ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
ATTACHMENTS
1. Resolution Approving Amended and Revised CPP CAO Stamp
2. CPP PPT 3.25.2025 CC meeting
3. Draft Citizen Participation Plan 2025
4. Citizen Participation Plan 2020
CONTACT
Alicia M. Jones, Housing Director, (707) 648-4408
[email protected]
Approved as to form:
By: for
Veronica Nebb, City Attorney
RESOLUTION NO._______________
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO
APPROVING THE PROPOSED REVISED AND AMENDED CITIZEN
PARTICIPATION PLAN (CPP) FOR HOUSING AND COMMUNITY DEVELOPMENT WHEREAS, the City of Vallejo receives Community Development Block Grant and HOME Investment Partnerships (HOME) funding annually from the U.S. Department of Housing and Urban Development (HUD); and
WHEREAS, as a condition for receiving this funding, the City of Vallejo must submit to HUD a Consolidated Plan every five years and Annual Action Plans each year to support the Consolidated Plan; and
WHEREAS, the Consolidated Plan and Annual Action Plans must conform to the requirements set forth in 24 CFR Part 91; and
WHEREAS, 24 CFR Part 91.105 requires the City of Vallejo to adopt and follow a Citizen Participation Plan; and
WHEREAS, in response to 2020 legislation establishing the CDBG-CV program, the City incorporated new public participation guidance into its Citizen Participation Plan which shortened the public notification period to 15 days and allowed public hearings to be conducted remotely; and
WHEREAS, the 15-day provision is no longer in effect; and WHEREAS, HUD’s San Francisco field office has recommended the City of Vallejo revise its Citizen Participation Plan be revised to be more specific and more closely aligned with the requirements of 24 CFR Part 91.105; and
WHEREAS, the Citizen Participation Plan must specify the criteria the City will use for determining what changes in the jurisdiction's planned or actual activities constitute a substantial amendment to the consolidated plan; and
WHEREAS, the citizen participation plan must include, among the criteria for a substantial amendment, changes in the use of CDBG funds from one eligible activity to another; and WHEREAS, the current Citizen Participation Plan requires a substantial amendment if the City wished to transfer fifteen percent (15%) or more of the annual allocation from one activity to another; and
WHEREAS, Housing and Community Development staff recommends increasing this to forty percent (40%) of the annual allocation which would allow the City to respond to changing needs more expeditiously; and
WHEREAS, a draft of the revised and amended Citizen Participation Plan was released on February 24, 2025 for public review and comment until March 25, 2025, and WHEREAS, written and electronic comments received were promptly responded to; and WHEREAS, adopting the revised and amended Citizen Participation Plan is expected to have no fiscal impact; and
WHEREAS, the action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment or a reasonably foreseeably physical change in the environment pursuant to CEQA Guideline section 15378;
NOW, THEREFORE, BE IT RESOLVED, by the City Council of the City of Vallejo as follows:
BE IT FURTHER RESOLVED, the City Council hereby approves the revised and amended Citizen Participation Plan (CPP)
BE IT FURTHER RESOLVED, the Housing and Community Development Department is authorized to implement and follow the revised and amended Citizen Participation Plan.
PASSED AND ADOPTED by the City Council of the City of Vallejo this 25 th day of March 2025.
AYES:
NOES:
ABSTAIN:
ABSENT:
Attest:
By:__________________________
City Clerk
CITY OF VALLEJO
REGULAR CITY COUNCIL MEETING
March 25, 2025
ACTION CALENDAR Item 8.I.
ADOPT A RESOLUTION
APPROVING AMENDMENTS
AND REVISIONS TO THE
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
FOR HUD COMMUNITY PLANNING AND
DEVELOPMENT PROGRAMS
Alicia M. Jones, Housing Director
Citizen Participation Plan (CPP)
Amendments and Revisions
What is Citizen Participation?
❑The primary goal is to provide citizens of the community where Community Planning and Development (CPD) funded activities will take place and to provide an opportunity to participate in an advisory role in the planning, implementation, and assessment of the programs and projects.
❑Entitlement cities must have a plan for involving its citizens in the programming of CPD- funded activities.
❑That plan must be written and adopted by your governing body and the public. ❑The plan itself needs to describe how citizens can provide input into the program throughout its duration.
Purpose of a Citizen Participation Plan
A process for encouraging citizens, including
minorities and non-English speaking persons, as
well as persons with disabilities, to participate in the development of the Consolidated Plan and any of its
Annual Action Plans, any substantial amendments, the
performance report, and the CPP itself.
What is a Consolidated Plan?
A Consolidated Plan serves as the five-
year comprehensive housing affordability
strategy, community development plan, and submissions
for funding under any of the Community Planning
and Development formula grant programs (e.g., CDBG
and HOME).
Each Consolidated Plan identifies the needs of the
community and goals sets forth as a strategic plan for the next five years. The plan is supported by an Annual Action Plan, which outlines the goals and funding for each year for eligible activities.
What happens when changes to The Plan
is necessary?
What is a Substantial Amendment?
Changes in planned or actual activities would require a substantial amendment if a new goal is identified or a need for reallocation of funds above the threshold set by the City. Therefore, a substantial amendment may be required.
Background:
City of Vallejo is an entitlement city and receives CDBG and HOME funding annually. Funding is based on HUD
grant allocation formula.
HUD requires us to adopt a Citizen Participation Plan,
which sets forth the City's policies and procedures for citizen participation.
Reason for revisions and amendments
Reason One
Ø In response to 2020 legislation establishing the CDBG-CV program, the City incorporated the new public participation guidance into its Citizen Participation Plan, which shortened the public notification period for Covid-related activities to 15 days and allowed public hearings to be conducted remotely.
The 15-day notice period is no longer in effect.
Ø Since the 15-day provision is no longer in effect the language must be removed from the CPP
Ø Enable staff to implement any new HUD guidance without the need to request a substantial amendment to the CPP.
Reason for revisions and amendments
Reason Two
HUD San Francisco field office has recommended the City of Vallejo revise its Citizen Participation Plan to be more specific and more closely aligned with the requirements of 24 CFR Part 91.105.
Footnote:
Section 24 CFR 91.105 outlines what must be in the Citizen Participation Plan.
Reason for revisions and amendments
Reason Three
Proposed change to the Annual Action Plan
Ø Amend the current Annual Action Plan to increase
the funding allocation threshold that will trigger a
substantial amendment from fifteen percent (15%) to
forty percent (40%) between eligible activities.
Ø The substantial amendment process can take up to 45
days or more. Increasing the threshold of annual
allocation will allow the city to respond to changing
needs more expeditiously.
CONTACT(S)
Alicia M. Jones
Housing Director
[email protected]
707-648-4507
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
1 I. OVERVIEW
A grantee receiving Community Planning and Development (CPD) program grants from the U.S. Department of Housing and Urban Development (HUD) is required by rule (24 CFR
91.105) to adopt a Citizen Participation Plan that sets forth its policies and procedures for citizen participation. The City of Vallejo receives annual funding allocations for two CPD programs: the Community Development Block Grant (CDBG) and the HOME Investment Partnership (HOME) programs.
In support of these programs, the City is required to prepare and submit to HUD the following:
• A Five-Year Consolidated Plan;
• Annual Action Plans in support of the Consolidated Plan; • Consolidated Annual Performance Evaluation Report (CAPER); • If needed, Substantial Amendments to the Consolidated Plan or an Action Plan.
This document details the City’s procedures for notifying the public and other interested parties of:
• meetings and public hearings;
• how reasonable and timely access to meetings and hearings will be provided; • opportunities for providing comment before the above documents are submitted to HUD;
• how and where records and the documents above will be made available for public review;
• how technical assistance will be provided to groups representing low - and moderate-income persons that wish to develop proposals for funding assistance; and
• how the City will handle complaints related to the above submissions;
II. Encouragement of Citizen Participation [§91.105(a)(2)]
Meetings and public hearings may take place at Vallejo City Hall, remotely, or at other accessible locations in the community. It is a policy of the City to provide residents of the community with reasonable and timely access to local meetings, consistent with accessibility and reasonable accommodation requirements, in accordance with section 504 of the Rehabilitation Act of 1973 and the regulations at 24 CFR part 8; and the Americans with Disabilities Act and the regulations at 28 CFR parts 35 and 36, as applicable. Requests should be addressed to Chari Francisco, Staff Secretary at [email protected] or by phone at (707) 553-7204.
The City of Vallejo invites comments from its citizens on critical planning issues and decisions for the use of CDBG and HOME funds allocated annually. The City commits to providing the general public and interested and affected persons, including minorities and non-English speaking persons, with ample notification of these critical actions and ample time to comment.
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
2 The City encourages the participation of local and regional institutions, the Vallejo/Solano County Continuum of Care (CA -518), and other organizations (including businesses, developers, nonprofit organizations, philanthropic organizations, and community -based and faith -based organizations) in the process of developing and impl ementing the consolidated plan and Action Plans.
The City encourages residents of public and assisted housing developments (including any resident advisory boards, resident councils, and resident management corporations) to participate in the process of developing and implementing the consolidated plan, along with other low-income residents of targeted revitalization areas in which the developments are located.
The City will explore alternative public involvement techniques and quantitative ways to measure efforts that encourage citizen participation in a shared vision for change in communities and neighborhoods, and the review of program performance; e.g., use of focus groups and the Internet.
Upon request, the City will make the Citizen Participation Plan available in a format accessible to persons with disabilities.
III. The Consolidated Plan and Related Documents [§91.105(b)]
A. The Consolidated Plan
A grantee receiving Community Planning and Development Program grants (CDBG, HOME, ESG, and/or HOPWA) from the U.S. Department of Housing and Urban Development is required by rule (24 CFR 91.1) state in one document its plan to use pursue the goals identified in §91.1(a):
i. Decent housing
ii. Suitable living environment
iii. Expanded economic opportunities
HUD rules refer to this document as the Consolidated Plan. The planning cycle for the Consolidated Plan is five years. The Consolidated Plan is supported by a series of annual Action Plans, the first of which is submitted to HUD in conjunction with the Consolidated Plan. The Plan must be submitted to HUD for approval no later than 45 days before the beginning of the next program year.
1. Public Hearings
The City of Vallejo will conduct a minimum of two public hearings on its Consolidated Plan. The public hearings may be conducted by the Housing and Community Development Commission and/or the City Council. The H CD is an advisory body created by the City Council to make recommendations on CDBG Program funding, and to provide progress reports on the status of CDBG projects and activities.
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
3 Public Hearings conducted by t he Commission are held in conjunction with a regular monthly meeting. The Commission meets on the first Thursday of the month in the Council Chambers of City Hall at 555 Santa Clara Street. The meetings begin at 7:00 p.m.
The first public hearing will be conducted to receive input and comments on the City's needs and priorities. This input will be considered by the City in the development of the Consolidated Plan.
The second public hearing will be conducted after the City has prepared a draft of the Consolidated Plan. The purpose of the public hearing will be to receive comments and input on the draft Consolidated Plan from residents and other interested parties.
2. Public Notice
Beginning at least fourteen (14) days prior to each public hearing – unless HUD issues guidance calling for a shorter number of calendar days – the City of Vallejo will publish a notice at least twice in the local newspaper. The notice will indicate the place, time, and location of the public hearing. The notice will provide information concerning the purpose of the public hearing.
The public notice for the proposed Consolidated Plan will include a summary of the Plan. The summary will indicate the amount of assistance the City expects to receive (CDBG and HOME grant funds and program income), the range of activities that may be undertaken, and the estimated amount of funds that will benefit very low-/moderate and low-income persons. This summary will describe the contents and purposes of the Consolidated Plan. It will also list the locations where the Consolidated Plan will be available for examination.
3. Comment Period
The City of Vallejo will consider any comments or views of residents or other interested parties received in writing or orally at public hearings. W ritten comments on the draft Consolidated Plan will be accepted by the city for a minimum of thirty (30) calendar days The 30-day period will start on the date the following the second public hearing or the date the document is made available to the public.
The public notice will inform the public about the availability of documents and the dates of the 30-day comment period. Comments may be submitted by mail, email, or hand-delivered to the office of the Housing and Community Development (HCD) Department, 200 Georgia Street, Vallejo, CA 94590.
The City will consider all comments received. The City will respond to all comments, in writing, within fifteen (15) calendar days. All comments and responses will be incorporated into the document.
B. Annual Action Plan [91.220]
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
4 The five Annual Action Plans supporting the Consolidated Plan describe the activities and projects the City will undertake during the next program year to address priority needs and objectives. Vallejo’s program year begins July 1 of each year and con cludes on June 30 of the following year. The Annual Action Plan is designed to collect the information required by the Consolidated Plan regulations in §91 Subpart C.
The Annual Action Plan’s description of activities includes estimat es of the number and type of persons and families that will benefit from the proposed activities; the specific local objectives and priority needs (identified in accordance with § 91.215) that will be addressed by the activities using CDBG and HOME grant funds and program income the City expects to receive during the program year; proposed accomplishments; and a target date for completion of the activity. The plan also describes the reasons for the allocation priorities and identifies any obstacles to addressing underserved needs.
The Plan must be submitted to HUD for approval no later than 45 days before the beginning of the next program year. The First-Year Annual Action Plan is submitted in conjunction with the Consolidated Plan.
1. Public Hearings
The City of Vallejo will conduct a minimum of two public hearings each year on its Annual Plans.
The first public hearing will be conducted to receive comments and input on housing and community development needs and proposed activities. The purpose of the public hearing will be to determine if the needs identified in the Consolidated Plan may have changed significantly and what, if any, changes in proposed activities may be appropriate.
The second public hearing will be conducted after the City has prepared a draft of the Action Plan. The second public hearing will be conducted to receive comment and input on the proposed Annual Plan(s).
2. Public Notice
Beginning at least fourteen (14) days prior to each public hearing – unless HUD issues guidance calling for a shorter number of calendar days – the City of Vallejo will publish a notice at least twice in the local newspaper. The notice will indicate the place, time, and location of the public hearing. The notice will provide information concerning the purpose of the public hearing.
3. Comment Period
The City of Vallejo will consider any comments or views of residents or other interested parties received in writing or orally at public hearings. Written comments on the draft Annual Action Plan will be accepted by the city for a minimum of thirty (30) calendar days The 30-day period will start on the date the following the second public hearing or the date the document is made available to the public.
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
5 The public notice will inform the public about the availability of documents and the dates of the 30-day comment period. Comments may be submitted by mail, email, or hand-delivered to the office of the Housing and Community Development (HCD) Department, 200 Georgia Street, Vallejo, CA 94590.
The City will consider all comments received. The City will respond to all comments, in writing, within fifteen (15) calendar days. All comments and responses will be incorporated into the document.
C. Performance Reports [§91.105d)]
The City of Vallejo submits a Consolidated Annual Performance and Evaluation Report (CAPER) to HUD no later than 45 days after the end of each program year. The CAPER explains how the City carried out its housing and community development strategies, projects, and activities. The City strives to provide data and narratives in the CAPER that clearly describe the goals of each activity and project; how effective the City and its partners were in achi eving those goals; who and how many persons were served; and where those activities and projects occurred.
1. Public Hearings
The City of Vallejo will conduct at least one public hearing on any performance report required by HUD. The purpose of the public hearing will be to receive comment and input on the contents of the draft performance report.
2. Public Notice
Beginning at least fourteen (14) days prior to each public hearing – unless HUD issues guidance calling for a shorter number of calendar days – the City of Vallejo will publish a notice at least twice in the local newspaper. The notice will indicate the place, time, and location of the public hearing. The notice will provide information concerning the purpose of the public hearing.
The notice will indicate the place, time, and location of the public hearing. The notice will provide sufficient information on the purpose of the public hearing.
3. Comment Period
The City of Vallejo will consider any comments or views of residents or other interested parties received in writing or orally at public hearings. Written comments on the draft CAPER will be accepted by the city for a minimum of fifteen (15) calendar days.
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
6 The City will consider all comments received. The City will respond to all comments, in writing, within fifteen (15) calendar days. All comments and responses will be incorporated into the document.
D. Substantial Amendments [§91.105(c)]
All CDBG and HOME projects and activities must tie to a goal identified in the Consolidated Plan. The City will prepare and submit to HUD a Substantial Amendment to the Consolidated Plan if it wishes to add a goal not listed in Section SP -45 of the Consolidated Plan.
The City will prepare and submit a Substantial Amendment to an Annual Action Plan if it proposes to transfer funds equal to or greater than forty Percent (40%) of the annual allocation from one eligible activity to another eligible activity.
Amendments that are NOT substantial are increases or decreases in the amount of funds allocated to an approved project or activity to achieve the original purpose of the project or activity if the amount of funding being transferred is less than forty percent (40%) of the annual allocation.
1. Public Hearings
The City of Vallejo will conduct at least one public hearing on any proposed substantial amendment. The purpose of the public hearing will be to receive comment and input on the contents of the substantial amendment.
2. Public Notice
Beginning at least fourteen (14) days prior to each public hearing – unless HUD issues guidance calling for a shorter number of calendar days – the City of Vallejo will publish a notice at least twice in the local newspaper. The notice will indicate the place, time, and location of the public hearing. The notice will provide information concerning the purpose of the public hearing.
The notice will indicate the place, time, and location of the public hearing. The notice will provide information on the purpose of the public hearing.
3. Comment Period
The City of Vallejo will consider any comments or views of residents or other interested parties received in writing or orally at public hearings. Written comments on the draft will be accepted by the city for a minimum of thirty (30) calendar days.
The 30-day period will start on the date the following the second public hearing or the date the document is made available to the public.
The public notice will inform the public about the availability of documents and the dates of the 30-day comment period. Comments may be submitted by mail, email,
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
7 or hand-delivered to the office of the Housing and Community Development (HCD) Department, 200 Georgia Street, Vallejo, CA 94590.
The City will consider all comments received. The City will respond to all comments, in writing, within fifteen (15) calendar days. All comments and responses will be incorporated into the document.
IV. PUBLIC NOTICE [§91.105(e)(2)]
At least fourteen (14) calendar days prior to each public hearing, or for a shorter number of calendar days as may be allowed by HUD, the City of Vallejo will provide local Chambers of Commerce, ethnic organizations, the Vallejo Housing Authority, the public libraries, and interested persons, with a copy of the public notice.
These locations will include at least the following - the City Clerk's Office of City Hall, the Housing and Community Development Division of the City of Vallejo, and local public libraries.
V. COMMENT PERIODS
• The Consolidated Plan and First -Year Action Plan – a minimum of thirty (30) calendar days
• Year 2-5 Annual Action Plans – a minimum of thirty (30) calendar days • Performance Reports – a minimum of fifteen (15) calendar days • Substantial amendments – a minimum of thirty (30) calendar days
The City may provide comment periods shorter than 30 or fifteen days, pursuant to waivers as may be granted by HUD.
VI. AVAILABILITY OF DOCUMENTS [§91.105(g) & (h)]
The Consolidated Plan, Annual Plan, Performance Report, and amendments to any of these documents will be available to the public at the City Clerk's Office and Housing and Community Development Division Office during normal working hours, and on the City’s Internet Website. The documents will be provided to the interested party within three (3) working days of their request. The Consolidated Plan and related documents will be made available in a form accessible to persons with disabilities, upon request to the Housing and Community Development Division Office during normal working hours.
The documents will be retained for at least five (5) years.
A minimum of ten (10) free copies of the Consolidated Plan and related documents will be made available to residents or other interested parties.
VII. TECHNICAL ASSISTANCE [§91.105(i)]
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
8 The City of Vallejo provide s up to forty (40) hours per year of technical assistance to organizations that represent very low-/moderate and low -income persons that request assistance in developing proposals for CDBG or HOME funding assistance . This technical assistance may include:
• publishing instructions on how to fill out forms/applications; ▪ conducting workshops to explain: (1) the process for submitting proposals and (2) federal and local rules and requirements;
• providing comments and advice on the telephone or in meetings; and • reviewing and commenting on draft proposals.
The City will also provide ongoing assistance to CDBG Program- and HOME Program - funded agencies as needed to help them maintain their eligibility for full funding.
The City may provide additional (beyond forty (40) hours) technical assistance if, in the opinion of the City Manager, staff time is available. up to forty (40) hours per year of
VII. ASSISTANCE TO NON-ENGLISH SPEAKING [§91.101(e)(4)]
Upon request from a resident or interested party or w hen City staff reasonably expects a significant number of non -English speaking residents to participate at a public hearing, the City will make a translator available at the meeting.
VIII. DISPLACEMENT [§91.105(b)(1)(ii)]
The federal regulations stipulate that the City will include in its Citizen Participation Plan the City's "plans to minimize displacement of persons and to assist any persons displaced, specifying the types and levels of assistance ..."
The City of Vallejo has adopted , pursuant to (Resolution 81-723), a General Relocation Plan.
This plan meets the requirements of 24 CFR 91.105(b)(1). A copy of the City’s General Relocation Plan is available for review on the web at
https://mitigatehazards.com/solanohmp/hmp/ .
CITY OF VALLEJO
CITIZEN PARTICIPATION PLAN
I. OVERVIEW
The City of Vallejo invites comments from its citizens on critical planning issues and decisions for the federal Community Development Block Grant (CDBG) Program and Home Investment Partnerships (HOME) Programs. The City commits to provide the general public and interested and affected persons with ample notification of these critical actions and ample time to comment. Meetings will take place at Vallejo City Hall, remotely, or at other accessible locations in the community.
At a minimum, the Citizen Participation Plan shall apply to the following: (1) the Consolidated Plan, (2) the Annual Plan, (3) Performance Reports, and (4) substantial amendments to the above.
The City of Vallejo will prepare a Five-Year Consolidated Plan. The City may prepare an Annual Plan each fiscal year or the City may prepare multiple Annual Plans in one fiscal year.
Performance Reports shall be prepared as required by the U.S. Department of Housing and Urban Development (HUD) and shall also be subject to the provisions of the Citizen Participation Plan.
The City of Vallejo may consider substantial amendments to any of these plans or documents. In such cases, the City will invite public comments.
The subsequent sections of the Citizen Participation Plan address the specifics of how and when the public will be notified, how they may provide comments, how long they will have to comment, and where documents will be available.
II. PUBLIC HEARINGS
A. Consolidated Plan
Every five years, the City of Vallejo shall conduct at least two public hearings on its Consolidated Plan. The public hearings may be conducted by the Housing and Community Development Commission and/or the City Council. The first public hearing shall be conducted to receive input and comments on the City's needs and priorities. This input shall be considered by the City in the development of the Consolidated Plan.
1 The second public hearing shall be conducted after the City has prepared a draft of the Consolidated Plan. The purpose of the public hearing shall be to receive comments and input on the draft Consolidated Plan.
B. Annual Plan
The City of Vallejo shall conduct at least two public hearings every year on its Annual Plans. The City may adopt multiple Annual Plans in one year. For example, in Fiscal Year 2020/21, the City may adopt Annual Plans for Fiscal Year 2013/14 2020/21and 2021/22.
The first public hearing shall be conducted to receive comments and input on housing and community development needs and proposed activities. The purpose of the public hearing shall be to determine how the needs may have significantly changed from those identified in the Consolidated Plan and what, if any, changes in proposed activities may be appropriate.
The second public hearing shall be conducted to receive comment and input on the proposed Annual Plan(s).
C. Performance Reports
The City of Vallejo shall conduct at least one public hearing on any performance report required by HUD. The purpose of the public hearing shall be to receive comment and input on the contents of the draft performance report.
D. Substantial Amendments
A substantial amendment is defined as the addition or deletion of any program or activity. A substantial amendment also includes any change in statistical data of 20% twenty percent or more in the Consolidated Plan, Annual Plan, or Performance Report.
Amendments that are NOT substantial are: increases or decreases in the amount of funds allocated to an approved project or activity, to achieve the original purpose of the project or activity.
At least one public hearing is required for a substantial amendment to any of the plans or documents.
2 III. PUBLIC NOTICE
Beginning at least fourteen (14) days prior to each public hearing, or for a shorter number of calendar days as may be allowed by HUD, the City of Vallejo shall publish a notice in the local newspaper. The notice shall indicate the place, time, and location of the public hearing.
The notice shall provide sufficient information on the purpose of the public hearing.
At least fourteen calendar days prior to each public hearing, or for a shorter number of calendar days as may be allowed by HUD, the City of Vallejo shall provide local Chambers of Commerce, ethnic organizations, the Vallejo Housing Authority, the public libraries, and interested persons, with a copy of the public notice.
The public notice for the proposed Consolidated Plan will include a summary of the Plan. It shall indicate the amount of assistance the City expects to receive (grant funds and program income), the range of activities that may be undertaken, and the estimated amount of funds that will benefit very low- and low-income persons. This summary shall describe the contents and purposes of the Consolidated Plan. It shall also list the locations where the Consolidated Plan will be available for examination. These locations shall include at least the following - the City Clerk's Office of City Hall, the Housing and Community Development Division of the City of Vallejo, and local public libraries.
IV. COMMENT PERIOD
The City of Vallejo shall provide a period of at least thirty calendar days to receive comments on the draft Consolidated Plan, draft Annual Plan, and on any substantial amendments. The 30-day period may start on the date the document is available to the public. The City will also provide public notice regarding the availability of documents and the dates of the 30-day comment period.
For performance the City shall provide at least fifteen calendar days to receive public comment.
The City shall consider all comments received. The City shall respond to all complaints, in writing, within fifteen calendar days. All comments and responses shall be incorporated into the document.
The City may provide comment periods shorter than 30 or fifteen days, pursuant to waivers as may be granted by HUD.
V. AVAILABILITY OF DOCUMENTS
The Consolidated Plan, Annual Plan, Performance Report, and amendments to any of these documents shall be available to the public at the City Clerk's Office and Housing and
3 Community Development Division Office during normal working hours, and on the City’s Internet Website. The documents shall be provided to the interested party within three (3) working days of their request.
The documents shall be retained for at least five years.
The City shall make available at least ten (10) free copies of the Consolidated Plan to local residents or organizations.
VI. TECHNICAL ASSISTANCE
The City of Vallejo shall provide up to hours per year of technical assistance to organizations that represent very low- and low-income persons. This technical assistance may include:
- publishing instructions on how to fill out forms/applications;
- conducting workshops to explain: (1) the process for submitting proposals and (2) federal and local requirements;
- providing comments and advice on the telephone or in meetings; and
- reviewing and commenting on draft proposals.
The City shall also provide ongoing assistance to CDBG Program- and HOME Program- funded agencies as needed to help them maintain their eligibility for full funding.
The City may provide additional (beyond forty hours) technical assistance if, in the opinion of the City Manager, staff time is available.
VII. ASSISTANCE TO NON-ENGLISH SPEAKING
When City staff reasonably expects a significant number of non-English speaking residents to participate at a public hearing, the City will make a translator available at the meeting.
VIII. DISPLACEMENT
The federal regulations stipulate that the City shall include in its Citizen Participation Plan the City's "plans to minimize displacement of persons and to assist any persons displaced, specifying the types and levels of assistance ..."
The City of Vallejo has adopted, pursuant to (Resolution 81-723), a General Relocation Plan. This plan meets the requirements of 24 CFR 91.105(b)(1).
4 CONSENT CALENDAR 8.I.
DATE: March 25, 2025
TO: Mayor and Members of the City Council
FROM: Cesar Orozco, Planning Manager-Current Development SUBJECT: ADOPT A RESOLUTION DENYING THE APPEAL (APP24-0004) OF THE
ARCHITECTURAL HERITAGE AND LANDMARK COMMISSION'S DECISION TO
APPROVE, AND HEREBY GRANTING, A CERTIFICATE OF APPROPRIATENESS (COA22-0007) AND DEVELOPMENT REVIEW (DVR22-0031) TO ALLOW THE DEVELOPMENT OF A NEW SINGLE-FAMILY RESIDENCE AT 128 CAROLINA STREET,
AFTER FINDING THE PROJECT EXEMPT FROM ENVIRONMENTAL REVIEW UNDER
THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTION 15303 – NEW CONSTRUCTION OR CONVERSION OF SMALL
STRUCTURES
RECOMMENDATION
Adopt a resolution to approve a Certificate of Appropriateness (COA22-0007) and Development Review (DVR22-0031) to Allow the Development of a New Single-Family Residence at 128 Carolina Street (APN:
0055-121-120)
REASONS FOR RECOMMENDATION
Staff recommends that City Council deny the appeal and grant the Certificate of Appropriateness and Development Review approval for the following reasons: (1) the project is consistent with the General Plan 2040 and all applicable provisions of the Vallejo Municipal Code (VMC); (2) the project complies with all objective development standards and would contribute to the city’s housing stock; (3) of the project would provide investment on a currently vacant site within an established neighborhood; and (4) the Architectural Heritage and Landmarks Commission appropriately made all the required findings to grant the subject Certificate of Appropriateness, Development review, and related actions.
BACKGROUND AND DISCUSSION
On March 11, 2025, the City Council unanimously approved a Certificate of Appropriateness and Development review to allow the development of a new single-family residence on a vacant site located at 128 Carolina Street. As part of their motion, Council directed staff to correct the resolution and revise the conditions of approval for the project. The corrected resolution and revised conditions of approval are attached.
FISCAL IMPACT
Approval of the project would provide property tax revenues to the City both directly from the subject property development, and indirectly through potential property value increases resulting from development of a currently vacant site and potential further investment in the surrounding area
ENVIRONMENTAL REVIEW
The Project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) (Public Resources Code §21000, et seq. and California Code of Regulations, Title 14, §15000, et seq.) pursuant to CEQA Guidelines Section 15303(c) (Class 3, “New Construction or Conversion of Small
Date: March 25, 2025
Subject: ADOPT A RESOLUTION DENYING THE APPEAL (APP24-0004) OF THE
ARCHITECTURAL HERITAGE AND LANDMARK COMMISSION'S DECISION TO
APPROVE, AND HEREBY GRANTING, A CERTIFICATE OF APPROPRIATENESS (COA22-0007) AND DEVELOPMENT REVIEW (DVR22-0031) TO ALLOW THE DEVELOPMENT OF A NEW SINGLE-FAMILY RESIDENCE AT 128 CAROLINA
STREET, AFTER FINDING THE PROJECT EXEMPT FROM ENVIRONMENTAL
REVIEW UNDER THE CALIFORNIA ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTION 15303 – NEW CONSTRUCTION OR
CONVERSION OF SMALL STRUCTURES
Structures”). The Project proposes the construction of a new single-family residence in a residential district.
None of the exceptions in CEQA Guidelines Section 15300.2 apply, as follows: (a) the site is located in an urbanized area with no environmentally sensitive habitats or species of concern on the site, (b) there has been no successive effort to intensity land uses in the area and thus there is no significant cumulative impact that would result from successive projects of the same type over time, (c) there are no significant effects due to unusual circumstances that would pose a reasonable possibility of having a significant effect on the environment, (d) the Project is not located near a scenic highway, (e) the Project site is not located on a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project is consistent with the Secretary of Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (1995), Weeks and Grimmer, and therefore would not adversely affect any historical resource.
ATTACHMENTS
1. APP24-0003 - Resolution_CAO Stamp_Revised_Redline
2. Exhibit A - CarolinaSt.128.Conditions of Approval_Revised_Redline
3. APP24-0003 - Resolution_CAO Stamp_Revised_Clean
4. Exhibit A - CarolinaSt.128.Conditions of Approval_Revised_Clean_
CONTACT
Cesar Orozco, Planning Manager - Current Development
[email protected]
RESOLUTION NO. 25-_____ N.C.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO DENYING THE APPEAL (APP24-0004) OF THE ARCHITECTURAL HERITAGE AND LANDMARK COMMISSION’S DECISION TO APPROVE, AND HEREBY GRANTING, A CERTIFICATE OF APPROPRIATENESS (COA22-0007) AND DEVELOPMENT REVIEW (DVR22-0031) TO ALLOW THE DEVELOPMENT OF A NEW SINGLE- FAMILY RESIDENCE AT 128 CAROLINA STREET, AFTER FINDING THE PROJECT
EXEMPT FROM ENVIRONMENTAL REVIEW UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTION 15303 – NEW CONSTRUCTION OR CONVERSION OF SMALL
STRUCTURES
APN: 0055-121-120
* * * * * * * * * * * * * * * * * * * * * * * * *
RECITALS
WHEREAS, on August 29, 2017, the City Council adopted General Plan 2040; and
WHEREAS, the property which is the subject of the above-referenced proposed entitlements (the “Subject Property)”) has a General Plan 2040 land use designation of Primarily Single-Family; and
WHEREAS, on July 22, 2021, the City Council adopted a new Zoning Code and Zoning Map; and
WHEREAS, the Subject Property is located in the Residential Low Density Zoning District; and
WHEREAS, on August 22, 2022, Rob Kelly and Mario Vazquez, on behalf of Luis Rivera, the property owner, filed an application for a Certificate of Appropriateness (COA22-0007) and Development Review (DVR#22-0031) (“application”), Application”), seeking approval to construct a new single-family dwelling and associated site improvements on a vacant lot at 128 Carolina Street (APN:0055-121-120) located in the St. Vincent’s Historic District; and
WHEREAS, on November 7, 2024, pursuant to Vallejo Municipal Code (VMC) Section16Section 16.602.08(A), notice of thisa public hearing before the Architectural Heritage and Landmark Commission was published in the Times Herald and mailed to all active neighborhood groups and property owners within 500 feet of the subject propertySubject Property and electronically mailed to the members of the Architectural Heritage and Landmark Commission and to the applicant; and
ATTACHMENT 1
WHEREAS, on November 21, 2024, the City of Vallejo Architectural Heritage and Landmarks Commission after giving all public notices required by State law and the Vallejo Municipal Code, conducted a duly noticed public hearing; and
WHEREAS, the Architectural Heritage and Landmarks Commission considered testimonypublic comments and evidence, both written and oral, provided at the public hearing, as well as other documents contained in the recordRecord of proceedingsProceedings relating to the Project, which recordRecord is maintained in the offices of the City of Vallejo Planning Division; and
WHEREAS, based on evidence received in the staff report and at the public hearing, the Architectural Heritage and Landmarks Commission made factual findings and approved the Project with a 5-0 vote (with two commissioners absent); and
WHEREAS, on December 2, 2024, Liana Berube and Abbey Schlageter, on behalf of themselves and other neighbors on thetheir block, filed an appeal requesting that the City Council overturn the Architectural Heritage and Landmarks Commission approval of the Certificate of Appropriateness and Development Review; and
WHEREAS, on February 6, 2025, notice of the March 11, 2025 public hearing before the City Council was published in the Times Herald, mailed to all active neighborhood groups, all property owners within 500 feet of the Subject Property, and any other interested parties, and electronically mailed to the applicant, appellant, the Mayor and the members of the City Council; and
WHEREAS, the Appeal came before the City Council for a de novo public hearing on March 11, 2025; and
WHEREAS, the Appellant, the Applicant, supporters of the application, those opposed to the Application and interested and neutral parties were given ample opportunity to participate in the public hearing by submitting oral and/or written comments prior to the close of the public hearing; and
WHEREAS, the City Council considered the testimony and evidence, both written and oral, provided at the March 11, 2025 public hearing, as well as all other evidence and information contained in the Record of Proceedings, which Record is maintained in the offices of the City of Vallejo Planning Division; and
WHEREAS, following the close of the public hearing of March 11, 2025, the City Council voted unanimously to deny the appeal of the Architectural Heritage and Landmark Commission’s decision to approve, and to grant, a Certificate of Appropriateness (COA22- 0007) and Development Review (DVR22-0031) to allow the development of a new single- family residence at 128 Carolina Street, subject to revised conditions of approval and directed staff to prepare a resolution in accordance therewith.
NOW THEREFORE, theBE IT RESOLVED that the City Council, having heard, considered and weighed all the evidence in the Record presented on behalf of all the parties and being fully informed of the Application, the City Architectural Heritage and Landmark Commission’s decision, and the Appeal, hereby makes the following findings and determinations:
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I. RECORD OF PROCEEDINGS
The Record of Proceedings (“Record”) upon which the City Council bases its decision on the Projectproject at issue herein, includes, but is not limited to: (1) the staff reports, City files, records and other documents, prepared for and/or
1. The application, including all submitted to the City relating to the Project; (3)designs, plans, studies, data and correspondence submitted to the City in connection with the Project;
2. The environmental document (categorical exemption) prepared for the evidence, facts, findingsproject;
3. The notice of appeal and all accompanying statements and materials;
4. All staff reports, decision letters and other determinations set forth in this resolution; (4documentation and information produced by or on behalf of the City in connection with the Project;
5. All documentary and oral evidence received at the public hearings regarding the Project;
6. All matters of common knowledge and all official enactments and acts of the City, including without limitation: (a) the City of Vallejo General Plan 2040 and its related EIR; (5b) the 2021 Zoning Code and its Initial Study and Mitigated Negative Declaration; (c) the Vallejo Municipal Code; (d) and its related environmental documents; (6) all designs, plans, studies, data and correspondence submitted to the City in connection with the Project; (e7) all documentary and oral evidence received at the public hearing regarding the Project; and (8) all other matters of common knowledge to the City Council including, but not limited to, City,(f) other applicable City of Vallejo policies and regulations; and (g) all applicable state, and federal laws, policies, rules, regulations, reports, records and projections related to development within the City of Vallejo and its surrounding areas; and.
WHEREAS, WHEREAS, Said the Custodian of Record is the City Clerk of the City of Vallejo, is maintained in the offices of City of Vallejo Planning and Development Services Division, 555 Santa Clara Street, Vallejo, California 94590.
NOW THEREFORE, based on the Record, the City Council hereby makes the following findings:
I.II. CALIFORNIA ENVIRONMENTAL QUALITY ACT FINDING
The Project is categorically exempt from the provisions of the California Environmental Quality Act (((CEQA) (Public Resources Code §21000, et seq. and California Code of Regulations, Title 14, §15000, et seq.) pursuant to CEQA Guidelines Section 15303(c) (Class 3, “New Construction or Conversion of Small Structures”). The Project proposes the construction of a new single-family residence in a residential district.
None of the exceptions in CEQA Guidelines Section 15300.2 apply, as follows: (a) the Project site is located in an urbanized area with no environmentally sensitive habitats or species of concern on the sitenot located in an environmentally sensitive area, (b) there are no cumulative impactsthere has been no successive effort to intensity land uses in the area and thus there is no significant cumulative impact from successive projects of the same type over time, (c) there are no significant effects due to unusual circumstances that Formatted: Indent: Left: 0.5"
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II, III, … + Start at: 1 + Alignment: Left + Aligned at:
0.25" + Indent at: 0.75"
would pose a reasonable possibility of having a significant effect on the environment, (d) the Project is not located near a scenic highway,, (e) the Project site is not located on a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project is consistent with the Secretary of Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (1995), Weeks and Grimmer, and therefore the Project would not adversely affect any historical resource.
II.III. FINDINGS RELATING TO THE APPROVAL OF THE CERTIFICATE OF APPROPRIATENESS PERMIT (VMC Section 16.614.09.E)
The City Council hereby finds that:
A. The Project is in conformance with the U.S. Secretary of the Interior’s Standards for the Treatment of Historic Properties applicable to the Project and any ordinance designating the Historic District or Landmark.
FACTS IN SUPPORT: The Secretary of the Interior’s Standards for Rehabilitation are applicable to the Project and are as follows:
1) A property will be used as it was historically or be given a new use that requires minimal change to its distinctive materials, features, spaces, and spatial relationships.
Agree. According to historical mapping (Sandborn Maps), there was a small one- story cottage that existed on the site in 1919. By 1959, a second one-story structure had been constructed, resulting in two separate dwelling units on the site. The current proposal includes one new single-family home, which is consistent with the historic use of the site.
2) The historic character of a property will be retained and preserved. The removal of distinctive materials or alteration of features, spaces and spatial relationships that characterize a property will be avoided.
Not Applicable/Unenforceable. The site has been vacant for over 40 years. There are no known records available to confirm the historic character of the property and in any event, the Housing Accountability Act limits the City’s ability to require design features for the new construction beyond the objective requirements outlined in the VMC.
Not Applicable, as the property has been vacant for over 40 years.
3) Each property will be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or elements from other historic properties, will not be undertaken.
Not Applicable/UnenforceableAgree. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of the property, aside from historical mapping (Sandborn Maps). The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and objective design requirements outlined in the VMC (which are the only standards that can be applied to new residential development in accordance with the Housing Accountability Act).
It should be noted that the proposed architectural style of the new construction is compatible with the features, size, scale, and massing of the surrounding Formatted: Numbered + Level: 1 + Numbering Style: I,
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neighborhood, which would help to protect the integrity of historic district. The building will be constructed with modern materials such as Hardie board siding and metal garage doors which will help the property be recognized as a physical record of its time, place, and use. Recreating a false sense of historical features is discouraged with new construction. The proposed single-family residence aims to have similar scale and mass, height, setbacks and materials as homes within the district, without imitating historical features and will therefore not create a false sense of historical development.
