge consisting primarily of base rental payments to be made by the City as rental for certain City-owned property. The bonds were issued to reimburse the City for the purchase of the Bank of America building in 2020 and to fund renovations for the new customer service center and roof replacement at the museum. As of June 30, 2025, renovations have been delayed due to compliance with ADA and other architectural challenges, and the remaining bond proceeds continue to be reserved for these improvements. Principal payments are due annually in amounts ranging from $150,000 to $175,000 through 2040, 57 Attachment 1

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NOTE 7 – LONG-TERM LIABILITIES (CONTINUED)
with interest payable semi-annually on April 1 and October 1, at rates ranging from 3.00 percent to 4.00 percent. In the event of default, there is no remedy of acceleration of the total base rental payments due over the term of the lease, and neither the Ukiah Public Financing Authority nor the Trustee is empowered to sell or relet the leased facilities to redeem the bonds or pay debt service.

Series 2020B Taxable Lease Revenue Bonds (CalPERS Prepayment Project) Dated December 1, 2020, the original amount of the obligation was $49,875,000 and is secured with a pledge consisting primarily of base rental payments to be made by the City as rental for certain City-owned property. This obligation is shared with business-type funds, with the governmental fund’s share being 65 percent. The obligation principal is payable in annual installments, ranging from $705,000 to $3,015,000 through year 2049. Interest is payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2023, with an interest rate ranging from 1.37 percent to 3.706 percent. The Series 2020B Taxable Lease Revenue Bonds were issued to refinance a portion of the UAL of the City’s Miscellaneous, Safety Fire, and Safety Police pension plans with CalPERS. In the event of a default, there is no remedy of acceleration of the total base rental payments due over the term of the lease and neither the Ukiah Public Financing Authority nor the Trustee are empowered to sell or relet the leased facilities and use the proceeds of such sale or reletting to redeem the bonds or pay debt service with respect thereto.

Series 2022 Lease Revenue Bonds (Street Projects)
Dated March 9, 2022, the original amount of the obligation was $15,350,000 and is secured with a pledge consisting primarily of base rental payments made for the use of all the city’s street. The obligation principal is payable in annual installments beginning April 1, 2023, ranging from $1,245,000 to $1,825,000. Interest on the Bonds are payable semiannually on April 1 and October 1 of each year, commencing October 1, 2023, and bear an interest rate of 4.0 percent. The Series 2023 Lease Revenue Bonds (Street Projects) were issued to finance various street improvement projects. In the event of a default, there is no remedy of acceleration of the total base rental payments due over the term of the lease and neither the Ukiah Public Financing Authority nor the Trustee are empowered to sell or relet the leased facilities and use the proceeds of such sale or reletting to redeem the bonds or pay debt service with respect thereto.

Series 2022 Lease Revenue Bonds (Corporation Yard Projects) Dated March 9, 2022, the original amount of the obligation was $14,850,000 and is secured with a pledge consisting primarily of base rental payments made for the use of all the city’s street. The obligation principal is payable in annual installments, ranging from $235,000 to $815,000. Interest on the Bonds are payable semiannually on April 1 and October 1 of each year, commencing October 1, 2023, and bear an interest rate of 4.0 percent. The Series 2023 Lease Revenue Bonds (Corporation Yard Projects) were issued to finance the renovation of the city’s Corporation Yard facilities. In the event of a default, there is no remedy of acceleration of the total base rental payments due over the term of the lease and neither the Ukiah Public Financing Authority nor the Trustee are empowered to sell or relet the leased facilities and use the proceeds of such sale or reletting to redeem the bonds or pay debt service with respect thereto.
58 Attachment 1