4) Changes to a property that have acquired historic significance in their own right will be retained and preserved.
Not Applicable/Unenforceable.. The site has been vacant for over 40 years and has no historical significance.
5) Distinctive materials, features, finishes, and construction techniques or examples of craftsmanship that characterize a property will be preserved.
Not Applicable/Unenforceable.. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of any former structuresthe previous structure on the property. The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and objective design requirements outlined in the VMC (which are the only standards that can be applied to new residential development in accordance with the Housing Accountability Act)..
It should be noted that the proposed architectural style of the new construction is compatible with the features, size, scale, and massing of the surrounding neighborhood, which (while not required) will help to protect the integrity of historic district.
6) Deteriorated historic features will be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature will match the old in design, color, texture and, where possible, materials. Replacement of missing features will be substantiated by documentary and physical evidence.
Not Applicable/Unenforceable.. There are no structures on the site and no replacement or repair of historic features is proposed.
7) Chemical or physical treatments, if appropriate, will be undertaken using the gentlest means possible. Treatments that cause damage to historic materials will not be used.
Not Applicable. There are no structures or historic materials on the site.
8) Archeological resources will be protected and preserved in place. If such resources must be disturbed, mitigation measures will be undertaken.
The Project proposes new construction on a vacant lot. Archeological resources are not expected to be found at the site; however, if they are discovered during construction activities, then construction activities would halt and any resources would be protected, in accordance with applicable State requirements and General Plan Action Policy NBE-1.9A.
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9) New additions, exterior alterations, or related new construction will not destroy historic materials, features, and spatial relationships that characterize the property. The new work will be differentiated from the old and will be compatible with the historic materials, features, size, scale and proportion, and massing to protect the integrity of the property and its environment.
Not Applicable/Unenforceable.. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of any former structures on the property. The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and objective design requirements outlined in the VMC (which are the only standards that can be applied to new residential development in accordance with the Housing Accountability Act)..
It should be noted that the proposed architectural style of the new construction is compatible with the features, size, scale, and massing of the surrounding neighborhood, which (while not required) will help to protect the integrity of historic district.
10) New additions and adjacent or related new construction will be undertaken in such a manner that, if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired.
Not Applicable/Unenforceable. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of any former structures on the property. The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and objective design requirements outlined in the VMC (which are the only standards that can be applied to new residential development in accordance with the Housing Accountability Act).
Not Applicable. The site has been vacant for over 40 years.
B. For projects located in a Historic District, the proposed project is consistent with any conservation plan or specific plan adopted for the Historic District.
The Project site is within the St. Vincent’s Historic District for which there is no adopted conservation plan or specific plan.
C. For projects that require demolition, the Architectural Heritage and Landmarks Commission shall also find, as applicable: (a) It is not feasible to preserve or restore the structure after considering alternatives and balancing interest in preservation versus cost. (b) The retention of the structure constitutes a hazard to public safety. (c) The structure is a deterrent to a major improvement program which substantially benefits the City. (4) Retention of the structure in the judgment of the commission is not in the interest of the majority within the Historic District.
Not applicable. There is no demolition proposed as part of this Project.
III.IV. FINDINGS RELATING TO THE APPROVAL OF THE DEVELOPMENT REVIEW (VMC Section 16.605.03)
1. Complies with all applicable specific standards and criteria of this Zoning Code.
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The proposed Project is located on a property zoned Residential Low Density (RLD).
The RLD zone is intended for low-density residential areas in which permanent single unit residences, including detached and attached (duplexes and townhouses) units, are the primary use. The Project is consistent with the RLD zoning district in terms of land use, in that it involves the construction of a new single-family residence within an established neighborhood. The Project is consistent with the applicable development standards, such as setbacks, lot coverage, building height, objective design standards, etc., as outlined in VMC Title 16, as proposed and conditioned.
2. Is consistent with the General Plan and any applicable approved Specific Plan or Planned Development.
The site has a General Plan designation of Primarily Single Family (R-SF), which is consistent with the current RLD zoning of the site. The R-SF General Plan designation applies to residential neighborhoods primarily characterized by detached single‐ family homes. Dwellings typically have front and rear yards, as well as side setbacks. Permitted land uses include single‐family homes, in some instances duplexes, triplexes, fourplexes, and small commercial spaces, and public facilities such as schools, religious institutions, parks, and other community facilities appropriate within a residential neighborhood. The maximum permitted residential density in the R‐SF designation is 12 dwelling units per acre. The proposed new dwelling is consistent with the permitted density range. The Project is consistent with R-SF land use designation in that it involves the construction of a single-family residence within an established neighborhood that is primarily characterized by a mixture of detached single-family residences or multifamily residential. The buildings and its uses are consistent with applicable actions and policies of the General Plan, such as Policy NBE-1.11 - Historic Districts and NBE-2.8 - Infill Development, and the General Plan Designation.
3. Complies with any design conditions, standards, or requirements imposed by a discretionary approval including but not limited to a Major or Minor Use Permit, Variance, Specific Plan, Planned Development, or tentative map applicable to the project or the location where it is proposed.
The proposed single-family residence and associated improvements are consistent with the applicable development standards outlined in VMC Title 16 as proposed and conditioned. A Minor Use Permit is required to develop on a slope greater than 15%, which is a condition of approval and will be processed by the Director subsequent to this action, should Council grant its approval of the Certificate of Appropriateness and Development Review.
4. Is in substantial compliance with any applicable adopted design guidelines.
VMC Section 16.202.03 – Design Standards for single-unit housing (detached and attached), provides objective design standards as detailed in Table 3 of Attachment
2. As proposed, the dwelling complies with all applicable development and design standards for single-unit dwellings within the RLD zone.
5. Will serve to achieve groupings of structures that are well related one to another and which, taken together, will result in a well-composed urban design, with consideration given to site, height, arrangement, texture, material, color and appurtenances, the relation of these factors to other structures in the immediate area, and the relation of the development to the total setting as
seen from key points in the surrounding area; only elements of design which have some significant relationship to outside appearance shall be considered.
The proposed dwelling has been designed with consideration to the existing structures within the nearby vicinity. The dwelling features comparable setbacks (to the extent feasible with current setback standards) and massing and incorporates desirable features such as a covered front porch, high degree of fenestration, quality exterior materials, and landscaping improvements which overall relate well to other structures in the neighborhood. The new dwelling will fill a currently vacant lot within an existing neighborhood and will work to complete the urban framework of the neighborhood.
6. Will be of a quality and demonstrates thoughtful site planning that will serve to protect the value of private and public investments in the area.
The proposed Project demonstrates thoughtful site planning in that it meets all applicable development standards required and as conditioned, and the proposed dwelling is sited to blend with the existing adjacent structures with respect to setback, massing, and architectural design. Therefore, it will serve to protect the value of private and public investments in the area.
7. That the project has been reviewed in compliance with the California Environmental Quality Act, if applicable, and the requirements of this Chapter.
The proposed Project is exempt under Section 15303 (a) (Class 3 “New Construction”) of the CEQA Guidelines. Furthermore, the City has considered whether any of the exceptions found under Section 15300.2 of the CEQA Guidelines exist, which would preclude the Project from being categorically exempt from CEQA.
The Project is consistent with Section 15300.2 as follows: (a) the site is not located in an environmentally sensitive area, (b) there are no cumulative impacts, (c) there are no significant effects due to unusual circumstances, (d) the Project is not located near a scenic highway, (e) the Project site is not located on an open a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project would not adversely affect any historical resource.
IV.V. FINDINGS RELEVANT TO THE DENIAL OF THE APPEAL
The appellant provided a project comment letter prior to the initial hearing on November 21, 2024. The main arguments are restated below in bold, with staff’s responses following in italics.
1. No precedent of a two-story building on the lot; the original structure cannot be rebuilt in original dimensions due to current code. The cottage that originally existed on the property was no larger than 700 square feet. The footprint of the historic building was nearly identical to the neighboring cottage, according to a 1919 Sanborn map. We are in a historically protected neighborhood, and the average home in this neighborhood on a full lot is 1,450 sqft. The proposed home, at over 1700 sqft of living space plus 280 sqft attached garage on a non- conforming half lot, is grossly disproportionate to the norm of the area even if it was on a full lot, which it’s not. The proposed house would also be the only building from the start of Carolina St at Butte St all the way to Sacramento St to be set back from the street front. It would be the only single family home within the immediate area (100 block of Carolina St, the 100 block of Butte St, and the 100 block of Branciforte St) to be taller than 1.5 stories. No discussion of this was brought up in the AHLC meeting on Nov 21, 2024, while the next proposal Formatted: Numbered + Level: 1 + Numbering Style: I,
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under review, on a lot just two blocks away, was discussed extensively and unfavorably for such criteria, including referencing Sanborn maps to decide on appropriateness. Not only is the proposed building at 128 Carolina St an anomaly with the norms of the area, but the allowed discussion and reasoning of the AHLC was blatantly inconsistent during the Nov 21 hearing.
FindingsStaff Response: The RLD zoning for the site allows for a single-family dwelling to be built, subject to the development standards of the district (VMC Chapter 16.202 – Residential Districts). As proposed and conditioned, the project would be consistent with all the applicable development standards, including maximum building height, front, interior side and rear setbacks for the residence and garage, and maximum lot coverage. The proposed building height of 24 feet is within the maximum allowable building height of 35 feet. The proposed building front yard setback of 35 feet meets the minimum front yard setback of 15 feet. The proposed side yard setback of 5 feet complies with the “narrow lot” requirement which allows for setbacks that are 10% the lot width (or 3-feet for this site, as described in VMC Section 16.202.02.5).
In addition, all residential development with the City must comply with California Housing Accountability Act (Government Code Section 65589.5), including that in an historic district. The Housing Accountability Act limits a local government’s ability to deny, reduce the density of, or make infeasible housing development projects, that are consistent with objective local development standards and contribute to meeting housing need. The project as proposed, complies not only with all development standards required, but also with all applicable objective design standards set forth in the VMC, and as such, the decision making body has no legal authority to require any design modifications beyond the objective requirements outlined in the VMC.
2. Survey legitimacy is questionable. (Markers not industry standard) The survey of the property is not legal. In addition to the previously stated issue with the survey, a call was made to the Solano Recorders Office in Fairfield on November 25, 2024. A search was done for any recorded survey for 128 Carolina Street, and no survey has been recorded. This supposed survey was conducted at least a year ago or more, on a holiday (which is another red flag). According to California law: “(c) The record of survey required to be filed pursuant to this section shall be filed within 90 days after the setting of boundary monuments during the performance of a field survey or within 90 days after completion of a field survey, whichever comes first.” (Ca. Bus. And Prof’l. Code § 8762) Therefore, this survey is not legal. A legitimate survey is required to build a new residence on a vacant lot. (CBC Ch. 1, Div. 11, §107.1(c); CRC Ch. 1, Div. II, § R106.1(c))
FindingsStaff Response: A survey is not required for a Certificate of Appropriateness application; however, a 'boundary survey' is required for a Development Review application. According to the Planning Division's published application submittal checklist, the boundary survey shall: 1) be prepared by a licensed California Surveyor or Civil Engineer licensed to perform survey; 2) include a drawing to scale (utilizing an Engineer’s Scale and a Scale Bar); 3) include the date of survey preparation and any subsequent revisions; 4) include the street address and Assessor’s Parcel Map Number; and 5) include information on any existing easements. A boundary survey for the proposed project was submitted as part of the planning application, and it was
reviewed by staff and deemed to have met the submittal requirements for processing of the planning application.
Further, as part of a subsequent building permit review, the Building Division will also require submittal of a 'survey report' since this project involves new construction at five- feet from the property line (requirement is described in the Building Division's published "C-03R Checklist for New Residential Construction"). As a standard practice in Vallejo, once a building permit has been issued and construction has commenced, the Building Division will require a signed letter from the engineer or surveyor to confirm the accuracy of the foundation in accordance with approved plans.
Lastly, it should be noted that a "record of survey" as described in the California Business and Professional Code Section 8762 referenced by the appellant, is only required when certain discrepancies exist and is not required to be recorded for every property.
3. The only access to this lot for materials and vehicles is an alley which is heavily damaged and not maintained on both Carolina and Florida streets in this block, and for many neighbors, this is the only access to their property. Due to this, for years neighbors have been dragging huge chunks of displaced concrete as well as pouring concrete to fill holes so people will not lose their oil pans, or worse.
This alley is most of the neighbors’ driveway. The construction vehicles would not only heavily damage the already severely compromised and unmaintained alley further, it would often block many neighbors’ collective access to their properties. It was stated at the Nov 21, 2024 AHLC meeting that the public right- of-way for most neighbors to access their properties off Lozier Alley would be blocked for an extended time frame. This includes houses on the alley that only are accessible via the alley. This is an issue of quality of life for everyone in the block who rely on the alley for access to their properties. What was not stated at the meeting was by blocking residents public right-of-way to their properties, first responders and other public services such as trash pickup would also be blocked. (CPC §148.2) This absolutely is a public health and safety issue for most houses on the block, but is especially crucial for houses located directly on the Alley with no other street access. Residents of the block who use Lozier Alley are will aware of the difficulties the dimensions and condition of the Alley present; despite what Public Works or other city employees may see on a map, we who have daily lived experiences of Lozier Alley know that it is often not even large enough for two small cars to pass, and is certainly not large far-fetched scenario: in mid November, one of the residences on Lozier Alley had a house fire and a fire truck had to drive down the Alley to access it; in fact, a fire truck had to return less than a week later for another emergency. If construction was going on, without question VFD would have been blocked from accessing a situation in which seconds can make the difference between houses burning, the whole block burning, and between life and death for occupants. On Nov 26, 2024, a medium sized truck hired by a neighbor was loading in a polite and respectful way, to the side of the alley, and made it impossible for even a small car to pass. Visitors who have parked as far to the side of the alley as possible have received notes threatening fines and/or towing from trash collectors due to blocking the alley. Furthermore, there is no possible way for the construction to not continuously obstruct the alley as the proposed building’s footprint goes up to the back of the lot. There is no place to pull in construction vehicles and work on the building simultaneously. In its current state and physical dimensions and restrictions, Lozier Alley cannot support the construction of the proposed structure.
FindingsStaff Response: Lozier Alley stretches the entire block and can be accessed by vehicles at either end. The Conditions of Approval have been revised to address these concerns. In particular, Condition 5.e has been revised to read as follows:
“Lozier Alley Vehicle Parking and Access. No contractor or construction worker vehicles shall be allowed to park in the alley at any time. All such vehicles shall be parked either on the Subject Property or on the public streets, except with the prior consent of the Public Works Director based on strict necessity--for example, to allow a concrete mixer when pouring concrete for the driveway.
Deliveries of construction materials are permitted either to park on the edge of the alley for purposes of loading and unloading only, provided they occur within a two-hour window or less. Any time in excess of such two-hour window shall be based on strict necessity and shall require the prior consent of the Public Works Director or designee.”
During future construction of this site, if any construction equipment is required to be parked in any manner that would block access through the alley for an extended duration of time (typically considered 2-4 hours, or longer in some cases), then an encroachment permit would be deemed
necessary. Encroachment permits are issued by the Public Works Department, and they are intended to ensure appropriate traffic controls are in place in the event there is private, temporary occupancy of any public right of way.
NOW, THEREFORE, BE IT FURTHER RESOLVED that the City Council hereby finds and resolves that, based on substantial evidence in the record:
1. The above findings and recitals are true and correct and are incorporated herein.
2. The Project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) (Public Resources Code §21000, et seq. and California Code of Regulations, Title 14, §15000, et seq.) pursuant to CEQA Guidelines Section 15303(c) (Class 3, “New Construction or Conversion of Small Structures”). The Project is exempt from CEQA pursuant to Section 15303(c) (Class 3, “New Construction or Conversion of Small Structures”). The Project proposes the construction of a new single-family residence in a residential district.
None of the exceptions in CEQA Guidelines Section 15300.2 apply, as follows:
(a) the site is located in an urbanized area with no environmentally sensitive habitats or species of concern on the site the site is not located in an environmentally sensitive area, (b) there has been no successive effort to intensity land uses in the area and thus there is no significant cumulative impact that would result from successive projects of the same type over timethere are no cumulative impacts, (c) there are no significant effects due to unusual circumstances that would pose a reasonable possibility of having a significant effect on the environment, (d) the Project is not located near a scenic highway, (e) the Project site is not located on a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project is consistent with the Formatted: Indent: Left: 0.75", No bullets or
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Secretary of Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (1995), Weeks and Grimmer, and therefore would not adversely affect any historical resource.
3. Appeal (APP24-0003) is DENIED.
4. The decision of the Architectural Heritage and Landmarks Commission is UPHELD.
5. Certificate of Appropriateness (COA#22-0007) and Development Review (DVR#22-0031) are GRANTED, subject to the Conditions of Approval attached hereto as Exhibit A, and in accordance based on the analysis contained in the staff report and the findings contained herein and subject to the revised Conditions of Approval attached hereto as Exhibit A.
ADOPTED BY THE CITY COUNCIL OF THE CITY OF VALLEJO at an adjourneda regular meeting held on March 1125, 2025, with the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
________________________________________
ANDREA SOURCE
City of Vallejo City Council
Attest:
________________________________________
DAWN ABRAHAMSON, CITY CLERK
City of Vallejo City Clerk
Exhibit A
CONDITIONS OF APPROVAL
CERTIFICATE OF APPROPRIATNESS (COA22-0007)
DEVELOPMENT REVIEW (DVR22-0031)
128 CAROLINA STREET
APN # 0055-121-120
PERMIT DESCRIPTION: The project consists of a new two-story 1,732 square foot single-family residence, with an attached 280 square-foot one-car garage on a vacant lot within the Saint (St.) Vincent Historic District. Access to the garage will be off Lozier Alley. The residence façade will have Hardie lap siding and wood accent brackets both painted different shades of gray, with black vinyl windows. The project also includes 1,249.52 square feet of new landscaping along Carolina Street and throughout the site.
A. PLANNING DIVISION
Laura Solomon, Associate Planner | [email protected] | (707) 648-5391
Pre-Building Permit:
1. Prior to building permit submittal, this project must receive approval of the required Minor Use Permit (MUP23-0018) per Vallejo Municipal Code Chapter 16.212 - Hillside Development Standards.
2. Prior to building permit submittal, submit a numbered list to the Planning Division with a written response on how each condition of project approval contained in this report will be satisfied. The list should be submitted to the project planner who will coordinate further development of the project. The approved conditions shall also be included with the building permit set, after the cover sheet.
3. Prior to building permit issuance, the Planning Division shall confirm that the building permit drawings and subsequent construction substantially conform with the approved Planning entitlement.
4. Prior to building permit issuance, the Planning Division shall confirm that the building permit, grading permit and all other drawings and documents substantially conform with the documents and/or representations, whether oral or written that were presented to and approved by the Planning and Development Services Director. Pursuant to VMC 16.602.10.b the site plan, floor plans, building elevations and/or any additional information or representations, whether oral or written, indicating the proposed structure or manner of operation submitted with an application or submitted during the approval process shall be deemed conditions of approval. Any approval may be subject to requirements that the applicant guarantees, warranties, or ensures compliance with the plans and conditions in all respects.
During Construction:
5. Construction activities shall be managed in compliance with the following requirements:
a. Site Watering. During the construction of a project, all portions of the site shall be watered as necessary to reduce emissions of dust and other particulate matter, and all stockpiles shall be covered.
b. Maintenance. Streets and sidewalks shall be made dirt free at the completion of construction.
c. Noise. All construction and transport equipment shall be muffled in accordance with state and federal laws and shall not exceed the City’s maximum allowable noise levels.. All construction activity shall comply with Vallejo Municipal Code subsection 16.502.12.D.1., Maximum Noise Level for Temporary Construction Activity. Construction equipment noise levels shall not exceed the City’s maximum allowable noise levels d. Formatted: Indent: Left: 1", No bullets or numbering
2 e.d. Emissions. Construction and transport equipment shall be operated to minimize exhaust emissions. During construction, trucks and equipment should be running only when necessary.
f.e. Lozier Alley Vehicle Parking and Aaccess. No contractor or construction worker vehicles shall be allowed to park in the alley at any time. All such vehicles shall be parked either on the Subject Property or on the public streets, except with the prior consent of the Public Works Director based on strict necessity--for example, to allow a concrete mixer when pouring concrete for the driveway. An encroachment permit from the Public Works Department shall be required if any construction equipment will be parked in any manner that would block access through the alley for more than two hours, Deliveries of construction materials are permitted either to park on the edge of the alley for purposes of loading and unloading only, provided they occur within a two-hour window or less. Any time in excess of such two-hour window shall be based on strict necessity and shall require the prior consent of the Public Works Director or designee. g.f. Hours of Operation. Grading, and pile driving operations, construction, demolition, and related loading/unloading activities within ¼ mile of residential units shall be limited to between 8:00 am and 5:00 p.m. on weekdays and 9:00 a.m. and 6 p.m. on Saturdays. to ensure compliance with the requirements for construction activity in Subsection
16.502.12.D.1., Maximum Noise Level for Temporary Construction Activity, or as otherwise restricted as part of an approval. These time limitations may be extended for the delivery of construction materials only by approval of the Public Works Director or designee, provided such deliveries comply with all other requirements herein. No construction is to occur on Sundays or on federal holidays. h.g. Water Run-off. All water run-off from construction sites shall be controlled. During construction, trucks and equipment should be running only when necessary and shall comply with Chapter 12.41 of the Vallejo Municipal Code.
6. No person shall make, or cause to suffer, or permit to be made upon any public property, public right-of-way or private property, any excessive noise, annoying noise, amplified sound or vibrations that are physically annoying to reasonable persons of normal sensitivity or that are so harsh or so prolonged or unnatural or unusual in their use, time or place as to cause or contribute to the unnecessary and unreasonable discomfort of any persons of normal sensitivity located at the lot line of the property from which these noises emanate or that interfere with the peace and comfort of residents or their guests, or the operators or customers in places of business in the vicinity, or that may detrimentally or adversely affect such residences or places of business. (VMC Section 16.502.09 (C))
7. Construction, demolition, and related loading/unloading activities that may generate noise shall be limited to the following: 7 a.m. and 6 p.m. in Monday- Friday, Saturday 9 am- 6 pm. No construction is to occur on Sunday or federal holidays. Construction equipment noise levels shall not exceed the City’s maximum allowable noise levels
7. In the event that any archeological resources are discovered on the site during construction, all construction activities shall cease immediately, and a qualified archeologist and the City’s Chief Building Official shall be notified.
8. The fencing for construction sites shall not be installed until a building permit or grading permit has been issued and shall be removed prior to final inspection. In the event that the building permits expire before the construction is completed, the Planning and Development Services Director may issue a temporary use permit pursuant to Chapter 16.339, Temporary Uses, to allow the fencing to remain for a longer period of time. (VMC Section 16.505.08 (B))
Landscaping:
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3 9. Prior to first final building inspection, the landscape architect shall provide a Certificate of Completion and Certificate of Installation according to the Landscape Documentation in accordance with VMC Chapter 16.504.09: Water Efficient Landscape Requirements. The documentation shall include the following:
a. Irrigation Scheduling (VMC Section 16.504.11)
b. Schedule of Landscape and Irrigation Maintenance (VMC Section 16.504.08) c. Landscape Irrigation Audit Report (VMC Section 16.504.13) d. Soil Management Report (VMC Section 16.504.10)
10. Prior to the first final building inspection, all landscaping and irrigation shall be installed in accordance with the approved plans, and the landscape architect shall provide written verification that the landscaping and irrigation have been installed in accordance with the approved landscape plans, particularly with respect to size, health, number and species of plants, and the overall design concept.
11. All landscaping shall be permanently maintained in a healthy and thriving condition at all times, in compliance with the approved landscape plan. Irrigation systems and their components shall be maintained in a fully functional manner consistent with the original approved design or upgraded to reflect current best practices for water efficiency. Regular maintenance shall include but is not limited to:
a. Adjusting, checking, and repairing irrigation equipment; resetting automatic controllers; aerating and de-thatching turf areas; adding/replenishing fertilizer, mulch, soil amendments; insect control; the replacement of dead or diseased plants; pruning; watering; and weeding all landscaped areas.
b. The trimming of vegetation is necessary to maintain the effective functioning of solar energy facilities and passive solar design features installed both on site and on adjacent properties.
c. The trimming of vegetation is necessary to keep pedestrian and bicycle paths clear. (VMC Section 16.504.08 (A))
d. Pruning, cultivating, weeding, fertilizing, replacement of plants, and watering on a regular basis.
e. Pruning or removal of overgrown vegetation, cultivated or uncultivated, that may harbor rats, vermin, or other nuisances, or otherwise be detrimental to neighboring properties. f. The removal of dead, decayed, diseased, or hazardous trees, weeds and debris that create an unsightly appearance and may be dangerous to public safety and welfare or detrimental to neighboring properties or property values. Compliance shall be by removal, replacement, or maintenance.
g. Landscaping (trees, shrubs, ground cover, turf, etc.) which, due to accident, damage, disease, lack of maintenance, or other cause, fails to show a healthy appearance and growth, shall be replaced. Replacement plants shall conform to all standards that govern the original planting installation, approved landscaping plan, or as approved by the director. (VMC Section 16.504.08 (D))
12. Litter shall be removed from all landscaped areas in a timely fashion. (VMC Section16.504.08 (B))
13. Turf areas shall be mowed on a regular basis and be kept green. Accumulation of leaves, twigs, bark, and other similar materials shall be removed on a regular basis. Planting areas shall be kept free of weeds at all times. (VMC Section 16.504.08 (C))
Fences, Walls and Screening:
14. Fencing and walls shall be continuously maintained with no sign of rust or disrepair. Any graffiti shall be removed within forty-eight hours of discovery by the property manager. (VMC Section
16.505.02 (B)).
4 15. All exterior mechanical equipment, whether on a roof, on the side of a structure, or located on the ground, shall be screened from public view. Exterior mechanical equipment to be screened includes, without limitation, heating, ventilation, air conditioning, refrigeration equipment, plumbing lines, ductwork, transformers, smoke exhaust fans, water meters, backflow preventers, service entry section, back-up and emergency generators, and similar utility devices. a. Screening shall be architecturally integrated into the main structure with regard to materials, color, shape, and size to appear as an integral part of the building or structure. b. Equipment shall be screened on all sides, and screening materials shall be opaque. c. When screening with plants, evergreen types of vegetation shall be planted and maintained. Plant material sizes and types shall be selected and installed so that, at the time of building occupancy, such plants effectively screen their respective equipment. d. The use of wood expanded metal lath, and chain link for the purpose of screening is prohibited. (VMC Section 16.505.10)
Lighting:
16. Lighting shall be designed, located, and installed to be directed downward or toward structures, be shielded or fully shielded, and shall be well-maintained in order to prevent glare, light trespass (unwanted light on adjacent lots and public rights-of-way), and light pollution to the maximum extent feasible. No permanently installed lighting shall blink, flash, or be of unusually high intensity or brightness, as determined by the Planning and Development Services Director. (VMC Section 16.506.04 (B))
Overall Project:
17. This entitlement shall automatically expire within two years of the effective date of this approval, on March 25November 21, 20267, unless the use is exercised or extended (VMC Section
16.602.12 (A)). Issuance of a building permit shall constitute exercise of rights; provided, however, that, unless otherwise specified as a condition of project approval, the permit shall expire if:
a. The building permit expires.
b. Final inspection is not completed, or certificate of occupancy issued within the time specified as a condition of project approval.
c. The rights granted under the permit are not exercised within one year following the earliest to occur of the following: issuance of a certificate of occupancy; or if no certificate of occupancy is required, the last required final inspection for the new construction. (VMC Section 16.602.11 (B))
18. The Planning and Development Services Director may approve a one-year extension of any permit or approval granted for a residential or non-residential project under the Zoning Code upon receipt of a written application and fees received fifteen calendar days) before the expiration date with the required fee prior to expiration of the permit. (VMC Section 16.602.11 (C.1))
19. No change in the use for which a permit or other approval has been issued is permitted, in accordance with Government Code section 66411.7.
20. For new developments, utilities including, but not limited to, all electrical, telephone, cable television, fiber-optic cable, gas, water, sewer, irrigation/recycled water, and similar distribution lines providing direct service to a project shall be installed underground within the site. This requirement may be waived by the Planning and Development Services Director upon
5 determining that underground installation is infeasible, or the electrical line is otherwise exempt from an under-grounding requirement. (VMC Section 16.501.10)
21. Applicant shall indemnify, hold harmless, and defend City, its officers, officials, directors, employees, agents, volunteers and affiliates and each of them from any and all claims, demands, causes of action, damages, costs, expenses, actual attorney’s fees, applicant’s fees, expert fees, losses or liability, in law or in equity, of every kind and nature whatsoever arising out of or in connection with Applicant’s operations, or any subcontractor’s operations, to be performed under this agreement for Applicant’s or subcontractor’s tort negligence including active or passive, or strict negligence, including but not limited to personal injury including, but not limited to bodily injury, emotional injury, sickness or disease, or death to persons and/or damage to property of anyone, including loss of use thereof, caused or alleged to be caused by any act or omission of Applicant, or any subcontractor, or anyone directly or indirectly employed by any of them or anyone for the full period of time allowed by the law, regardless to any limitation by insurance, with the exception of the sole negligence or willful misconduct of the City. No modification of the project, any application, permit, certification, condition, environmental determination, other approval, change in applicable laws and regulations, or change in processing methods shall alter the Applicant’s indemnity obligation.
B. Building Division
Staff Contact: Bill Collins Sergio Caldera | [email protected] [email protected] | (707) 648-43837
1. Plans and permits will be required for building, mechanical, plumbing, and electrical work per California Code of Regulations, Title 24 and applicable City Ordinance in effect at the time of the completed Building Permit application date and required fees shall be paid at the time of application.
2. Soils report will be required for foundation design plan reviews.
3. 2022 California Code of Regulations applies if permit application(s) are received before the end of 2025. After 12-31-2025 the 2025 California Code of Regulations will apply.
4. Fees will apply to the current fiscal year of permit applications
C. Water Department
Staff Contact: Melissa Cansdale | [email protected] | (707) 553-7223
1. CODE REQUIREMENTS. All code requirements as stated in Title 11 of the Vallejo Municipal Code (VMC) and Vallejo Standard Specifications and Standard Drawings adopted in 2011 (VSSSD) that apply to this project shall be conformed to. The project is being made aware of codes that require extra attention by the following items.
2. WATER SYSTEM PLANS (VSSSD Section 4.1). All water system improvements shall be consistent with the latest Vallejo Water System Master Plan, prepared by Kennedy/Jenks Engineers. Prior to Improvement plan approval and building permit issuance, water system improvement plans shall be submitted to the Water Department for review and approval, and shall contain at least:
a. Location and size of fire sprinkler service connection(s). b. Location and size of existing and proposed domestic service connection(s). c. Location and size of irrigation service connection(s), if any. d. Location of fire hydrants.
e. Location of structures with respect to existing public water system improvements, such as mains, meters, etc.
f. Location and size of any new water mains.
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6 g. Location and size of backflow prevention devices (required on water service connections to irrigation systems, certain commercial water users, and to commercial fire sprinkler systems, per City Ordinance 922 N.C. (2d).
3. FIRE FLOW REQUIREMENTS (VSSSD Section 4.1). Fire flow requirements of the Fire department shall be complied with. Fire flow at no less than 25 psi residual pressure shall be available within 1,000 feet of any structure. One half of the fire flow shall be available within 300 feet of any structure.
a. For single family residential units, the fire flow is 1,500 gpm. b. For other developments, see the Vallejo Water System Master Plan, 2015, prepared by Kennedy Jenks.
4. HYDRAULIC CALCULATIONS (VSSSD Section 4.1). Prior to Improvement Plan and building permit issuance, hydraulic calculations shall be submitted to the Water Director demonstrating that the fire flow requirements are complied with.
5. FIRE PROTECTION SYSTEMS (VSSSD Section 4.1). Fire hydrant placement and fire sprinkler system installation, if any, shall meet the requirements of the Fire Department. For combined water and fire services, the requirements of both the Fire Department and the Vallejo Water System Master Plan, with latest revisions, shall be satisfied.
6. WATER EASEMENTS (VSSSD Section 4.1). Easements shall be granted for all water system improvements installed outside the public right-of-way in the City's Standard Form for Grant of Water Line Easement with the following widths:
a. 15 ft. wide (minimum) for water mains.
b. 10 ft. wide (minimum) for fire hydrants, water meters, backflow preventers, double detector check valves, etc.
c. Other facilities will be reviewed by the Water Department.
7. WATER METERS (VMC 11.04.110 and 11.16.090). Each parcel shall be metered separately and shall have a separate fire sprinkler service connection.
8. WATER SERVICE BONDS AND FEES (VMC Sections 11.16, 11.18, 11.20 and 11.24). Water service shall be provided by the City of Vallejo following completion of the required water system improvements and payment of applicable fees. Performance and payment bonds shall be provided to the City of Vallejo prior to construction of water system improvements. Fees include those fees specified in the Vallejo Municipal Code including connection and elevated storage fees, etc., and fees for tapping, tie-ins, inspections, disinfection, construction water, and other services provided by the City with respect to the water system improvements. The Water Department may be contacted for a description of applicable fees. These fees have to be paid prior to issuance of the building permit.
9. GENERAL CONDITIONS OF APPROVAL
a) Apply and pay for Fire Flow Test with the Water Department in order to determine operation of sprinkler system and final service size.
b) Provide water meter and service sizing calculations per most recent California Plumbing Code, include a water fixture count table.
c) As of January 1, 2018, all units in multi-family, commercial, or combination thereof, buildings shall be individually metered (if existing plumbing allows or is re-configured) by the City, additional meters at the owner/applicant’s expense; or, master metered by the City, and sub-metered by the property owner, with approved/certified meters. Per California Senate Bill 7 (SB7).
10. WATER SYSTEM INSTALLATION. Prior to occupancy or final building inspection, install water system improvements as required. Backflow device/s where required shall be installed in areas hidden from public view and/or shall be mitigated by landscaping.
7 D. Fire Prevention
Staff Contact: Moises Zarate | [email protected] | (707) 648-4565
1. All buildings, facilities, and improvements shall be accessible to fire department apparatus by way of approved access roadways.
2. Prior to Final Inspection, in accordance with the 2019 CFC, approved address numbers shall be placed on all new and existing buildings in such a position as to be plainly visible and legible from the street or road fronting the property. Said numbers shall clearly contrast with their background.
The characters shall be a minimum of 4" high with a 1/2" stroke. The size of the building and distance or location of the address numbers from the roadway may necessitate larger numbers.
3. All roof material shall be rated class "C" or better.
4. Provide smoke detectors in all sleeping rooms and common hallways. Detectors shall be hardwired, interconnected with battery backup. Electrical circuits supplying detectors shall be separate dedicated lines with no other devices on the circuits.
5. Provide carbon monoxide detectors outside each sleeping area in the immediate vicinity of all bedrooms.
6. Emergency escape and rescue openings are required in each bedroom in accordance with the 2019 CA Building Code.
7. An NFPA 13D automatic fire sprinkler system is required for all new residential structures, please submit 2 sets of plans and calculations to the Fire Prevention Office and obtain a permit prior to installation. Adequate pressure and GPM verification is required prior to residential construction.
8. Provide a one-hour fire separation between the R-3 and U Occupancy.
9. A final inspection from the Fire Prevention Division is required.
E. Vallejo Flood and Wastewater
Staff Contact: Mariah Henderson | [email protected] | (707) 652-7810
1. Utility site plan will need to show required two-way cleanout within 2 feet of the foundation where waste plumbing exits the building and District cleanout near the public right of way.
2. Add the following notes to plans:
a. All sewer work shall conform to the Vallejo Wastewater Standards, b. Call Vallejo Wastewater a minimum of 24 hours in advance for inspections.
3. Applicant will be required to pay applicable fees and obtain VFWD Connection Permit upon final plan approval.
RESOLUTION NO. 25-_____ N.C.
A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF VALLEJO DENYING THE APPEAL (APP24-0004) OF THE ARCHITECTURAL HERITAGE AND LANDMARK COMMISSION’S DECISION TO APPROVE, AND HEREBY GRANTING, A CERTIFICATE OF APPROPRIATENESS (COA22-0007) AND DEVELOPMENT REVIEW (DVR22-0031) TO ALLOW THE DEVELOPMENT OF A NEW SINGLE- FAMILY RESIDENCE AT 128 CAROLINA STREET, AFTER FINDING THE PROJECT
EXEMPT FROM ENVIRONMENTAL REVIEW UNDER THE CALIFORNIA
ENVIRONMENTAL QUALITY ACT (CEQA) PURSUANT TO CEQA GUIDELINES SECTION 15303 – NEW CONSTRUCTION OR CONVERSION OF SMALL
STRUCTURES
APN: 0055-121-120
* * * * * * * * * * * * * * * * * * * * * * * * *
RECITALS
WHEREAS, on August 29, 2017, the City Council adopted General Plan 2040; and WHEREAS, the property which is the subject of the above-referenced proposed entitlements (the “Subject Property”) has a General Plan 2040 land use designation of Primarily Single-Family; and
WHEREAS, on July 22, 2021, the City Council adopted a new Zoning Code and Zoning Map; and
WHEREAS, the Subject Property is located in the Residential Low Density Zoning District; and
WHEREAS, on August 22, 2022, Rob Kelly and Mario Vazquez, on behalf of Luis Rivera, the property owner, filed an application for a Certificate of Appropriateness (COA22-0007) and Development Review (DVR#22-0031) (“Application”), seeking approval to construct a new single-family dwelling and associated site improvements on a vacant lot at 128 Carolina Street (APN:0055-121-120) located in the St. Vincent’s Historic District; and WHEREAS, on November 7, 2024, pursuant to Vallejo Municipal Code (VMC) Section
16.602.08(A), notice of a public hearing before the Architectural Heritage and Landmark Commission was published in the Times Herald and mailed to all active neighborhood groups and property owners within 500 feet of the Subject Property and electronically mailed to the members of the Architectural Heritage and Landmark Commission and to the applicant; and
WHEREAS, on November 21, 2024, the City of Vallejo Architectural Heritage and Landmarks Commission after giving all public notices required by State law and the Vallejo Municipal Code, conducted a duly noticed public hearing; and ATTACHMENT 1
WHEREAS, the Architectural Heritage and Landmarks Commission considered public comments and evidence, both written and oral, provided at the public hearing, as well as other documents contained in the Record of Proceedings relating to the Project, which Record is maintained in the offices of the City of Vallejo Planning Division; and
WHEREAS, based on evidence received in the staff report and at the public hearing, the Architectural Heritage and Landmarks Commission made factual findings and approved the Project with a 5-0 vote (with two commissioners absent); and WHEREAS, on December 2, 2024, Liana Berube and Abbey Schlageter, on behalf of themselves and other neighbors on their block, filed an appeal requesting that the City Council overturn the Architectural Heritage and Landmarks Commission approval of the Certificate of Appropriateness and Development Review; and WHEREAS, on February 6, 2025, notice of the March 11, 2025 public hearing before the City Council was published in the Times Herald, mailed to all active neighborhood groups, all property owners within 500 feet of the Subject Property, and any other interested parties, and electronically mailed to the applicant, appellant, the Mayor and the members of the City Council; and
WHEREAS, the Appeal came before the City Council for a de novo public hearing on March 11, 2025; and
WHEREAS, the Appellant, the Applicant, supporters of the application, those opposed to the Application and interested and neutral parties were given ample opportunity to participate in the public hearing by submitting oral and/or written comments prior to the close of the public hearing; and
WHEREAS, the City Council considered the testimony and evidence, both written and oral, provided at the March 11, 2025 public hearing, as well as all other evidence and information contained in the Record of Proceedings, which Record is maintained in the offices of the City of Vallejo Planning Division; and
WHEREAS, following the close of the public hearing of March 11, 2025, the City Council voted unanimously to deny the appeal of the Architectural Heritage and Landmark Commission’s decision to approve, and to grant, a Certificate of Appropriateness (COA22- 0007) and Development Review (DVR22-0031) to allow the development of a new single- family residence at 128 Carolina Street, subject to revised conditions of approval and directed staff to prepare a resolution in accordance therewith.
NOW THEREFORE, BE IT RESOLVED that the City Council, having heard, considered and weighed all the evidence in the Record presented on behalf of all the parties and being fully informed of the Application, the City Architectural Heritage and Landmark Commission’s decision, and the Appeal, hereby makes the following findings and determinations:
I. RECORD OF PROCEEDINGS
The Record of Proceedings (“Record”) upon which the City Council bases its decision on the project at issue herein, includes, but is not limited to:
1. The application, including all designs, plans, studies, data and correspondence submitted to the City in connection with the Project;
2. The environmental document (categorical exemption) prepared for the project;
3. The notice of appeal and all accompanying statements and materials;
4. All staff reports, decision letters and other documentation and information produced by or on behalf of the City in connection with the Project;
5. All documentary and oral evidence received at the public hearings regarding the Project;
6. All matters of common knowledge and all official enactments and acts of the City, including without limitation: (a) the City of Vallejo General Plan 2040 and its related EIR; (b) the 2021 Zoning Code and its Initial Study and Mitigated Negative Declaration; (c) the Vallejo Municipal Code; (d) all designs, plans, studies, data and correspondence submitted to the City in connection with the Project; (e) all documentary and oral evidence received at the public hearing regarding the Project; (f) other applicable City of Vallejo policies and regulations; and (g) all applicable state and federal laws, rules, regulations, reports, records and projections related to development within the City of Vallejo and its surrounding areas.