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NOTE 7 – LONG-TERM LIABILITIES (CONTINUED)
The annual debt service of these obligations to maturity are as follows: Debt Service Schedule Governmental Year Ending June 30,
Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2026 121,016 6,943 100,501 120,053 447,131 31,071 22,980 2,764 34,295 4,587 2027 124,055 3,904 103,817 116,381 171,234 13,978 23,536 2,208 35,125 3,757 2028 63,191 789 107,243 112,587 139,254 7,455 24,106 1,638 35,975 2,907 2029 - - 110,782 108,667 51,911 2,025 24,689 1,055 36,846 2,036 2030 - - 114,438 104,619 - - 25,287 457 37,738 1,144 2031-2035 - - 631,394 457,530 - - - - 19,210 231 2036-2040 - - 742,680 334,291 - - - - - - 2041-2045 - - 873,582 189,329 - - - - - - 2046-2050 - - 596,435 33,567 - - - - - - 2051-2055 - - - - - - - - - - Total $ 308,262 $ 11,636 $ 3,380,872 $ 1,577,024 $ 809,529 $ 54,529 $ 120,598 $ 8,122 $ 199,189 $ 14,662 Due within one year 121,016 $ $ 6,943 $ 100,501 $ 120,053 $ 447,131 $ 31,071 $ 22,980 $ 2,764 $ 34,295 $ 4,587 Due after one year 187,246 4,693 3,280,371 1,456,971 362,399 23,458 97,618 5,358 164,894 10,075 Total 308,262 $ $ 11,636 $ 3,380,872 $ 1,577,024 $ 809,529 $ 54,529 $ 120,598 $ 8,122 $ 199,189 $ 14,662 Year Ending
June 30,
Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2026 100,000 80,400 897,216 1,127,367 1,440,000 455,400 305,000 537,263 3,468,139 2,365,848 2027 105,000 76,400 916,722 1,105,489 1,500,000 397,800 315,000 525,063 3,294,489 2,244,980 2028 110,000 72,200 952,480 1,081,303 1,560,000 337,800 325,000 512,463 3,317,249 2,129,142 2029 115,000 67,800 991,490 1,054,172 1,620,000 275,400 340,000 499,463 3,290,718 2,010,617 2030 120,000 63,200 1,033,750 1,024,665 1,685,000 210,600 355,000 485,863 3,371,213 1,890,548 2031-2035 655,000 242,000 5,867,669 4,587,293 3,580,000 216,200 2,005,000 2,200,165 12,758,273 7,703,419 2036-2040 805,000 99,000 7,346,778 3,365,395 - - 2,450,000 1,748,565 11,344,458 5,547,251 2041-2045 8,260,249 1,694,671 - - 2,850,000 1,222,565 11,983,831 3,106,565 2046-2050 3,202,028 276,192 - - 5,100,000 628,039 8,898,463 937,798 2051-2055 - - - - - - 1,605,000 78,651 1,605,000 78,651 Total $ 2,010,000 $ 701,000 $ 29,468,382 $ 15,316,547 $ 11,385,000 $ 1,893,200 $ 15,650,000 $ 8,438,100 $ 63,331,833 $ 28,014,820 Due within one year 100,000 $ $ 80,400 $ 897,216 $ 1,127,367 $ 1,440,000 $ 455,400 $ 305,000 $ 537,263 $ 3,468,139 $ 2,365,848 Due after one year 1,910,000 620,600 28,571,166 14,189,180 9,945,000 1,437,800 15,345,000 7,900,837 59,863,694 25,648,972 Total 2,010,000 $ $ 701,000 $ 29,468,382 $ 15,316,547 $ 11,385,000 $ 1,893,200 $ 15,650,000 $ 8,438,100 $ 63,331,833 $ 28,014,820 Series 2022 Lease Revenue Bonds (Corporation Yard Projects) Total Series 2020A Community Facilities Lease Revenue Bonds
Governmental Activities Capital Lease, Fire Brush Truck (2020)
Series 2020B CalPERS Taxable Lease Revenue Bonds Series 2022 Lease Revenue Bonds (Street Projects) Capital Lease, Fire Engines (2017) I-Bank Financing Lease (2017) Equipment Lease, Self-Contained
Technology Subscription Liability Breathing Apparatus (2020) Business-Type Activities
2017 Caltrans Aeronautics Loan – Airport (direct borrowing) Loan issued to the City for the design, purchase, and installation of a 12,000-gallon service aviation gas fuel tank at the Ukiah Municipal Airport. Annual principal and interest payments are made at an annual interest rate of 2.33 percent, are due February each year. Revenues generated by airport operations secure payments. In the event of default, the State may take one or more of the following actions: (i) declare the entire outstanding principal amount of the loan and all accrued interest immediately due and payable; (ii) notify the City that they may be ineligible for future financing under the program.
2016 Water Revenue Refunding Bonds
Dated March 1, 2016, the original amount of the obligation was $11,155,000 and is secured with a pledge of net revenues from the City’s Water system. The obligation principal is payable in annual installments beginning September 1, 2016, ranging from $475,000 to $740,000 through September 1, 2035. Interest payments commence September 1, 2016, and are payable semiannually on September 1st and March 1st and pay interest ranging from 2.00 percent to 3.125 percent. The bonds contain a provision that, in an event of default, outstanding amounts may become immediately due. The 2016 Water Revenue Refunding Bonds were issued to refund the 2005 ABAG Bonds 59 Attachment 1