WHEREAS, the Custodian of Record is the City Clerk of the City of Vallejo, 555 Santa Clara Street, Vallejo, California 94590.
II. CALIFORNIA ENVIRONMENTAL QUALITY ACT FINDING
The Project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) (Public Resources Code §21000, et seq. and California Code of Regulations, Title 14, §15000, et seq.) pursuant to CEQA Guidelines Section 15303(c) (Class 3, “New Construction or Conversion of Small Structures”). The Project proposes the construction of a new single-family residence in a residential district.
None of the exceptions in CEQA Guidelines Section 15300.2 apply, as follows: (a) the Project site is located in an urbanized area with no environmentally sensitive habitats or species of concern on the site, (b) there has been no successive effort to intensity land uses in the area and thus there is no significant cumulative impact from successive projects of the same type over time, (c) there are no significant effects due to unusual circumstances that would pose a reasonable possibility of having a significant effect on the environment, (d) the Project is not located near a scenic highway, (e) the Project site is not located on a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project is consistent with the Secretary of Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (1995), Weeks and Grimmer, and therefore would not adversely affect any historical resource.
III.FINDINGS RELATING TO THE APPROVAL OF THE CERTIFICATE OF APPROPRIATENESS PERMIT (VMC Section 16.614.09.E)
The City Council hereby finds that:
A. The Project is in conformance with the U.S. Secretary of the Interior’s Standards for the Treatment of Historic Properties applicable to the Project and any ordinance designating the Historic District or Landmark.
FACTS IN SUPPORT: The Secretary of the Interior’s Standards for Rehabilitation are applicable to the Project and are as follows:
1) A property will be used as it was historically or be given a new use that requires minimal change to its distinctive materials, features, spaces, and spatial relationships.
Agree. According to historical mapping (Sandborn Maps), there was a small one- story cottage that existed on the site in 1919. By 1959, a second one-story structure had been constructed, resulting in two separate dwelling units on the site. The current proposal includes one new single-family home, which is consistent with the historic use of the site.
2) The historic character of a property will be retained and preserved. The removal of distinctive materials or alteration of features, spaces and spatial relationships that characterize a property will be avoided.
Not Applicable, as the property has been vacant for over 40 years. 3) Each property will be recognized as a physical record of its time, place, and use. Changes that create a false sense of historical development, such as adding conjectural features or elements from other historic properties, will not be undertaken.
Agree. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of the property, aside from historical mapping (Sandborn Maps). The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and design requirements outlined in the VMC.
It should be noted that the proposed architectural style of the new construction is compatible with the features, size, scale, and massing of the surrounding neighborhood, which would help to protect the integrity of historic district. The building will be constructed with modern materials such as Hardie board siding and metal garage doors which will help the property be recognized as a physical record of its time, place, and use. Recreating a false sense of historical features is discouraged with new construction. The proposed single-family residence aims to have similar scale and mass, height, setbacks and materials as homes within the district, without imitating historical features and will therefore not create a false sense of historical development.
4) Changes to a property that have acquired historic significance in their own right will be retained and preserved.
Not Applicable. The site has been vacant for over 40 years and has no historical significance.
5) Distinctive materials, features, finishes, and construction techniques or examples of craftsmanship that characterize a property will be preserved.
Not Applicable. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of the previous structure on the property. The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and design requirements outlined in the VMC.
It should be noted that the proposed architectural style of the new construction is compatible with the features, size, scale, and massing of the surrounding neighborhood, which (while not required) will help to protect the integrity of historic district.
6) Deteriorated historic features will be repaired rather than replaced. Where the severity of deterioration requires replacement of a distinctive feature, the new feature will match the old in design, color, texture and, where possible, materials. Replacement of missing features will be substantiated by documentary and physical evidence.
Not Applicable. There are no structures on the site and no replacement or repair of historic features is proposed.
7) Chemical or physical treatments, if appropriate, will be undertaken using the gentlest means possible. Treatments that cause damage to historic materials will not be used.
Not Applicable. There are no structures or historic materials on the site. 8) Archeological resources will be protected and preserved in place. If such resources must be disturbed, mitigation measures will be undertaken.
The Project proposes new construction on a vacant lot. Archeological resources are not expected to be found at the site; however, if they are discovered during construction activities, then construction activities would halt and any resources would be protected, in accordance with applicable State requirements and General Plan Action Policy NBE-1.9A.
9) New additions, exterior alterations, or related new construction will not destroy historic materials, features, and spatial relationships that characterize the property. The new work will be differentiated from the old and will be compatible with the historic materials, features, size, scale and proportion, and massing to protect the integrity of the property and its environment.
Not Applicable. The site has been vacant for over 40 years, and there are no known records available to confirm the historic character of any former structures on the property. The current proposal includes one new single-family home, which is consistent with the historic use of the site and consistent with all applicable development standards and design requirements outlined in the VMC.
It should be noted that the proposed architectural style of the new construction is compatible with the features, size, scale, and massing of the surrounding neighborhood, which (while not required) will help to protect the integrity of historic district.
10) New additions and adjacent or related new construction will be undertaken in such a manner that, if removed in the future, the essential form and integrity of the historic property and its environment would be unimpaired.
Not Applicable. The site has been vacant for over 40 years.
B. For projects located in a Historic District, the proposed project is consistent with any conservation plan or specific plan adopted for the Historic District.
The Project site is within the St. Vincent’s Historic District for which there is no adopted conservation plan or specific plan.
C. For projects that require demolition, the Architectural Heritage and Landmarks Commission shall also find, as applicable: (a) It is not feasible to preserve or restore the structure after considering alternatives and balancing interest in preservation versus cost. (b) The retention of the structure constitutes a hazard to public safety. (c) The structure is a deterrent to a major improvement program which substantially benefits the City. (4) Retention of the structure in the judgment of the commission is not in the interest of the majority within the Historic District.
Not applicable. There is no demolition proposed as part of this Project.
IV.FINDINGS RELATING TO THE APPROVAL OF THE DEVELOPMENT REVIEW (VMC Section 16.605.03)
1. Complies with all applicable specific standards and criteria of this Zoning Code.
The proposed Project is located on a property zoned Residential Low Density (RLD).
The RLD zone is intended for low-density residential areas in which permanent single unit residences, including detached and attached (duplexes and townhouses) units, are the primary use. The Project is consistent with the RLD zoning district in terms of land use, in that it involves the construction of a new single-family residence within an established neighborhood. The Project is consistent with the applicable development standards, such as setbacks, lot coverage, building height, design standards, etc., as outlined in VMC Title 16, as proposed and conditioned.
2. Is consistent with the General Plan and any applicable approved Specific Plan or Planned Development.
The site has a General Plan designation of Primarily Single Family (R-SF), which is consistent with the current RLD zoning of the site. The R-SF General Plan designation applies to residential neighborhoods primarily characterized by detached single‐ family homes. Dwellings typically have front and rear yards, as well as side setbacks. Permitted land uses include single ‐family homes, in some instances duplexes, triplexes, fourplexes, and small commercial spaces, and public facilities such as schools, religious institutions, parks, and other community facilities appropriate within a residential neighborhood. The maximum permitted residential density in the R ‐SF designation is 12 dwelling units per acre. The proposed new dwelling is consistent with the permitted density range. The Project is consistent with R-SF land use designation in that it involves the construction of a single-family residence within an established neighborhood that is primarily characterized by a mixture of detached single-family residences or multifamily residential. The buildings and its uses are consistent with applicable actions and policies of the General Plan, such as Policy NBE-1.11 - Historic Districts and NBE-2.8 - Infill Development, and the General Plan Designation.
3. Complies with any design conditions, standards, or requirements imposed by a discretionary approval including but not limited to a Major or Minor Use Permit, Variance, Specific Plan, Planned Development, or tentative map applicable to the project or the location where it is proposed.
The proposed single-family residence and associated improvements are consistent with the applicable development standards outlined in VMC Title 16 as proposed and conditioned. A Minor Use Permit is required to develop on a slope greater than 15%, which is a condition of approval and will be processed by the Director subsequent to this action, should Council grant its approval of the Certificate of Appropriateness and Development Review.
4. Is in substantial compliance with any applicable adopted design guidelines.
VMC Section 16.202.03 – Design Standards for single-unit housing (detached and attached), provides design standards as detailed in Table 3 of Attachment 2. As proposed, the dwelling complies with all applicable development and design standards for single-unit dwellings within the RLD zone.
5. Will serve to achieve groupings of structures that are well related one to another and which, taken together, will result in a well-composed urban design, with consideration given to site, height, arrangement, texture, material, color and appurtenances, the relation of these factors to other structures in the immediate area, and the relation of the development to the total setting as seen from key points in the surrounding area; only elements of design which have some significant relationship to outside appearance shall be considered.
The proposed dwelling has been designed with consideration to the existing structures within the nearby vicinity. The dwelling features comparable setbacks (to the extent feasible with current setback standards) and massing and incorporates desirable features such as a covered front porch, high degree of fenestration, quality exterior materials, and landscaping improvements which overall relate well to other structures in the neighborhood. The new dwelling will fill a currently vacant lot within an existing neighborhood and will work to complete the urban framework of the neighborhood.
6. Will be of a quality and demonstrates thoughtful site planning that will serve to protect the value of private and public investments in the area.
The proposed Project demonstrates thoughtful site planning in that it meets all applicable development standards required and as conditioned, and the proposed dwelling is sited to blend with the existing adjacent structures with respect to setback, massing, and architectural design. Therefore, it will serve to protect the value of private and public investments in the area.
7. That the project has been reviewed in compliance with the California Environmental Quality Act, if applicable, and the requirements of this Chapter.
The proposed Project is exempt under Section 15303 (a) (Class 3 “New Construction”) of the CEQA Guidelines. Furthermore, the City has considered whether any of the exceptions found under Section 15300.2 of the CEQA Guidelines exist, which would preclude the Project from being categorically exempt from CEQA.
The Project is consistent with Section 15300.2 as follows: (a) the site is not located in an environmentally sensitive area, (b) there are no cumulative impacts, (c) there are no significant effects due to unusual circumstances, (d) the Project is not located near a scenic highway, (e) the Project site is not located on an open a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project would not adversely affect any historical resource.
V. FINDINGS RELEVANT TO THE DENIAL OF THE APPEAL
The appellant provided a project comment letter prior to the initial hearing on November 21, 2024. The main arguments are restated below in bold, with staff’s responses following in italics.
1. No precedent of a two-story building on the lot; the original structure cannot be rebuilt in original dimensions due to current code. The cottage that originally existed on the property was no larger than 700 square feet. The footprint of the historic building was nearly identical to the neighboring cottage, according to a 1919 Sanborn map. We are in a historically protected neighborhood, and the average home in this neighborhood on a full lot is 1,450 sqft. The proposed home, at over 1700 sqft of living space plus 280 sqft attached garage on a non- conforming half lot, is grossly disproportionate to the norm of the area even if it was on a full lot, which it’s not. The proposed house would also be the only building from the start of Carolina St at Butte St all the way to Sacramento St to be set back from the street front. It would be the only single family home within the immediate area (100 block of Carolina St, the 100 block of Butte St, and the 100 block of Branciforte St) to be taller than 1.5 stories. No discussion of this was brought up in the AHLC meeting on Nov 21, 2024, while the next proposal under review, on a lot just two blocks away, was discussed extensively and unfavorably for such criteria, including referencing Sanborn maps to decide on appropriateness. Not only is the proposed building at 128 Carolina St an anomaly with the norms of the area, but the allowed discussion and reasoning of the AHLC was blatantly inconsistent during the Nov 21 hearing.
Findings: The RLD zoning for the site allows for a single-family dwelling to be built, subject to the development standards of the district (VMC Chapter 16.202 – Residential Districts). As proposed and conditioned, the project would be consistent with all the applicable development standards, including maximum building height, front, interior side and rear setbacks for the residence and garage, and maximum lot coverage. The proposed building height of 24 feet is within the maximum allowable building height of 35 feet. The proposed building front yard setback of 35 feet meets the minimum front yard setback of 15 feet.
The proposed side yard setback of 5 feet complies with the “narrow lot” requirement which allows for setbacks that are 10% the lot width (or 3-feet for this site, as described in VMC Section 16.202.02.5).
2. Survey legitimacy is questionable. (Markers not industry standard) The survey of the property is not legal. In addition to the previously stated issue with the survey, a call was made to the Solano Recorders Office in Fairfield on November 25, 2024. A search was done for any recorded survey for 128 Carolina Street, and no survey has been recorded. This supposed survey was conducted at least a year ago or more, on a holiday (which is another red flag). According to California law: “(c) The record of survey required to be filed pursuant to this section shall be filed within 90 days after the setting of boundary monuments during the performance of a field survey or within 90 days after completion of a field survey, whichever comes first.” (Ca. Bus. And Prof’l. Code § 8762) Therefore, this survey is not legal. A legitimate survey is required to build a new residence on a vacant lot. (CBC Ch. 1, Div. 11, §107.1(c); CRC Ch. 1, Div. II, § R106.1(c))
Findings: A survey is not required for a Certificate of Appropriateness application; however, a 'boundary survey' is required for a Development Review application. According to the Planning Division's published application submittal checklist, the boundary survey shall: 1) be prepared by a licensed California Surveyor or Civil Engineer licensed to perform survey; 2) include a drawing to scale (utilizing an Engineer’s Scale and a Scale Bar); 3) include the date of survey preparation and any subsequent revisions; 4) include the street address and Assessor’s Parcel Map Number; and 5) include information on any existing easements. A boundary survey for the proposed project was submitted as part of the planning application, and it was reviewed by staff and deemed to have met the submittal requirements for processing of the planning application.
Further, as part of a subsequent building permit review, the Building Division will also require submittal of a 'survey report' since this project involves new construction at five- feet from the property line (requirement is described in the Building Division's published "C-03R Checklist for New Residential Construction"). As a standard practice in Vallejo, once a building permit has been issued and construction has commenced, the Building Division will require a signed letter from the engineer or surveyor to confirm the accuracy of the foundation in accordance with approved plans.
Lastly, it should be noted that a "record of survey" as described in the California Business and Professional Code Section 8762 referenced by the appellant, is only required when certain discrepancies exist and is not required to be recorded for every property.
3. The only access to this lot for materials and vehicles is an alley which is heavily damaged and not maintained on both Carolina and Florida streets in this block, and for many neighbors, this is the only access to their property. Due to this, for years neighbors have been dragging huge chunks of displaced concrete as well as pouring concrete to fill holes so people will not lose their oil pans, or worse.
This alley is most of the neighbors’ driveway. The construction vehicles would not only heavily damage the already severely compromised and unmaintained alley further, it would often block many neighbors’ collective access to their properties. It was stated at the Nov 21, 2024 AHLC meeting that the public right- of-way for most neighbors to access their properties off Lozier Alley would be blocked for an extended time frame. This includes houses on the alley that only are accessible via the alley. This is an issue of quality of life for everyone in the block who rely on the alley for access to their properties. What was not stated at the meeting was by blocking residents public right-of-way to their properties, first responders and other public services such as trash pickup would also be blocked. (CPC §148.2) This absolutely is a public health and safety issue for most houses on the block, but is especially crucial for houses located directly on the Alley with no other street access. Residents of the block who use Lozier Alley are will aware of the difficulties the dimensions and condition of the Alley present; despite what Public Works or other city employees may see on a map, we who have daily lived experiences of Lozier Alley know that it is often not even large enough for two small cars to pass, and is certainly not large far-fetched scenario: in mid November, one of the residences on Lozier Alley had a house fire and a fire truck had to drive down the Alley to access it; in fact, a fire truck had to return less than a week later for another emergency. If construction was going on, without question VFD would have been blocked from accessing a situation in which seconds can make the difference between houses burning, the whole block burning, and between life and death for occupants. On Nov 26, 2024, a medium sized truck hired by a neighbor was loading in a polite and respectful way, to the side of the alley, and made it impossible for even a small car to pass. Visitors who have parked as far to the side of the alley as possible have received notes threatening fines and/or towing from trash collectors due to blocking the alley. Furthermore, there is no possible way for the construction to not continuously obstruct the alley as the proposed building’s footprint goes up to the back of the lot. There is no place to pull in construction vehicles and work on the building simultaneously. In its current state and physical dimensions and restrictions, Lozier Alley cannot support the construction of the proposed structure.
Findings: Lozier Alley stretches the entire block and can be accessed by vehicles at either end. The Conditions of Approval have been revised to address these concerns. In particular, Condition 5.e has been revised to read as follows:
“Lozier Alley Vehicle Parking and Access. No contractor or construction worker vehicles shall be allowed to park in the alley at any time. All such vehicles shall be parked either on the Subject Property or on the public streets, except with the prior consent of the Public Works Director based on strict necessity--for example, to allow a concrete mixer when pouring concrete for the driveway.
Deliveries of construction materials are permitted either to park on the edge of the alley for purposes of loading and unloading only, provided they occur within a two-hour window or less. Any time in excess of such two-hour window shall be based on strict necessity and shall require the prior consent of the Public Works Director or designee.”
NOW, THEREFORE, BE IT FURTHER RESOLVED that the City Council hereby finds and resolves that, based on substantial evidence in the record:
1. The above findings and recitals are true and correct and are incorporated herein.
2. The Project is categorically exempt from the provisions of the California Environmental Quality Act (CEQA) (Public Resources Code §21000, et seq. and California Code of Regulations, Title 14, §15000, et seq.) pursuant to CEQA Guidelines Section 15303(c) (Class 3, “New Construction or Conversion of Small Structures”). The Project proposes the construction of a new single-family residence in a residential district.
None of the exceptions in CEQA Guidelines Section 15300.2 apply, as follows:
(a) the site is located in an urbanized area with no environmentally sensitive habitats or species of concern on the site, (b) there has been no successive effort to intensity land uses in the area and thus there is no significant cumulative impact that would result from successive projects of the same type over time, (c) there are no significant effects due to unusual circumstances that would pose a reasonable possibility of having a significant effect on the environment, (d) the Project is not located near a scenic highway, (e) the Project site is not located on a hazardous waste site pursuant to Government Code Section 65962.5, and (f) the Project is consistent with the Secretary of Interior’s Standards for the Treatment of Historic Properties with Guidelines for Preserving, Rehabilitating, Restoring, and Reconstructing Historic Buildings (1995), Weeks and Grimmer, and therefore would not adversely affect any historical resource.
3. Appeal (APP24-0003) is DENIED.
4. The decision of the Architectural Heritage and Landmarks Commission is UPHELD.
5. Certificate of Appropriateness (COA#22-0007) and Development Review (DVR#22-0031) are GRANTED, in accordance based on the analysis contained in the staff report and the findings contained herein and subject to the revised Conditions of Approval attached hereto as Exhibit A.
ADOPTED BY THE CITY COUNCIL OF THE CITY OF VALLEJO at a regular meeting held on March 25, 2025, with the following vote:
AYES:
NOES:
ABSTAIN:
ABSENT:
________________________________________
ANDREA SOURCE
City of Vallejo City Council
Attest:
________________________________________
DAWN ABRAHAMSON, CITY CLERK
City of Vallejo City Clerk
Exhibit A
CONDITIONS OF APPROVAL
CERTIFICATE OF APPROPRIATNESS (COA22-0007)
DEVELOPMENT REVIEW (DVR22-0031)
128 CAROLINA STREET
APN # 0055-121-120
PERMIT DESCRIPTION: The project consists of a new two-story 1,732 square foot single-family residence, with an attached 280 square-foot one-car garage on a vacant lot within the Saint (St.) Vincent Historic District. Access to the garage will be off Lozier Alley.
A.PLANNING DIVISION
Laura Solomon, Associate Planner | [email protected] | (707) 648-5391 Pre-Building Permit:
1. Prior to building permit submittal, this project must receive approval of the required Minor Use Permit (MUP23-0018) per Vallejo Municipal Code Chapter 16.212 - Hillside Development Standards.
2. Prior to building permit submittal, submit a numbered list to the Planning Division with a written response on how each condition of project approval contained in this report will be satisfied. The list should be submitted to the project planner who will coordinate further development of the project. The approved conditions shall also be included with the building permit set, after the cover sheet.
3. Prior to building permit issuance, the Planning Division shall confirm that the building permit drawings and subsequent construction substantially conform with the approved Planning entitlement.
4. Prior to building permit issuance, the Planning Division shall confirm that the building permit, grading permit and all other drawings and documents substantially conform with the documents and/or representations, whether oral or written that were presented to and approved by the Planning and Development Services Director. Pursuant to VMC 16.602.10.b the site plan, floor plans, building elevations and/or any additional information or representations, whether oral or written, indicating the proposed structure or manner of operation submitted with an application or submitted during the approval process shall be deemed conditions of approval. Any approval may be subject to requirements that the applicant guarantees, warranties, or ensures compliance with the plans and conditions in all respects.
During Construction:
5. Construction activities shall be managed in compliance with the following requirements:
a. Site Watering. During the construction of a project, all portions of the site shall be watered as necessary to reduce emissions of dust and other particulate matter, and all stockpiles shall be covered.
b. Maintenance. Streets and sidewalks shall be made dirt free at the completion of construction.
c. Noise. All construction and transport equipment shall be muffled in accordance with state and federal laws and shall not exceed the City’s maximum allowable noise levels. All construction activity shall comply with Vallejo Municipal Code subsection 16.502.12.D.1., Maximum Noise Level for Temporary Construction Activity. d. Emissions. Construction and transport equipment shall be operated to minimize exhaust emissions. During construction, trucks and equipment should be running only when necessary.
2 e. Lozier Alley Vehicle Parking and Access. No contractor or construction worker vehicles shall be allowed to park in the alley at any time. All such vehicles shall be parked either on the Subject Property or on the public streets, except with the prior consent of the Public Works Director based on strict necessity--for example, to allow a concrete mixer when pouring concrete for the driveway. Deliveries of construction materials are permitted either to park on the edge of the alley for purposes of loading and unloading only, provided they occur within a two-hour window or less. Any time in excess of such two-hour window shall be based on strict necessity and shall require the prior consent of the Public Works Director or designee.
f. Hours of Operation. Grading, pile driving operations, construction, demolition, and related loading/unloading activities shall be limited to between 8:00 am and 5:00 p.m. on weekdays and 9:00 a.m. and 6 p.m. on Saturdays. . These time limitations may be extended for the delivery of construction materials only by approval of the Public Works Director or designee, provided such deliveries comply with all other requirements herein.
No construction is to occur on Sundays or on federal holidays. g. Water Run-off. All water run-off from construction sites shall be controlled. During construction, trucks and equipment should be running only when necessary and shall comply with Chapter 12.41 of the Vallejo Municipal Code.
6. No person shall make, or cause to suffer, or permit to be made upon any public property, public right-of-way or private property, any excessive noise, annoying noise, amplified sound or vibrations that are physically annoying to reasonable persons of normal sensitivity or that are so harsh or so prolonged or unnatural or unusual in their use, time or place as to cause or contribute to the unnecessary and unreasonable discomfort of any persons of normal sensitivity located at the lot line of the property from which these noises emanate or that interfere with the peace and comfort of residents or their guests, or the operators or customers in places of business in the vicinity, or that may detrimentally or adversely affect such residences or places of business. (VMC Section 16.502.09 (C))
7. In the event that any archeological resources are discovered on the site during construction, all construction activities shall cease immediately, and a qualified archeologist and the City’s Chief Building Official shall be notified.
8. The fencing for construction sites shall not be installed until a building permit or grading permit has been issued and shall be removed prior to final inspection. In the event that the building permits expire before the construction is completed, the Planning and Development Services Director may issue a temporary use permit pursuant to Chapter 16.339, Temporary Uses, to allow the fencing to remain for a longer period of time. (VMC Section 16.505.08 (B)) Landscaping:
9. Prior to first final building inspection, the landscape architect shall provide a Certificate of Completion and Certificate of Installation according to the Landscape Documentation in accordance with VMC Chapter 16.504.09: Water Efficient Landscape Requirements. The documentation shall include the following:
a. Irrigation Scheduling (VMC Section 16.504.11)
b. Schedule of Landscape and Irrigation Maintenance (VMC Section 16.504.08) c. Landscape Irrigation Audit Report (VMC Section 16.504.13) d. Soil Management Report (VMC Section 16.504.10)
10. Prior to the first final building inspection, all landscaping and irrigation shall be installed in accordance with the approved plans, and the landscape architect shall provide written verification that the landscaping and irrigation have been installed in accordance with the approved landscape plans, particularly with respect to size, health, number and species of plants, and the overall design concept.
3 11. All landscaping shall be permanently maintained in a healthy and thriving condition at all times, in compliance with the approved landscape plan. Irrigation systems and their components shall be maintained in a fully functional manner consistent with the original approved design or upgraded to reflect current best practices for water efficiency. Regular maintenance shall include but is not limited to:
a. Adjusting, checking, and repairing irrigation equipment; resetting automatic controllers; aerating and de-thatching turf areas; adding/replenishing fertilizer, mulch, soil amendments; insect control; the replacement of dead or diseased plants; pruning; watering; and weeding all landscaped areas.
b. The trimming of vegetation is necessary to maintain the effective functioning of solar energy facilities and passive solar design features installed both on site and on adjacent properties.
c. The trimming of vegetation is necessary to keep pedestrian and bicycle paths clear. (VMC Section 16.504.08 (A))
d. Pruning, cultivating, weeding, fertilizing, replacement of plants, and watering on a regular basis.
e. Pruning or removal of overgrown vegetation, cultivated or uncultivated, that may harbor rats, vermin, or other nuisances, or otherwise be detrimental to neighboring properties. f. The removal of dead, decayed, diseased, or hazardous trees, weeds and debris that create an unsightly appearance and may be dangerous to public safety and welfare or detrimental to neighboring properties or property values. Compliance shall be by removal, replacement, or maintenance.
g. Landscaping (trees, shrubs, ground cover, turf, etc.) which, due to accident, damage, disease, lack of maintenance, or other cause, fails to show a healthy appearance and growth, shall be replaced. Replacement plants shall conform to all standards that govern the original planting installation, approved landscaping plan, or as approved by the director. (VMC Section 16.504.08 (D))
12. Litter shall be removed from all landscaped areas in a timely fashion. (VMC Section16.504.08 (B))
13. Turf areas shall be mowed on a regular basis and be kept green. Accumulation of leaves, twigs, bark, and other similar materials shall be removed on a regular basis. Planting areas shall be kept free of weeds at all times. (VMC Section 16.504.08 (C)) Fences, Walls and Screening:
14. Fencing and walls shall be continuously maintained with no sign of rust or disrepair. Any graffiti shall be removed within forty-eight hours of discovery by the property manager. (VMC Section
16.505.02 (B)).
15. All exterior mechanical equipment, whether on a roof, on the side of a structure, or located on the ground, shall be screened from public view. Exterior mechanical equipment to be screened includes, without limitation, heating, ventilation, air conditioning, refrigeration equipment, plumbing lines, ductwork, transformers, smoke exhaust fans, water meters, backflow preventers, service entry section, back-up and emergency generators, and similar utility devices. a. Screening shall be architecturally integrated into the main structure with regard to materials, color, shape, and size to appear as an integral part of the building or structure. b. Equipment shall be screened on all sides, and screening materials shall be opaque. c. When screening with plants, evergreen types of vegetation shall be planted and maintained. Plant material sizes and types shall be selected and installed so that, at the time of building occupancy, such plants effectively screen their respective equipment. d. The use of wood expanded metal lath, and chain link for the purpose of screening is prohibited. (VMC Section 16.505.10)
4 Lighting:
16. Lighting shall be designed, located, and installed to be directed downward or toward structures, be shielded or fully shielded, and shall be well-maintained in order to prevent glare, light trespass (unwanted light on adjacent lots and public rights-of-way), and light pollution to the maximum extent feasible. No permanently installed lighting shall blink, flash, or be of unusually high intensity or brightness, as determined by the Planning and Development Services Director. (VMC Section 16.506.04 (B))
Overall Project:
17. This entitlement shall automatically expire within two years of the effective date of this approval, on March 25, 2027, unless the use is exercised or extended (VMC Section 16.602.12 (A)).
Issuance of a building permit shall constitute exercise of rights; provided, however, that, unless otherwise specified as a condition of project approval, the permit shall expire if:
a. The building permit expires.
b. Final inspection is not completed, or certificate of occupancy issued within the time specified as a condition of project approval.
c. The rights granted under the permit are not exercised within one year following the earliest to occur of the following: issuance of a certificate of occupancy; or if no certificate of occupancy is required, the last required final inspection for the new construction. (VMC Section 16.602.11 (B))
18. The Planning and Development Services Director may approve a one-year extension of any permit or approval granted for a residential or non-residential project under the Zoning Code upon receipt of a written application and fees received fifteen calendar days) before the expiration date with the required fee prior to expiration of the permit. (VMC Section 16.602.11 (C.1))
19. No change in the use for which a permit or other approval has been issued is permitted, in accordance with Government Code section 66411.7.
20. For new developments, utilities including, but not limited to, all electrical, telephone, cable television, fiber-optic cable, gas, water, sewer, irrigation/recycled water, and similar distribution lines providing direct service to a project shall be installed underground within the site. This requirement may be waived by the Planning and Development Services Director upon determining that underground installation is infeasible, or the electrical line is otherwise exempt from an under-grounding requirement. (VMC Section 16.501.10)
21. Applicant shall indemnify, hold harmless, and defend City, its officers, officials, directors, employees, agents, volunteers and affiliates and each of them from any and all claims, demands, causes of action, damages, costs, expenses, actual attorney’s fees, applicant’s fees, expert fees, losses or liability, in law or in equity, of every kind and nature whatsoever arising out of or in connection with Applicant’s operations, or any subcontractor’s operations, to be performed under this agreement for Applicant’s or subcontractor’s tort negligence including active or passive, or strict negligence, including but not limited to personal injury including, but not limited to bodily injury, emotional injury, sickness or disease, or death to persons and/or damage to property of anyone, including loss of use thereof, caused or alleged to be caused by any act or omission of Applicant, or any subcontractor, or anyone directly or indirectly employed by any of them or anyone for the full period of time allowed by the law, regardless to any limitation by insurance, with the exception of the sole negligence or willful misconduct of the City. No modification of the project, any application, permit, certification, condition, environmental determination, other 5 approval, change in applicable laws and regulations, or change in processing methods shall alter the Applicant’s indemnity obligation.
B. Building Division
Staff Contact: Bill Collins [email protected] | (707) 648-4387
1. Plans and permits will be required for building, mechanical, plumbing, and electrical work per California Code of Regulations, Title 24 and applicable City Ordinance in effect at the time of the completed Building Permit application date and required fees shall be paid at the time of application.
2. Soils report will be required for foundation design plan reviews.
3. 2022 California Code of Regulations applies if permit application(s) are received before the end of 2025. After 12-31-2025 the 2025 California Code of Regulations will apply.
4. Fees will apply to the current fiscal year of permit applications C. Water Department
Staff Contact: Melissa Cansdale | [email protected] | (707) 553-7223
1. CODE REQUIREMENTS. All code requirements as stated in Title 11 of the Vallejo Municipal Code (VMC) and Vallejo Standard Specifications and Standard Drawings adopted in 2011 (VSSSD) that apply to this project shall be conformed to. The project is being made aware of codes that require extra attention by the following items.
2. WATER SYSTEM PLANS (VSSSD Section 4.1). All water system improvements shall be consistent with the latest Vallejo Water System Master Plan, prepared by Kennedy/Jenks Engineers. Prior to Improvement plan approval and building permit issuance, water system improvement plans shall be submitted to the Water Department for review and approval, and shall contain at least:
a. Location and size of fire sprinkler service connection(s). b. Location and size of existing and proposed domestic service connection(s). c. Location and size of irrigation service connection(s), if any. d. Location of fire hydrants.
e. Location of structures with respect to existing public water system improvements, such as mains, meters, etc.
f. Location and size of any new water mains.
g. Location and size of backflow prevention devices (required on water service connections to irrigation systems, certain commercial water users, and to commercial fire sprinkler systems, per City Ordinance 922 N.C. (2d).
3. FIRE FLOW REQUIREMENTS (VSSSD Section 4.1). Fire flow requirements of the Fire department shall be complied with. Fire flow at no less than 25 psi residual pressure shall be available within 1,000 feet of any structure. One half of the fire flow shall be available within 300 feet of any structure.
a. For single family residential units, the fire flow is 1,500 gpm. b. For other developments, see the Vallejo Water System Master Plan, 2015, prepared by Kennedy Jenks.
4. HYDRAULIC CALCULATIONS (VSSSD Section 4.1). Prior to Improvement Plan and building permit issuance, hydraulic calculations shall be submitted to the Water Director demonstrating that the fire flow requirements are complied with.
6 5. FIRE PROTECTION SYSTEMS (VSSSD Section 4.1). Fire hydrant placement and fire sprinkler system installation, if any, shall meet the requirements of the Fire Department. For combined water and fire services, the requirements of both the Fire Department and the Vallejo Water System Master Plan, with latest revisions, shall be satisfied.
6. WATER EASEMENTS (VSSSD Section 4.1). Easements shall be granted for all water system improvements installed outside the public right-of-way in the City's Standard Form for Grant of Water Line Easement with the following widths:
a. 15 ft. wide (minimum) for water mains.
b. 10 ft. wide (minimum) for fire hydrants, water meters, backflow preventers, double detector check valves, etc.
c. Other facilities will be reviewed by the Water Department.
7. WATER METERS (VMC 11.04.110 and 11.16.090). Each parcel shall be metered separately and shall have a separate fire sprinkler service connection.
8. WATER SERVICE BONDS AND FEES (VMC Sections 11.16, 11.18, 11.20 and 11.24). Water service shall be provided by the City of Vallejo following completion of the required water system improvements and payment of applicable fees. Performance and payment bonds shall be provided to the City of Vallejo prior to construction of water system improvements. Fees include those fees specified in the Vallejo Municipal Code including connection and elevated storage fees, etc., and fees for tapping, tie-ins, inspections, disinfection, construction water, and other services provided by the City with respect to the water system improvements. The Water Department may be contacted for a description of applicable fees. These fees have to be paid prior to issuance of the building permit.
9. GENERAL CONDITIONS OF APPROVAL
a) Apply and pay for Fire Flow Test with the Water Department in order to determine operation of sprinkler system and final service size.
b) Provide water meter and service sizing calculations per most recent California Plumbing Code, include a water fixture count table.
c) As of January 1, 2018, all units in multi-family, commercial, or combination thereof, buildings shall be individually metered (if existing plumbing allows or is re-configured) by the City, additional meters at the owner/applicant’s expense; or, master metered by the City, and sub-metered by the property owner, with approved/certified meters. Per California Senate Bill 7 (SB7).
10. WATER SYSTEM INSTALLATION. Prior to occupancy or final building inspection, install water system improvements as required. Backflow device/s where required shall be installed in areas hidden from public view and/or shall be mitigated by landscaping.
D. Fire Prevention
Staff Contact: Moises Zarate | [email protected] | (707) 648-4565
1. All buildings, facilities, and improvements shall be accessible to fire department apparatus by way of approved access roadways.
2. Prior to Final Inspection, in accordance with the 2019 CFC, approved address numbers shall be placed on all new and existing buildings in such a position as to be plainly visible and legible from the street or road fronting the property. Said numbers shall clearly contrast with their background.
The characters shall be a minimum of 4" high with a 1/2" stroke. The size of the building and distance or location of the address numbers from the roadway may necessitate larger numbers.
3. All roof material shall be rated class "C" or better. 7 4. Provide smoke detectors in all sleeping rooms and common hallways. Detectors shall be hardwired, interconnected with battery backup. Electrical circuits supplying detectors shall be separate dedicated lines with no other devices on the circuits.
5. Provide carbon monoxide detectors outside each sleeping area in the immediate vicinity of all bedrooms.
6. Emergency escape and rescue openings are required in each bedroom in accordance with the 2019 CA Building Code.
7. An NFPA 13D automatic fire sprinkler system is required for all new residential structures, please submit 2 sets of plans and calculations to the Fire Prevention Office and obtain a permit prior to installation. Adequate pressure and GPM verification is required prior to residential construction.
8. Provide a one-hour fire separation between the R-3 and U Occupancy.
9. A final inspection from the Fire Prevention Division is required.
E. Vallejo Flood and Wastewater
Staff Contact: Mariah Henderson | [email protected] | (707) 652-7810
1. Utility site plan will need to show required two-way cleanout within 2 feet of the foundation where waste plumbing exits the building and District cleanout near the public right of way.
2. Add the following notes to plans:
a. All sewer work shall conform to the Vallejo Wastewater Standards, b. Call Vallejo Wastewater a minimum of 24 hours in advance for inspections.
3. Applicant will be required to pay applicable fees and obtain VFWD Connection Permit upon final plan approval.
ACTION ITEM 9.A.
DATE: March 25, 2025
TO: Mayor and Members of the City Council
FROM: Rekha Nayar, Finance Director
SUBJECT: RECEIVE AND FILE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) AND OTHER ANNUAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2024
RECOMMENDATION
Receive and file the City's Annual Comprehensive Financial Report (ACFR) and other annual reports for the fiscal year ended June 30, 2024
REASONS FOR RECOMMENDATION
The City is required by Charter Section 721 to have an independent audit of its financial records performed each fiscal year. The audited financial statements for the fiscal year that ended June 30, 2024, have been completed. Copies of the ACFR and other annual reports will be available for public inspection during the meeting. Additionally, electronic copy of the reports have been posted on the city website and can be accessed using the link provided below.
Finance Document Library
BACKGROUND AND DISCUSSION
Each year, the City is required under Charter Section 721 to undergo an independent audit of its financial records. For Fiscal Year 2023-24, the City engaged Lance, Soll & Lunghard, LLP (LSL), an independent certified public accounting firm, to conduct the annual audit of the City of Vallejo and its blended component units.
The ACFR provides a detailed overview of the City’s financial position and that of its component units.
The 2023-24 ACFR has been prepared in accordance with Generally Accepted Accounting Principles (GAAP) and the presentation requirements established by the Governmental Accounting Standards Board (GASB). This comprehensive document covers all funds and offers in-depth financial information for each. As a general-purpose report, the ACFR is designed to meet the needs of a broad range of stakeholders.
Historically, the City files the ACFR in December or January following the financial year-end of June 30th.
This FY 2023-24 year, the transition to the new financial software, Finance Enterprise, caused a significant delay in the City's year-end closing process. However, staff expects to return to the standard reporting schedule for FY 2024-25.
The quality of the City’s financial reporting is evaluated in two key ways: 1) A clean audit report from the independent auditors, indicating sound financial management; 2) The Certificate of Achievement for Excellence in Financial Reporting, awarded by the Government Finance Officers Association (GFOA) of
Date: March 25, 2025
Subject: RECEIVE AND FILE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) AND OTHER ANNUAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2024
the United States and Canada. This prestigious recognition represents the highest standard in governmental accounting and financial reporting.
The auditors have issued an unmodified opinion, or clean report, on the City’s financial statements—the highest level of assurance (see Auditor’s Opinion of the ACFR). The auditors' Communication Letter and Report on Internal Control are also included with this report as attachments.
Additionally, the City has been awarded the Certificate of Achievement for Excellence in Financial Reporting by the Government Finance Officers Association (GFOA) for the Fiscal Year 2022-23 ACFR— marking the 10th time the City has received this recognition since emerging from bankruptcy. Staff anticipates that the current ACFR will also meet the requirements for this prestigious award.
A summary of the City’s financial condition can be found in the Transmittal Letter and the Management's Discussion and Analysis (MD&A) section of the ACFR. The City also prepares a Popular Annual Financial Report (PAFR), a condensed version of the ACFR that presents key financial information in a more easy to ready format. While the PAFR is not audited, it serves as a supplementary resource and is included as an attachment to this staff report.
The following highlights the City's key financial metrics for Fiscal Year 2023-24:
Government-wide Financial Statements (Statement of Net Position): This statement provides a long-term view of the City’s financial activities as a whole, using the full accrual basis of accounting, similar to that of a commercial enterprise.
For Fiscal Year 2023-24, the City's total net position for all activities was $441.2 million. Net position represents the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources. It is categorized as follows:
• Invested in capital assets: $424.5 million
• Restricted: $131.5 million
• Unrestricted (deficit): $(114.8) million
The unrestricted net position shows a deficit due to the City’s long-term liabilities, including pension obligations and compensated absences. Further details on the City's net position can be found in MD&A and Note 12A of the financial statements.
Fund-Level Financial Statements: These statements provide a more detailed look at the City's operations than the government-wide Statement of Net Position.
Governmental Funds: The City’s governmental funds account for the majority of its programs (total of 78 funds). At the close of Fiscal Year 2023-24, the combined ending fund balance was $212.4 million, reflecting an increase of $29.7 million or 16% over the prior year.
Of the total fund balance, 37% ($78.9 million) belongs to the General Fund. Fund balance categories include:
• Non-spendable: $4.7 million (not available for use)
• Restricted: $126.5 million (subject to externally imposed restrictions) • Committed: $30.0 million (designated by City Council resolution) Date: March 25, 2025
Subject: RECEIVE AND FILE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) AND OTHER ANNUAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2024
• Assigned: $21.5 million (earmarked for specific purposes • Unassigned: $29.7 million (available for general city operations, primarily within the General Fund)
Further details on the governmental fund balance categories can be found in Note 12B of the ACFR.
General Fund: The General Fund is the City’s primary operating fund and serves as a key indicator of its financial health. It includes revenues from Measure B/V, Measure P, and ARPA funds. At the close of Fiscal Year 2023-24, the General Fund recorded a surplus:
• Total revenues and other financing sources: $163 million • Total expenditures and other financing uses: $148.7 million • Surplus: $14.3 million
This $14.3 million surplus was allocated across the following fund balance categories:
FY 22-23 FY 23-24
Balance Surplus Balance
Non-spendable 4.20 (0.10) 4.10
Restricted 22.60 4.30 26.90
Assigned -Others 8.60 (5.60) 3.00
Assigned - Measure P 4.20 10.80 15.00 Unassigned (Available) 25.00 4.90 29.90 Totals 64.60 14.30 78.90
The General Fund’s unassigned fund balance of $29.9 million represents 22% (or 2.6 months) of the Fiscal Year 2024-25 original operating budget, excluding Measure P. This exceeds the Government Finance Officers Association (GFOA) recommended reserve level of two months’ expenditures. A detailed analysis of the General Fund can be found in MD&A, and further details on the General Fund’s balance categories are available in Note 12B of the ACFR.
Proprietary - Enterprise Funds: These include Water Fund and other non-major funds such as Golf, Marina, Parking and Fiber. The total unrestricted net position of enterprise funds was $32.6 million. Of this, $32.1 million (98.5%) was attributable to Water Fund. The Water Fund’s unrestricted net position increased by $8.9 million during FY 23-24, primarily due to strong investment earnings, water rate increases adopted in 2017 and 2019, and lower operating and capital-related expenses.
Proprietary – Internal Service Funds: These include Fleet Maintenance/Replacement, Payroll Benefits, Retiree Health (OPEB), General Liability and Workers Compensation funds. The total unrestricted net position of the internal services funds was $11.0 million. All funds reported a positive balance, except for the Retiree Health Benefits (OPEB) fund, which had a deficit of $5.7 million due to the net OPEB liability.
Audit Opinion: The independent auditor's report addressed to the City Council issued an "unmodified" opinion for FY 2023-24 audit. This reflects the auditor's assessment that the basic financial statements Date: March 25, 2025
Subject: RECEIVE AND FILE ANNUAL COMPREHENSIVE FINANCIAL REPORT (ACFR) AND OTHER ANNUAL REPORTS FOR THE FISCAL YEAR ENDED JUNE 30, 2024
contained in the ACFR present fairly, in all material aspects, the financial position and the changes in financial position of the City of Vallejo for the year ended June 30, 2024, in accordance with GAAP and GASB requirements.
Report on Internal Control and Compliance: No deficiencies identified.
Auditor Communication Letter: No findings reported.
Measure P Compliance report: The City is found to comply with the Ordinance.
Measure B/V compliance report: The City is found to comply with the Ordinance.
Transportation Development Act (TDA) Audit : Under California Public Utilities Code all claimants of TDA funds must submit an annual fiscal and compliance audit to the California State Controller's office.
FISCAL IMPACT
The cost of preparing the ACFR and the independent audit was budgeted as part of the FY 24.-25 budget. There is no fiscal impact of this action.
ENVIRONMENTAL REVIEW
This action is exempt from the California Environmental Quality Act (CEQA) because it is not a project which has a potential for resulting in either a direct physical change in the environment, or a reasonably foreseeable indirect physical change in the environment, pursuant to CEQA Guideline section 15378.
ATTACHMENTS
1. Attachment 1 - City of Vallejo ACFR as of June 30, 2024
2. Attachment 2 - Vallejo Auditor Communication Letter
3. Attachment 3 - Vallejo Report on IC and Compliance
4. Attachment 4 - City of Vallejo Measure BV Report
5. Attachment 5 - City of Vallejo Measure P Report
6. Attachment 6 - City of Vallejo TDA
7. Attachment 7 - City of Vallejo PAFR
CONTACT
Rekha Nayar, Finance Director (707-648-4592)
[email protected]
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CITY OF VALLEJO, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
3 CITY OF VALLEJO
VALLEJO, CALIFORNIA
Annual Comprehensive Financial Report
For the Year Ended June 30, 2024
Table of Contents
INTRODUCTORY SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 8 Letter of Transmittal . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 9 Public Officials . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 21 Organizational Chart . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 22 GFOA Certificate of Achievement . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 23 FINANCIAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 24 Independent Auditors’ Report . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 25 Management’s Discussion and Analysis (Unaudited) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 29 Basic Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 50 Government-Wide Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 51 Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 52 Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 54 Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 56 Governmental Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 57 Balance Sheet - Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 58 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 61 Statement of Revenues, Expenditures and Changes in Fund Balances . . . . . . . . . . . . . . . . 62 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities . . . . . . . . . . . . . . . . . . . . . . . 64 Proprietary Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 65 Statement of Net Position - Other Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 66 Statement of Revenues, Expenses and Changes in Net Position - Other Enterprise Funds 68 Statement of Cash Flows - Other Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 70 Fiduciary Fund Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 72 Statement of Fiduciary Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 73 Statement of Changes in Fiduciary Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 74 Notes to The Basic Financial Statements . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 75 Page
4 Table of Contents
FINANCIAL SECTION (continued)
Required Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 148 Budgetary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 149 Schedules of Revenues, Expenditures, and Changes in Fund Balances:
Budget and Actual - General Fund and Major Special Revenue Funds . . . . . . . . . . . . . . . . . 151
General Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 152 Housing Authority . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 153 City's Retiree Medical Benefits (OPEB) Schedule of Changes in the Net OPEB Liability and Related Ratios . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 154
City's Retiree Medical Benefits (OPEB) Schedule of Contributions . . . . . . . . . . . . . . . . . . . . . . . . 156 VFWD’s Schedule of Changes in the Net OPEB Liability and Related Ratios . . . . . . . . . . . . . . . 158 VFWD’s Schedule of Contributions . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 160 Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous Plan) . . 162 Schedule of Plan Contributions (Miscellaneous Plan) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 164 Schedule of Changes in the Net Pension Liability and Related Ratios (Safety Plan) . . . . . . . . . 166 Schedule of Plan Contributions (Safety Plan) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 168 Schedule of the Plan's Proportionate Share of the Net Pension Liability and Related Ratios (VFWD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 170
Schedule of Plan Contributions (VFWD) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 172 Supplementary Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 175 Nonmajor Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 176 Combining Balance Sheet . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 178 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances . . . . . . . . . 187 Combining Schedules of Revenues, Expenditures, and Changes in Fund Balances:
Budget and Actual - Nonmajor Special Revenue Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 195
Solid Waste Disposal Fund #135 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 196 State Gas Tax Fund #133 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 197 Community Development Block Grant Fund #101 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 198 HOME Program Fund #102 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 199 Hiddenbrooke Community Services District Fund #138 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 200 Mare Island Base Reuse Fund #107 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 201 Mare Island CFD 2002 Fund #112 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 202 Mare Island CFD 2005 1A (State) Fund #113 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 203 Mare Island CFD 2005 1B (Local) Fund #114 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 204 Hazmat Revolving Fund #143 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 205 Supplemental Law Enforcement Grant Fund #151 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 206 Traffic Offender / Vehicle Impound Program Fund #140 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 207 Landscape Maintenance Districts Fund #161-188 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 208 Outside Services Fund #129 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 209 Administrative Trust Fund #601 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 210 State Lands Fund #134 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 211 Neighborhood Stabilization Program Fund #103 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 212 Navigation Center #191 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 213 NLP Nuisance Abatement Fund #147 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 214 Page
5 Table of Contents
FINANCIAL SECTION (continued)
Schedules of Revenues, Expenditures, and Changes in Fund Balances:
Budget and Actual - Nonmajor Debt Service Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 215
Certificates of Participation Fund #-Various . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 217 Schedules of Revenues, Expenditures, and Changes in Fund Balances:
Budget and Actual - Permanent Fund . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 218
McCune Collection Fund #603 . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 219 Nonmajor Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 221 Combining Statement of Net Position - Other Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . 222 Combining Statement of Revenues, Expenses and Changes in Net Position - Proprietary Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 223
Combining Statement of Cash Flows - Other Enterprise Funds . . . . . . . . . . . . . . . . . . . . . . . . 224 Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 227 Combining Statement of Net Position - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . 228 Combining Statement of Revenues, Expenses and Changes in Net Position - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 230
Combining Statement of Cash Flows - Internal Service Funds . . . . . . . . . . . . . . . . . . . . . . . . . 232 Combining Fiduciary Funds (Custodial Funds) . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 235 Combining Statement of Fiduciary Net Position - Fiduciary Funds - Custodial Funds . . . . . 236 Combining Statement of Fiduciary Net Position - Fiduciary Funds - Custodial Funds . . . . . 237 Page
6 Table of Contents
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STATISTICAL SECTION . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 238 Financial Trends . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 240 Net Position by Component . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 241 Changes in Net Position . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 242 Fund Balances of Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 245 Changes in Fund Balances of Governmental Funds . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 246 Revenue Capacity Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 248 Assessed Value and Estimated Actual Value of Taxable Property . . . . . . . . . . . . . . . . . . . . . . . . . . . . 249 Direct and Overlapping Property Tax Rates . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 250 Top 10 Principal Property Tax Payers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 251 Property Tax Levies and Collections . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 252 Taxable Sales by Category . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 253 Top 25 Principal Sales Tax Payers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 254 Debt Capacity Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 255 Ratios of Outstanding Debt by Type . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 256 Direct and Overlapping Debt . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 257 Legal Debt Margin Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 258 Pledged Revenue Coverage . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 259 Demographic and Economic Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 262 Demographic and Economic Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 263 Top 10 Principal Employers . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 264 Full-time and Part-time City Employees by Function . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 265 Operating Information . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 266 Operating Indicators . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 267 Capital Asset Statistics . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . . 268 7 INTRODUCTORY SECTION
8 Letter of Transmittal
March 7, 2025
To the Honorable Mayor, Members of the City Council
And Citizens of the City of Vallejo, California
It is our pleasure to present to you the 2024 Annual Comprehensive Financial Report (ACFR) for the City of Vallejo, California. The Finance Department has prepared this ACFR in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB). This report presents the City of Vallejo's financial position as of June 30, 2024, the results of its operations, and the cash flows of its proprietary funds for the year then ended in accordance with Generally Accepted Accounting Principles (GAAP).
Responsibility for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the City. To the best of our knowledge, we believe the data, as presented, is accurate in all material aspects. It is presented in a manner designed to fairly set forth the City's financial position and changes in financial position. All disclosures necessary to enable the reader to gain an understanding of the City's financial affairs have been included.
LSL, LLP, a fully licensed public accounting firm qualified to perform audits of the state and local governments within the State of California, have audited the City's basic financial statements. The independent audit's goal was to provide reasonable assurance that the City's basic financial statements for the fiscal year ended June 30, 2024, are free of material misstatement. The independent auditors' report is presented as the first component of the financial section of this report.
The ACFR is presented in three parts: introductory, financial and statistical sections. This transmittal letter is the introductory section together with organizational chart. Management's Discussion and Analysis (MD&A) provides a narrative introduction, overview, and analysis to accompany the basic financial statements. This letter of transmittal is designed to complement the MD&A and should be read in conjunction with it. The MD&A can be found immediately following the report of the independent auditors in the financial section. The statistical section includes selected financial and demographic information presented on a multi-year basis.
PROFILE OF GOVERNMENT
The City of Vallejo is a municipal corporation incorporated in March 1868, under the laws of the State of California. A Charter City located within Solano County in Northern California, the City operates under a City Charter initially adopted in 1911 and last amended in November 2013. The Charter provides for a Council- Manager form of government in which the City Manager recommends policy, program, and budget priorities to the City Council, who in turn develops legislation and policies to direct the City.
The citizens elect the City of Vallejo's governing body in a general, popular election. The Mayor, elected by the community-at-large to a four-year term, acts as the City's formal representative and presides over Council meetings. The City Council, elected on a nonpartisan basis, consists of six members elected by the six districts to four-year, staggered terms. Vallejo is the largest city in Solano County with a population of approximately 121,558 Vallejo is the site of Mare Island Naval Shipyard, the first United States naval base established on the Pacific Ocean. Established in 1854, the shipyard began building ships the following year. More than 500 naval vessels were constructed, and thousands were overhauled at Mare Island before the base closure in 1996.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 9 The Sacramento, Napa, and San Joaquin Rivers all flow into the San Francisco Bay at Vallejo. Rolling hills surround the City, protecting it from fog and wind typical of many coastal towns. Vallejo enjoys a mild Mediterranean climate. It is connected to the Greater Bay Area, the Pacific Rim, and the rest of the world by ship, rail, automobile, and air.
Vallejo is located in Northern California, 30 miles northeast of San Francisco, Approximately 60 miles southwest of Sacramento, 70 miles north of Silicon Valley, and 385 miles north of Los Angeles. *Map Source: Google Maps
The City provides a wide range of municipal services, including public safety (police and fire protection), a municipal water system, street maintenance, and other public works infrastructure functions, housing assistance, golf courses, planning, building inspection, public marina, and general administration. The separate Greater Vallejo Recreation District (GVRD) provides for Parks and Recreation programs and services, Water Emergency Transport Agency (WETA) provides for ferry services, and Solano County Transit (SolTrans) provides bus services.
This report includes all organizations and activities for which elected City officials exercise financial accountability.
The notes to the financial statements further discuss the City as a financial reporting entity.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 10 Accordingly, the following entities, although legally separate, are component units and are incorporated in the accompanying financial statements:
• Housing Authority of the City of Vallejo (Blended Component Unit) • Marine World Joint Powers Authority (Blended Component Unit) • Parking Authority of the City of Vallejo (Blended Component Unit) • Public Financing Authority of the City of Vallejo (Blended Component Unit) • Vallejo Homeless Navigation Center JPA (Blended Component Unit) • Vallejo Flood and Wastewater District (Discrete Component Unit) • Vallejo Flood and Wastewater District Financing Corporation (Discrete Component Unit)
ECONOMIC CONDITION AND OUTLOOK
Overall, the City has seen a steady recovery in its local economy in 2024 while still navigating the lingering impacts of the pandemic. In addition, the everchanging conflicts within the country and abroad continue to have an effect and have been felt throughout the City, County, and State. The unemployment rate in Solano County went up slightly to 5.1% in December 2024 from 4.6% in September 2023. This rate is still down from the 9.5% experienced in 2020, despite the fewer number of available workers who reside within the City. In addition, the City’s economy continues to show resilience and stability with a steady stream of major development projects and a revitalization of the local business community. Looking to 2025, there are signs to show that the City will continue to grow and thrive.
These positive indicators are helpful as the City continues to face challenges with aging infrastructure, rising employee salaries and benefits, and meeting the needs of its citizens, all of which require significant capital expenditure. The City has seen a reduction of revenue which has direct effect on expenditures. The City has taken major steps to mitigate these reductions with continued fiscal prudence, responsibility, and transparency.
State Budget California is still a powerhouse in the global economy as it maintained its position as the 5th largest economy in the world. The state's nominal GDP reached nearly $3.9 trillion in 2023, with a growth rate of
6.1% since the previous year. This growth was driven by strong performances across all industry sectors which include agriculture, entertainment, and technology.
Similar to the City, California's economy has shown resilience wherein the unemployment rate stands at 5.5% as of December 2024 which illustrates the steady recovery in the labor market.
Looking ahead, California's economic outlook for 2025 remains strong and positive. The state's fiscal resilience and prudent planning shows a goal of continued economic stability, with a focus on key areas such as homelessness and public safety. California continues to budget and prioritize these areas.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 11 Revenues and Local Sales Tax Increase – In November 2016, the Vallejo voters approved a sales tax measure, known as "Measure V," that permanently extended the City's 2011 Measure B one-cent per dollar transaction and use tax. This tax continues to provide around $20.6 million annual revenue to the City. These revenues are strategically allocated towards specific projects, targeted staffing, and the rebuilding of reserves under the direction of the City Council. In addition, on November 2022, the Vallejo voters approved “Measure P” adding an additional 0.875% transaction tax to the current tax rate of 8.375%, which resulted in City of Vallejo sales tax of
9.25% effective April 1, 2023. This tax provided around $17.7 million in 2024 and is expected to receive $18.1 million in 2025. These funds will help in street maintenance and essential services such as maintaining fire protection/emergency medical response and crime prevention, homelessness and blight. The following chart tracks the improvement in the total General Fund revenues and expenditure over the last ten years. The revenue budget in FY 24-25 is less than the FY 23-24 actual mainly due to ARPA.
General Fund - Revenue & Expenditure Trends
Millions
Revenues Expenditures
$80
$90
$100
$110
$120
$130
$140
$150
$160
$170
FY 15-16 FY 16-17 FY 17-18 FY 18-19 FY 19-20 FY 20-21 FY 21-22 FY 22-23 * FY 23-24 * FY 24-25 Budget *
Revenues $ 96 $ 103 $ 106 $ 110 $ 109 $ 121 $ 127 $ 151 $ 162 $ 152 Expenditures $ 85 $ 89 $ 92 $ 95 $ 101 $ 104 $ 107 $ 117 $ 122 $ 134 Excludes Other financing sources (uses) and special items *Includes Measure P
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 12 CURRENT FINANCIAL CONDITIONS
Current Financial Conditions – The graph below illustrates the City's current financial condition and its improved fiscal stability since the passage of the 2011 Measure B/V tax and on 2022 the passing of Measure P tax. It presents the changes in fund balance for the General Fund for the fiscal year ended June 30, 2024, as compared with the nine prior years.
General Fund - Fund Balance Trends
Fiscal Year Ended June 30
Millions
$21.56
$25.75
$30.38 $29.86 $32.16
$28.32
$40.38
$43.13
$64.60
$78.92
$7.98 $9.93
$15.68
$21.24
$24.51
$17.98
$21.68 $23.20 $25.04
$29.98
Total Fund Balance Unassigned
2015 2016 2017 2018 2019 2020 2021 2022 2023 2024
$-
$20
$40
$60
$80
$100
In fiscal year 2023-24 the city’s General Fund revenues increased from last year due to the passing of Measure P and various grants. As a result, the City was able to maintain General Fund unassigned fund balance (budget reserves) over GFOA recommended level of two months of expenditure. The City is committed to maintaining and growing these fund balance reserves to provide additional strength and assurance for ongoing City operations and future obligations.
Pension and Other Post-Employment Benefit (OPEB) Obligations – While CalPERS has made progress in improving its funded status and investment returns, California cities continue to face rising pension obligations.
Ongoing adjustments to actuarial assumptions remain essential to addressing these challenges effectively. As a result, the city's pension contribution rates are expected to rise in the coming years, driven by CalPERS' investment volatility.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 13 During fiscal year 2023-24, the City contributed 22.75% and 11.36% of employee salary towards the normal cost for its Safety and Miscellaneous pension plans, respectively. In addition, in July 2023, the City made its $24.8 million required annual payment on the Unfunded Accrued Liabilities (UAL). Projections utilizing July 2024 CalPERS data show the City's FY 2029-30 normal rates for its Safety and Miscellaneous plans decreasing to
19.1% and 10.01% respectively as employees are hired into lower benefit tiers while its total required annual payment on the UAL increased to $39.4million.
The City has previously taken steps to mitigate both this CalPERS rate increase and its OPEB retiree health obligations. In 2013, the City proactively made a supplemental contribution of $6.5 million to CalPERS to begin plan stabilization. In August 2017, the City established an Internal Revenue Code (IRC) Section115 Trust with the Public Agency Retirement Services (PARS) organization to further mitigate future CalPERS increases. As of June 30, 2024, the General Fund reported $22.2 million in total cumulative contributions to the PARS Pension Trust Fund, inclusive of investment earnings.
During 2013-14, the City made an initial $10 million contribution to a dedicated and irrevocable retiree health benefits trust fund to begin to provide the resources necessary to ensure long-term funding for its OPEB obligation. As of June 30, 2024, the City's total cumulative contributions to the California Employer' Retiree Benefit Trust (CERBT) were $29.6 million inclusive of investment earnings, funding 88% of the City's total OPEB liabilities of $33.7 million as of the June 30, 2023 measurement date.
LONG RANGE FINANCIAL FORECASTING
General Fund Long-Term Financial Forecast – The City regularly utilizes the General Fund long-term financial forecast to help the City plan by providing an understanding of available funding while evaluating financial risks and identifying future commitments and resource demands. The table below provides the current five-year view of the City's fiscal condition and incorporates both operating and capital needs in the community.
General Fund Long Term Forecast through Fiscal Year 28/29 (In millions) FY 24-25
Adopted
FY 25-26
Projected
FY 26-27
Projected
FY 27-28
Projected
FY 28-29
Projected
Revenues $ 134 $ 137 $ 142 $ 147 $ 152
Expenditures 134 137 143 148 155
(Deficit)/ Surplus for Year - - (1) (1) (3)
Ending Available Balance $ 24 $ 24 $ 23 $ 22 $ 19
Excludes Measure P
The City operates with a balanced budget in fiscal year 2024-25 where recurring revenues are equal to recurring expenditures. The five years’ projection anticipates any potential challenges that might arise and takes corrective action through budget or operational adjustments.
Capital Improvement Project Planning – The City's Capital Improvement Program (CIP) is planned for five years and analyzed using City-specific prioritization criteria. This is updated regularly to reflect changing needs, funding availability and removal of projects which have been completed. The CIP budget for 2024-25 is $8.7 million. Funding comes from multiple sources, including General fund transfers, fees, grants, and bond proceeds.
MAJOR INITIATIVES
Each year the City is provided with a new opportunity to identify, address, and resolve issues facing the community and its residents.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 14 Small Business Grant Program
The City implemented a follow up to the successful Small Business Grant program by implementing a Small Business Hardening Grant that supported 31 Vallejo small businesses. The City Council approved the use of American Rescue Plan Act (ARPA) funds to provide $60,000 in security improvements earlier in 2024 as direct support to small businesses in Vallejo.
Economic Development Strategic Plan Initiatives
The City continues to focus on economic development with a commitment to advance job growth, create sustainable revenue, and to maintain an excellent quality of life for all residents. The Economic Development Strategic Plan kicked off last year and was adopted by the Council in December of 2024. It provides strategies and a road map to implement them to ensure economic growth in the future. As part of the implementation of the ED Strategic Plan, the Council approved a business revolving loan program in December 2024 to support businesses in Vallejo. This program is being implemented in collaboration with the Solano Economic Development Corporation.
Several exciting Economic and Community Improvement Projects on key pieces of property are seeing movement over the past year with a list of opportunities in the coming year. The City continues to see many business and development inquiries, and staff are working diligently to expedite these projects with the vision that their success will ripple through the community and help bolster future development opportunities. Some of these projects include:
Mare Island – Proposed Mixed-Use Development
The Nimitz group took ownership of the majority of Mare Island and contracted with development partner Southern Land Company at the end of 2019 and became Mare Island Company. Mare Island Company embarked on a program of hiring a development team, facilitating business in their core commercial area, assessing current buildings for upgrades, providing security and improvements, analyzing the infrastructure costs on the island, and the costs for North Mare Island. They also have added to their design and planning team to develop an island-wide master plan to set up Mare Island as a community of manufacturing, business, employment, housing, and recreation. The developer team has submitted a new island-wide Specific Plan to the City to guide future development on the island. Phase 1 of the North Mare Island Development Agreement implementation includes the Connelly Corridor development to be constructed within 60 months of closing. This proposal includes approximately 29,000 sq. ft. of office, 373 multifamily units, a 200-room hotel, 46,000 sq ft of ancillary uses, and 194,000 sq ft open space. The first phase of Connelly Corridor has been submitted through a Preliminary Review Application and is currently being reviewed.
Cooke Property – New Costco and Housing Development in Process Vallejo Fairview Developers/Lewis Group received entitlement approval for a Master Plan to construct a new, expanded Costco, additional retail and 178 new single-family homes on the 50-acre parcel formerly known as the Cooke Property on Admiral Callahan Lane adjacent to I-80 in 2020. The long-vacant site's size and visibility make it an ideal relocation site for Costco, and it allows the City to retain this major employer and sales tax collector, as well as provide much needed housing to the community housing stock. After lengthy litigation, the agreements to implement this project are complete and the developer is under construction. The developer submitted an amendment in late 2024 to approve the request for additional housing units for a total of 245 housing units.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 15 Blue Rock Springs – Proposed Golf and Housing Development The City Council approved a Performance and Participation Agreement in December 2024 with the Greg Norman Company and Lewis Group, for a proposed Project Concept that would transform two fiscally unsustainable City golf courses and an aging clubhouse on 225 acres of City-owned land into a new community of approximately 400 single-family homes designed within a single 18-hole Greg Norman golf course and state-of-the-art clubhouse.
Revenue from the proposed project would cover the modernization of the golf course and a new clubhouse and the golf component would remain public/City-owned. The Pandemic, neighbor concerns, and other challenges have slowed this project process, but the disposition of the land has been completed in 2022 with completion of the key deal terms and performance timelines adopted by the Council in December of 2024.
New Automotive Dealership - Hyundai
The City has been working on review and entitlement of a proposed new automotive dealership for the Hyundai brand. This new dealership will be located at 500 Redwood Street, near the intersection of Sonoma Blvd. The dealership is proposed to be approximately 25,000 square feet in size with parking for 294 vehicles on 4.17-acre site. The existing Vallejo Hyundai dealer is planning to relocate into this new location which will provide a much larger facility and room for expanded operations. The project recently received its final planning entitlement with construction estimated to begin by the fall of 2025.
New Hotel Development – La Quinta Inn and Suites
The City has been working on review and entitlement of a proposed new hotel for the La Quinta Inn and Suites brand. The hotel is proposed to be located on a 13.14 vacant lot at 5190 Sonoma Blvd. The project involves the development of an approximately 49,741-square-foot, four-story hotel, which would include 96 guest rooms and would provide other onsite guest amenities, including an outdoor swimming pool, fitness room, bar, dining room, and community gathering areas. The project is estimated to receive final entitlement in Q1 of 2025.
Other Noteworthy Residential Development Projects in Progress • Vista Cove Residential Subdivision: 51 single-family detached residential units proposed behind the existing neighborhood at the northeast corner of Shady Lane and Wildflower Ave. This project is nearing completion of its environmental analysis and is expected to be completed by mid-2025. • Rollingwood Residential Subdivision: 130 single-family detached residential units proposed at 201 Rollingwood Drive. This project is nearing completion of its environmental analysis and is expected to be completed by mid-2025.
Participatory Budgeting
In 2012, the Vallejo City Council established the first citywide Participatory Budgeting (PB) process in the United States, where residents could propose how to spend a portion of the city budget. Through the PB process, Vallejo residents and stakeholders share ideas, develop project proposals, and residents vote on projects. The approved list of projects that receive the most votes are submitted to City Council for consideration. By Fiscal Year 2022-23, approximately 66 projects have been approved through the PB process, totaling more than $10 million in funding.
Although Participatory Budgeting was placed on pause in Fiscal Year 2021-22, an additional $1,000,000 was allocated towards the program; $500,000 in FY 2021-22 and $500,000 in FY 2022-23. FY 2023-24 received a $500,000 allocation towards Cycle 9 project funding. In 2024 PB transitioned to a two-year process to allow for additional time for idea proposal development of projects proposals, and then execution of selected projects.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 16 Firm Foundation Housing Project – Broadway Project
The City, along with non-profit developer Firm Foundation and non-profit operator Shelter Inc., received a $12 Million grant from the State Housing and Community Development Commission (HCD) for the Homekey grant to build 48 units on Broadway Street to serve as permanent supportive housing for chronically homeless individuals in the community. The City and Firm Foundation partnered with Factory OS to provide the units and ground broke in the fall of 2022. The project is expected to be ready for tenants to move in early 2025. This project took the effort of many City Departments and funding from the City, HCD, and Solano County.
Vallejo Homeless Navigation Center
The Vallejo Homeless Navigation Center (Nav Center) will be a “one-stop-shop” that will provide services and 125 shelter beds critical to helping address homelessness. The project has made the effort of several City Departments to bring fruition. The property for the Nav Center was purchased by the City in November 2022 and broke ground in April 2024. The City will be contracting with a non-profit to operate and provide services at the Nav Center, which is anticipated to open in early 2025.
The Vallejo Navigation Center is made possible by funding from the City of Vallejo, County of Solano, CAP Solano JPA, the U.S. Department of Housing and Urban Development, California Department of Housing and Community Development, Kaiser Permanente, Sutter Health, and NorthBay Health.
Improving Technology
Information Technology continues to make strides in several areas of the city to improve technology and enhance communication. The following are projects that greatly enhance the City's operation and represent a considerable benefit for our citizens:
• Implement EAM (Enterprise Asset Management) for Public Works Fleet, Public Works Streets & Maintenance, Police, Fire, and IT.
• Migrated Motorola public safety radio system from EBRCSA (East Bay Regional Communication Systems Authority) to Solano County.
• Create an Information Technology Strategic Plan.
Broadband rollout
Information Technology’s focus for the next several years is Broadband and Digital Equity. On May 17, 2022, Vallejo City Council adopted a new Broadband and Digital Equity Strategy. This policy document gives a clear direction to the city to continue to build and expand its municipal fiber network. The City Council has made an allocation of $2.5 million towards the buildout of fiber infrastructure for the city. On November 7, 2024, the City of Vallejo received $3.8 million grant through CPUC (California Public Utility Commission) to build and deliver last mile broadband infrastructure to 4 underserved areas in Vallejo. The last mile project will benefit and provide affordable highspeed broadband to 1,000 homes and over 4,000 people in Vallejo. In the upcoming months the City of Vallejo will be implementing the following projects:
• Continue to expand and build broadband fiber network and gain retail and residential customers. • Complete the last mile build of broadband as per CPUC grant awarded. • Public Wi-Fi installations in Vallejo Downtown, Waterfront, Blue Rock Springs Park, and Dan Foley cultural center are expected to be completed in the third quarter 2025.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 17 Lake Dalwigk Park Improvements
The State of California issued a call for projects in August of 2021 seeking local agencies to submit grant applications for funding that would help clean-up California and invest in local public/community spaces with an emphasis on underserved communities. Public Works and Economic Development staff disseminated this opportunity to various community organizations, including Central Core Restoration Corporation (CCRC), Greater Vallejo Recreation District (GVRD), and Vallejo City Unified School District (VCUSD), as well as looking at City- owned and operated facilities. Staff worked with Ghirardelli Associates' (pro-bono) consultant support developed a grant application to improve Lake Dalwigk Park and Caltrans awarded a $4.8M grant that 100% (no match required) funded the project.
City of Vallejo Public Works staff partnered with GVRD, Vallejo Flood Wastewater District, and Solano Conservation Resource District staff to deliver project improvements that included: providing an accessible, lighted, paved pathway across the park connecting to the Curtola Park and Ride and Soltrans Transit Center, restoring bathrooms, adding shade trees, removing non-native and invasive plants and restoring landscaping with native, drought tolerant plantings, incorporating traffic calming and safe pedestrian crossing on the frontage streets (5th and Lemon Streets), adding trash receptacles and a drinking fountain, improving trash capture in the drainage to the lake, restoring the basketball courts and playground, repairing the adjacent sidewalks, and adding art and interpretive programming, plus trash and graffiti clean-up. This project will be completed by the end of January 2025.
Pavement Management Program
The City continues to develop a comprehensive 10-year Pavement Management Program aimed at improving and maintaining roadway infrastructure to ensure long-term sustainability and safety. This initiative focuses on conducting thorough assessments of the current pavement conditions, identifying areas in need of repair or reconstruction, addressing accessibility compliance, and implementing a data-driven approach to prioritize repairs based on factors such as traffic volume, pavement age, and severity of deterioration. The program incorporates modern technologies like geographic information systems (GIS) and pavement condition index (PCI) tracking to optimize resources and budget allocation. Pavement management efforts have traditionally been funded from gas tax revenues, but this latest effort is being significantly increased with additional funding from Measure P. Over the 10 years, the City aims to treat ~80% of Vallejo’s roadway network, significantly reduce the backlog of deteriorating roads, and significantly improve overall driving conditions for its residents.
Bay Trail/ Vine Trail Gap Closure Project
The San Francisco Bay Trail (Bay Trail) is a planned 500-mile, multi-use trail administered by the Association of Bay Area Governments (ABAG). When complete, the trail will encircle the San Francisco Bay, linking the shorelines of 47 cities and nine counties. The Napa Valley Vine Trail (Vine Trail) is a 47-mile multi-use trail administered by the Napa Valley Vine Trail Coalition (VVTC) that will extend from the Ferry Terminal here in Vallejo to the City of Calistoga in Napa County. Portions of the Bay Trail and the Vine Trail exist in the City of American Canyon on separate alignments and terminate near the Vallejo city limits. The Bay and Vine Trails exist in Vallejo on a shared alignment along White Slough Trail, located on the south side of SR 37 between SR 29 and Sacramento Street. The Bay and Vine Trails also exist on a shared alignment along Wilson Avenue on the Vallejo waterfront, extending from just south of SR 37 to the Vallejo Ferry Terminal. The trails within Vallejo did not connect to the American Canyon portion. The City’s Bay Trail & Vine Trail Gap Closure Project constructed almost 5 miles of Class I, Class II and Class IV Bike Path and Bike Lanes in the City of Vallejo between River Park and the City of American Canyon. Additional improvements included the installation of ADA curb ramps, high visibility crosswalks, pedestrian and bike counters, and bulb-out streets in Vallejo. Over $8M in various state, regional, and county grant funding supported the trail connection project.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 18 BUDGETARY CONTROL
The City maintains budgetary controls through the annual budget adopted by the City Council. The City Manager is required to present the budget for approval 45 days before the new fiscal year. Expenditures cannot exceed the approved budget, though the City Manager can transfer unencumbered funds within departments or funds with City Council resolution.
Budgetary control is established at different levels: a) General Fund – Department level: b) Other Funds – Fund level; c) Capital Projects – Department level. The City Manager can authorize line-item budget transfers, subject to Finance Director and City Manager approval for salary-related and capital project budget transfers.
Encumbrance accounting is used to earmark funds for future expenses, ensuring budget control. Unused appropriations lapse at year-end, except for encumbered funds, capital projects, grants, and Participatory Budgeting, which carry forward.
Additionally, contracting and spending authority is delegated to the City Manager and City Attorney up to $100,000, with further delegation to staff based on internal signature limits.
ACCOUNTING SYSTEM CONTROL
Note 1 in the Basic Financial Statements provides a comprehensive overview of the City’s significant accounting policies. To protect government assets from loss, theft, or misuse and ensure the responsible management of public resources, the City has implemented internal controls. While recognizing that the cost of these controls should not exceed their benefits, the City’s framework is designed to provide reasonable—not absolute— assurance that financial statements are free from material misstatements.
The City also maintains several documented financial policies, including those related to purchasing, debt management, investments, capital assets, and cash handling. These policies are periodically reviewed and updated to align with best practices and changes in laws and regulations.
FY 2023-24 marked the City’s first year utilizing the new CentralSquare Finance Enterprise ERP system. The financial modules went live in March 2024, providing enhanced capabilities over the legacy system.
AWARDS
GOVERNMENT FINANCE OFFICERS ASSOCIATION OF THE UNITED STATES AND CANADA (GFOA)
CERTIFICATE OF ACHIEVEMENT FOR EXCELLENCE IN FINANCIAL REPORTING We are once again pleased to report that the Government Finance Officers Association of the United States and Canada (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Vallejo for its Annual Comprehensive Financial Report for the fiscal year ended June 30, 2023.
The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standards for preparing state and local government financial reports. To be awarded a Certificate of Achievement, a governmental unit must publish an easily readable and efficiently organized annual comprehensive financial report, whose contents conform to program standards. Such reports must satisfy both generally accepted accounting principles and applicable legal requirements. The City believes the ACFR as of fiscal year ended June 30, 2024 continues to conform to the Certificate of Achievement Program requirements.
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 19 ACKNOWLEDGMENTS
The preparation of this Annual Comprehensive Financial Report would not have been possible without the outstanding efforts, dedication, and teamwork throughout the year of the entire Finance Department, in particular the Accounting and Audit team, with the cooperation and assistance of all City departments.
I also recognize the professional support and guidance of the City's audit firm, LSL, LLP.
Finally, I would like to express my gratitude to the Mayor, City Council and City Manager, for their vision and continued support to maintain long-term fiscal stability for the City.
Respectfully submitted,
Rekha Nayar
Finance Director
OFFICE OF THE FINANCE DIRECTOR • 555 Santa Clara Street • Vallejo • CA • 94590 • 707.648.4592 20 Public Officials
21 Organizational Chart
22 GFOA Certificate of Achievement
23 FINANCIAL SECTION
24 Independent Auditors’ Report
To the Honorable Mayor and Members of the City Council
City of Vallejo
Vallejo, California
Report on the Audit of the Financial Statements
Opinion
We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City of Vallejo, California (the “City”), as of and for the year ended June 30, 2024, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents.
In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2024, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America.
We did not audit the financial statements of the Vallejo Flood and Wastewater District (VFWD), a discretely presented component unit, as of June 30, 2024. Those statements were audited by other auditors whose report has been furnished to us, and our opinions, insofar as it relates to the amounts included for VFWD, are based solely on the report of the other auditors.
Basis for Opinion
We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditor’s Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City and to meet our other ethical responsibilities, in accordance with the relevant ethical 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 the 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 fraud or error.
In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial 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.
25 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, 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, budgetary comparison information, and required pension and other postemployment benefits schedules, as listed on 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.
To To the Honorable Mayor and Members of the City Council City of Vallejo
Vallejo, California
26 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 and individual fund financial statements and schedules (“supplementary information”) 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 our opinion, the supplementary information is 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 our report dated March 7, 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 solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance.
Irvine, California
March 7, 2025
To To the Honorable Mayor and Members of the City Council City of Vallejo
Vallejo, California
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28 MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED)
Management’s Discussion and Analysis (Unaudited)
Fiscal Year Ended June 30, 2024
This narrative of the City of Vallejo’s financial performance provides an overview and analysis of the City’s financial activities for the year ended June 30, 2024. We encourage readers to consider the information presented here in conjunction with the Transmittal Letter, the Basic Financial Statements, and the accompanying notes to the financial statements.
29 Financial Highlights
Government-wide (full accrual basis)
• The City’s assets and deferred outflows exceeded its liabilities and deferred inflows at the close of the fiscal year 2024 by $441.2 Million (net position). This amount improved by $66.8 million from the prior fiscal year.
• The City’s net position increased by $66.8 million. Governmental activities increase by $49.5 million primarily due to the implementation of Measure P sales tax in April of 2023, investment earnings and contributions and grants. The increase in business type activities of $17.3 million is due to the increase in charges for services and operating contributions and grants.
Fund level
• As of June 30, 2024, the City’s governmental funds reported combined fund balance of $212.4 million, $29.8 million higher than the prior year balance. Approximately 14% of this amount, or $29.7 million, is categorized as unassigned funds, primarily General Fund, providing the City with discretionary resources for targeted spending initiatives.
• The General Fund concluded the fiscal year with a robust total ending fund balance, reaching $78.9 million, marking an increase of $14.3 million. Out of these fund balance, $30.0 million or 38% is unassigned. This unassigned portion represents 2.6 months or 22% of the Fiscal Year 2024-25 original budgeted expenditures, inclusive of Measure B programs which surpasses the City’s goal and GFOA recommendations. The City's commitment to maintaining a reserve level exceeding the two months expenditure reserve reflects a prudent approach to financial stewardship and ensures a solid foundation for meeting future financial obligations and community needs. • The passage of Measure P introduced a new transaction tax of 0.875%, elevating the city's overall tax rate to 9.25%, effective as of April 2023. This strategic move was aimed at providing additional financial resources to support essential services and community initiatives. In its full year of implementation, Measure P proved to be a significant contributor, with the city receiving an additional $17.8 million in sales tax revenues.