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NOTE 7 – LONG-TERM LIABILITIES (CONTINUED)
(Water Treatment Plant Installment Loan) and the SWRCB Water Treatment Loan. The two debt obligations were used to acquire and construct capital improvements to the City’s water treatment plant.

Series 2020 Wastewater Revenue Refunding Obligations (2020 Wastewater Refunding Project) Dated February 24, 2020, the original amount of the obligation was $25,010,000 and is secured with a pledge of net revenues from the City’s wastewater system. Proceeds were used to refund the ABAG 2006 Water & Wastewater Revenue Bonds, Series A. The obligation principal and interest payments at an annual interest rate of 2.42% are payable in annual installments, ranging from $1,998,772 to $1,999,719 through March 1, 2035. The bonds contain a provision that, in an event of default, outstanding amounts may become immediately due. 2017 SWRCB Recycled Water Loan (direct borrowing)
In July 2017, the City entered into an agreement with the California State Water Resource Control Board (SWRCB) to finance the development and construction of a recycled water system. Construction was completed in September 2019. Annual principal and interest payments will be made for a thirty-year term at an interest rate of 1.00 percent.

The loan will be repaid with revenues from the Water Enterprise Fund. In the event of a breach of contract, the City will immediately repay any amount equal to the project funds disbursed, accrued interest, penalty assessments and additional payments.

Series 2020B Taxable Lease Revenue Bonds (CalPERS Prepayment Project) Dated December 1, 2020, the original amount of the obligation was $49,875,000 and is secured with a pledge consisting primarily of base rental payments to be made by the City as rental for certain City-owned property. This obligation is shared with governmental funds, with the business-type fund’s share being 35 percent. The obligation principal is payable in annual installments beginning April 1, 2021, ranging from $705,000 to $3,015,000 through year 2049. Interest is payable semi-annually on April 1 and October 1 of each year, commencing October 1, 2021, with an interest rate ranging from 1.37 percent to 3.706 percent. The Series 2020B Taxable Lease Revenue Bonds were issued to refinance a portion of the UAL of the City’s Miscellaneous, Safety Fire, and Safety Police pension plans with CalPERS. In the event of a default, there is no remedy of acceleration of the total base rental payments due over the term of the lease and neither the Ukiah Public Financing Authority nor the Trustee are empowered to sell or relet the leased facilities and use the proceeds of such sale or reletting to redeem the bonds or pay debt service with respect thereto.

Series 2022 Lease Revenue Bonds (Utilities Projects)
Dated March 9, 2022, the original amount of the obligation was $8,770,000 and is secured with a pledge consisting primarily of base rental payments made for the use of all the city’s street. The obligation principal is payable in annual installments, ranging from $435,000 to $760,000. Interest on the Bonds are payable semiannually on April 1 and October 1 of each year, commencing October 1, 2022, and bear an interest rate of 4.0 percent. The Series 2022 Lease Revenue Bonds (Corporation Yard Projects) were issued to finance various utility projects. In the event of a default, there is no remedy of acceleration of the total base rental payments due over the term of the lease and neither the Ukiah Public Financing Authority nor the Trustee are empowered to sell or relet the leased facilities and use the proceeds of such sale or reletting to redeem the bonds or pay debt service with respect thereto.

Series 2022 Electric Revenue Bonds
Dated March 3, 2022, the original amount of the obligation was $9,190,000. The obligation is payable solely from the revenues and from certain other amounts of deposit in funds and accounts. The obligation principal is payable in annual installments, ranging from $310,000 to $680,000. Interest on the Bonds are payable in annual installments commencing on March 1, 2023, and bear interest rates of 3.0 to 5.0 percent. The Series 2023 Bonds are being issued to (i) finance improvements to the Electric System of the City, and (ii) pay certain costs incurred in connection with the issuance of the Bonds. In the event of default, the Trustee has the right to accelerate the total unpaid 60 Attachment 1

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NOTE 7 – LONG-TERM LIABILITIES (CONTINUED)
principal amount of the unpaid payments under the Installment Sale Agreement, including the Installment Payments. However, due to events outside the control of the City, there is no assurance that the City would have sufficient funds to pay the accelerated payments.
2024 Ambulance & Emergency Equipment Lease (direct borrowing) In October 2024, the City entered into a municipal lease-purchase agreement with Umpqua Bank Equipment Leasing & Finance to acquire three ambulances and emergency medical equipment totaling $711,225. Monthly payments of $13,524 are due from February 1, 2025, through January 1, 2030, including an administrative fee assessed with the first payment. In the event of default, the Lessor may accelerate all amounts due and recover the equipment as provided in the agreement. Title transfers to the City upon payment of all installments and the $1 purchase option.

The annual debt service of these obligations to maturity are as follows:

Debt Service Schedule
Business-type
Year Ending
June 30,
Principal Interest Principal Interest Principal Interest Principal Interest Principal Interest 2026 11,683 2,691 480,000 270,569 545,581 161,086 1,581,000 417,934 482,784 606,771 2027 11,956 2,419 505,000 245,943 551,037 155,631 1,620,000 379,444 493,278 594,996 2028 12,234 2,140 530,000 220,069 556,548 150,120 1,659,000 339,998 512,520 581,978 2029 12,519 1,855 560,000 192,819 562,113 144,555 1,700,000 299,608 533,510 567,238 2030 12,811 1,564 585,000 164,193 567,734 138,934 1,741,000 258,226 556,250 551,361 2031-2035 54,300 3,201 3,345,000 403,522 2,924,974 608,363 9,362,000 634,318 3,157,331 2,468,374 2036-2040 - - 740,000 11,563 3,074,178 459,160 - - 3,953,222 1,810,882 2041-2045 - - - - 3,230,992 302,347 - - 4,444,751 911,884 2046-2050 - - - - 3,395,806 137,534 - - 1,722,972 148,616 2051-2055 - - - - 699,671 6,997 - - - - Total $ 115,503 $ 13,870 $ 6,745,000 $ 1,508,678 16,108,633 2,264,726 $ 17,663,000 $ 2,329,528 $ 15,856,618 $ 8,242,100 Due within one year $ 11,683 $ 2,691 $ 480,000 $ 270,569 $ 545,581 $ 161,086 $ 1,581,000 $ 417,934 $ 482,784 $ 606,771 Due after one year 103,820 11,179 6,265,000 1,238,109 15,563,052 2,103,640 16,082,000 1,911,594 15,373,834 7,635,329 Total 115,503 $ $ 13,870 $ 6,745,000 $ 1,508,678 $ 16,108,633 $ 2,264,725 $ 17,663,000 $ 2,329,528 $ 15,856,618 $ 8,242,100 Year Ending
June 30,
Principal Interest Principal Interest Principal Interest Principal Interest 2026 - 356,300 345,000 356,350 130,426 31,860 3,576,474 417,934 2027 - 356,300 360,000 339,100 137,527 24,759 3,678,798 379,444 2028 435,000 356,300 360,000 321,100 145,014 17,272 4,210,316 339,998 2029 455,000 338,900 395,000 303,100 152,909 9,377 4,371,051 299,608 2030 470,000 320,700 415,000 283,350 93,012 1,654 4,440,807 258,226 2031-2035 2,660,000 1,300,000 2,390,000 1,111,600 - - 23,893,605 634,318 2036-2040 3,255,000 700,000 2,945,000 549,450 - - - - 2041-2045 1,495,000 90,200 1,340,000 60,600 - - - - 2046-2050 - - - - - - - - 2051-2055 - - - - - - - - Total $ 8,770,000 $ 3,818,700 $ 8,550,000 $ 3,324,650 $ 658,888 $ 84,923 74,467,642 $ 21,587,174 Due within one year $ 356,300 - $ $ 345,000 $ 356,350 $ 130,426 $ 31,860 $ 3,576,474 $ 417,934 Due after one year 8,770,000 3,462,400 8,205,000 2,968,300 528,462 53,063 70,891,168 21,169,240 Total 8,770,000 $ $ 3,818,700 $ 8,550,000 $ 3,324,650 $ 658,888 $ 84,923 $ 74,467,642 $ 21,587,174 Business-type Activities
2017 SWRCB Recycled Water Loan
Series 2020B CalPERS Taxable Lease
Revenue Bonds
Municipal Lease-Purchase,
Ambulances and Emergency
Series 2022 Lease Revenue Bonds
(Utilities Projects) Series 2022 Electric Revenue Bonds Total 2017 CalTrans Aeronautics Loan -
Airport
2016 Water Revenue Refunding
Bonds
Series 2020 Wastewater Refunding
Bonds
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NOTE 8 – LANDFILL CLOSURE
State and federal laws and regulations require the City to place a final cover on its landfill upon closure and to perform maintenance and monitoring functions at the landfill site for 30 years after closure. The recognition of closure and post-closure care costs is based on the amount of landfill used during the year. As of June 30, 2025, the estimated liability for landfill closure and post-closure care costs is $22,483,193, including $1,183,865 for corrective action liability. This liability reflects 100.0% usage (filled) of the landfill.

The estimated total current cost of landfill closure and post-closure care is based on the most recent engineering study, which assumes all equipment, facilities, and services required to close, monitor, and maintain the landfill were acquired as of June 30, 2025. Actual costs may vary due to inflation, changes in technology, or revisions to state and federal regulations.

At June 30, 2025, the City has $11,163,067 in cash and other current assets designated for landfill closure and postclosure care, $11,100,607 of which is held within its pooled investments. This leaves a funding shortfall of $11,320,126, which the City intends to address through future annual contributions, service charges, and other revenue sources.

The liability includes the following components:

Final cover installation: $12,544,088
Post-closure monitoring: $8,755,240
Corrective action liability: $1,183,865
The City adjusts the estimated liability for inflation annually using the U.S. Department of Commerce, Bureau of Economic Analysis, Table 4.

The City is in compliance with all current state and federal laws governing landfill closure and post-closure care.

Changes in regulations or environmental conditions may result in additional costs. [THIS AREA LEFT BLANK INTENTIONALLY]
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NOTE 9 – INTERFUND TRANSACTIONS
Interfund transactions are an integral component of the City’s financial operations, facilitating the transfer of resources between funds to support operations, capital projects, and debt service requirements. These transactions occur with City Council approval as part of the budget process and are recorded in accordance with the City's debt management policy.