• The City has spent $16.4 million of the $25.7 million funding received through the American Rescue Plan Act (ARPA). This one time funding was strategically allocated by the City Council towards different carefully selected projects to meet the diverse needs of the community and are slated for implementation through December 2026. For fiscal year 2024, the City spent $8.3 million of these allocated funds. • The Water Fund reported an unrestricted net position of $32.1 million. This placed the Water Fund in an advantageous position to help address its operational and capital requirements.
Detailed discussion of the changes in net position and fund balances can be found in the subsequent sections.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Highlights
30 Overview of Financial Statements
The Financial Section of this report is presented in the following sections:
1. This introductory commentary, Management’s Discussion and Analysis (MD&A)
2. Basic Financial Statements, including:
a. Government-Wide Financial Statements
b. Fund Financial Statements
c. Notes to the Financial Statements
3. Required Supplemental Information:
a. Net OPEB Liability and Contribution Schedules
b. Net Pension Liability and Contribution Schedules
4. Supplemental Information:
a. Non-major governmental funds
b. Internal service funds
c. Non-major Proprietary Funds
d. Fiduciary funds
Basic Financial Statements
This discussion and analysis is intended to serve as introduction to the City’s Basic Financial Statements, comprised of the Government-wide Financial Statements and the Fund Financial Statements. These two sets of financial statements provide two different views of the City’s financial activities and financial position.
Government-wide Financial Statements
The Government-wide Financial Statements provide a long-term view of the City’s activities as a whole. The Statement of Net Position provides information about financial position, including capital assets and long-term liabilities on a full accrual basis, similar to that used by commercial enterprises. The Statement of Activities provides information about the City ’s revenues and expenses, also on a full accrual basis, with emphasis on measuring the net revenues and expenses of City programs. Information is presented both in total and separately for governmental activities, which are generally supported by taxes and grants, and for business-type activities, which are generally supported by user fees. The City’s activities include the activities of multiple legal entities, and the Vallejo Flood and Wastewater District (VFWD, formerly Vallejo Sanitation and Flood Control District), a discretely presented component unit, because the City is either financially accountable for these entities or has control of the governing board of these entities.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Overview of Financial Statements
31 Fund Financial Statements
The Fund Financial Statements report the City’s operations in more detail than the government-wide statements.
The focus is on the individual funds that are used to report the status of restricted or otherwise segregated resources and also to demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into the following three categories:
• Governmental Funds – Governmental funds account for essentially the same functions reported as governmental activities in the Government-wide Financial Statements. However, unlike the Government- w i d e F i n a n c i a l S t a t e m e n t s , g o v e r n m e n t a l f u n d f i n a n c i a l s t a t e m e n t s f o c u s o n n e a r - t e r m i n f l o w s a n d outflows of spendable resources, as well as on balances of spendable resources available at the end of the fiscal year (Modified Accrual Basis of Accounting). Such information may be useful in evaluating the C i t y ’ s n e a r - t e r m f i n a n c i n g r e q u i r e m e n t s . T o u n d e r s t a n d t h e l o n g - t e r m i m p a c t o f t h e C i t y ’ s n e a r - t e r m financing decisions, it is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the Government-wide Financial Statements. Both the Governmental Funds Balance Sheet and the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between governmental funds and governmental activities.
• Proprietary Funds – The City maintains two different types of proprietary funds: enterprise funds and internal service funds.
E n t e r p r i s e F u n d s r e p o r t t h e s a m e f u n c t i o n s p r e s e n t e d a s b u s i n e s s - t y p e a c t i v i t i e s i n t h e G o v e r n m e n t - w i d e Financial Statements. The City has five enterprise funds, Water Fund is reported as major fund, while others are reported as nonmajor.
Internal Service Funds are an accounting device used to accumulate and allocate costs internally among the City’s various functions. The City’s internal service funds account for fleet maintenance and replacement, risk management and insurance, payroll and retiree health benefits. Since these services p r e d o m i n a n t l y b e n e f i t g o v e r n m e n t a l r a t h e r t h a n b u s i n e s s - t y p e f u n c t i o n s , t h e y a r e c o n s o l i d a t e d w i t h i n governmental activities in the Government-wide Financial Statements.
Proprietary funds provide the same type of information as the Government-wide Financial Statements, but in more detail. The proprietary funds financial statements provide separate information for each of the enterprise funds. Data for the five internal service funds are combined into a single, aggregated presentation in the proprietary funds financial statements. • Fiduciary Funds – Fiduciary funds account for resources held for the benefit of parties outside the City.
Fiduciary funds are not reflected in the Government-wide Financial Statements because the resources of those funds are not available to support the City’s own programs. Fiduciary fund accounting is similar to proprietary fund accounting. The City has two types of fiduciary funds: the custodial funds and the private purpose trust funds.
Notes to the Financial Statements
The notes provide additional information that is essential to a full understanding of the data provided in the Government-wide and Fund Financial Statements. The notes to the Financial Statements follow the basic financial statements.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Overview of Financial Statements
32 Other Information
In addition to the basic financial statements and accompanying notes, this report also presents certain required supplementary information concerning the City’s progress in funding its obligation to provide pension and retiree medical benefits to its employees. Required Supplementary Information follows the notes to the financial statements. Supplementary information on non-major governmental funds and internal service funds are also presented immediately following the required supplementary information on pensions.
Financial Analysis of the City as a Whole
Below is a summary of the City’s government-wide net position as of June 30, 2024 and 2023, as measured on a full accrual basis of accounting. Over time, increases or decreases in net position may serve as a useful indicator as to whether the City’s financial position is improving or weakening.
Statements of Net Position (In millions)
Governmental Activities Business-Type Activities Government-wide Totals Increase/ (Decrease)2024 2023 2024 2023 2024 2023
Assets:
Current and other assets 340.2— 299.9 130.3— 116.4 470.5— 416.3 54.2 Capital assets 360.9 341.1 115.6 112.7 476.5 453.8 22.7 Total assets 701.1 641.0 245.9 229.1 947.0 870.1 76.9
Deferred outflows of resources:
Unamortized loss on refunding
of debt - - 0.9 1.1 0.9 1.1 (0.2)
Related to pensions 67.56
7 68.9 8.8 9.3 76.3 78.2 (1.9)
Related to OPEB 3.7 4.3 0.9 1.1 4.6 5.4 (0.8)
Total deferred outlows of
resources 71.2 73.2 10.7 11.5 81.8 84.7 (2.9)
Liabilities:
Current and other liabilities 70.4 66.8 13.2 16.9 83.6 83.7 (0.1) Net pension liability 305.5 295.8 42.2 39.1 347.7 334.9 12.8 Other long-term liabilities 50.5 50.9 88.4 88.4 138.9 139.3 (0.4) Total liabilities 426.4 413.5 143.8 144.4 570.2 557.9 12.3 Deferred inflows of resources:
Related to pensions 0.8 2.6 0.2 0.4 1.0 3.0 (2.0)
Related to OPEB 4.2 6.2 1.1 1.6 5.3 7.8 (2.5)
Related to leases 11.1 11.7 — - 11.1 11.7 (0.6)
Total deferred inflows of
resources 16.1 20.5 1.3 2.0 17.4 22.5 (5.1)
Net position:
Net investment in capital assets 345.9 326.4 78.6 69.9 424.5 396.3 28.2 Restricted 131.1 120.7 0.4 - 131.5 120.7 10.8
Unrestricted (147.3) (166.9) 32.5 24.3 (114.8) (142.6) 27.8 Total net position $ 329.7 $ 280.2 $ 111.5 $ 94.2 $ 441.2 $ 374.4 $ 66.8 Current and other assets in 2024 increased by $54.2 million or 13% over the prior year, primarily due to cash and investments. Cash inflows from all revenue sources continued to outpace cash outflows mostly due to the delayed implementation of the City’s capital projects and programs.
Capital assets increased by $22.7 million mainly due to construction in progress and leased assets.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Other Information
33 As noted earlier, the City’s assets and deferred outflows exceeded its liabilities and deferred inflows at the close of the fiscal year by $441.2 million (net position). This amount increased by $66.8 million, or 17.9%, from prior year and is comprised of the following major components:
• Net investment in capital assets increased by $28.2 million to $424.5 million due to the increase in construction in progress and the right to use lease property . The City uses these capital assets to provide services to its residents and other stakeholders. Accordingly, these assets are not available for future spending. Although the City’s investment in its capital assets is reported net of related debt, the resources needed to repay this debt must be provided from other sources, as the capital assets themselves could not be used to liquidate these liabilities. • Restricted net position increased by $10.8 million to $131.5 million attributed to the increased funding in street and highway related projects. These assets are subject to agreements with creditors, developers, grantors, or laws or regulations of other governments. By definition, the City cannot remove these restrictions as they are imposed by parties outside the City. • The unrestricted net deficit improved from $142.6 million in 2023 to $114.8 million in 2024. This deficit was primarily due to recognition of net pension obligations for the Safety and Miscellaneous plans.
Additional information on the net pension liability can be found in Note 11 to the Financial Statements and related trend information is included in RSI section.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
34 Governmental Activities
The following analysis focuses on the changes in net position of the City’s governmental activities for the years ended June 30, 2024 and 2023.
Statement of Activities (In millions)
Governmental Activities
2024 2023 $ Change % Change
Revenues:
Program revenues:
Charges for services $ 28.9 $ 37.5 $ (8.6) -23 %
Operating grants and contributions 54.2 40.3 13.9 35 % Capital grants and contributions 15.0 15.0 —
Total program revenues 98.1 92.8 5.3 6 %
General revenues:
Property taxes, levied for general purpose 38.9 40.1 (1.2) -3 % Transient occupancy taxes 1.6 2.1 (0.5) -25 %
Sales taxes 59.3 45.0 14.3 32 %
Franchise taxes 7.3 6.8 0.5 8 %
Utility users tax 15.4 15.6 (0.2) -1 %
Other taxes 6.0 6.9 (0.9) -13 %
Use of money and property 15.2 4.1 11.1 271 %
Other 3.0 4.1 (1.1) -28 %
Total general revenues 146.7 124.7 22.0 18 %
Total revenues 244.8 217.5 27.3 13 %
Expenses:
Administration 22.1 14.6 7.5 51 %
Community services 29.8 31.3 (1.5) -5 %
Planning and development services 5.6 4.7 0.9 20 %
Fire services 39.4 36.1 3.3 9 %
Police services 61.8 52.5 9.3 18 %
Public works 34.2 29.2 5.0 17 %
Interest on long-term debt 0.5 0.5 — 3 %
Total expenses 193.4 168.9 24.4 14 %
Excess (deficiency) before transfers 51.4 48.6 2.8 6 % Special item - (18.3) 18.3 -100 %
Transfers (1.9) (9.8) 7.9 -81 %
Changes in net position 49.5 20.5 29.0 141 %
Net position - beginning 280.2 259.7 20.5 8 %
Net position - ending $ 329.7 $ 280.2 $ 49.5 18 %
Governmental activities increased the City’s net position by $49.5 million driven by the 13% growth in total revenues.
Revenues
Revenues are divided into two categories: Program Revenues, which are the revenues derived directly from the functional programs or from parties outside the City’s taxpayers or citizenry; and General Revenues, mostly which are the revenues that do not meet the requirements of program revenue, most of which are taxes. These are property, sales and transaction, franchise and utility users taxes.
Program Revenues were up 5.3 million, or 6%, to $98.1 million. The increase is mainly due to operating grants and contributions which increased to $54.2 million. Charges for services declined due to less development activities leading to lower fees collected for the current year and reclassification of accounts from previous year.
The major projects in prior year that contributed to the increase of fees were Broadway, Oakwood apartments and Costco projects.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
35 Total General Revenues of $146.7 million increased by $22.0 million from prior year. These revenues included general taxes, which provided the City Council with the most discretionary spending ability. The most significant factors in the year-over-year change in General Revenues were as follows:
• Sales and transaction tax revenues increased by $14.3 million, or 32%, to $59.3 million due to the newly approved Measure P sales tax.
• Investment earnings and others grew by $11.1 million. The city experienced significant earnings from its investments, primarily because of the notable gains driven by favorable market conditions.
Total revenues for the City’s governmental activities reflected an improving economic base. Both general revenues and operating grants and contributions contributed to a combined $ 35.9 million increase in revenues from the prior year offset by the $8.6 million decrease in charges for services.
The pie chart below illustrates the distribution of the governmental activities revenues by source. The largest revenue source for governmental activities is grants and contributions at $69.2 million ( 28%) and sales tax at $59.3 million (24%) followed by property related tax ( 16%) and charge for services ( 12%). The City’s reliance upon grant and tax revenues is evident from the chart, which is consistent with the nature and purpose of governmental funds, particularly in the General Fund, where programs are largely supported by general taxes.
Governmental Activities Revenues by Source 244.8M for the year ended June 30, 2024 12%
28%
16%
24%
12%
8%
Charges for services
Grants and contributions
Property related tax
Sales and transaction tax
Utility users tax & others
Investment earnings and others
Expenses
Overall costs of services for governmental activities increased from $168.9 million in the prior year to $193.4 million in the current fiscal year. Except Community Services, every expense category increased this year primarily due to the increases in salaries and benefits that include pension and OPEB expenses related to adjustments required by GASB Statements No. 68 and 75.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
36 Net Revenues (Expenses)
Program revenues associated with Governmental Activities totaled $98.1 million, or 51%, of program expenses ($192.9 million). Expenses not covered by program revenues must be funded from non-program sources like general tax revenues. The table below illustrates the gap between program revenues and expenses by major activity. Public safety programs rely heavily on taxes to support operations. Public Work’s program revenues include capital grant funding for capital outlay. General government programs provide benefit to both business- type and governmental activities and receive some funding through internal indirect cost allocations to supplement program and general tax revenues.
Governmental Activities - Program Revenues and Expenses (In millions) $22.1
$29.8
$5.6
$39.4
$61.8
$34.2
$12.7
$30.2
$4.7 $7.8 $4.9
$37.9
Expenses Program Revenues
General
government
Community
services
Planning and
development
services
Fire services Police services Public works
$—
$64.8
Detailed analysis of the General Fund and other major governmental funds are discussed in the subsequent sections.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
37 Business-type Activities
The following analysis focuses on the changes in net position of the City’s business-type activities for the years ended June 30, 2024 and 2023.
Business-type Activities
2024 2023 $ Change % Change
Revenues:
Program revenues:
Charges for services 62.2 58.0 4.2 7 %
Operating grants and contributions 1.7 0.1 1.6 1,600 % Capital grants and contributions 2.3 2.6 (0.3) -12 % Total Program Revenues 66.2 60.7 5.5 9 %
General revenues:
Investment Earnings and Others 5.2 (1.4) 6.6 471 %
Total revenues 71.4 59.3 12.1 20 %
Expenses:
Water Fund 48.1 47.1 1.0 2 %
Marina Fund 1.9 1.6 0.3 19 %
Golf Fund 4.3 3.8 0.5 13 %
Vallejo Station Parking Fund 0.7 0.7 — 13 %
Fiber Optic Fund 1.0 0.8 0.2 13 %
Total expenses 56.0 54.0 2.0 4 %
Excess (deficiency) before transfers 15.4 5.3 10.1 193 % Transfers 1.9 9.8 (7.9) -81 %
Changes in net position 17.3 15.1 2.2 16 %
Net position - beginning 94.2 79.1 15.1 19 %
Net position - ending $ 111.5 $ 94.2 $ 17.3 18 %
Business-type activities increased the City’s net position by $17.3 million, or 18%, to $111.5 million.
Charges for services were up by $4.2 million, or 7%, primarily in Water Fund. Water charges for services increased $4 million from prior year due to an increase in water rates.
Capital grants and contributions were down by $0.3 million driven by a slight decline in commercial development activities during the year.
Investment earnings increased to $5.2 million this current fiscal year due to improved investment income and significant unrealized gain adjustment as a result of investment market fluctuations.
Overall expenses of $56.0 million increased from the previous year by $2 million. This increase is mainly in the Water Fund due to operational and intergovernmental expenses.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
38 The table below provides a visual representation of the net program cost information for business-type activities for the year ended June 30, 2024. In these programs, annual surpluses or deficits are retained in the programs as an increase or decrease in the program’s net position.
Net Revenue (Expense) of Business-type Activities (in millions) Expenses Program Revenues
Net Revenue
(Expense) of
Activities
Water $ (48.1) $ 59.2 $ 11.1
Marina (1.9) 1.5 (0.4)
Golf (4.3) 4.5 0.2
Vallejo Station Parking (0.7) 0.9 0.2
Fiber Optic (1.0) 0.1 (0.9)
$ (56.0) $ 66.2 $ 10.2
In total, the program revenues for these business-type operations were generally intended to cover operating, debt service, and capital reinvestment requirements. For the current year, Water operations contributed $11.1 million. The other business-type activities funds combined loss was $0.9 million. Although each of these programs collected user fees, the fees of Marina and Fiber funds did not fully cover their annual costs. The General Fund transferred $0.7 million to cover Marina Fund’s debt service payments and ARPA fund transferred $1.1 million to Fiber fund to build the physical network that can support and sustain retail/residential customers.
Detailed analysis of each of the business-type operations are discussed in the Enterprise Funds section.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
39 Business-Type Activities
Business-Type Activities - Program Revenues and Expenses (In millions) $48.1
$1.9 $4.3 $0.7 $1.0
$59.2
$1.5 $4.5 $0.9 $0.1
Expenses Program Revenues
Water Fund Marina Fund Golf Fund Vallejo Station
Parking Fund
Fiber Optic Fund
$—
$20.0
$40.0
$60.0
$80.0
Business-Type Activities Revenues by Source - $71.4M for year the ended June 30, 2024
87.2%
2.4%
3.2%
7.2%
Charges for services
Operating grants and contributions
Capital grants and contributions
Investment & other revenues
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of the City as a Whole (Continued)
40 Financial Analysis of Funds
In addition to the full accrual-basis government-wide statements described above, the City also maintains financial records at the fund level for budgetary control. Individual funds are generally established to track the resources and operating results for specific, restricted programs. The results for governmental funds below differ from the results reported above in the government-wide statements. Here, the focus is to provide information on near-term inflows, outflows, and balances of spendable resources, which can be useful in assessing the City’s financing requirements. Specifically, unassigned fund balance can serve as an informative measure of a government’s net resources available for discretionary use at the end of the fiscal year.
As of June 30, 2024, the City’s Governmental Funds reported a combined ending fund balances of $212.4 million, a $29.8 million increase in comparison with the prior year’s total ending fund balances. The chart showing the components of City’s governmental total fund balance are presented below.
Governmental Funds - Fund Balance - (in millions)
$4.7
$126.5
$30.0
$21.5
$29.7
$4.6
$116.3
$19.9 $16.9
$24.9
2024 2023
Nonspendable Restricted Committed Assigned Unassigned
$-
$25.0
$50.0
$75.0
$100.0
$125.0
$150.0
• Nonspendable Fund Balance of $4.7 million is consistent with prior year. These amounts are not spendable in form, or are legally or contractually required to be maintained intact, and are made up of l o n g - t e r m r e c e i v a b l e s a n d p r e p a i d e x p e n s e s a n d d e p o s i t s . • Restricted Fund Balance increased by $10.2 million to $126.5 million. This consists of amounts with constraints put on their use by creditors, grantors, contributors, laws, regulations or enabling legislation. • Committed Fund Balance increased by $10.1 million to $30.0 million. This includes amounts for specific purposes determined by the City Council, which are binding unless removed by the Council in the same manner.
• Assigned Fund Balance increased by $4.6 million to $21.5 million. The City intends for these amounts to be used for a specific purpose, but they are neither restricted nor committed.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of Funds
41 • Unassigned Fund Balance increased by $4.8 million to $29.7 million. This represents the residual balance of the City’s General Fund.
For more information on governmental fund balances, please refer to Note 12 of the Basic Financial Statements.
Presented below and on the next pages are the major funds that either qualified under the reporting criteria or are considered to be important to financial statement users.
General Fund
The City’s General Fund provides police, fire, community services, public works, and administrative services to the City’s 121,558 residents, other funds, businesses and visitors. The General Fund is distinct from other funds because it is the only source of unrestricted funds that can be allocated, at the discretion of the City Council, for any municipal purpose. For financial reporting purposes, the scope of General Fund balances and activities includes the City’s Measure B/V and Contingency Reserve Funds as well as Measure P voter approved tax and ARPA grant funds.
During fiscal year 2024, the General Fund expended $102 million in labor costs to provide these services, funding 505 authorized full-time equivalent positions. Labor costs comprised 69% of General Fund’s total expenditures and transfers out.
Budgetary Highlights – During the fiscal year 2024, adjustments were made between the original budget and the final budget, resulting in a $17.8 million increase in budgeted revenues and transfers in. This augmentation is due to ARPA budget carryover. Conversely, there was a significant $33.7 million increase in budgeted expenditure and transfers out. Most of these adjustments, totaling $17.6 million, were allocated for ARPA projects and $9.9 million to Measure P projects. The remaining balance was appropriated for various purposes to support city programs.
The aggregate of revenue collections and transfers was $162.9 million. This came short of the final budget by $5.8 million, reflecting a 3.4% shortfall. The shortfall in the budget is due primarily to unrealized ARPA revenue.
Concurrently, there was expenditure savings of $6.3 million from program departments who came under their approved expenditure budgets. Expenditure savings of $3.5 million was from services and supplies and $2.3 million from salary savings. Moreover, there was considerable budgetary savings of $11.3 million in transfers out, due to delayed implementation of ARPA and Measure P funded projects. Although there is a decrease in revenue savings, expenditures and transfers out led to a net budget surplus of $12.6 million for the current fiscal year.
Current Year Increase in General Fund Revenues/Expenditures – The General Fund revenues including other financing sources improved noticeably by $10.9 million, or 6.7%, from the prior fiscal year to $162.9 million. This boost can be attributed to several key factors such as increases in realized ARPA grant revenues ($2.7 million) and sales tax due to the new measure P tax ($13.5 million). The city’s revenues decreased from one-time inflows from last year by $5.2 million.
General Fund expenditures excluding transfers totaled to $121.5 million for FY 2023-24 compared to $117.1 million in the prior fiscal year. The increase was $4.4 million, or 3.8%. This uptick was attributed to the savings in service and supplies ($1.8 million) and an increase in salaries and benefits ($6.2 million). Transfers out, allocated for capital projects, debt service, and city operations, saw an increase of $13.6 million, from $13.5 million in the prior year to $27.1 million in the current fiscal year. This increase was primarily due to a $3.0 million additional contribution made from Measure P and $2.4 million ARPA towards City’s program.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Financial Analysis of Funds (Continued)
42 Fund balance – The General fund at the close of the fiscal year 2024 ended with a surplus, as total revenues and other financing sources soared to $163.0 million, surpassing the total expenditures and other financing uses of $148.7 million by a substantial margin of $14.3 million. This positive financial outcome had significantly bolstered the General Fund's total fund balance, culminating in an impressive $78.9 million. Of this amount, the unassigned fund balance stands at $30.0 million, representing 22% of the subsequent year's General Fund annual operating budget, inclusive of Measure B programs.
The chart below illustrates the changes in the components of the General Fund balance from June 30, 2023 to June 30, 2024.
General Funds - Fund Balance - (in millions)
$4.0
$26.9
$18.0
$30.0
$4.2
$22.6
$12.8
$25.0
2024 2023
Nonspendable Restricted Assigned Unassigned
$-
$10.0
$20.0
$30.0
$40.0
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
General Fund (Continued)
43 Other Major Governmental Funds
Housing Authority Fund –The Fund received $23.5 million in federal HUD grant allocations and other revenues during the year to support its $24.2 million Section 8 Housing Assistance Voucher Program expenditures. As of June 30, 2024, the Housing Authority Fund reported a combined fund balance of $16.5 million, consistent with prior fiscal year. Of the total fund balance, $13.7 million is restricted and committed. Most of these funds are invested in long-term loans and mortgages and are not anticipated to be collected within the next year.
Mare Island Conversion Fund – As of June 30, 2024, this fund held $17.2 million of restricted federal funds to pay for the environmental remediation of the former Mare Island Naval base. $6.3 million was expended during the year on this effort. The fund also received an additional grant from the Navy in the amount of $7.9 million during the year.
Capital Outlay Fund – The fund received $23 million from General fund for improvement of public property, for public works projects facilities equipment and systems. The fund ended with $28.5 million in fund balance of which $23.2 is committed to capital outlay development and $4.7 million restricted to public facilities projects.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Other Major Governmental Funds
44 Enterprise Funds
The City’s enterprise fund statements provide the same information found in the government-wide financial statements but in more detail.
As of June 30, 2024, total enterprise funds’ net position increased to $111.5 million, up $17.3 million from $94.2 million in the prior year. The significant changes by enterprise fund are discussed below:
Table 1 - Net Position by Fund (In millions)
2024 2023 Increase/ (Decrease)
Water $ 103.0 $ 86.7 $ 16.3
Marina 2.3 1.9 0.4
Golf 5.2 5.0 0.2
Vallejo Parking 1.1 0.8 0.3
Fiber (0.1) (0.2) 0.1
Total $ 111.5 $ 94.2 $ 17.3
Water – Total net position of the Water Fund on June 30, 2024 was up $16.3 million from the previous year to $103.0 million. The increase was mainly due to the improved investment earnings and increase in charge for services. The rate structures adopted in June 2017 and October 2019 continued to provide for user fee increases during the year to help generate sufficient revenues to operate and maintain the Vallejo Municipal Water System.
The ongoing smart meter replacement project upgrading outdated meters with a more advanced metering infrastructure will increase conservation and save water.
Marina – Total net position of the Marina Fund on June 30, 2024 increased by 0.4 million from the previous year.
The fund received ($0.7 million) transfer from General Fund to cover the annual debt service payments.
Maintaining revenue is an ongoing issue: the Marina is continuing to lose tenants due to silting and vandalism.
The 3% annual CPI increases for berth rents and live aboard fees are projected to steadily improve the net position over the next several years. The City had entered into a management agreement with F3 to improve both financial operations and customer service of the Vallejo Municipal Marina.
Golf – The total net position of the Golf Fund on June 30, 2024, increased by $0.2 to $5.2 million from the previous year. The city is seeing positive results from hiring Touchstone Golf in 2018 to manage the golf operations. During the current fiscal year, the Blue Rock Springs golf courses generated $4.5 million in user fees, which were used to cover its program costs. In fiscal year 22-23, a portion of land associated with the golf course was sold to Blue Rock Springs, LLC. After continuous negotiations with BRS, LLC., the City and BRS have finally entered into a participation and performance agreement, the sold land will be developed into residential development (62 acres) and two commercial parcels (parcels are on the northern and southern end of the property.) Per the agreement, the City is set to receive $10.5 million, minimum, for development.
Vallejo Station Parking – The Vallejo Station Parking Fund’s revenues net revenue of $0.3 million at the end of the fiscal year. This revenue is comprised of $0.2 million in operating income and $0.1 million in ARPA fund transfer. The fund improved its parking revenues by $0.1 million from the previous year as commuter traffic returned to the Vallejo Waterfront. The fund improved its overall payment system by replacing old pay stations and incorporating electronic payments through mobile devices.
Fiber Optic – In May 2017 to leverage City assets and promote economic development, the Fiber Optic Fund was established with a $0.8 million interfund loan from the General Fund for working capital. With the infusion of ARPA funding the city will expand and create a robust broadband that can serve Vallejo. The fund received $1.1 million from ARPA in the current year. In November 2022, the city contracted Smart Fiber Networks to operate and maintain the City’s fiber networks and service retail and residential customers within the City for a 40% revenue sharing arrangement starting fiscal year 2024. The fund had reduced its deficit by 55% during this fiscal year.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Enterprise Funds
45 Capital Assets
GASB Statement No. 34 requires that the City record all its capital assets that are used in the performance of the City’s functions, including infrastructure assets. The following is a summary of these assets as of June 30, 2024 and 2023.
Summary of Activities - Capital Assets (In millions)
Governmental
Activities
Business-type
Activities Total Increase/
(Decrease)2024 2023 2024 2023 2024 2023
Capital assets not subject to depreciation/
amortization:
Land $116.1 $116.1 $17.4 $17.4 $133.5 $133.5 $—
Construction-in-progress 44.8 23.6 20.2 14.1 65.0 37.7 27.3 Subscription-in-progress — 0.6 — 0.5 — 1.1 (1.1) Depreciable capital assets:
Buildings and Improvements 55.5 59.8 23.8 25.0 79.3 84.8 (5.5) Machinery and equipment 15.1 16.0 10.3 9.6 25.4 25.6 (0.2) Infrastructure 125.4 123.0 43.6 45.9 169.0 168.9 0.1 Right-to-use lease property 3.6 — — — 3.6 — 3.6
Right-to-use lease machinery and equipment — — — 0.1 — 0.1 (0.1) Right-to-use subscription software 0.4 2.0 0.3 0.1 0.7 2.1 (1.4) Total capital assets, net $360.9 $341.1 $115.6 $112.7 $476.5 $453.8 $22.7 Throughout the fiscal year, the City’s capital assets experienced notable changes, with major additions in governmental capital assets attributed to construction in progress related to infrastructure enhancements ( $21.2 million). These were offset by annual depreciation and amortization for Governmental activities ($11.1 million).
Major capital projects in FY23-24 include:
• Bay Trail/vine Trail Project $6.9 million
• Lake Dalwigk Park Improvement $2.2 million
• PD Building Improvement $1.9 million
• Street Road Diet $1.1 million
Business-type capital asset major additions include construction in progress ($5.6 million) related to water equipment and infrastructure improvements. These were offset by the annual depreciation ($5.1 million). Major capital projects included in the construction in progress include:
• Water main replacement $1.8 million
• Advance Metering Infrastructure $2.4 million
Overall, the City’s capital assets net of depreciation increased by $22.7 million during the year to $476.5 million on June 30, 2024. Further detail about the City’s capital assets can be found in Note 6 to the Financial Statements.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Capital Assets
46 Debt Administration
The following is a summary of the City’s long-term debt obligations as of June 30, 2024 and 2023.
Long-Term Debt (In millions)
Governmental Activities Business-type Activities Total Increase/ (Decrease)2024 2023 2024 2023 2024 2023
Certificates of Participation $ 1.7 $ 1.9 $ — $ — $ 1.7 $ 1.9 $ (0.2) Financed Purchases 1.3 1.8 — — 1.3 1.8 (0.5)
Revenue Bonds — — 69.4 74.2 69.4 74.2 (4.8)
Loans & Notes Payable 13.7 14.9 15.9 16.6 29.6 31.5 (1.9) Total long-term debt $ 16.7 $ 18.6 $ 85.3 $ 90.8 $ 102.0 $ 109.4 $ (7.4) Claims and Judgments 28.5 28.4 — — 28.5 28.4 0.1 Lease Payables (GASB87) 3.6 — — 0.1 3.6 0.1 3.5
Subscription Payables
(GASB96) 0.5 1.9 0.3 0.1 0.8 2.0 (1.2)
Compensated Absences 12.0 11.2 1.4 1.5 13.4 12.7 0.7 Net Pension Liability 305.5 295.8 42.2 39.1 347.7 335.0 12.7 Net OPEB Obligation 5.6 6.9 1.4 1.8 7.0 8.7 (1.7) Total City Long-Term
Obligations $ 355.7 $ 344.2 $ 45.3 $ 42.6 $ 401.0 $ 387.0 $ 14.1 Total City Debt and
Obligation $ 372.4 $ 362.8 $ 130.6 $ 133.4 $ 503.0 $ 496.4 $ 6.7 Annual Activity – The City’s total long-term debt obligations decreased by $7.4 million as of June 30, 2024 due to the required debt service payments. No new debt was issued for this fiscal year. Comprehensive details regarding each of the City's debt issues, including specifics on terms and conditions can be found in Notes 7 to the Financial Statements.
The total City’s long-term obligations increased by $14.1 million as of June 30, 2024. • This includes an increase in net pension liability of $12.7 million due to CalPERS lower than expected investment return and higher than anticipated inflation. • Also, on June 15, 2024, City entered into a new Farragut lease agreement for $3.5 million increasing lease payable, on the other hand subscription payable GASB 96 decreased by $1.2 million due to termination and modification of SBITA (Subscription-Based Information Technology) agreements. • The Net OPEB obligation decreased by $1.7 million due to increase in net investment income than benefits payments paid.
More detail can be found on note 5 GASB 87/96, note 9 compensated absences, note 10 pension and note 11 OPEB.
Bond Rating – On June 11, 2024, Standard & Poor’s raised its rating from ‘A-’ to “A“ for the 1999 Certificates of Participation. It further states that, given the combination of revenue enhancement very strong reserve balances and good financial position will remain at least stable in the near term.
Net Debt - The percentage of net bonded debt to taxable property valuation, and the amount of bonded debt per capita, are useful indicators of the City’s net debt position to management, citizens, and investors. A comparison of these indicators follows. Per capita debt outstanding decreased to $837 as of June 30, 2024, from $917 in the prior fiscal year.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Debt Administration
47 Net Debt
June 30, 2024 June 30, 2023
Net debt (in millions) $ 101.9 $ 111.5
Net debt per capita 837.0 917.0
Net debt per capita as a percentage of per capita personal income 2.05 % 2.50 % Net debt as a percentage of net assessed value 0.76 % 0.87 %
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Debt Administration (Continued)
48 Economic Outlook
Economic Factors
The economy and the City’s major initiatives for next year are discussed in detail in the accompanying Transmittal Letter.
Next Year’s Budget
Total revenue across all funds is budgeted for fiscal year 2025 at $298.9 million. The General Fund, a key component of this financial plan, is projected to contribute $134.3 million excluding Measure P to this total. The steady recovery that is felt by the city is also facing economic impact of sudden shifts in the labor force, housing markets and the global impact of current political conflicts which is felt throughout California. The cautiously optimistic budget reflects the City's confidence in a steadily improving tax base and ongoing economic development initiatives. The anticipation of moderate growth in the coming year is fueled by these positive trends, signaling a resilient local economy. Furthermore, the City's proactive approach includes the pursuit of federal and state grants, demonstrating a commitment to diversifying revenue streams and leveraging external funding sources to support key projects and initiatives.
The City’s total expenditure budget for next year is $284.9 million, with a notable portion of $134.3 million earmarked for the General Fund. This financial commitment underscores the City's dedication to fostering economic development, supporting local businesses, and upholding its commitment to affordable housing initiatives. Notably, the General Fund revenue budget, set at $134.3 million, aligns with and fully covers these expenditures, eliminating any projected shortfalls. Demonstrating prudent fiscal planning, the City aims to maintain General Fund reserves at a minimum two months of General Fund expenditures, acting as a safeguard against potential economic downturns. This cautious approach reflects the City's dedication to sustaining a balanced budget and minimizing risks, as it remains vigilant in monitoring economic indicators, revenue sources, and spending patterns as part of its overall sound and conservative fiscal strategy.
Contacting Financial Management
This Annual Comprehensive Financial Report (ACFR) is designed to provide our citizens, taxpayers, customers, and investors and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. For the convenience of the public, a copy of this report is posted on the City’s website (https://www.cityofvallejo.net/our_city/departments_divisions/finance_department). If you have questions about this report, separate reports of the City’s component units, or need any additional financial information, contact the Finance Department at 555 Santa Clara Street, Vallejo, California, 94590, phone 707-648-4592.
CITY OF VALLEJO
Management’s Discussion and Analysis (Unaudited)
For the Year Ended June 30, 2024
Economic Outlook
49 Basic Financial Statements
50 Government-Wide Financial Statements
51 Statement of Net Position
Primary Government
Component
Unit
Vallejo Flood
and
Governmental Business-Type Wastewater
Activities Activities Total District
ASSETS
Cash and investments (Note 2) $ 217,903,692 $ 71,360,658 $ 289,264,350 $ 53,957,471 Receivables (net of uncollectibles):
Accounts 5,203,163 11,592,280 16,795,443 2,850,892
Interest receivable 1,752,466 192 1,752,658 298,477 Due from other governments 24,924,536 216,456 25,140,992 8,945,739 Notes and loans (Note 4) 30,477,104 - 30,477,104 266,415 Lease receivable (Note 5a) 11,996,684 - 11,996,684 171,722 Internal balances (Note 3c) 680,000 (680,000) - -
Materials, parts and supplies (Note 1f) 199,192 1,417,657 1,616,849 335,549 Prepaids and deposits (Note 1h) 1,051,099 542,493 1,593,592 823,203 Restricted assets:
Cash and investments (Note 2) 40,060,048 3,404 40,063,452 1,269,416 Cash with fiscal agent (Note 2) 5,398,745 45,938,975 51,337,720 - Land held for redevelopment 499,684 - 499,684 -
Capital assets (not being depreciated) (Note 6) 160,893,578 37,597,897 198,491,475 39,535,082 Capital assets (net of accumulated depreciation/amortization) (Note 6) 200,026,739 77,969,239 277,995,978 173,247,632 Total assets 701,066,730 245,959,251 947,025,981 281,701,598
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions (Note 10) 67,454,181 8,846,437 76,300,618 12,973,054 Related to OPEB (Note 11) 3,716,125 900,875 4,617,000 1,470,038 Deferred charge on refunding (Note 7) - 907,658 907,658 - Total deferred outflows of resources 71,170,306 10,654,970 81,825,276 14,443,092
LIABILITIES
Accounts payable and accrued liabilities 25,042,909 6,493,812 31,536,721 5,202,785 Due to other governments 984,289 - 984,289 -
Accrued interest 139,743 483,786 623,529 204,730
Deposits payable 2,736,297 4,813,819 7,550,116 -
Unearned revenues 25,173,203 1,431,020 26,604,223 12,009 Other liabilities due within one year - - - 1,202,486 Noncurrent liabilities:
Due within one year:
Long-term debt due within one year (Note 7) 1,924,896 5,201,110 7,126,006 1,815,010 Employee benefits payable due within one year (Note 9) 7,148,311 1,080,598 8,228,909 966,506 Lease payable due within one year (Note 5b) 101,467 23,086 124,553 156,266 Subscription payable due within one year (Note 5c) 335,285 146,595 481,880 95,035 Claims due within one year (Note 13) 6,938,010 - 6,938,010 -
CITY OF VALLEJO
Statement of Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements 52 Primary Government
Component
Unit
Vallejo Flood
and
Governmental Business-Type Wastewater
Activities Activities Total District
Due in more than one year:
Long-term debt due more than one year (Note 7) 14,768,102 80,040,775 94,808,877 43,464,758 Employee benefits payable due in more than one year
(Note 9) 4,816,849 332,336 5,149,185 1,449,760
Lease payable due in more than one year (Note 5b) 3,484,704 13,658 3,498,362 227,860 Subscription payable due in more than one year (Note 5c) 168,754 136,237 304,991 192,379 Claims due in more than one year (Note 13) 21,593,990 - 21,593,990 - Net Pension Liability (Note 10) 305,453,605 42,205,730 347,659,335 32,598,425 Net OPEB Liability (Note 11) 5,573,232 1,410,768 6,984,000 7,062,948 Total liabilities 426,383,646 143,813,330 570,196,976 94,650,957
DEFERRED INFLOWS OF RESOURCES
Related to pensions (Note 10) 792,448 204,914 997,362 1,598,112 Related to OPEB (Note 11) 4,238,976 1,073,024 5,312,000 1,789,704 Related to leases (Note 5a) 11,111,531 - 11,111,531 163,292 Deferred amount on refunding - - - 1,802,194
Total deferred inflows of resources 16,142,955 1,277,938 17,420,893 5,353,302 NET POSITION (NOTE 12)
Net investment in capital assets 345,870,587 78,558,161 424,428,748 161,435,955 Restricted:
Restricted other - 381,490 381,490 -
Nonexpendable - McCune Endowment 64,625 - 64,625 -
Capital projects 32,613,466 - 32,613,466 26,634,527 Debt service 289,677 13,011 302,688 240,896
Housing programs 24,508,116 - 24,508,116 -
Mare Island Programs 13,283,459 - 13,283,459 -
Landscape maintenance district services 23,913,557 - 23,913,557 - Other special projects and programs 36,500,229 - 36,500,229 - Unrestricted (deficit) (147,333,281) 32,570,291 (114,762,990) 7,829,053 Total net position $ 329,710,435 $ 111,522,953 $ 441,233,388 $ 196,140,431
CITY OF VALLEJO
Statement of Net Position (Continued)
June 30, 2024
See accompanying Notes to the Basic Financial Statements 53 Statement of Activities
Program Revenues
Expenses
Charges for
Services
Operating
Contributions and
Grants
Capital
Contributions and
Grants
Functions/Programs:
Primary government:
Governmental activities:
Legislative and advisory $ 262,429 $ - $ 3,740 $ -
Executive 3,641,393 - 3,548,832 -
Finance 2,680,976 - 127,026 -
Human resources 1,748,816 - 55,538 -
Law 1,600,994 - 41,139 -
Community services 29,750,151 1,075,416 29,098,638 - Planning and development services 5,617,806 4,546,696 108,203 - Fire services 39,356,934 5,071,540 2,687,873 -
Police services 61,750,656 2,059,083 2,847,947 -
Public works 34,230,703 15,492,995 7,424,778 14,961,198 Economic development 9,837,557 622,118 6,484,293 -
Information technology 2,401,779 - 1,796,930 -
Interest on long-term debt 473,612 - - -
Total governmental activities 193,353,806 28,867,848 54,224,937 14,961,198 Business-type activities:
Water Fund 48,075,546 55,397,356 1,502,901 2,312,606 Marina Fund 1,865,744 1,266,760 196,699 -
Golf Fund 4,365,634 4,543,912 - -
Vallejo Station Parking Fund 739,849 934,144 - -
Fiber Optic Fund 993,561 53,069 - -
Total business-type activities 56,040,334 62,195,241 1,699,600 2,312,606 Total primary government 249,394,140 91,063,089 55,924,537 17,273,804 Component Units:
Vallejo Flood and Wastewater District 45,812,982 50,096,960 - 1,146,711 General revenues and transfers:
General revenues:
Property taxes, levied for general purpose
Transient occupancy taxes
Sales taxes
Franchise taxes
Utility users tax
Other taxes
Use of money and property
Other
Gain (loss) on sale of capital asset
Transfers-in (Note 3a)
Total general revenues and transfers
Change in net position
Net position-beginning
Net position-ending
CITY OF VALLEJO
Statement of Activities
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 54 Net (Expenses) Revenues and
Changes in Net Position
Primary Government Component Unit
Governmental
Activities
Business-Type
Activities Total
Vallejo Flood and
Wastewater District
Functions/Programs:
Primary government:
Governmental activities:
Legislative and advisory $ (258,689) $ - $ (258,689) $ - Executive (92,561) - (92,561) -
Finance (2,553,950) - (2,553,950) -
Human resources (1,693,278) - (1,693,278) -
Law (1,559,855) - (1,559,855) -
Community services 423,903 - 423,903 -
Planning and development services (962,907) - (962,907) - Fire services (31,597,521) - (31,597,521) -
Police services (56,843,626) - (56,843,626) -
Public works 3,648,268 - 3,648,268 -
Economic development (2,731,146) - (2,731,146) -
Information technology (604,849) - (604,849) -
Interest on long-term debt (473,612) - (473,612) -
Total governmental activities (95,299,823) - (95,299,823) - Business-type activities:
Water Fund - 11,137,317 11,137,317 -
Marina Fund - (402,285) (402,285) -
Golf Fund - 178,278 178,278 -
Vallejo Station Parking Fund - 194,295 194,295 -
Fiber Optic Fund - (940,492) (940,492) -
Total business-type activities - 10,167,113 10,167,113 - Total primary government (95,299,823) 10,167,113 (85,132,710) - Component Units:
Vallejo Flood and Wastewater District - - - 5,430,689 38,906,644 - 38,906,644 1,446,346
1,574,896 - 1,574,896 -
59,307,883 - 59,307,883 -
7,318,632 - 7,318,632 -
15,413,998 - 15,413,998 -
5,987,381 - 5,987,381 -
15,197,409 5,255,870 20,453,279 2,620,173
2,956,538 - 2,956,538 522,004
46,266 3,381 49,647 -
(1,870,054) 1,870,054 - -
144,839,593 7,129,305 151,968,898 4,588,523
49,539,770 17,296,418 66,836,188 10,019,212
280,170,665 94,226,535 374,397,200 186,121,219
$ 329,710,435 $ 111,522,953 $ 441,233,388 $ 196,140,431
CITY OF VALLEJO
Statement of Activities
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 55 Fund Financial Statements
56 Governmental Fund Financial Statements
The City reported four major governmental funds in fiscal year 2023-24. These major funds were presented in their respective columns and described in Note 1.d. The remaining funds were combined into a column titled "Other Governmental Funds". Individual fund data for each of these non-major funds may be found in the Supplemental Information section.
57 Balance Sheet - Governmental Funds
Special
Revenue Funds
Capital Projects
Funds
Housing
Authority
Capital Outlay
Fund #201General Fund
ASSETS
Cash and investments $ 54,834,619 $ 4,184,850 $ 29,598,560 Receivables (net of allowance for uncollectible):
Accounts receivable 3,522,935 48,978 72,518
Notes and loans receivable 2,809,183 16,692,397 -
Interest and dividends receivable 1,676,779 - 958
Leases 6,293,146 - 884,952
Prepaids and deposits 83,535 - 534,867
Due from other governments, current 13,653,431 - -
Advances from other funds 680,000 - -
Materials, parts, and supplies 1,185 - -
Land held for redevelopment 499,684 - -
Restricted assets:
Cash and investments, restricted 22,162,616 706,758 - Cash with fiscal agent - - -
Total assets $ 106,217,113 $ 21,632,983 $ 31,091,855
LIABILITIES
Accounts payable and accrued liabilities $ 9,246,704 $ 415,989 $ 1,849,699 Unearned revenues 10,174,630 - -
Deposits payable 981,349 599,164 -
Due to other governments 1,015 - -
Due to other funds (Note 3b) - - -
Total liabilities 20,403,698 1,015,153 1,849,699
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 1,114,747 4,082,041 -
Deferred inflows for leases 5,780,964 - 732,425
Total deferred inflows of resources 6,895,711 4,082,041 732,425
FUND BALANCES (DEFICITS)
Nonspendable 4,073,587 - 534,867
Restricted 26,873,625 12,381,175 4,715,806
Committed - 1,284,722 23,259,058
Assigned 17,988,552 2,869,892 -
Unassigned 29,981,940 - -
Total fund balances (deficits) 78,917,704 16,535,789 28,509,731 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 106,217,113 $ 21,632,983 $ 31,091,855
CITY OF VALLEJO
Balance Sheet - Governmental Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 58 Capital Projects
Funds
Mare Island
Conversion
#106
Other Total
Governmental Governmental
Funds Funds
ASSETS
Cash and investments $ 1,127,977 $ 81,286,167 $ 171,032,173 Receivables (net of allowance for uncollectible):
Accounts receivable - 1,187,239 4,831,670
Notes and loans receivable - 10,975,524 30,477,104
Interest and dividends receivable 28,352 46,377 1,752,466 Leases - 4,818,586 11,996,684
Due from other governments, current - 11,271,105 24,924,536 Advances from other funds - - 680,000
Materials, parts, and supplies - - 1,185
Land held for redevelopment - - 499,684
Restricted assets:
Cash and investments, restricted 17,190,674 - 40,060,048 Cash with fiscal agent - 289,677 289,677
Total assets $ 18,347,003 $ 109,874,675 $ 287,163,629
LIABILITIES
Accounts payable and accrued liabilities $ 1,043,374 $ 11,268,057 $ 23,823,823 Unearned revenues 12,969,836 2,028,737 25,173,203
Deposits payable - 1,155,784 2,736,297
Due to other governments - 983,274 984,289
Due to other funds (Note 3b) - 3,155,682 3,155,682
Total liabilities 14,013,210 18,591,534 55,873,294
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 2,593,566 7,790,354
Deferred inflows for leases - 4,598,142 11,111,531
Total deferred inflows of resources - 7,191,708 18,901,885
FUND BALANCES (DEFICITS)
Nonspendable - 64,625 4,673,079
Restricted 4,333,793 78,208,215 126,512,614
Committed - 5,503,631 30,047,411
Assigned - 591,178 21,449,622
Unassigned - (276,216) 29,705,724
Total fund balances (deficits) 4,333,793 84,091,433 212,388,450 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 18,347,003 $ 109,874,675 $ 287,163,629
CITY OF VALLEJO
Balance Sheet - Governmental Funds (Continued)
June 30, 2024
See accompanying Notes to the Basic Financial Statements 59 This page left intentionally blank.
60 Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position Amounts reported for governmental activities in the Statement of Net Position are different because:
Total fund balances - governmental funds $212,388,450
Capital assets, net of accumulated depreciation/amortization, used in governmental activities are not financial resources and, therefore, are not reported in the funds. 352,933,194 Other long-term assets that are not available to pay for current period expenditures and, therefore, are either labeled unavailable or not reported in the funds.
Miscellaneous revenues 7,790,354
Total other long-term assets 7,790,354
Internal service funds provide services to other funds on a cost-reimbursement basis. The assets, deferred outflows of resources, liabilities, and deferred inflows of resources of the internal service funds are included in governmental activities in the Statement of Activities. 19,672,403
Long-term liabilities that are not due and payable in the current period, and therefore, are not reported in the funds.
Long-term debt (12,292,998)
Lease payable (3,586,171)
Subscription payable (504,039)
Employee benefits payable (10,806,128)
Accrued interest payable on long-term debt (125,776)
Net pension liability (235,758,854)
Total long-term liabilities (263,073,966)
Net position of governmental activities $329,710,435
CITY OF VALLEJO
Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2024
See accompanying Notes to the Basic Financial Statements 61 Statement of Revenues, Expenditures and Changes in Fund Balances Special Revenue
Funds
Capital Projects
Funds
Housing Authority
Capital Outlay Fund
#201General Fund
REVENUES
Taxes $ 126,228,409 $ - $ -
Licenses and permits 4,582,940 - 223,165
Intergovernmental revenues 12,811,260 23,470,562 -
Charges for services 9,017,870 - -
Use of money and property 6,321,330 227,145 1,058,234 Fines and forfeitures 864,480 - -
Contribution revenue 2,166,494 - -
Other 278,366 123,460 200,000
Total revenues 162,271,149 23,821,167 1,481,399
EXPENDITURES
Current:
Legislative and advisory 320,378 - -
Executive 2,739,860 - 270,253
Finance 2,385,419 - 3,329
Human resources 1,809,149 - -
Law 1,579,391 - -
Community services - 24,154,207 -
Planning and development services 5,236,955 - 180,709 Fire services 34,197,102 - 57,842
Police services 53,908,951 - -
Public works 9,235,273 - 4,596
Economic development 1,653,183 - 99,946
Information technology 1,834,671 - 937,196
Non departmental 6,542,651 - -
Capital outlay 63,391 - 16,576,766
Debt service:
Principal long term debt payments - - 427,781
Principal - lease payments 25,168 2,876 5,778
Principal - subscription payments - - 481,912
Interest and fiscal charges 1,096 5 51,533
Total expenditures 121,532,638 24,157,088 19,097,641 Excess (deficiency) of revenues
over (under) expenditures 40,738,511 (335,921) (17,616,242)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) 664,414 160,000 23,002,254
Transfers out (Note 3a) (27,128,212) - -
Issuance of debt - leases 63,391 - 3,529,230
Issuance of debt - subscriptions - - 41,793
Total other financing sources (uses) (26,400,407) 160,000 26,573,277 Net change in fund balances 14,338,104 (175,921) 8,957,035 Fund balances-beginning 64,579,600 16,711,710 -
Restatements - changes in reporting entity - - 19,552,696 Fund balances (deficit)-beginning 64,579,600 16,711,710 19,552,696 Fund balances (deficit)-ending $ 78,917,704 $ 16,535,789 $ 28,509,731
CITY OF VALLEJO
Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 62 Capital Project
Funds
Mare Island
Conversion #106
Other Total
Governmental Governmental
Funds Funds
REVENUES
Taxes $ - $ 5,371,815 $ 131,600,224
Licenses and permits - 757,214 5,563,319
Intergovernmental revenues 6,215,794 22,062,867 64,560,483 Charges for services - 12,846,924 21,864,794
Use of money and property 986,730 4,179,817 12,773,256 Fines and forfeitures - 35,160 899,640
Contribution revenue - 1,000,741 3,167,235
Other - 356,141 957,967
Total revenues 7,202,524 46,610,679 241,386,918
EXPENDITURES
Current:
Legislative and advisory - - 320,378
Executive - - 3,010,113
Finance - - 2,388,748
Human resources - - 1,809,149
Law - - 1,579,391
Community services - 3,371,239 27,525,446
Planning and development services - 309,543 5,727,207 Fire services - 2,542,951 36,797,895
Police services - 1,738,287 55,647,238
Public works - 11,596,597 20,836,466
Economic development 6,310,420 1,763,968 9,827,517
Information technology - - 2,771,867
Non departmental - - 6,542,651
Capital outlay - 18,791,293 35,431,450
Debt service:
Principal long term debt payments - 962,276 1,390,057 Principal - lease payments - 24,229 58,051
Principal - subscription payments - 13,775 495,687
Interest and fiscal charges - 169,365 221,999
Total expenditures 6,310,420 41,283,523 212,381,310
Excess (deficiency) of revenues
over (under) expenditures 892,104 5,327,156 29,005,608
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - 2,042,563 25,869,231
Transfers out (Note 3a) - (1,593,414) (28,721,626)
Issuance of debt - leases - - 3,592,621
Issuance of debt - subscriptions - - 41,793
Total other financing sources (uses) - 449,149 782,019 Net change in fund balances 892,104 5,776,305 29,787,627 Fund balances-beginning 3,441,689 97,867,824 182,600,823 Restatements - changes in reporting entity - (19,552,696) - Fund balances (deficit)-beginning 3,441,689 78,315,128 182,600,823 Fund balances (deficit)-ending $ 4,333,793 $ 84,091,433 $ 212,388,450
CITY OF VALLEJO
Statement of Revenues, Expenditures and Changes in Fund Balances (Continued) June 30, 2024
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 63 Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Amounts reported for governmental activities in the Statement of Activities are different because:
Net change in fund balances - total governmental funds: $29,787,627 Governmental funds report capital outlays are expenditures. However, in the Statement of Activities, the cost of these assets is allocated over their estimated useful lives and reported as depreciation/amortization expense.
This is the amount by which capital outlays exceeded depreciation/ amortization expense in the current period.
Capital outlay 30,202,795
Adjustments due to Subscription/Leases and other capital assets (995,463) Depreciation/amortization expense (9,342,752)
Total adjustment 19,864,580
Revenues in the Statement of Activities that do not provide current financial resources are not reported as revenues in the funds.
Earned but unavailable other revenues 1,047,410
Total adjustment 1,047,410
Bond and other debt proceeds provide current financial resources to governmental funds, but issuing debt increases long-term liabilities in the Statement of Net Position. Repayment of bond and other debt principal is an expenditure in the governmental funds, but repayment reduces long-term liabilities in the Statement of Net Position. Also, governmental 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.
Repayment of debt principal is added back to fund balance 1,390,056 Interest accrued to principal is deducted from fund balance (99,841) Leases issued (3,592,621)
Lease payable payments 34,050
Leases/Subscription adjustments 855,077
Subscription issued (41,793)
Subscription payments 519,918
Total adjustment (935,154)
Internal service funds provide services to other funds on a cost- reimbursement basis. The net revenue of certain activities of internal service funds is reported with governmental activities. 9,385,006 Some expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in the governmental funds.
Accrued interest on long-term debt 28,172
Compensated absences (448,102)
Changes in pension liabilities and related deferred outflows and inflows of resources (9,189,769)
Total adjustment (9,609,699)
Change in net position of governmental activities $49,539,770
CITY OF VALLEJO
Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 64 Proprietary Fund Financial Statements
The City reported Water enterprise fund as major fund in fiscal year 2023-24. This fund was presented in its respective columns and described in Note 1.d. In addition, all the remaining enterprise funds were combined into a single column titled “Other Enterprise Funds”. All internal service funds were combined into a single, aggregated presentation. Individual fund data for each of the other enterprise funds and internal service funds may be found in the Supplemental Information section.
See accompanying Notes to the Basic Financial Statements 65 Statement of Net Position - Other Enterprise Funds
Business-Type Activities
Governmental
Activities
Water Fund
Other
Enterprise Internal
Funds Totals Service Funds
ASSETS
Current assets:
Cash and investments $ 67,386,027 $ 3,974,631 $ 71,360,658 $ 46,871,519 Receivables (net of uncollectibles):
Accounts receivable 11,508,548 83,732 11,592,280 371,493 Interest and dividends receivable 192 - 192 -
Due from other governments, current 50,111 166,345 216,456 - Prepaids and deposits 440,502 101,991 542,493 432,697 Due from other funds (Note 3b) - - - 3,155,682
Materials, parts, and supplies 1,299,559 118,098 1,417,657 198,007 Restricted:
Cash and investments, restricted 3,404 - 3,404 -
Cash with fiscal agent 45,557,485 381,490 45,938,975 5,109,068 Total current assets 126,245,828 4,826,287 131,072,115 56,138,466 Noncurrent:
Capital assets, net 93,867,522 21,420,599 115,288,121 7,987,123 Leases, right-of-use assets 279,015 - 279,015 -
Total noncurrent assets 94,146,537 21,420,599 115,567,136 7,987,123 Total assets 220,392,365 26,246,886 246,639,251 64,125,589
DEFERRED OUTFLOWS OF RESOURCES
Related to pensions 8,846,437 - 8,846,437 821,362
Related to OPEB 900,875 - 900,875 3,716,125
Unamortized loss on refunding of debt 907,658 - 907,658 - Total deferred outflows of resources 10,654,970 - 10,654,970 4,537,487
CITY OF VALLEJO
Statement of Net Position
Proprietary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 66 Business-Type Activities
Governmental
Activities
Water Fund
Other
Enterprise Internal
Funds Totals Service Funds
LIABILITIES
Current liabilities:
Accounts payable and accrued liabilities 5,691,327 802,485 6,493,812 1,219,086 Accrued interest 353,656 130,130 483,786 13,967
Unearned revenues 1,273,164 157,856 1,431,020 -
Deposits payable 4,711,002 102,817 4,813,819 -
Lease payable 23,086 - 23,086 -
Subscription payable 146,595 - 146,595 -
Employee benefits payable, current 1,080,598 - 1,080,598 506,074 Accrued claims and judgments - - - 6,938,010
Bonds and notes payable 4,406,701 794,409 5,201,110 665,000 Total current liabilities 17,686,129 1,987,697 19,673,826 9,342,137 Noncurrent liabilities:
Advances from other funds - 680,000 680,000 -
Employee benefits payable 332,336 - 332,336 652,958 Accrued claims and judgments - - - 21,593,990
Net pension liability 42,205,730 - 42,205,730 3,835,756 Net OPEB liability 1,410,768 - 1,410,768 5,573,232
Lease payable 13,658 - 13,658 -
Subscription payable 136,237 - 136,237 -
Bonds, notes and loans payable 64,979,472 15,061,303 80,040,775 3,735,000 Total noncurrent liabilities 109,078,201 15,741,303 124,819,504 35,390,936 Total liabilities 126,764,330 17,729,000 144,493,330 44,733,073
DEFERRED INFLOWS OF RESOURCES
Related to pensions 204,914 - 204,914 18,624
Related to OPEB 1,073,024 - 1,073,024 4,238,976
Total deferred inflows of resources 1,277,938 - 1,277,938 4,257,600
NET POSITION
Net investment in capital assets 70,896,323 7,661,838 78,558,161 8,696,191 Restricted other - 381,490 381,490 -
Restricted for debt service 13,011 - 13,011 -
Net position, unrestricted 32,095,733 474,558 32,570,291 10,976,212 Total net position $ 103,005,067 $ 8,517,886 $ 111,522,953 $ 19,672,403
CITY OF VALLEJO
Statement of Net Position (Continued)
Proprietary Funds
June 30, 2024
See accompanying Notes to the Basic Financial Statements 67 Statement of Revenues, Expenses and Changes in Net Position - Other Enterprise Funds Business-Type
Activities
Water Fund Marina Fund Golf Fund
Vallejo
Station
Parking Fund
Fiber Optic
Fund
OPERATING REVENUES
Charges for services $ 55,380,360 $ - $ - $ - $ -
Other 16,996 - - - -
Total operating revenues 55,397,356 - - - -
OPERATING EXPENSES
General and administrative 20,931,440 - - - -
Operations expenses 18,856,592 - - - -
Insurance and claims - - - - -
Depreciation and amortization expense 5,012,647 - - - - Total operating expenses 44,800,679 - - - -
Operating income (loss) 10,596,677 - - - -
NONOPERATING REVENUES (EXPENSES)
Intergovernmental revenues 1,502,901 - - - -
Investment income (loss) 5,158,339 - - - -
Interest and fiscal charges (1,941,777) - - - -
Intergovernmental expense (1,333,090) - - - -
Gain (loss) on disposal of capital assets (205) - - - - Total nonoperating revenues (expenses) 3,386,168 - - - - Income (loss) before capital contributions and
transfers 13,982,845 - - - -
Capital contribution - developers 2,312,606 - - - - Transfers in (Note 3a) - - - - -
Change in net position 16,295,451 - - - -
Net position-beginning 86,709,616 1,911,600 5,004,618 817,367 (216,666) Restatements - change in reporting entity - (1,911,600) (5,004,618) (817,367) 216,666 Net position-beginning, restated 86,709,616 - - - - Net position-ending $ 103,005,067 $ - $ - $ - $ -
CITY OF VALLEJO
Statement of Revenues, Expenses and Changes in Net Position Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 68 Business-Type
Activities
Governmental
Activities
Other Total
Enterprise Enterprise Internal
Funds Funds Service Funds
OPERATING REVENUES
Charges for services $ 6,753,862 $ 62,134,222 $ 26,238,455 Other 44,023 61,019 54,084
Total operating revenues 6,797,885 62,195,241 26,292,539
OPERATING EXPENSES
General and administrative 2,326,062 23,257,502 -
Operations expenses 4,993,018 23,849,610 6,716,536
Insurance and claims - - 11,548,201
Depreciation and amortization expense 254,853 5,267,500 1,774,495 Total operating expenses 7,573,933 52,374,612 20,039,232 Operating income (loss) (776,048) 9,820,629 6,253,307
NONOPERATING REVENUES (EXPENSES)
Intergovernmental revenues 196,699 1,699,600 -
Investment income (loss) 97,531 5,255,870 2,283,036
Interest and fiscal charges (390,855) (2,332,632) (179,944) Intergovernmental expense - (1,333,090) -
Gain (loss) on disposal of capital assets 3,586 3,381 46,266 Total nonoperating revenues (expenses) (93,039) 3,293,129 2,149,358 Income (loss) before capital contributions and
transfers (869,087) 13,113,758 8,402,665
Capital contribution - developers - 2,312,606 -
Transfers in (Note 3a) 1,870,054 1,870,054 982,341
Change in net position 1,000,967 17,296,418 9,385,006 Net position-beginning - 94,226,535 10,287,397
Restatements - change in reporting entity 7,516,919 - - Net position-beginning, restated 7,516,919 94,226,535 10,287,397 Net position-ending $ 8,517,886 $ 111,522,953 $ 19,672,403
CITY OF VALLEJO
Statement of Revenues, Expenses and Changes in Net Position (Continued) Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 69 Statement of Cash Flows - Other Enterprise Funds
Business-Type
Activities
Governmental
Activities
Water Fund
Other
Enterprise Internal
Funds Totals Service Funds
CASH FLOWS FROM OPERATING ACTIVITIES
Receipts from customers $ 53,500,937 $ 6,739,854 $ 60,240,791 $ 106,798,425 Payments to suppliers and service providers (19,590,623) (7,180,506) (26,771,129) (8,009,472) Payments to employees for salaries and benefits (16,234,511) - (16,234,511) (85,077,295) Other receipts (payments) - - - (7,407,285)
Net cash provided by (used for)
operating activities 17,675,803 (440,652) 17,235,151 6,304,373
CASH FLOWS FROM NONCAPITAL
FINANCING ACTIVITIES
Transfers from other funds - 1,870,054 1,870,054 982,341 Payments to other funds on interfund borrowings - - - (2,019,600) Operating grants and contributions 119,700 106,663 226,363 - Net cash provided by (used for)
noncapital financing activities 119,700 1,976,717 2,096,417 (1,037,259)
CASH FLOWS FROM CAPITAL AND RELATED
FINANCING ACTIVITIES
Capital contributions 2,312,606 - 2,312,606 -
Acquisition and construction of capital assets (8,104,307) (491,522) (8,595,829) (1,712,999) Principal paid on capital debt (4,482,163) (1,057,506) (5,539,669) (600,000) Interest paid on capital debt (1,416,148) (110,840) (1,526,988) (180,460) Proceeds from sales of assets (31,620) 68,992 37,372 80,758 Net cash provided by (used for)
capital and related financing activities $ (11,721,632) $ (1,590,876) $ (13,312,508) $ (2,412,701)
CASH FLOWS FROM INVESTING ACTIVITIES
Interest on investments 5,268,358 97,532 5,365,890 2,283,036 Net cash provided by (used for)
investing activities $ 5,268,358 $ 97,532 $ 5,365,890 $ 2,283,036 Net increase (decrease) in
cash and cash equivalents 11,342,229 42,721 11,384,950 5,137,449 Cash and cash equivalents-beginning 101,604,687 4,313,400 105,918,087 46,843,138 Cash and cash equivalents-ending $ 112,946,916 $ 4,356,121 $ 117,303,037 $ 51,980,587
CITY OF VALLEJO
Statement of Cash Flows
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 70 Business-Type
Activities
Governmental
Activities
Water Fund
Other
Enterprise Internal
Funds Totals Service Funds
RECONCILIATION OF CASH AND CASH EQUIVALENTS
TO THE STATEMENT OF NET POSITION
Cash and investments 67,386,027 3,974,631 71,360,658 46,871,519 Restricted cash and investments 3,404 - 3,404 -
Cash with fiscal agent 45,557,485 381,490 45,938,975 5,109,068 Total cash and cash equivalents $ 112,946,916 $ 4,356,121 $ 117,303,037 $ 51,980,587
RECONCILIATION OF OPERATING INCOME
(LOSS)
TO NET CASH PROVIDED BY (USED FOR)
OPERATING ACTIVITIES
Operating income (loss) 10,596,677 (776,048) 9,820,629 6,253,307 Adjustments to reconcile operating income (loss) to
net cash provided by (used for) operating activities:
Depreciation/amortization expense 5,012,647 254,853 5,267,500 1,774,495 (Increase) decrease in accounts receivable (2,287,849) (36,891) (2,324,740) (210,997) (Increase) decrease in inventories (301,672) (2,300) (303,972) 25,111 (Increase) decrease in prepaid items 1,384 3,084 4,468 (52,810) Increase (decrease) in accounts payable 1,641,105 137,790 1,778,895 703,381 Increase (decrease) in deposits payable 391,430 (21,140) 370,290 - Increase (decrease) in compensated absences (61,854) - (61,854) 336,660 Increase (decrease) in claims and judgments - - - 141,000 Increase (decrease) in net pension liability 3,332,330 - 3,332,330 21,831 Increase (decrease) in net OPEB liability (648,395) - (648,395) (2,687,605) Total adjustments 7,079,126 335,396 7,414,522 51,066 Net cash provided by (used for)
operating activities $ 17,675,803 $ (440,652) $ 17,235,151 $ 6,304,373
NON-CASH INVESTING, CAPITAL, AND
FINANCING ACTIVITIES:
Accreted interest $ - $ 239,800 $ 239,800 $ -
Amortization of bond premium 499,498 - 499,498 -
Amortization of loss on refunding of debt (226,914) - (226,914) -
CITY OF VALLEJO
Statement of Cash Flows (Continued)
Proprietary Funds
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 71 Fiduciary Fund Financial Statements
The City has two types of fiduciary funds: the custodial funds and private purpose trust funds. The custodial funds were combined into a single column. Individual fund data of each of the custodial funds may be found in Supplemental Information section.
See accompanying Notes to the Basic Financial Statements 72 Statement of Fiduciary Net Position
Private
Purpose
Trust Fund
Successor
Agency
Custodial
Funds
ASSETS
Cash and investments (Note 2b) $ 324,870 $ 3,305,867
Restricted cash and investments with fiscal agents (Note 2b) 217,145 3,853,334 Capital assets, not being depreciated (Note 15b) 189,226 - Capital assets, net of accumulated depreciation (Note 15b) 35,643 - Total assets 766,884 7,159,201
LIABILITIES
Accounts payable and accrued liabilities - 14,438
Accrued interest 34,213 196,713
Due from County - 1,672,480
Deposits payable - 252,216
Due to other governments - 7,353
Due in one year (Notes 8, 15c) 190,000 1,185,000
Due in more than one year (Notes 8, 15c) 4,268,928 8,790,000 Total liabilities 4,493,141 12,118,200
NET POSITION (deficit)
Restricted for governments, individuals or other organizations (deficit) (3,726,257) (4,958,999) Total net position (deficit) $ (3,726,257) $ (4,958,999)
CITY OF VALLEJO
Statement of Fiduciary Net Position
June 30, 2024
See accompanying Notes to the Basic Financial Statements 73 Statement of Changes in Fiduciary Net Position
Private
Purpose Trust
Fund
Successor
Agency
Custodial
Funds
ADDITIONS
Investment earnings $ 14,644 $ 315,663
Miscellaneous income 222,614 -
Property taxes 1,142,101 -
Collections for assessment districts - 538,098
Total additions 1,379,359 853,761
DEDUCTIONS
Collections for assessment districts 39,875 382,019
Interest and fiscal charges 145,900 605,377
Depreciation and amortization expense 4,193 -
Total deductions 189,968 987,396
Net increase (decrease) in fiduciary net position 1,189,391 (133,635) Net position-beginning (deficit) (4,915,648) (4,825,364) Net position-ending (deficit) $ (3,726,257) $ (4,958,999)
CITY OF VALLEJO
Statement of Changes in Fiduciary Net Position
For the Year Ended June 30, 2024
See accompanying Notes to the Basic Financial Statements 74 Notes to The Basic Financial Statements
75 NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
A. Financial Reporting Entity
The City was incorporated in 1868 as a charter City, with a Council-Manager form of Government, and provides all municipal services, excluding garbage disposal and electricity.
The accompanying basic financial statements present the financial activity of the City, which is the primary government presented, along with the financial activities of its component units, which are entities for which the City is financially accountable. Although they are separate legal entities, blended component units are in substance part of the City’s operations and are reported as an integral part of the City’s financial statements. Each discretely presented component unit, on the other hand, is reported in a separate column in the basic financial statements to emphasize it is legally separate from the government.
The City’s component units are described below:
◦ Housing Authority of the City of Vallejo (Blended Component Unit) ◦ Marine World Joint Powers Authority (Blended Component Unit) ◦ Parking Authority of the City of Vallejo (Blended Component Unit) ◦ Public Financing Authority of the City of Vallejo (Blended Component Unit) ◦ Vallejo Homeless Navigation Center JPA (Blended Component Unit) ◦ Vallejo Flood and Wastewater District (Discrete Component Unit) ◦ Vallejo Flood and Wastewater District Financing Corporation (Discrete Component Unit) Additional financial information for each of these entities can be obtained from the Finance Department City of Vallejo, 555 Santa Clara Street, Vallejo, California 94590.
PRIMARY GOVERNMENT
The financial statements of the primary government of the City of Vallejo include the activities of the City as well as the Housing Authority of the City of Vallejo, the Marine World Joint Powers Authority, the Parking Authority of the City of Vallejo, the Public Financing Authority of the City of Vallejo, and the Vallejo Homeless Navigation Center JPA, all of which are controlled by and dependent on the City. While these are separate legal entities, their financial activities are integral to those of the City. Their financial activities have been aggregated and merged (termed “blended”) with those of the primary government of the City in the accompanying financial statements.
Blended Component Units
The Housing Authority of the City of Vallejo — was formed in June 1942 and is organized under the California Health and Safety Code. The objectives of the Housing Authority are to aid low-income families in obtaining decent, safe and sanitary housing through federal assistance programs and mortgage revenue bond programs.
On February 1, 2012, the Housing Authority also elected to assume the responsibilities of the Housing Successor for the low/moderate income housing programs of the former Redevelopment Agency. The Housing Authority is governed by a Board of Commissioners composed of the City Council members and two tenants of the Housing Authority. The operations of the Housing Authority are reported in the Housing Authority Special Revenue Fund.
Management of the City has operational responsibility for the Authority.
Separate financial statements for the Housing Authority may be obtained by contacting the office of the Finance Director at 555 Santa Clara Street, Vallejo, California, 94590, phone 707-648-4592.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
504
NOTE 1. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES
76 The Marine World Joint Powers Authority — was formed in October 1996, pursuant to the Joint Exercise of Powers Act of the Government Code of the State of California for the purpose of assuming ownership of the Marine World Africa USA theme park from the Marine World Foundation. The City Council is the governing body of the Marine World JPA. The City has full accountability for the Authority’s fiscal affairs. The Authority had no activity and had no assets or liabilities during the year ended June 30, 2024. The Authority does not issue separate financial statements.
The Parking Authority of the City of Vallejo — was formed in May 1975, pursuant to the provisions of California statutes. Operations of the Parking Authority began in May 1977, with the execution of a joint powers agreement with the City. The purpose of this agreement was to provide the acquisition, construction, financing and operation of parking facilities in the downtown area of the City. The City Cou ncil is the governing board of the Parking Authority. The City has full accountability for the Authority’s fiscal affairs. The Authority’s parcels of land had a carrying value of $72,800 as of June 30, 2024. The Authority is inactive and had no activity during the year ended June 30, 2024. The Authority does not issue separate financial statements.
The Public Financing Authority of the City of Vallejo — was formed in July 1990. The primary purpose of the Financing Authority is to provide financing for City projects. The City Council is the governing board of the Financing Authority. The City has full accountability for the Authority’s fiscal affairs. The activities of the Authority are blended with the Certificates of Participation Debt Service Fund, Marina Enterprise Fund, Golf Enterprise Fund and fiduciary funds. The Authority does not issue separate financial statements.
Vallejo Homeless Navigation Center Joint Powers Authority (JPA) — is a joint powers authority formed in 2020 under Chapter 5, Division 7, Title 1 of the Government Code of the State of California (commencing with section 6500) in order to provide the City’s homeless population with access to vital services. This center will also provide the City’s homeless population with temporary housing at a navigation center, which will include an opportunity to be connected to permanent housing, jobs and an income so that they may become self-sufficient.
The Authority does not issue separate financial statements.
DISCRETELY PRESENTED COMPONENT UNITS
Vallejo Flood and Wastewater District (VFWD) — was created by an act of the California legislature and began operations in April 1952 as the Vallejo Sanitation and Flood Control District (VSFCD). VSFCD changed its name to the Vallejo Flood and Wastewater District during fiscal year 2018. The purpose of the Act was to give autonomous authority to VFWD to provide for the collection, treatment and disposal of wastewater and to control and dispose of storm waters. From 1993 to 1999 VFWD was part of the City’s operations. Commencing July 1, 1999 the VFWD became a separate district from the City. The Board now consists of the seven elected City Council members and one member appointed by the Solano County Board of Supervisors. Although the City Council exercises control over the Board of VFWD, there is no operational responsibility or financial benefit or burden relationship with the primary government. Separate financial statements for VFWD may be obtained by contacting 450 Ryder Street, Vallejo, California 94590.
Vallejo Flood and Wastewater District Financing Corporation (VFWDFC) — is a non-profit public benefit corporation organized in July 1993 as the Vallejo Sanitation and Flood Control District Financing Corporation (VSFCDFC) and was renamed to the Vallejo Flood and Wastewater District Financing Corporation in March 2018.
The VFWDFC was organized under the laws of the State of California for the purpose of assisting the VFWD in funding certain projects and other matters relating to the purpose of VFWD. Members of the Board for VFWD serve as Directors of the VFWDFC. The activities of the VFWDFC are blended with the VFWD and separate financial statements are not prepared for the VFWDFC.
B. Basis of Presentation
These Basic Financial Statements are prepared in conformity with accounting principles generally accepted in the United States of America as applied to governmental agencies. The Governmental Accounting Standards Board is the acknowledged standard setting body for establishing accounting and financial reporting standards followed by governmental entities in the United States of America.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 77 The City’s financial position and results of operations are presented from two perspectives in the following two sets of financial statements:
Government-wide Statements: The government-wide financial statements, including the Statement of Net Position and the Statement of Activities, report the financial activities of the primary government (the City) and its blended and discretely presented component units.
Governmental activities, which normally are supported by taxes and intergovernmental revenues, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support.
Fiduciary activities of the City, which are custodial in nature, are not included in these statements and are presented separately. Eliminations have been made to minimize the double counting of internal activities. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental and business-type activities.
The Statement of Activities presents a comparison between direct expenses and program revenues for each function of the City. Direct expenses are those that are specifically associated with a program or function. Certain indirect costs are included in program expenses reported for individual functions and activities. Program revenues include (a) charges paid by the recipients of goods or services offered by the programs, (b) operating grants and contributions that are restricted to meeting the operational needs of a particular program, and (c) capital fees, grants and contributions that are restricted to financing the acquisition or construction of capital assets. Revenues that are not classified as program revenues are presented as general revenues.
The City may pay for its programs with a combination of cost-reimbursement grants, categorical block grants, and general revenues. Thus, both restricted and unrestricted net position may be available to finance program expenditures. The City’s policy is to first apply restricted grant resources to such programs, followed by general revenues if necessary.
Fund Financial Statements: In addition to the government-wide statements described above, the City also presents Fund Financial Statements. The accounts of the City are organized on the basis of funds. A fund is a separate accounting entity with a self-balancing set of accounts. Each fund is established for the purpose of accounting for specific activities in accordance with applicable regulations, restrictions or limitations. The City accounts for its operations in governmental, proprietary and fiduciary funds, which include the following categories:
Governmental Funds:
General Fund – To account for resources traditionally associated with general government operations of the City, including Measure B Transaction tax and Measure P sales tax and the related expenditures, and pre-1990 Successor Agency loans and the related revenues, that are not required legally or by sound financial management to be accounted for in another fund.
Special Revenue Funds – To account for the proceeds of specific revenue sources that are legally restricted to be expended for specified purposes.
Debt Service Funds – To account for the servicing of long-term debt not being financed by business-type funds.
Capital Projects Funds – To account for capital outlays including the acquisition and construction of capital improvements.
Permanent Funds – To account for and report resources that are restricted to the extent that only earnings, and not principal, may be used for purposes that support the reporting government’s programs — that is, for the benefit of the government or its citizenry.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 78 Proprietary Funds:
Enterprise Funds – To account for operations that are financed substantially through user fees and are operated in a manner similar to private business enterprises.
Internal Service Funds – To account for the financing of goods and services provided by one City department to other departments on a cost reimbursement basis.
Fiduciary Funds:
Custodial Funds – To report fiduciary activities that are not held in a trust or equivalent arrangement.
Private–Purpose Trust Funds – To report trust arrangements under which principal and income benefit other governmental entities.
The financial activities of these funds are excluded from the government-wide financial statements, but are presented in separate Fiduciary Fund financial statements.
C. Basis of Accounting
The government-wide, proprietary, and fiduciary fund financial statements are reported using the economic resources measurement focus and the full accrual basis of accounting. Revenues are recorded when earned and expenses are recorded at the time liabilities are incurred, regardless of when the related cash flows take place.
Governmental Funds: Governmental funds are used to report the majority of the City’s programs. These funds are reported in the Fund Financial Statements on the modified accrual basis of accounting, with a focus on current financial resources. This basis differs from the accrual basis of accounting used to report the government- wide financial statements and proprietary and fiduciary fund financial statements.
Revenues are recognized when measurable and available. The City considers revenues reported in the governmental funds to be available if the revenues are collected within ninety days after year-end. This period is extended to one year for grant programs. Revenues susceptible to accrual include taxes, intergovernmental revenues, charges for services and interest revenue. Non-exchange transactions, in which the City gives or receives value without directly receiving or giving equal value in exchange, include taxes, grants, entitlements, and donations. Revenue from grants, entitlements, and donations is recognized in the fiscal year in which all eligibility requirements have been satisfied.
Expenditures are recorded when the related fund liability is incurred, except for principal and interest on general long-term debt, compensated absences and claims payable, which are recognized as expenditures to the extent they have matured. Governmental capital asset acquisitions are reported as expenditures in governmental funds.
Proceeds of governmental long-term debt and acquisitions under capital leases are reported as other financing sources.
Proprietary Funds: The proprietary funds of the City are reported on the accrual basis of accounting in the Fund Financial Statements. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as non-operating revenues. Operating expenses are those expenses that are essential to the primary operations of the funds. All other expenses are reported as non-operating expenses.
D. Major Funds
The Fund Financial Statements focus on the individual major funds of the City, each of which is displayed in a separate column, and the aggregate of remaining funds, which are labeled as non-major funds. Major funds are defined as funds with assets and deferred outflows of resources, liabilities and deferred inflows of resources, revenues, expenditures, or expenses equal to ten percent of their fund-type total, and five percent of the grand total, or other funds of reporting significance.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 79 The City reports the following major governmental funds in the accompanying Fund Financial Statements:
General Fund – This is the City’s primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
Housing Authority Special Revenue Fund – is used to account for monies received and expended on housing assistance to low and moderate income families and the assets and liabilities assumed from the Housing Fund of the Former Redevelopment Agency upon the dissolution as of February 1, 2012. Funds are provided by receipts from the Federal Section 8 Housing and Urban Development (HUD) programs.