INTERFUND TRANSFERS
Transfers represent the reallocation of resources between funds, primarily for the following purposes:

1. To provide subsidies from one fund to another.

2. To fund significant capital projects.

3. To accumulate resources for debt service.

The schedule below details interfund transfers for the fiscal year ended June 30, 2025:

Interfund Transfers
Transfers Out General Fund
Streets Capital
Improvement
General Capital
Projects
Non-major
Governmental
Funds Landfill Water Total
General fund $ 2,757,989 - $ $ 2,498 - $ $ - $ 2,760,487 - $ Non-major governmental funds 1,101,769 - - 3,711 430,000 - 1,535,480 Water - - 305,563 - - - 305,563 Wastewater - - 1,141,648 - - 300,000 1,441,648 Total $ 1,101,769 $ 2,757,989 $ 1,447,211 $ 6,209 $ 430,000 $ 300,000 $ 6,043,178 Transfers In
Significant transfers during the year included:
• $2,757,989 transferred from the General Fund to the Streets Capital Improvement Fund, funded in part by Measure Y proceeds, to support streets and transportation-related capital improvement projects. • $1,101,769 transferred from non-major governmental funds to the General Fund to support general municipal operations in accordance with adopted budget allocations. • $430,000 transferred from the transfer station governmental funds to the Landfill Fund to support landfill closure, post‑closure, and related regulatory compliance activities. • $305,563 transferred from the Water Fund to the General Capital Projects Fund to finance system capital improvements and related infrastructure needs.
• $300,000 transferred from the Wastewater Fund to the Water Fund to support annual operating costs of recycled water facilities.
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NOTE 9 – INTERFUND TRANSACTIONS (CONTINUED)

INTERFUND BORROWING
Pursuant to the City’s debt management policy, interfund loans are recorded for the purposes of financing operations, grant activities, or capital projects on a temporary basis.

Interfund borrowing facilitates the temporary and long-term reallocation of resources to manage cash flow and finance operational and capital needs. These transactions are classified into the following categories:

Interfund Borrowing and Internal Balances
Fund Name Amount Fund Name Amount
City Wastewater Operations $ 293,243 Water $ 293,243
Conference Center Fund 175,264 General Fund 175,264
Winter Special Events 33,556 General Fund 33,556
Prop 172 1,000 General Fund 1,000
City Wastewater Operations 1,000,000 Pension Stabilization Fund 1,000,000 Streets Capital Improvements 1,000,000 General Capital Projects 1,000,000 Streets Capital Improvements 1,281,906 2106 Gas Tax 1,281,906 Water 1,000,000 General Capital Projects 1,000,000
Total Due To 4,784,969 Total Due From 4,784,969
Fund Name Amount Fund Name Amount
Riverside Park 12,005 General Fund 12,005
ARRC 26,601 General Fund 26,601
Winter Special Events 177,590 General Fund 177,590
Rail Trail 140,359 General Fund 140,359
Parking District #1 26,136 General Fund 26,136
Transfer Station 58,551 General Fund 58,551
Ambulance Services Fund 1,529,771 General Fund 1,529,771 Golf 830,200 General Fund 830,200
Conference Center Fund 123,546 General Fund 123,546
Airport Capital Improvement 195,187 General Fund 195,187 Playground & Park Amenities 30,000 City Administrative Services 30,000 City Sewer Capital Projects 1,681,372 General Capital Projects 1,681,372 Water 425,707 Golf 425,707
Street Lighting 321,621 Electric 321,621
Ambulance Services Fund 1,300,000 General Capital Projects 1,300,000 City Wastewater Operations 3,000,000 Pension Stabilization Fund 3,000,000 Total Advances From 9,878,646 Total Advances To 9,878,646 Total Interfund Borrowing $ 14,663,615 $ 14,663,615
Borrowing Fund (Due To) Lending Fund (Due From)
Borrowing Fund (Advances From) Lending Fund (Advances To) Due To/From Other Funds:
 Represent temporary interfund borrowings expected to be repaid within the fiscal year.  These balances address timing differences between cash outflows and reimbursements or revenues.