Capital Outlay Fund - is used to account for the expenditure of the General Fund and grant funded capital projects, including acquisitions and improvements of public property, public works projects, facilities, equipment and systems.
Mare Island Conversion Capital Projects Fund – accounts for monies received from federal grants which are used for activities relating to the conversion of the Mare Island Naval Shipyard to civilian use.
The City reports the Water Fund as major enterprise fund in the accompanying Fund Financial Statements.
Water Fund – is used to account for the production and distribution of water to residents and businesses located within the City. Water service is also provided to Lakes District and Travis Air Force Base customers outside the City limits.
The City also reports the following fund types:
Internal Service Funds: These funds account for fleet maintenance and replacement, workers' compensation and general liability self-insurance programs, payroll and retiree health benefits, all of which are provided to other departments on a cost- reimbursement basis. Revenues are recognized based on cycle billings rendered to customers.
Fiduciary Funds: Trust funds account for assets held by the City as an agent for various functions. Custodial funds are used to account for assets held by the City as a fiduciary for the bondholders of the improvement and assessment land-based debt districts within the City. The Successor Agency to the Redevelopment Agency Private-Purpose Trust Fund accounts for the accumulation of resources to be used for payments at appropriate amounts and times in the future.
E. Cash and Cash Equivalents
For purposes of the Statement of Cash Flows, cash equivalents are defined as cash and investments which are considered to be liquid assets for purposes of measuring cash flows. Cash and investment of all funds are pooled with the City’s pooled cash and investments, and are considered cash and cash equivalents because the pool is used essentially as a demand deposit account from the standpoint of the funds. Investments are recorded at fair value; changes in fair value are included with investment income in the operating statements.
F. Materials, Parts, and Supplies
City materials, parts and supplies are held for consumption and are valued at average cost. Enterprise fund supplies consist of materials and supplies which are held for future use. General Fund supplies are recorded as an expenditure at the time individual supply items are consumed.
VFWD supplies inventories are valued at cost and follow a first-in-first-out (FIFO) flow. This flow approximates market because ending inventory consists of the most recent items purchased. Inventories are recorded as expenses when consumed rather than when purchased.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 80 G. Land Held for Redevelopment
Land held for redevelopment is stated at the lower of historical cost or net realizable value, if estimable. Net realizable value equals the agreed-upon sales price when a disposition agreement has been reached with a developer.
H. Prepaids
Certain payments to vendors reflect costs applicable to future accounting periods and are recorded as prepaid items in both the government-wide and fund financial statements. The cost of prepaid items is recorded as expenditures/expenses when consumed rather than when purchased.
I. Deferred Outflows/Inflows of Resources
In addition to assets, the statement of net position or balance sheet reports a separate section for deferred outflows of resources. This separate financial statement element, deferred outflows of resources, represents a consumption of net assets that applies to a future period(s) and so will not be recognized as an outflow of resources (expense/expenditure) until then. The City has three types of items that qualify for reporting in this category. An unamortized loss on refunding of debt results from the difference in the carrying value of refunded debt and its reacquisition price. This amount is deferred and amortized over the shorter of the life of the refunded or refunding debt. The City also has deferred outflows and inflows of resources related to pensions and OPEB as discussed in Note 10 and 11, respectively.
In addition to liabilities, the statement of net position or balance sheet reports a separate section for deferred inflows of resources. This separate financial statement element, deferred inflows of resources, represents an acquisition of net assets that applies to a future period(s) and so will not be recognized as an inflow of resources (revenue) until that time. The City has one type of item, which arises only under the modified accrual basis of accounting that qualifies for reporting in this category. Accordingly, the item, unavailable revenue, is reported only in the governmental funds balance sheet. The governmental funds report unavailable revenues from accounts receivable, inter-agency reimbursements, and interest from notes and loans receivable. These amounts are deferred and recognized as an inflow of resources in the period that the amounts become available. The City also has three items, which arise only under the full-accrual basis of accounting that are reported in this category, which are deferred inflows of resources related to leases, pensions and OPEB as discussed in Notes 5, 10 and 11, respectively.
J. Property Tax Revenues
Solano County assesses properties and bills, collects, and distributes property taxes to the City. The County remits the entire amount levied and handles all delinquencies, retaining interest and penalties. Secured and unsecured property taxes are levied on January 1 of the preceding fiscal year. Property tax revenues are recognized by the City in the fiscal year they are assessed, provided they become available as defined above.
Secured property tax is due in two installments, on November 1 and March 1, and becomes a lien on January 1.
It becomes delinquent after December 10 and April 10, respectively. Unsecured property tax is due on July 1, and becomes delinquent on August 31. The term “unsecured” refers to taxes on personal property other than real estate, land and buildings. These taxes are secured by liens on the property being taxed.
K. Estimates and Assumptions
The preparation of financial statements in conformity with generally accepted accounting principles (GAAP) requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 81 L. Fair Value Measurements
Fair value is defined as the price that would be received to sell an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. The fair value hierarchy categorizes the inputs to valuation techniques used to measure fair value into three levels based on the extent to which inputs used in measuring fair value are observable in the market.
Level 1 inputs are quoted prices (unadjusted) in active markets for identical assets or liabilities.
Level 2 inputs are inputs – other than quoted prices included within level 1 – that are observable for an asset or liability, either directly or indirectly.
Level 3 inputs are unobservable inputs for an asset or liability.
If the fair value of an asset or liability is measured using inputs from more than one level of the fair value hierarchy, the measurement is considered to be based on the lowest priority level input that is significant to the entire measurement.
M. Leases
Lessee: The City is a lessee for noncancellable leases of equipment. The City recognizes a lease liability and an i n t a n g i b l e r i g h t - t o - u s e l e a s e a s s e t ( l e a s e a s s e t ) i n t h e f i n a n c i a l s t a t e m e n t s . T h e C i t y r e c o g n i z e s l e a s e l i a b i l i t i e s with an initial, individual value of $5,000 or more.
At the commencement of a lease, the City initially measures the lease liability at the present value of payments expected to be made during the lease term. Subsequently, the lease liability is reduced by the principal portion of lease payments made. The lease asset is initially measured as the initial amount of the lease liability, adjusted for lease payments made at or before the lease commencement date, plus certain initial direct costs. Subsequently, t h e r i g h t - t o - u s e l e a s e a s s e t i s a m o r t i z e d o n a s t r a i g h t - l i n e b a s i s o v e r t h e s h o r t e r o f t h e l e a s e t e r m o r i t s u s e f u l l i f e .
Key estimates and judgments related to leases include how the City determines (1) the discount rate it uses to discount the expected lease payments to present value, (2) lease term, and (3) lease payments. • The City uses the interest rate charged by the lessor as the discount rate. When the interest rate charged by the lessor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for leases.
• The lease term includes the noncancellable period of the lease. Lease payments included in the measurement of the lease liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise.
The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease asset and liability if certain changes occur that are expected to significantly affect the amount of the lease liability.
Lease assets are reported with other capital assets and lease liabilities are reported separately on the statement of net position.
Lessor: The City is a lessor for a noncancellable leases of various City facilities. The City recognizes a lease receivable and a deferred inflow of resources in the financial statements.
At the commencement of a lease, the City initially measures the lease receivable at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflow of resources is initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date.
Subsequently, the deferred inflow of resources is recognized as revenue over the life of the lease term.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 82 Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts. • The City uses its estimated incremental borrowing rate as the discount rate for leases. • The lease term includes the noncancellable period of the lease. Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee.
N. Subscription-Based Information Technology Arrangements The City of Vallejo is a subscriber for a noncancellable subscription of information technology services. The City o f V a l l e j o r e c o g n i z e s a s u b s c r i p t i o n l i a b i l i t y a n d a n i n t a n g i b l e r i g h t - t o - u s e s u b s c r i p t i o n a s s e t ( s u b s c r i p t i o n a s s e t ) i n t h e g o v e r n m e n t - w i d e f i n a n c i a l s t a t e m e n t s . T h e C i t y o f V a l l e j o r e c o g n i z e s s u b s c r i p t i o n l i a b i l i t i e s w i t h a n i n i t i a l , individual value of $50,000 or more.
At the commencement of a subscription, the City of Vallejo initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. The subscription asset is initially measured as the initial amount of the subscription liability, adjusted for subscription payments made at or before the subscription commencement date, plus certain initial direct costs. Subsequently, the subscription asset is a m o r t i z e d o n a s t r a i g h t - l i n e b a s i s o v e r i t s u s e f u l l i f e . K e y e s t i m a t e s a n d j u d g m e n t s r e l a t e d t o s u b s c r i p t i o n s i n c l u d e how the City of Vallejo determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) lease term, and (3) subscription payments.
The City of Vallejo uses the interest rate charged by the vendor as the discount rate. When the interest rate charged by the vendor is not provided, the City of Vallejo generally uses its estimated incremental borrowing rate as the discount rate for subscriptions.
The subscription term includes the noncancellable period of the subscription. Subscription payments included in the measurement of the subscription liability are composed of fixed payments that the City of Vallejo is reasonably certain to exercise.
The City of Vallejo monitors changes in circumstances that would require a remeasurement of its subscriptions and will remeasure the subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability.
Subscription assets are reported with other capital assets and subscription liabilities are reported separately on the statement of net position.
O. Budgeting Procedures
The City follows these procedures in establishing the budgetary data reflected in the financial statements:
The City Charter requires the City Manager to submit to the City Council a proposed operating budget by May 16 for the fiscal year commencing the following July 1. The operating budget includes proposed expenditures and the financing sources for all funds. Public hearings are conducted to obtain taxpayer comments. The budget is legally enacted through passage of a resolution. The City does not adopt annual budgets for its Capital Projects and Special Revenue Funds for Multi-year grants. Capital Project and multi-year budgets and funding are approved by the City Council as a multi-year budget on a project-by-project basis to cover the total estimated costs of all phases of specific projects that spans over several fiscal years. The Justice Assistance Grant Fund #149 and Office of Traffic Safety Fund #146 did not adopt a budget for the fiscal year ended June 30, 2024, as they are special revenue funds with multi-year project based budgets.
Level of Budgetary Control - Budgetary control is established at the following levels: a) General Fund – Department level; b) Other Funds – Fund level. The City Manager may authorize line item budget transfers within a General Fund department, or within a fund other than the General Fund.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 83 Budget Amendments - City Council authorization is required to transfer appropriations between General Fund departments, or between funds. City Council authorization is also required to establish or amend capital project budgets. The Budget may be amended at such times as the City Council may deem necessary, in accordance with the requirements and procedures contained in the City Charter and Municipal Code.
Budgets are adopted on a basis consistent with Generally Accepted Accounting Principles. Budgetary comparisons presented are on this budgetary basis and reflect applicable amendments and revisions.
Expenditures in Excess of Budget
The General Fund had expenditures in excess department budgets for the following departments for information technology by $98,808, Legislative and advisory by $10,299, capital outlay of $63,391 and debt service by $24,764. The total expenditures did not exceed the total budgeted expenditures within the General Fund.
The following funds had fund expenditures in excess of budget as follows:
State Gas Tax Fund $ 326,990
Hiddenbrooke Community Services District Fund $ 24,507
Traffic Offender/Vehicle Impound $ 3,832
The excess expenditures were covered by accumulated fund balance.
NOTE 2 - CASH AND INVESTMENTS
A. Administration
Cash and Investments are administered separately by the City and by the discrete component unit, the VFWD.
The respective cash and investment positions as of June 30, 2024, for each of these legal entities is as follows:
Primary Government
City Fiduciary Funds Subtotal Component Unit Total
Cash on Hand $ 8,950 $ - $ 8,950 $ 5,078 $ 14,028
Deposits 4,574,509 - 4,574,509 2,927,550 7,502,059 Investments 376,082,063 7,701,216 383,783,279 52,294,259 436,077,538 $ 380,665,522 $ 7,701,216 $ 388,366,738 $ 55,226,887 $ 443,593,625
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (CONTINUED) 84 B. Classification
Cash and investments are classified in the financial statements as shown below:
Reported on the Statement of Net Position
Primary Government:
Cash and Investments: 1
City
General Fund, including Measure B $ 54,834,619
Other Funds 230,244,881
Total, City $ 285,079,500
Housing Authority 4,184,850
289,264,350
Restricted Cash and Investments (held by fiscal agents): 2 City 90,694,414
Housing Authority 706,758
91,401,172
Subtotal Primary Government Cash and Investments 380,665,522 Discrete Component Unit (VFWD):
Cash and Investments 53,957,471
Restricted Cash and Investments (held by fiscal agents) 3 1,269,416 Subtotal Component Unit Cash and Investments 55,226,887 Reported on the Statement of Fiduciary Net Position
Custodial Funds
Cash and Investments 3,305,867
Restricted Investments (held by fiscal agents) 3,853,334 Total Custodial Funds 7,159,201
Successor Agency to the Redevelopment Agency
Private-Purpose Trust Fund
Cash and Investments 324,870
Restricted Investments (held by fiscal agents) 217,145 Total, Successor Agency to the Redevelopment Agency 542,015 Subtotal Fiduciary Funds Cash and Investments 7,701,216 Total Cash and Investments $ 443,593,625
1. These balances are available for operations of the City’s various programs and funds subject to their respective grant, fee, assessment, contract, or other restrictions.
2. These balances are held by the City of third party fiscal agents pursuant to debt covenants or other agreements.
3. These balances are held by third party fiscal agents pursuant to debt covenants or other agreements.
C. Policies
The City’s dependence on property tax receipts, which are received semi-annually, requires it to maintain significant cash reserves to finance operations during the remainder of the year. The City pools idle cash from all sources and all funds, except Cash with Fiscal Agents, Housing Authority, and the VFWD, so that it can be invested to achieve a reasonable rate of return, consistent with safety and liquidity.
Cash receipts and disbursements, including payroll, are processed by City staff which administers activities for the following separate legal entities: the City, the Successor Agency to the Redevelopment Agency, the Housing Authority, and the Vallejo Homeless Navigation Center.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
85 These cash transactions are recorded in the City’s main checking account with transactions allocated to each applicable general ledger fund of the City and its blended component units pending periodic reimbursement and settlement of inter-agency balances. As of June 30, 2024, the City held balances of cash for each of the above entities representing their equity in the City’s checking account.
Investment income is allocated among funds on the basis of average month-end cash and investment balances in these funds.
California Law requires banks and savings and loan institutions to pledge government securities with a market value of 110% of the City’s cash on deposit, or first trust deed mortgage notes with a market value of 150% of the deposit, as collateral for these deposits. Under California Law this collateral is held in a separate investment pool by another institution in the City’s name and places the City ahead of general creditors of the institution.
The City invests in individual investments and in investment pools. Individual investments are evidenced by specific identifiable securities instruments, or by an electronic entry registering the owner in the records of the Depository Trust Company, known as the book entry system. In order to safeguard the City’s funds, the City employs a bank to act as custodian of certain City-managed investments, regardless of their form. The assets are held in the name of the City and are not comingled with bank assets. Funds held in investment pools are also custodied in the aggregate but held in the City’s name and tracked by the pool’s transfer agent.
The City’s investments are carried at fair value, as required by generally accepted accounting principles. The City adjusts the carrying value of its investments to reflect their fair value at each fiscal year end, and it includes the effects of these adjustments in income for that fiscal year.
Cash and cash equivalents, including restricted cash, are considered to be liquid assets for purpose of measuring cash flows.
D. Investments Authorized by the California Government Code and the City’s Investment Policy The City’s Investment Policies and the California Government Code permit the following investments, provided the credit ratings of the issuers are acceptable and approved percentages and maturities are not exceeded. The tables below also identify certain provisions of the California Government Code, or Investment Policies if more restrictive, that addresses interest rate risk, credit risk and concentration of credit risk. This table does not address investments of debt proceeds held by bond trustees that are governed by the provisions of debt agreements, rather than the general provisions of the California Government Code or investment policies.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
86 City and Housing Authority
The City’s investment policy and the California Government Code allow the City and the Housing Authority to invest in the following investments:
Maximum Maximum
Maximum Percentage Maximum in Investment
Authorized Investment Type Maturity of Portfolio Portfolio in One Issuer U.S. Government Treasury Bills, Bonds and Notes 5 years No Limit No Limit No Limit U.S. Government Agencies and Government 5 years No Limit 50% 30% Repurchase Agreements N/A No Limit 20% No Limit
Bankers Acceptances 180 Days A 40% 5%
Commercial Paper 270 Days Highest Rating 40% 5%
Corporate Medium Term Notes 5 Years A 30% 5%
Certificates of Deposit 5 Years No Limit 20% No Limit
Negotiable Certificates of Deposit 5 Years A 30% 5%
Local Agency Investment Fund State Pool On Demand No Limit Up To Statutory Limits No Limit State of California or Local Agency Bonds 5 Years A 10% 5% Mutual Funds 4 Years Highest Rating 10% 5%
Money Market Mutual Funds 4 Years Highest Rating 20% 5% Asset Backed Securities 5 Years AA 20% 5%
Mortgage Backed Securities or Collateralized Mortgage 5 Years AA 20% 5% Local Government Investment Pools On Demand No Limit No Limit No Limit Municipal Bonds of Other States 5 Years A 10% 5%
Supranationals 5 Years AA 30% 10%
VFWD
VFWD’s investment policy and the California Government Code allow the VFWD to invest in the following investments:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
87 Maximum
Percentage
Authorized Investment Type of Portfolio
Government Agency obligations (callable) 20%
Medium Term Corporate Notes, Rate A or better 30%
Certificates of Deposit - Non-Negotiable None
California Local Agency Investment Fund None
Shares in Beneficial Interest Money Market Funds, two highest ratings 20% United States Treasury Securities None
Certificates of Deposit - Non-negotiable 30%
Bankers' Acceptances 40%
Commercial Paper of "Prime" Quality 25%
Repurchase Agreements None
Municipal Securities 30%
Asset Backed Securities 20%
Supranationals 30%
E. Public Agencies Postemployment Trust
On August 22, 2017, the City Council adopted resolution 17-094 N.C. approving the adoption of the Public Agencies Postemployment Trust administered by Public Agency Retirement Services (PARS). The Trust is an irrevocable trust and qualifies as an Internal Revenue Section 115 trust. This trust will assist the City in mitigating the CalPERS contribution rate volatility. Investments of funds held in Trust are governed by the Investment Guideline Document for the investment account and by the agreement for administrative services with PARS, rather than the general provisions of the California Government Code or the City’s investment policy. The City elected a discretionary investment approach which allows the City to maintain oversight of the investment management, control on target yield and the portfolio’s risk tolerance, under the Moderate HighMark PLUS Mutual Fund investment option. The assets in the Trust will eventually be used to fund pension plan obligations.
F. Investments Authorized by Debt Agreements
The City and VFWD must maintain required amounts of cash and investments with trustees or fiscal agents under the terms of certain debt issues. These funds are unexpended bond proceeds or are pledged reserves to be used if these entities fail to meet their obligations under these debt issues. The California Government Code requires these funds to be invested in accordance with resolutions, bond indentures or State statutes. The table below identifies, by entity, the investment types that are authorized for investments held by fiscal agents. The table also identifies certain provisions of these debt agreements.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
88 City Debt Agreements
Maximum Maximum
Maximum Minimum Credit Percentage Investment
Authorized Investment Type Maturity Quality of Portfolio in One Issuer U.S. Treasury Obligations No Limit No Limit No Limit No Limit U.S. Government Agency Obligation No Limit Two Highest Ratings No Limit 10% Money Market Funds No Limit Prime-1/AA-m No Limit No Limit Government Money Market Funds 360 Days Highest Rating No Limit No Limit Insured FDIC Deposits No Limit No Limit No Limit No Limit Interest-Bearing & Time Deposits - Banks or Savings No Limit A-1 No Limit No Limit Bankers Acceptances 180 Days Two Highest Ratings No Limit No Limit Commercial Paper 270 Days A-1+ No Limit No Limit
Repurchase Agreements 180 Days A No Limit No Limit
Tax-Exempt Obligations No Limit Two Highest Ratings No Limit No Limit Rated Investment Agreements and Contracts No Limit Three Highest Ratings No Limit No Limit State (or Municipality) Bonds/Notes No Limit Two Highest Ratings No Limit No Limit Local Agency Investment Fund No Limit No Limit No Limit No Limit Local Government Investment Pools No Limit No Limit No Limit No Limit Taxable Bonds No Limit A-1 No Limit No Limit
G. 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 manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments and by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations.
Information about the sensitivity of the fair values of these investments (including investments held by bond trustees) to market interest rate fluctuations is provided by the following tables that show the distribution of these investments by maturity date or earliest call date at June 30, 2024.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
89 Investment Type
Less than 1
Year 1 - 3 Years 3 - 5 Years Total
Held by the City and its Blended
Component Units:
U.S. Government Agencies $ 6,255,184 $ 7,482,899 $ 3,989,681 $ 17,727,764 Asset Backed Securities 824,964 2,175,748 2,474,703 5,475,415 Supranational - - 1,752,668 1,752,668
Corporate Medium Term Notes 3,303,176 7,442,930 14,796,593 25,542,699 U.S. Treasury Notes 79,249,117 18,392,125 23,151,910 120,793,152 California Local Agency Investment
Fund 62,975,024 - - 62,975,024
Collateralized Mortgage Obligation 751,303 - 1,769,680 2,520,983 Money Market Mutual Funds 52,234,088 - - 52,234,088 Held by Fiscal Agents:
PARS Post - Employment Benefit
Trust -
HighMark PLUS Mutual Fund 22,162,616 - - 22,162,616 Money Market Mutual Funds 72,598,870 - - 72,598,870 Total Investments $ 300,354,342 $ 35,493,702 $ 47,935,235 $ 383,783,279 VFWD
Investment Type Less than 1 Year 1 - 5 Years Total
Government Agency Obligations $ 195,426 $ 2,664,616 $ 2,860,042 US Treasury 31,292,190 4,339,263 35,631,453
Asset Backed Securities - 654,486 654,486
Supranationals 261,981 - 261,981
Medium Term Corporate Notes 757,743 2,057,204 2,814,947 Collateralized Mortgage Obligation 97,733 713,246 810,979 California Local Agency Investment Fund 5,102,140 - 5,102,140 Money Market Funds 2,888,815 - 2,888,815
Held by Trustee:
Money Market Mutual Funds 1,269,416 - 1,269,416
Total $ 41,865,444 $ 10,428,815 $ 52,294,259
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
90 Local Agency Investment Fund
The City and the VFWD are participants in the Local Agency Investment Fund (LAIF) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The balance is available for withdrawal on demand and is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis, however, each account is limited to fifteen transactions per month.
Included in LAIF’s investment portfolio are collateralized mortgage obligations, mortgage-backed securities, other asset-backed securities, loans to certain state funds, and floating rate securities issued by federal agencies, government-sponsored enterprises, United States Treasury Notes and Bills, and corporations.
H. Credit Risk
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 a nationally recognized statistical rating organization.
Presented below is the actual rating as of June 30, 2024 for the City and Housing Authority by investment type as provided by Moody’s investment rating system.
City and Housing Authority
Investment Type Aaa AA1 to AA3 A1 to A3 Total
Held by the City and its Blended Component Units:
U.S. Government Agencies
Non-Callable $ 17,727,764 $ - $ - $ 17,727,764
Asset Backed Securities 5,475,415 - - 5,475,415
Corporate Medium Term Notes 200,742 1,736,182 23,605,775 25,542,699 Collateralized Mortgage Obligation 2,520,983 - - 2,520,983 Supranational 1,752,668 - - 1,752,668
Held by Fiscal Agents
Money Market Mutual Funds 72,598,870 - - 72,598,870 Total Rated Investments $ 100,276,442 $ 1,736,182 $ 23,605,775 125,618,399 Exempt:
U.S. Treasury Notes 120,793,152
Non-Rated:
California Local Agency Investment Fund 62,975,024
Money Market Mutual Funds 52,234,088
PARS Post-Employment Benefit Trust
HighMark Plus Mutual Fund 22,162,616
Total Investments $ 383,783,279
VFWD
Presented below is the actual rating as of June 30, 2024 for the VFWD by investment type as provided by Standard and Poor’s investment rating system:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
91 Investment Type AAA/AAAm AA++/AA+AA- Total
Government Agency Obligations $ - $ 2,860,042 $ 2,860,042 US Treasury 35,631,453 - 35,631,453
Asset Backed Securities 654,486 - 654,486
Supranational 261,981 - 261,981
Medium Term Corporate Notes - 2,814,947 2,814,947
Collateralized Mortgage Obligation - 810,979 810,979 Money Market Funds 2,888,815 - 2,888,815
Money Market Mutual Funds 1,269,416 - 1,269,416
$ 40,706,151 $ 6,485,968 47,192,119
California Local Agency Investment Funds 5,102,140
Total Investments $ 52,294,259
I. Fair Value Hierarchy
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 fair value of the assets.
Level 1 inputs are quoted prices in an active market for identical assets; Level 2 inputs are significant other observable inputs; and Level 3 inputs are significant unobservable inputs.
City Housing Authority
The following is a summary of the fair value hierarchy of the fair value of investments of the City and Housing Authority as of June 30, 2024:
Level 2 Total
Investments by Fair Value Level:
U.S. Government Agencies $ 17,727,764 $ 17,727,764
Asset Backed Securities 5,475,415 5,475,415
Supranational 1,752,668 1,752,668
Corporate Medium Term Notes 25,542,699 25,542,699
U.S. Treasury Notes 120,793,152 120,793,152
Collateralized Mortgage Obligation 2,520,983 2,520,983 Subtotal $ 173,812,681 173,812,681
Investments Measured at Amortized Cost:
Money Market Mutual Funds 52,234,088
PARS Post-Employment Benefit Trust-
HighMark PLUS Mutual Fund 22,162,616
Held with Fiscal Agent:
Money Market Mutual Funds 72,598,870
Investments Not Subject to Fair Value Hierarchy:
California Local Agency Investment Fund 62,975,024
Total Investments $ 383,783,279
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
92 Asset Backed Securities, classified in Level 2 of the fair value hierarchy, are valued using IDC CMO pricing service. U.S. Government Agencies, U.S. Treasury Notes, Corporate Medium Term Notes and Collateralized Mortgage Obligations, classified in Level 2 of the fair value hierarchy, are valued using IDC Institutional Bond Pricing. These prices are obtained from various pricing sources by our custodian bank. Fair value is defined as the quoted market value on the last trading day of the period.
VFWD
The following is a summary of the fair value hierarchy of the fair value of investments of the VFWD as of June 30, 2024:
Level 2 Total
Investments by Fair Value Level:
U.S. Government Agencies $ 2,860,042 $ 2,860,042
U.S. Treasury Notes 35,631,453 35,631,453
Asset Backed Securities 654,486 654,486
Supranationals 261,981 261,981
Medium Term Corporate Notes 2,814,947 2,814,947
Collateralized Mortgage Obligation 810,979 810,979
Subtotal $ 43,033,888 43,033,888
Investments Measured at Amortized Cost:
Money Market Mutual Funds 2,888,815
Held with Fiscal Agent:
Money Market Mutual Funds 1,269,416
Investments Not Subject to Fair Value Hierarchy:
California Local Agency Investment Fund 5,102,140
Total Investments $ 52,294,259
The District categorizes the fair value measurements of its investments based on the fair value hierarchy established by generally accepted accounting principles. The hierarchy, which has three levels, is based on the valuation inputs used to measure an asset’s fair value: Level 1 inputs are quoted prices in active markets for identical assets; Level 2 inputs are significant other observable inputs; Level 3 inputs are significant unobservable inputs. The District does not have any investments that are measured using Level 1 and 3 inputs. Fair values are based on quoted market prices for similar securities in markets that are not active, and model-based techniques for which all significant assumptions are observable in the market, resulting in a Level 2 valuation.
J. Concentration Risk
The City and the VFWD investment policies regarding the amount that can be invested in any one issuer are stipulated by the California Government Code. However, these entities are required to disclose investments that represent a concentration of 5% or more of investments in any one issuer, held by individual Funds in the securities of issuers other than U.S. Treasury securities, mutual funds and external investment pools.
At June 30, 2024, these entities’ investments that represent a concentration of investments in the securities of any individual issuers, other than U.S. Treasury securities, mutual funds or external investment parts, are set forth below.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
93 City Concentration Risk
City did not have any investment that qualified over the concentration risk.
VFWD Concentration Risk
The VFWD had no investments in the securities of any individual issuer, other than U.S. Treasury securities, mutual funds, and external investment pools, that represent 5% or more of total investments for the fiscal year ended June 30, 2024.
K. Custodial Credit Risk
The custodial credit risk for cash deposits is the risk that, in the event of the failure of the financial institution holding the deposits, the depositor will not be able to recover the value of its deposits.
At June 30, 2024, the VFWD deposit and investment balances were exposed to custodial risk as follow:
Deposits - uninsured and collateralized with securities held by the pledging bank’s trust department or agent not in the District’s name $4,426,405.
NOTE 3 - INTERFUND TRANSACTIONS
A. Transfers Between Funds
Transfers between funds during the fiscal year ended June 30, 2024, were as follows:
Fund Making Transfers Fund Receiving Transfers Amount Transferred General Fund Capital Outlay fund $ 23,002,254
(A), (C ), (D),
(F)
Other Governmental Funds 1,273,563 (A), (B)
Other Enterprise Funds 1,870,054 (C), (B)
Fleet Maintenance/Replacement
Internal Service Fund 982,341 (A)
Special Revenue Funds:
Other Governmental Funds General Fund 153,502 (A)
Other Governmental Funds 769,000 (C)
Capital Projects Funds:
Other Governmental Funds General Fund 510,912 (A)
Housing Authority Special Revenue
Fund 160,000 (E)
Total $ 28,721,626
(A) To Fund City Operations
(B) To Fund Debt Service Payments
(C) To Fund Capital Program Projects
(D) To Transfer Technology Surcharge Fees to Capital Projects Fund (E) To Fund Affordable Housing
(F) To Fund Participatory Budgeting Projects
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 2 - CASH AND INVESTMENTS (CONTINUED)
94 B. Current Interfund Balances
As of June 30, 2024, the City’s Workers’ Compensation Insurance Internal Service Fund had provided $3,155,682 in short-term lending to other governmental funds with deficit cash positions. It is the City’s practice to use the City’s Workers’ Compensation Insurance Internal Service Fund to cover temporary cash shortfalls, as this fund is primarily funded by the General Fund. Additionally, the Workers’ Compensation Insurance Internal Service Fund has built a sufficient cash reserve to be able to cover the temporary cash shortfalls in other funds. These balances are expected to be repaid shortly after the end of the fiscal year upon receipt of grant or other reimbursements.
Due from Other Funds Due to Other Funds
Governmental Fund:
Other Governmental $ - $ 3,155,682
Internal Service Fund:
Workers' Comp 3,155,682 -
Total $ 3,155,682 $ 3,155,682
C. Long-Term Interfund Advances
At June 30, 2024 the funds below made advances that are not expected to be repaid within the next year:
(Asset) (Liability)
Fund Making Advance Funds Receiving Advance Amount
General Fund Fiber Optic Enterprise Fund $ 680,000
Marina Enterprise Fund 7,098,950
Golf Enterprise Fund 4,706,950
Vallejo Station Parking Enterprise Fund 1,359,984
Allowance for Collectability (13,165,884)
Net Advances Total $ 680,000
Fiber Optic Fund
In Fiscal Year 2018, the General Fund advanced $830,000 to the Fiber Optic Enterprise Fund to provide a capital and operating reserve, allowing the project to move forward until revenues commence. Amended payments of $150,000 are due annually on June 30, 2025 through June 30, 2028 and one final payment of $80,000 on June 30, 2029 to allow the fund to generate sufficient revenues to make the debt service payments.
Subsidies Allowance
Cumulative to June 30, 2024, the General Fund has advanced $7,098,950 to the Marina Enterprise Fund, $4,706,950 to the Golf Enterprise Fund and $1,359,984 to the Vallejo Station Parking Enterprise Fund. These General Fund advances are offset with a 100% allowance for collectability since there are currently no repayment plans established for these loans. However, the City is anticipating that these funds would have sufficient resources to make repayments in the future with the increased user fees, proposed Golf and Housing development, and downtown parking improvements and enforcements.
D. Internal Balances
Internal balances are presented in the Entity-wide financial statements only. They represent the net interfund receivables and payables remaining after the elimination of all such balances within governmental and business- type activities.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 3 - INTERFUND TRANSACTIONS (CONTINUED)
95 NOTE 4 - NOTES & LOANS RECEIVABLE
A. Summary of Notes and Loans Receivable
The following notes and loans receivable were outstanding as of June 30, 2024. These loans are not anticipated to be fully collected within the year:
Type of Loans Fund Type Amounts
Primary Government and Blended Component Units:
Housing Programs
Housing Authority Programs Major Governmental
Affordable Housing (20% Set Aside)
Eden Housing $ 1,600,000
Avian Glen 3,093,750
Citizen Housing 2,500,000
Marina Towers 551,759
Solano Vallejo AR, L.P-Solano Vista I 600,000
Single Family Residential 296,933
Temple Arts Lofts 750,000
Firm Foundation Community Housing 2,398,789
Accrued Interest 3,982,041
Residential Rehabilitation 246,592
Vallejo Housing Collaborative 672,532
16,692,396
HOME Program Non-Major Governmental
Avian Glen 900,000
Marina Towers 359,424
Temple Arts Lofts 495,734
Vallejo Housing Collaborative 100,000
Solano-Napa Habitat for Humanity 93,735
Vallejo PSH, LP 495,229
Single Family Residential 1,731,740
4,175,862
Community Development Block Grant Non-Major Governmental Reynaissance Family Center 920,362
Bay Area Community Services 240,000
Temple Art Lofts 400,000
Single Family Residential 245,489
1,805,851
Neighborhood Stabilization Program Non-Major Governmental Temple Arts Lofts 1,437,844
Community Housing Development Program 493,315
Single Family Residential 273,645
2,204,804
General Fund Major Governmental
Vallejo PSH, LLP 1,691,481
1,691,481
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE
96 Type of Loans Fund Type Amounts
Development Programs
Sereno Village Apartments
General Fund Major Governmental 1,093,881
Neighborhood Parks Fund Non-Major Governmental 195,990 1,289,871
Other Programs
General Fund- Temple Arts Lofts Major Governmental 23,821 Transportation Impact Mitigation Fund-
Temple Art Lofts Non-Major Governmental 89,088
112,909
Advances to Former Redevelopment Agency (Successor Agency) Empress Theater
Hiddenbrooke Overpass Fund Non-Major Governmental 248,874 Arts and Convention Center Fund Non-Major Governmental 1,997,092 Georgia Street Extension
Bridge Construction Fund Non-Major Governmental 257,962 2,503,928
Total Primary Government Notes and Loans Receivable 30,477,102 Total Notes and Loans Receivable $ 30,477,102
B. Affordable Housing and Residential Rehabilitation
On February 1, 2012, the Housing Authority elected to become the Housing Successor of the former Redevelopment Agency (RDA) under the provisions of AB 1484 and assumed the RDA housing assets. These assets include the following various loans granted to developers under the affordable housing programs. $ 1,600,000 In June 30, 2018, the Housing Authority entered into a loan agreement with Eden Housing, Inc., in the amount of $1,600,000. The proceeds of the loan were used to partially fund the plan, development, and construction of seventy-six housing units on Sacramento Street for extremely low-income individuals and households. The loan bears simple interest of 2% and is repayable from residual receipts as defined in the agreement. The loan will be secured by a deed of trust on the property and unpaid principal and interest is due on or before the fifty-fifth anniversary of the promissory note. As of June 30, 2022, the developer had drawn down the full $1,600,000 of the loan proceeds.
$ 3,093,750 In August 2004, the former Redevelopment Agency of the City of Vallejo entered into an acquisition loan agreement in the amount of $750,000 and a permanent financing loan agreement in the amount of $2,343,750 with Avian Glen. The loans were used to partially fund the construction of a multi-family residential housing complex containing 87 units. The term of the promissory note is 30 years at 3% interest per annum and repayable from surplus cash as defined in the agreement.
$ 2,500,000 In July 2003, the former Redevelopment Agency of the City of Vallejo entered into an acquisition loan agreement in the amount of $600,000 and a permanent financing loan agreement in the amount of $1,900,000 with Sereno Village Associates to partially fund the construction of a multi- family residential housing complex containing 125 units. It was agreed to defer repayment of these notes until the VSFCD note and City/GVRD notes are repaid in full. The term of the promissory note is 3% interest per annum with payments made from pro-rated share of Net Surplus Cash from the project.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE (CONTINUED)
97 $ 551,759 In August 2005, the former Redevelopment Agency of the City of Vallejo entered into a participation loan agreement in the amount of $750,000 with Marina Tower Associates for the purchase and rehabilitation of 155 residential apartment units. The term of the promissory note is 55 years at 3% interest per annum.
$ 600,000 In December 2002, the former Redevelopment Agency of the City of Vallejo entered into a loan agreement with the Builders Alliance for Affordable Housing II, L.P. in the original amount of $500,000 with a term of 30 years and 5 % simple interest to assist covering the costs for the development of a 96-unit senior housing project on the property commonly known as Solano Vista Senior Apartments. In December 2018, an assumption and assignment agreement was entered into between Builder Alliance for Affordable Housing II, L.P. and Solano Vallejo AR L.P., where the original note shall be cancelled and superseded by the amended and restated note.
The City capitalized $100,000 of accrued interest from the remaining loan balance. As a result of entering this agreement, the new principal loan balance is $600,000 with a term of 40 years and a simple interest rate of 5% starting December 2018.
$ 296,933 These various residential purchase and rehabilitation loan programs were offered to qualifying low- to moderate- income individuals by the former Redevelopment Agency through the Affordable Housing Special Revenue Fund. These loans are secured by first or second mortgages on the residential property and are insured by private guaranty mortgage insurance.
The terms vary greatly depending on the ability of the property owner to repay the loan. Interest rates on these loans range from 3.0% to 8.0% and the principal maturity dates range from 5 years to 30 years. Deferred interest loans are offered as well as below-market-rate 30-year loans.
Interest income is recorded as payments are received.
$ 750,000 In October 2010, the former Redevelopment Agency of the City of Vallejo entered into a loan agreement in the original amount of $750,000 with Temple Art Loft Associates, L.P. This loan will partially fund the acquisition and rehabilitation of two existing buildings at 707-715 Marin Street.
The term of the loan is payable either at the sale of the housing project or at 57 years, and a simple interest of 3% per annum.
$2,398,789 In March 2024, the Housing Successor Agency of the City of Vallejo and Firm Foundation Community Housing entered into a loan agreement with a principal sum of no more than $3,300,000. The purpose of this agreement is to effectuate the Permanent Support Housing project for 2441 Broadway Street by providing financial assistance to the Borrower to pay for certain costs associated with the development and construction of the Project, consisting of approximately 47affordable and/or PSH units plus 1 unrestricted manager’s unit. As of June 2024, only $2,398,789 has been drawn down. The term of the loan is payable either at the sale of the Housing project or at 55 years, and a simple interest of 3% per annum. $ 3,982,041 These are the accumulated accrued interest for the various developer loans under the affordable housing programs.
In addition, the Housing Authority had entered into loan agreements with the following developers under its residential purchase and rehabilitation programs:
$ 246,592 The residential rehabilitation loan is a single loan entered into December 2011 with Temple Art Lofts Associates, L.P. The principal shall be due and payable in full upon the 55th anniversary of the date of the note. As long as no Event of Default occurs prior to the maturity date, borrower shall not be obliged to pay periodic payments of principal and or interest on the principal amount.
The outstanding balance at June 30, 2024 remains at $246,592 and recorded in the Section 8 Operating Reserve Fund.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE (CONTINUED)
98 $ 672,532 In July 2014, the Housing Authority entered into a loan agreement with Vallejo Housing Collaborative, LLC, in the amount of $900,000. The proceeds of the loan will be used to partially fund the acquisition, rehab and operations of ten to twelve properties that are improved with housing to provide permanent housing for extremely low-income individuals and households transitioning from homelessness. The loan bears simple interest of 3% and is repayable from residual receipts as defined in the agreement. The loan is secured by up to two deeds of trust on the properties and unpaid principal and interest is due on or before the thirtieth anniversary of the promissory note. As of June 30, 2024, the developer has drawn down $672,532 of the loan proceeds. This amount is recorded in the Section 8 Operating Reserve Fund and Section 8 Administration Program Fund.