Advances To/From Other Funds:
 Represent long-term interfund borrowings with specified repayment schedules.  These transactions are formalized through agreements, with terms and conditions approved per the City’s debt management policy.
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NOTE 10 – RISK MANAGEMENT
The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; and natural disasters for which the City participates The City is a member of the California Intergovernmental Risk Authority (CIRA), a public entity pool comprised of fifty statewide California charter and associate member cities (formerly the Redwood Empire Municipal Insurance Fund [REMIF], see Note 12 for additional information). CIRA is organized under a Joint Powers Agreement pursuant to the California Government Code. The purpose of CIRA is to arrange and administer programs of insurance for the pooling of selfinsured losses and to purchase excess insurance coverage. The City pays an annual premium to CIRA for its workers’ compensation, general liability and property coverage.

The City of Ukiah participates in the following three CIRA programs:

General Liability Insurance
Annual premiums are paid by the member cities and are adjusted retrospectively to cover costs. The City of Ukiah self-insures for the first $25,000 of each loss and pays 100 percent of all losses incurred under $25,000. The City does not share or pay for losses of other cities under $5,000, depending on the entity’s deductible amount.

Participating cities then share in the next $5,000 to $1,000,000 per loss occurrence. Specific coverage includes comprehensive and general automotive liability, personal injury, contractual liability, professional liability, and certain other coverage. CIRA is a member of Public Risk, Innovation, Solutions, and Management (PRISM), which provides CIRA with an additional $39,000,000 liability insurance coverage over and above CIRA retention level of $1,000,000.

Worker’s Compensation
Periodic deposits are paid by member cities and are adjusted retrospectively to cover costs. The City of Ukiah is self-insured for the first $50,000 of each loss and pays 100 percent of all losses incurred under $50,000. The City does not share or pay for losses of other cities under $5,000.

Property Insurance
The City participates in CIRA’s property insurance program. The annual deposits paid by participating member cities are based upon deductibility levels and are not subject to retroactive adjustments. The City of Ukiah has a deductible level of $25,000 for high-risk flood zones and $100,000 for all wildfire and property related claims, and a coverage limit of $600,000,000 declared value.

Separate internal service funds are maintained by the City for the City’s deductibles and allocated share of pooled costs noted above. The total cash and investments held in these funds at June 30, 2025, was $599,311.

Changes in the Internal Service Funds claims liability amounts in fiscal year 2025 and 2024 were as follows:
2025 2024
Balance, beginning of the fiscal year $ - $ 143,486
Claims and adjustments - - Claims payments - (143,486)
Balance, end of the fiscal year $ - $ -
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NOTE 10 – RISK MANAGEMENT (CONTINUED)
In the past four years, no claims for general liability or workers’ compensation have exceeded the City’s purchased insurance coverage.

In accordance with the CIRA governing documents, CIRA Board has the authority to levy a cash assessment for any pooled coverage program on the Participating member. CIRA’s overall equity balance was $30,559,260 as of June 30, 2024.

Risks Management Coverage
Amount Coverage Provider Payment Source
General Liability Claims:
$0-25,000 Self-insured Retention City funds
25,001-40,000,000 PRISM Shared risk pool
Workers Compensation Claims:
$0-10,000 Self-insured Retention City funds
10,001-750,000 (Non-Safety)
1,000,000 (Safety)
Commercial Re-insurance Shared risk pool
1,000,001-20,000,000 Commercial Reinsurance Shared risk pool Property Liability Claims:

Claims other than High Risk
Flood Claims:
$0-100,000 Deductible City funds
100,001-600,000,000 PRISM Shared risk pool
High Risk Flood Claims:
$0-10,000 Deductible City funds
10,001-100,000,000 PRISM Shared risk pool
The following is a summary of the most recent audited financial statements of REMIF as of and for the fiscal year ended June 30, 2024. As of the date of this report, 2025 information was not yet available.

REMIF Equity, June 30, 2024
Total assets $ 30,471,567
Total deferred outflows of resources - Total liabilities 18,560,643 To deferred inflow of resources 161,033
Members' equity $ 11,749,891
Net operating revenues $ 19,856,923
Total operating expenses 20,453,593
Operating income (loss) $ (596,670)
The following is a summary of the most recent audited financial statements of CIRA as of and for the fiscal year ended June 30, 2024.
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Ukiah City CouncilJanuary 21, 2026

Ukiah City Council
January 21, 2026