C. HOME Program, CDBG Program, and NSP Program
Various residential purchase and rehabilitation loan programs are offered to qualifying low- to moderate- income individuals by the City through the, HOME, CDBG and NSP Programs. The loan portfolio also includes loans made to affordable housing developers for rental housing projects. $ 900,000 In June 2006, the City entered into a loan agreement with Avian Glen to provide additional funding for the construction of a multi-family residential housing complex containing 87 units. The term of the promissory note is 30 years at 3% interest per annum. $ 359,424 In August 2005, the City entered into a loan agreement Marina Tower Associates in the amount of $500,000 for rehabilitation of a multi-family rental housing development offering affordable housing for low-income senior citizens. The term of the promissory note is 55 years at 3% interest per annum.
$ 495,734 In March 2011, the City entered into a loan agreement with Temple Art Loft Associates, L.P. to provide additional funding from HOME program for the construction and rehabilitation of 2 existing buildings located at 707-715 Marin Street. The term of the promissory note is 57 years at 3% interest per annum.
$ 100,000 In July 2014, the City entered into a loan agreement with Vallejo Housing Collaborative using HOME funds to partially fund the same project funded with loan from Vallejo Housing Authority.
The term of the promissory note is 30 years at 3% interest per annum and repayable from residual receipts as defined in the agreement.
$ 93,735 In July 2016, the City entered into a loan agreement with Solano-Napa Habitat for Humanity for the acquisition and development of owner-occupied affordable housing of a single-family home located at 760 Tregaskis Avenue in Vallejo. The loan term is 5 years at 0% simple interest and principal payments are deferred. Management is working on establishing new loan terms with the borrower.
$ 495,229 In December 2023, the City entered into a loan agreement with Vallejo PSH, L.P. to partially fund the construction costs of the Blue Oak Landing project at 2118 Sacramento Street. The term of the promissory note is 55 years at 3% interest per annum. $ 1,731,740 Various loans granted for residential purchase and rehabilitation for qualifying low to moderate income individuals through the HOME program.
$ 920,362 The City entered into a loan agreement with Reynaissance Family Center for purchase and rehabilitation of a real property located at 2160 Sacramento Street in Vallejo. This loan was due and payable at 3% on December 31, 2017. At the option of the City Council, the loan could be deferred/extended for an additional ten years if the center is still in operation. Management is working on establishing new loan terms with the borrower.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE (CONTINUED)
99 $ 240,000 In February 2002, the City entered into a loan agreement with Youth and Family services for “Rosewood House” a six-bed transitional housing facility. In 2014, Youth and Family Services ceased operations and defaulted on loan. In 2015 Bay Area Community Services expressed interest in assuming loan and was assigned loan. This loan was due and payable June 30, 2022 at interest rate of 3% per annum. Loan will be considered paid in full by the city if property is utilized continuously by borrower for transitional housing with supportive service and Annual Performance reports required by HUD are submitted.
$ 400,000 In March 2011, the City entered into a loan agreement with Temple Art Loft Associates, L.P. to provide additional funding from CDBG program for the rehabilitation of 2 existing buildings located at 707-715 Marin Street. The term of the promissory note is 57 years at 3% interest per annum.
$ 245,489 Various loans granted for residential purchase and rehabilitation for qualifying low to moderate income individuals through the CDBG program. These loans are secured by first or second mortgages on the residential property and are insured by private guaranty mortgage insurance.
The terms vary greatly depending on the ability of the property owner to repay the loan. Interest rates on these loans range from 3.0% to 5.0% and the principal maturity dates range from 5 years to 30 years.
$ 1,437,844 In March 2011, the City entered into a loan agreement with Temple Art Loft Associates, L.P. from NSP program funds for the rehabilitation of 2 existing buildings located at 707-715 Marin Street.
The term of the promissory note is 57 years at 3% interest per annum. $ 493,315 In May 2019, the City entered into a loan agreement with Community Housing Development Corporation (CHDC) in the amount of $969,612.The CHDC has drawn $493,315 of the loan for the acquisition of real property located at 759, 747, 720 and 726 Sonoma Boulevard in Vallejo for low-income owner occupied housing project. The loan term is 0% simple interest and principal payments are deferred. The loan is due and payable no later than May 14, 2024. However, the City may, at its option, extend the note for an additional five-year term(s) subject to continuing compliance with the NSP program requirements.
$ 273,645 Various loans granted for residential purchase and rehabilitation for qualifying low to moderate income individuals through the NSP program. These loans are secured by first or second mortgages on the residential property and are insured by private guaranty mortgage insurance.
The terms vary greatly depending on the ability of the property owner to repay the loan. Interest rates on these loans range from 3.0% to 5.0% and the principal maturity dates range from 5 years to 30 years.
D. General Fund
$ 1,691,481 In December 2023, the City entered into a loan agreement with Vallejo PSH, LP to recoup HOME funds disallowed by HUD for project noncompliance for the Blue Oak Landing project at 2118 Sacramento Street. The term of the promissory note is 55 years at 3% interest per annum.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE (CONTINUED)
100
E. Sereno Village Apartments
$ 1,289,871 In May 2003, the City entered into a $1,400,000 loan agreement with Sereno Village Associates for the development of a 125 unit very low-income rental housing project. The note bears 3% simple interest and will be due in full to the City in 15 years. The loan is secured by a deed of trust. To the extent there is excess cash flow from the project, the developer is required to repay all accrued interest and principal annually. At June 30, 2024 the outstanding balance of this loan, including accrued interest, was $1,289,871 comprised of $1,093,881 funded by the General Fund and $195,990 funded by the Neighborhood Parks Capital Project Fund. City management is working on establishing new loan terms with the borrower.
During fiscal 2002, the Vallejo Flood and Wastewater District loaned $351,635 to Sereno Village Association. The loan is secured by deed of trust, bearing simple interest at 3% and it is due in 15 years. The outstanding balance at June 30, 2024 was $248,860. This balance remains unchanged from the prior year and management is working on establishing new loan terms with Sereno Village. Management deems this note as collectible.
F. Temple Art Loft Impact Fee Loan
$ 112,909 In December 2011, the City entered into a $112,909 loan agreement with Temple Art Lofts Associates to pay certain impact fees, permit fees, and administrative fees for the 707-715 Marin Street Project. The loan bears zero interest and will be due and payable in full upon the 55th anniversary of the date of the loan which is December 15, 2066. The loan is recorded in the General Fund and the Transportation Impact Mitigation Fund.
G. Golf Cart Storage
During fiscal year 2007, the City loaned $350,000 to Vallejo Golf Club, Inc. for the construction of a golf cart storage building. During fiscal year 2011, the City established an allowance for collectability equal to the total amount owed of $180,843. At June 30, 2024, the outstanding balance of this loan and the offsetting allowance were $180,843.
H. Long-Term Loans - Former Redevelopment Agency
$ 2,503,928 From 2003 to 2006, the City had advanced $4,296,000 to the Vallejo Central Debt Service Fund which the Agency, in turn, loaned to Empress Investment Fund, LLC, for the purpose of theater improvements, and in fiscal year 2003, the City advanced $500,000 to the Marina Vista Debt Service Fund for the Georgia Street extension project. Repayment of these loans were contingent upon the Successor Agency receiving a Finding of Completion, as defined in Health and Safety Code Section 34179.6. After the Successor Agency receives a Finding of Completion, under the provisions of Health and Safety Code Section 34191.4(b)(2)(A), the loans can be repaid by the Successor Agency. However, the Successor Agency must apply for approval of the loans by the Oversight Board including a finding that the loans were for legitimate redevelopment purposes.
On February 12, 2015 the Oversight Board to the Successor Agency of the former Vallejo Redevelopment Agency approved these pre-dissolution loans between the City and the former Vallejo Redevelopment Agency as enforceable obligations. The DOF approved these loans as enforceable obligations in March 2015.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE (CONTINUED)
101
During the early years of the Agency (pre-1990), the City advanced start-up funds to the Agency.
As of January 31, 2012, the date of dissolution of the former Redevelopment Agency, the balance of these advances, including accrued interest at that date totaled $9,042,032. On February 12, 2015, the Oversight Board also approved these pre-1990 loans between the City and the former Vallejo Redevelopment Agency as enforceable obligations, but the DOF overturned the approval.
However, a change in Health and Safety Code Section 34191.4 during fiscal year 2016 provided for the reestablishment of these prior loans as enforceable obligations so long as they were approved by the Oversight Board. On January 28, 2016, the Oversight Board passed resolution OB 16-002 to reaffirm its approval of the Pre-1990 loans.
However, the DOF continued to deny approval of the pre-1990 loans as enforceable obligations during the Recognized Obligation Payment Schedule (ROPS) process. Due to the uncertainty of State approval, the City reports these loans their full value of $3,424,829, with an offsetting allowance as of June 30, 2024.
The loan balances as of June 30, 2024 are as follows:
Principal
Accrued
Interest Total
Hiddenbrooke Overpass Capital Projects Fund $ 46,455 $ 202,419 $ 248,874 Bridge Construction Capital Projects Fund 27,512 230,450 257,962 Arts and Convention Center Capital Projects Fund 201,080 1,796,012 1,997,092 General Fund:
Waterfront 162,805 889,915 1,052,720
Marina Vista - 647,510 647,510
Central 708,372 1,016,227 1,724,599
Less Allowance for Doubtful Accounts (871,177) (2,553,652) (3,424,829) $ 275,047 $ 2,228,881 $ 2,503,928
The loans bear simple interest of 3%. Repayment of these loans is governed by Health and Safety Code Section 34176(e)(6) and the maximum annual repayment is limited based on calculations in that Code Section.
Repayment installments were approved by the State Department of Finance starting fiscal year 2016-17 through the annual ROPS process.
I. VFWD Employee Computer Loans
VFWD has a Computer Literacy program that allows employees to borrow, in an amount approved by the District Manager, to purchase personal computers. The principal balance amount, with the rate of interest equal to the rate of interest being earned by VFWD that shall not exceed 9%, is to be paid off within 36 months from the date of the loan.
NOTE 5 - LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS City and Housing Authority
A. Governmental Activities
As of June 30, 2024, the City as a lessor, has 47 qualified leases under GASB Statement No., 87. These agreements involve the leasing of land, office space, facilities and telecommunications infrastructure to various lessees. Leases were initially measure on July 1, 2021, with the City’s adoption of the new lease standards. The City also had inflows of resources during the fiscal year totaling $1,249,501. This includes $995,135 of lease revenue, $176,659 of interest revenue and $77,707 of variable and other payments excluded in the initial measurement of the lease receivables. The balance of deferred inflows or resources associated with the City’s leases agreements is $11,111,531.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 4 - NOTES & LOANS RECEIVABLE (CONTINUED)
102
The following is a summary of the 47 qualified leases and description of the lease arrangements and the balance of the deferred inflow of resources associated with the leases:
Lease Receivable Inflows of Resources
Lease
Balance at
6/30/2023
Principal
Payments Additions Deletions
Balance at
6/30/24 Lease Revenue
Interest
Revenue
Variable
Payments
Land $ 4,947,910 $ (129,323) $ - $ - $ 4,818,587 $ 201,574 $ 80,499 $ 67,560 Office and Related Space 1,033,927 (148,975) - - 884,952 266,875 13,789 - Telecommunications 6,316,526 (364,500) 570,305 (229,186) 6,293,145 526,686 82,371 10,147 Total $ 12,298,363 $ (642,798) $ 570,305 $ (229,186) $ 11,996,684 $ 995,135 $ 176,659 $ 77,707 Land Leases - The City is the lessor for 8 ground lease agreements related to land including railroad track, certain tide and submerged lands with varied terms and the latest expiring on September 30, 2066. Interest rates vary between .90% to 2.1%. Total payments for the current year ranged from $1,200 to $62,324.
Office and Related Space Lease - On July 31, 2019, the City assumed the existing agreement between Alsation Land Company Vallejo, LLC and Veteran’s Administration for the lease of office and related space in 400 Mare Island Way. The lease is for twenty years which includes a termination option that the City is reasonably certain will be exercised by lessee after the ten-year firm term end date in 2027. Interest rate is 1.5%. Total monthly payments received for the current year was $162,764.
Telecommunication Leases - The City entered into 45 lease agreements with wireless providers (AT&T, Verizon, T-Mobile, Mobilitie) related to telecommunications. These agreements are for the installation, operation, and maintenance of telecommunication sites, mounting structures and equipment associated with the transmission and reception of radio communication signals. These agreements are all qualified leases under GASB Statement No. 87 with periods covering various ranges and the latest expiring on February 28, 2047. Interest rates range from .90% to 1.5%. Total payments for the current year varied from $1,293 to $60,758.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 5 - LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) 103
Future annual lease receivables as of June 30, 2024, are as follows:
Fiscal Year Ended Principal Interest Total
2025 $ 1,072,093 $ 187,224 $ 1,259,317
2026 874,602 160,120 1,034,722
2027 794,793 148,109 942,902
2028 609,628 139,121 748,749
2029 644,921 130,754 775,675
2030-2034 2,451,503 533,847 2,985,350
2035-2039 1,674,780 390,539 2,065,319
2040-2044 1,658,672 262,584 1,921,256
2045-2049 1,408,678 138,546 1,547,224
2050-2054 324,766 62,914 387,680
2055-2059 190,363 42,850 233,213
2060-2064 213,634 21,899 235,533
2065-2070 78,251 2,330 80,581
Total $ 11,996,684 $ 2,220,837 $ 14,217,521
The remaining agreements that are not qualified under GASB Statement No. 87 are either short-term in nature, do not meet the City’s threshold or outside the scope of the standard. These non-qualified lease agreements have not been recognized and measured as part of the City’s lease receivable, and the receipts related to these agreements are recognized as revenue as appropriate under standard GAAP revenue recognition rules.
VFWD
The District has entered into a lease agreement with New Inspiration Broadcasting Company, Inc. for certain land on Tubbs Island, California for use as a tower site. The terms of this agreement include monthly rental payments increasing annually based on the Consumer Price Index (CPI) for all Urban Consumers for the San Francisco/ Oakland/San Jose Metropolitan Area published by the United States Department of Labor. This lease commenced on April 1, 2021. The lease receivable was discounted to a net present value of April 1, 2021 using a 0.5% interest rate and CPI increase of 2.2% per year. For the year ended June 30, 2024, the District received $47,299 in lease revenue and $994 in lease interest revenue. Future payments due to the District under the non-cancellable agreement are as follows for the year ended June 30:
Fiscal Year Ended Principal Interest Total
2025 $ 49,943 $ 745 $ 50,688
2026 51,311 492 51,803
2027 52,711 233 52,944
2028 17,757 19 17,776
Total $ 171,722 $ 1,489 $ 173,211
Also, the District has a deferred inflow of resources associated with this lease that will be recognized as revenue over the lease term. As of June 30, 2024, the balance of the deferred inflow was $163,292.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 5 - LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) 104
B. Lease Payable
Lease agreements are summarized as follows:
Description
Balance
June 30,
2023 Adjustments Additions Retirement
Balance
June 30,
2024
Current
Portion
Governmental Activities
Equipment - Copiers - Xerox $ 27,895 $ (531) $ 63,391 $ 33,814 $ 56,941 $ 13,006 Equipment - Golf Cart 236 - - 236 - -
Property - 301 Farragut Street - - 3,529,230 - 3,529,230 88,461 Total Governmental Activities 28,131 (531) 3,592,621 34,050 3,586,171 101,467 Business-type Activities
Equipment - Copiers - Xerox 28,404 184 - 8,610 19,978 6,320 Equipment - Golf Cart 44,468 - - 44,468 - -
Equipment - Trimble 17,049 5 - 17,054 - -
Equipment - Messer 33,141 - - 16,375 16,766 16,766 Total Business-Type Activities 123,062 189 - 86,507 36,744 23,086 Total $ 151,193 $ (342) $ 3,592,621 $ 120,557 $ 3,622,915 $ 124,553 The City of Vallejo has fully adopted and implemented GASB87 standard in which the City recognizes leased equipment lease liability and a lease asset. Leased equipment includes lease agreements with Xerox Company for seven copiers with term in months ranging from 36-60 for a combined total of 247 months with fixed interest ranging from 0.25% to 2.45%. In addition, the City has leases with Messer and Trimble equipment for Water Department with 23 month term for a combined total of 46 months with a fixed 2.35% interest rate.
Annual requirements to amortize long-term lease obligations and related interest are as follows:
Ending Governmental Activities Business-type Activities Total June 30, Principal Interest Principal Interest Principal Interest 2025 $ 101,467 $ 51,374 $ 23,086 $ 612 $ 124,553 $ 51,986 2026 111,182 51,719 4,713 282 115,895 52,001
2027 104,827 50,023 4,830 165 109,657 50,188
2028 101,729 48,561 4,115 47 105,844 48,608
2029 96,403 46,906 - - 96,403 46,906
2030-2034 479,974 213,359 - - 479,974 213,359
2035-2039 2,590,589 177,182 - - 2,590,589 177,182 Totals $ 3,586,171 $ 639,124 $ 36,744 $ 1,106 $ 3,622,915 $ 640,230
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 5 - LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) 105
C. Subscription-Based Information Technology Arrangements The City has entered into various SBITAs as the subscriber for the use of software solution. The subscription liability range was from $20,877 to $261,956. As of June 30, 2024, the total value of the subscription liability was $786,871. The subscriptions have interest rates ranging from 1.89% to 3.38%. Information on the subscription assets as of June 30, 2024 are as follows:
Governmental Activities
Subscription Type Amount of SBITA Capital Assets Accumulated Amortization Software as a service $970,438 $522,420
Subtotal - governmental activities 970,438 522,420
Business-type Activities
Subscription Type Amount of SBITA Capital Assets Accumulated Amortization Software as a service 390,673 111,658
Subtotal - business type activities 390,673 111,658
Total $ 1,361,111 $ 634,078
Information on the subscription liabilities as of June 30, 2024 are as follows:
Description
Balance June
30, 2023 Adjustments Additions Retirement
Balance June
30, 2024
Current
Portion
Governmental Activities
Software Liability $ 1,836,710 $ (854,546) $ 41,793 $ 519,918 $ 504,039 $ 335,285 Total Governmental
Activities 1,836,710 (854,546) 41,793 519,918 504,039 335,285 Business-type Activities
Software Liability 118,636 (47,989) 328,905 116,720 282,832 146,595 Total Business-Type
Activities 118,636 (47,989) 328,905 116,720 282,832 146,595 Total $ 1,955,346 $ (902,535) $ 370,698 $ 636,638 $ 786,871 $ 481,880 The future principal and interest subscription payments as of June 30, 2024, were as follows:
Ending Governmental Activities Business-type Activities Total June 30, Principal Interest Principal Interest Principal Interest 2025 $ 335,285 $ 11,835 $ 146,595 $ 8,413 $ 481,880 $ 20,248 2026 154,735 7,434 136,237 4,154 290,972 11,588
2027 14,019 344 - - 14,019 344
Totals $ 504,039 $ 19,613 $ 282,832 $ 12,567 $ 786,871 $ 32,180
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 5 - LEASES AND SUBSCRIPTION-BASED INFORMATION TECHNOLOGY ARRANGEMENTS (CONTINUED) 106
NOTE 6 - CAPITAL ASSETS
All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available.
Contributed capital assets are valued at their estimated acquisition value on the date contributed.
Capital assets with limited useful lives are depreciated over their estimated useful lives. The amount charged to depreciation expense each year represents that year’s pro rata share of the cost of capital assets.
Depreciation is determined using the half year convention method, which means the cost of the asset is divided by its expected useful life in years and the result is charged to expense each year, but only half of the full year depreciation is charged in the first year, while the other half is charged in the last year of depreciation or in the year the asset is sold or retired.
The City has assigned the useful lives and capitalization thresholds listed below to capital assets.
Useful Lives Capitalization Threshold
Land N/A Capitalize All
Easements N/A $ 500,000
Land Improvements 25 to 60 Years 50,000
Buildings and Improvements 5 to 50 Years 50,000
Machinery and Equipment 5 to 25 Years 5,000
Internally Developed Software 2 to 5 Years 500,000
Purchased Software 2 to 5 Years 50,000
Right-to-use assets 5,000
Machinery and Equipment Shorter of the lease term or 2-5 years 5,000 Subscription assets Shorter of subscription term or 2-5 years 50,000 Infrastructure:
Traffic Signals 5 to 25 Years 50,000
Street Lights 15 to 50 Years 50,000
Bridges and Culverts 15 to 60 Years 50,000
Sidewalks, Curbs and Gutters 15 to 40 Years 50,000
Streets and Roads 15 to 40 Years 50,000
Improvements to existing infrastructure assets in excess of $50,000 are capitalized if: the estimated useful life of the existing asset has been extended by at least 25%; or the capacity of the existing asset has been substantially improved; or the quality of the output of the existing asset has been substantially improved.
The VFWD capitalizes applicable assets greater than $10,000 and the VFWD has assigned the useful lives listed below to capital assets:
Wastewater Treatment Plant and Facilities 5 to 40 Years Wastewater and Storm Warm Pump Stations 5 to 25 Years
Wastewater Collection and Storm Water Transmissions Systems 5 to 50 Years Buildings and Improvements 5 to 40 Years
Machinery and Equipment 5 to 25 Years
Right-of-use lease assets 3 to 10 Years
Major outlays for capital assets and improvements are capitalized as projects are constructed. Interest incurred during the construction phase is reflected in the capitalized value of the asset constructed, net of interest earned on the invested proceeds over the same period.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 6 - CAPITAL ASSETS
107
A. Government Capital Asset Activity
Balance Balance
July 1, 2023 Adjustments Additions Deletions Transfers June 30, 2024 Governmental activities:
Capital assets, not being
depreciated/amortized
Land $ 116,109,761 $ - $ - $ - $ - $ 116,109,761
Construction-in-progress 23,601,740 - 25,441,955 (218,720) (4,041,158) 44,783,817 Subscription-in-progress 634,795 - - (634,795) - - Total capital assets, not being
depreciated/amortized 140,346,296 - 25,441,955 (853,515) (4,041,158) 160,893,578 Capital assets, being
depreciated/amortized
Buildings and Improvements 125,713,582 - 605,979 - - 126,319,561 Machinery and equipment 53,544,099 - 2,221,765 (514,323) - 55,251,541 Infrastructure 300,331,362 - - - 4,041,158 304,372,520 Total capital assets, being
depreciated/amortized 479,589,043 - 2,827,744 (514,323) 4,041,158 485,943,622 Less accumulated
depreciation/amortization
Buildings and Improvements (65,963,976) 712,000 (5,531,854) - - (70,783,830) Machinery and equipment (37,522,377) 53,098 (3,220,504) 479,831 - (40,209,952) Infrastructure (177,325,409) - (1,653,662) - - (178,979,071) Total accumulated
depreciation/amortization (280,811,762) 765,098 (10,406,020) 479,831 - (289,972,853) Right-to-use assets being
amortized:
Right-to-use lease property - - 3,604,302 - - 3,604,302 Right-to-use lease machinery
and equipment 60,431 (544) - (27,569) - 32,318
Right-to-use subscription
software 2,621,557 (937,506) 41,793 (755,406) - 970,438 Total right-to-use assets 2,681,988 (938,050) 3,646,095 (782,975) - 4,607,058 Less accumulated
depreciation/amortization
Right-to-use lease property - - - - - -
Right-to-use lease machinery
and equipment (32,518) 393 (24,112) 27,569 - (28,668) Right-to-use subscription
software (621,322) 30,611 (687,115) 755,406 - (522,420) Total accumulated
depreciation/amortization (653,840) 31,004 (711,227) 782,975 - (551,088) Total capital assets, being
depreciated/amortized, net 200,805,429 (141,948) (4,643,408) (34,492) 4,041,158 200,026,739 Total governmental activities
capital assets $ 341,151,725 $ (141,948) $ 20,798,547 $ (888,007) $ - $ 360,920,317
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 6 - CAPITAL ASSETS (CONTINUED)
108
B. Business-Type Capital Asset Activity
Balance Balance
July 1, 2023 Additions Deletions Transfers June 30, 2024 Business-type activities:
Capital assets, not being depreciated/amortized
Land $ 17,405,624 $ - $ - $ - $ 17,405,624
Construction-in-progress 14,078,565 6,324,515 - (210,807) 20,192,273 Subscription-in-progress 489,484 - (489,484) - -
Total capital assets, not being depreciated/amortized 31,973,673 6,324,515 (489,484) (210,807) 37,597,897 Capital assets, being depreciated/amortized
Buildings and Improvements 93,392,625 68,433 - 210,807 93,671,865 Machinery and Equipment 25,550,872 1,911,998 - - 27,462,870 Infrastructure 166,388,764 - - - 166,388,764
Total capital assets, being depreciated/amortized 285,332,261 1,980,431 - 210,807 287,523,499 Less accumulated depreciation/amortization
Buildings and Improvements (68,379,383) (1,543,921) - - (69,923,304) Machinery and Equipment (15,978,979) (1,189,165) - - (17,168,144) Infrastructure (120,463,483) (2,314,565) - - (122,778,048) Total accumulated depreciation/amortization (204,821,845) (5,047,651) - - (209,869,496) Right-to-use assets being amortized:
Right-to-use lease machinery and equipment 531,160 - (444,337) - 86,823 Right-to-use subscription software 187,319 290,883 (87,529) - 390,673 Total right-to-use assets 718,479 290,883 (531,866) - 477,496 Less accumulated depreciation/amortization
Right-to-use lease machinery and equipment (402,481) (92,855) 444,734 - (50,602) Right-to-use subscription software (65,100) (126,994) 80,436 - (111,658) Total accumulated depreciation/amortization (467,581) (219,849) 525,170 - (162,260) Total capital assets, being depreciated/amortized, net 80,761,314 (2,996,186) (6,696) 210,807 77,969,239 Total business-type activities capital assets $ 112,734,987 $ 3,328,329 $ (496,180) $ - $ 115,567,136
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 6 - CAPITAL ASSETS (CONTINUED)
109
C. VFWD Capital Asset Activity
Balance at
June 30, 2023 Additions Retirements Transfers
Balance at
June 30, 2024
Capital Assets, Not Being Depreciated:
Land $ 2,810,716 $ - $ - $ - $ 2,810,716
Construction in Progress 19,162,173 27,452,195 (178,273) (9,711,729) 36,724,366 Total Capital Assets, Not Being Depreciated 21,972,889 27,452,195 (178,273) (9,711,729) 39,535,082 Capital Assets Being Depreciated:
Buildings and Improvements 4,607,533 - - - 4,607,533 Pump stations 45,204,413 - - - 45,204,413
Plant and facilities 140,592,432 17,502 - - 140,609,934 Collection systems 142,195,559 67,200 - 9,510,895 151,773,654 Collection systems - con cap 46,144,269 - - - 46,144,269 Plant and facilities - con cap 2,165,355 - - - 2,165,355 Machinery, equipment, vehicles 13,789,517 874,117 (372,252) 200,834 14,492,216 Right-to-use lease assets 2,058,577 218,234 (21,581) - 2,255,230 Right-to-use subscription assets 904,272 48,218 (143,934) - 808,556 Total Capital Assets Being Depreciated/Amortized 397,661,927 1,225,271 (537,767) 9,711,729 408,061,160 Less Accumulated Depreciation for:
Buildings and Improvements (2,892,785) (117,323) - - (3,010,108) Pump stations (32,565,376) (1,075,222) - - (33,640,598) Plant and facilities (94,169,189) (3,151,138) - - (97,320,327) Collection systems (50,334,869) (2,941,399) - - (53,276,268) Collection systems - con cap (33,358,434) (826,270) - - (34,184,704) Plant and facilities - con cap (1,411,995) (54,134) - - (1,466,129) Machinery, equipment, vehicles (10,723,413) (602,167) 353,756 - (10,971,824) Right-to-use lease assets (405,453) (190,800) 20,861 - (575,392) Right-to-use subscription assets (227,248) (196,861) 55,931 - (368,178) Total Accumulated Depreciation (226,088,762) (9,155,314) 430,548 - (234,813,528) Net Capital Assets Being Depreciated/Amortized 171,573,165 (7,930,043) (107,219) 9,711,729 173,247,632 Capital Assets, Net $ 193,546,054 $ 19,522,152 $ (285,492) $ - $ 212,782,714 D. Depreciation and Amortization Allocation
Governmental Activities
Executive $ 540,563
Finance 175,602
Community Development 303,125
Fire Services 240,916
Police Services 1,008,948
Public Works 7,073,598
Internal Service 1,774,495
Total depreciation/amortization expense $ 11,117,247
Business-Type Activities
Water $ 5,012,647
Marina 56,497
Golf 147,891
Parking 26,783
Fiber 23,682
Total depreciation/amortization expense $ 5,267,500
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 6 - CAPITAL ASSETS (CONTINUED)
110
NOTE 7 - LONG-TERM DEBT
The City generally incurs long-term debt to finance projects or purchase assets, which will have useful lives equal to or greater than the related debt.
For governmental fund types, bond premiums and discounts, as well as issuance costs, are recognized during the current period. Bond proceeds are reported as another financing source gross of the applicable premium or discount. Issuance costs, even if withheld from the actual net proceeds received, are reported as debt service expenditures.
For proprietary fund types, bond premiums and discounts are deferred and amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond premium or discount.
Bond issuance costs are expensed in the year incurred. Any differences between proprietary refunded debt and the debt issued to refund it is recorded as Deferred Outflows/Inflows of Resources and amortized over the remaining life of either the refunded debt or the refunding debt, whichever is shorter.
A. Current Year Transactions and Balances
The City’s long-term debt issues and transactions were as follows:
Original
Issue
Amount
Balance at
June 30,
2023 Additions Retirements
Balance at
June 30,
2024
Current
Portion
Governmental Activity Debt:
Certificates of Participation:
1999 COPs
(Restructured, see Note 6C) $ 4,815,000 $ 1,926,517 $ - $ (225,000) $ 1,701,517 $ 235,000 Total Certificates of Participation 4,815,000 1,926,517 - (225,000) 1,701,517 235,000 UBOC Reimbursement Obligations:
UBOC Tranche A - General Fund 7,813,780 1,339,433 - (613,614) 725,819 463,017 UBOC Tranche B - General Fund
Loan Principal 7,906,677 7,906,677 - - 7,906,677 - Accreted Interest - 648,230 99,841 (123,661) 624,410 125,671 15,720,457 9,894,340 99,841 (737,275) 9,256,906 588,688 Bank of America Fleet Loan 5,000,000 5,000,000 - (600,000) 4,400,000 665,000 Total Loans & Note Payable 20,720,457 14,894,340 99,841 (1,337,275) 13,656,906 1,253,688 Financed Purchases:
Motorola Equipment Lease (Police) 3,997,967 1,762,356 - (427,781) 1,334,575 436,208 Total Financed Purchases 3,997,967 1,762,356 - (427,781) 1,334,575 436,208 Total Direct Borrowings 24,718,424 16,656,696 99,841 (1,765,056) 14,991,481 1,689,896 Total Governmental Activity Debt $ 29,533,424 $ 18,583,213 $ 99,841 $ (1,990,056) $ 16,692,998 $ 1,924,896
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT
111
Original Issue
Amount
Balance at
June 30,
2023 Additions Retirements
Balance at
June 30,
2024
Current
Portion
Business-Type Activity Debt:
Revenue Bonds:
2020A Water Revenue Refunding Bonds,
4%, due 5/1/30 $ 16,750,000 $ 6,685,000 $ - $ - $ 6,685,000 $ - Plus: Unamortized Bond Premium - 1,377,321 - (196,760) 1,180,561 - 2020B Water Revenue Refunding Bonds,
var. rate, due 5/1/28 20,075,000 16,635,000 - (3,500,000) 13,135,000 3,550,000 2021A Water Revenue Bonds, var. rate,
due 5/1/51 42,600,000 41,030,000 - (820,000) 40,210,000 855,000 Plus: Unamortized Bond Premium - 8,476,649 - (302,738) 8,173,911 - Total Revenue Bonds 79,425,000 74,203,970 - (4,819,498) 69,384,472 4,405,000 Business Activity Debt - Direct
Borrowing:
UBOC Reimbursement Obligations:
UBOC Tranche A - Golf Course 4,269,641 478,704 - (342,700) 136,004 136,004 UBOC Tranche A - Marina 7,916,579 802,463 - (640,963) 161,500 161,500 UBOC Tranche B - Golf Course
Loan Principal 4,561,670 4,561,670 - - 4,561,670 128,172 Accreted Interest - 712,195 85,700 - 797,895 -
UBOC Tranche B - Marina
Loan Principal 8,899,586 8,899,586 - - 8,899,586 368,733 Accreted Interest - 1,174,332 154,100 (29,375) 1,299,057 - Other Loans & Notes Payable:
State Safe Drinking Water 0%, due 1/1/25 68,080 5,105 - (3,404) 1,701 1,701 Total Direct Borrowings 25,715,556 16,634,055 239,800 (1,016,442) 15,857,413 796,110 Total Business Activity Debt $ 105,140,556 $ 90,838,025 $ 239,800 $ (5,835,940) $ 85,241,885 $ 5,201,110
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
112
Original Issue
Amount
Balance at
June 30,
2023 Additions Retirements
Balance at
June 30,
2024
Current
Portion
VFWD:
Revenue Bonds:
2014 Revenue Bonds, 4-5%, due
5/1/36 $ 34,294,966 $ 23,782,394 $ - $ (23,782,394) $ - $ - 2011 Revenue Bonds, 2-5%, due
5/1/25 3,345,000 610,002 - (610,002) - -
2024 Refunding Bond 18,825,000 - 18,825,000 (1,755,000) 17,070,000 1,505,000 Premium on bond, net 1,935,011 - 1,935,011 (64,500) 1,870,511 — Total Revenue Bonds 58,399,977 24,392,396 20,760,011 (26,211,896) 18,940,511 1,505,000 Other Loans & Notes Payable -
Direct Borrowings:
State Clean Water (2008) 2.4%,
due 2025 4,406,072 612,753 - (302,743) 310,010 310,010 2021 State Revolving Fund Loan 2,025,735 5,539,131 20,490,116 - 26,029,247 - Lease liability - 346,063 180,859 (142,796) 384,126 156,266 Subscription liability - 423,382 48,218 (184,186) 287,414 95,035 Total Loans & Notes
Payable 6,431,807 6,921,329 20,719,193 (629,725) 27,010,797 561,311 Total VFWD Debt $ 64,831,784 $ 31,313,725 $ 41,479,204 $ (26,841,621) $ 45,951,308 $ 2,066,311 B. Debt Service Requirements
Annual debt service requirements to maturity are shown below for all long-term debt:
Governmental Activities
1999 COPs Direct Borrowings
For the Year
Ending June 30 Principal Interest Principal (a) Interest 2025 $ 235,000 $ 78,357 $ 1,689,896 $ 249,211
2026 245,000 65,757 1,633,995 303,679
2027 260,000 52,501 1,715,935 256,785
2028 275,000 38,457 1,305,962 210,326
2029 290,000 23,625 1,344,909 171,411
2030-2034 396,517 8,006 5,074,037 433,909
2035-2039 - - 2,226,747 66,341
Total $ 1,701,517 $ 266,703 $ 14,991,481 $ 1,691,662
(a) Includes accreted interest on the UBOC Retirement Obligations - Tranche B for $624,410.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
113
Business-Type Activities
Revenue Bonds Direct Borrowings
For the Year Ending
June 30 Principal Interest Principal (a) Interest
2025 $ 4,405,000 $ 2,111,961 $ 796,110 $ 260,258
2026 4,405,000 2,021,210 809,920 244,746
2027 4,005,000 1,923,113 823,082 231,585
2028 4,105,000 1,827,963 836,457 218,210
2029 4,200,000 1,724,400 850,049 204,617
2030-2034 8,960,000 6,816,400 4,461,989 811,344
2035-2039 6,845,000 5,463,800 4,836,501 436,831
2040-2044 8,330,000 3,981,000 2,443,305 69,384
2045-2049 10,135,000 2,176,200 - -
2050-2053 4,640,000 280,200 - -
Total 60,030,000 $ 28,326,247 15,857,413 $ 2,476,975
Plus: Unamortized
Bond Premium
(discount) 9,354,472 -
Net Long-Term Debt $ 69,384,472 $ 15,857,413
(a) Includes accreted interest on the UBOC Retirement Obligations - Tranche B for $2,096,952.
VFWD
Revenue Bonds and
Certificates of Participation State Revolving Fund Loan For the Year Ending
June 30 Principal Interest Principal Interest
2025 $ 1,505,000 $ 805,300 $ 310,010 $ 7,440
2026 1,585,000 730,050 - -
2027 1,660,000 650,800 - -
2028 1,740,000 567,800 - -
2029 1,825,000 480,800 - -
2030-2034 8,755,000 1,004,550 - -
Total 17,070,000 $ 4,239,300 310,010 $ 7,440
Plus: Unamortized Bond
Premium (discount) 1,935,011 -
Net Long-Term Debt $ 19,005,011 $ 310,010
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
114
VFWD
Leases
For the Year Ending
June 30 Principal Interest Total
2025 $ 156,266 $ 16,009 $ 172,275
2026 126,165 10,283 136,448
2027 41,720 6,304 48,024
2028 39,755 3,318 43,073
2029 20,220 643 20,863
Total $ 384,126 $ 36,557 $ 420,683
VFWD
SBITAs
For the Year Ending
June 30 Principal Interest Total
2025 $ 95,035 $ 2,314 $ 97,349
2026 95,804 1,545 97,349
2027 96,575 775 97,350
Total $ 287,414 $ 4,634 $ 292,048
C. Certificates of Participation (COPs)
1999 COPs – In July 1999, the City issued $4,815,000 of Certificates of Participation (1999 Capital Improvements Project) to finance City capital improvements. Principal payments are payable annually on July 15. Interest payments are due semiannually on January 15 and July 15.
Due to the failure of the City to pay the scheduled amounts due under the original agreement, on January 25, 2011, the City, National Public Finance Guarantee Corporation (National) and the Controller for the State of California (the “Controller”) entered into a Settlement Agreement (the Settlement Agreement).
Commencing July 1, 2013, the City was to pay the Trustee the full scheduled amount when due and commencing on January 15, 2014, to pay National, on January 15 and July 15 of each year, an amount equal to 100% of all MVLF to which the City would be entitled under the California Revenue and Taxation Code during the previous six months, minus the amount paid to the Trustee for the same period, provided that the MVLF exceed the total amounts due for that period. The City’s obligation to pay amounts is not dependent on its receipt of MVLF in any amount.
The MVLF catch-up payment is to be applied to the shortfall indebtedness until paid in full. To the extent that the shortfall indebtedness is not paid in full by the last scheduled payment under the Lease Agreement, the City is to pay the remaining balance of the shortfall indebtedness to National no later than January 15, 2030. As of June 30, 2024, shortfall indebtedness was fully paid.
Bond Rating – On June 11, 2024, Standard and Poor’s raised its long-term rating and underlying rating (SPUR) to “A” from “A-” on 1999 COPS. The credit report highlighted the City’s strong financial position during the past five fiscal years.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
115
D. UBOC Reimbursement Obligations
On August 2, 2011, Union Bank and the City reached a restructuring agreement regarding series 2000, 2001, 2002, and 2003 Certificates of Participation (COPs) which amended and replaced the COPs as follows:
There are two tranches: the “A” obligation and the “B” obligation. The starting principal balance of the “A” obligation is $18,049,887 and the “B” obligation has a starting principal of $21,367,933. No interest accrued on either the “A” or the “B” obligation from the effective date of November 1, 2011, through December 31, 2014, and interest commenced accrual on both obligations on January 1, 2015. The “A” obligation has a fixed annual interest rate of 2.5% and the “B” obligation has a fixed annual interest rate of 1.625%. Interest is payable annually on the first business day of each calendar year, in a single annual payment, in advance. Interest payments on the obligations commence in the calendar years 2015 and 2018 for obligations “A” and “B”, respectively, and continuing, in each case, until the principal balance of that obligation has been paid in full.
Principal is payable annually on the first business day of each calendar year, in a single annual payment, commencing with the 2012 calendar year for the “A” obligation and 2025 for the “B” obligation. The outstanding principal balance, all accrued but unpaid interest, and all other amounts due under the New Union Bank Reimbursement Agreement Payment Agreement with respect to the “A” obligation is due and payable on January 1, 2026; and the “B” obligation is due and payable on January 1, 2042.
E. Revenue Bonds
2020 Water Revenue Refunding Bonds – On March 31, 2020, the City issued $36,825,000 in Water Revenue Refunding Bonds to refund the outstanding 2006 and 2013 Water Revenue Bonds. The refunding resulted in an economic gain (difference between the present values of the debt service payments on the old and new debt) of $5,583,330.
The Series 2020 A & B Bonds and the interest thereon are payable solely from a first lien on and pledge of the Net Revenues (the amount of the gross revenues less operating expenses) derived by the City from the operation of the City’s water system. Interest is payable on May 1 and November 1. Annual principal payments are due on May 1. The debt is secured and serviced by water system operations. The 2020 Series A&B Bonds were given an AA rating by Standard & Poor’s.
2021 Water Revenue Bonds Series A – On February 2, 2021, the City issued $42,600,000 in Water Revenue Bonds to provide funds to finance capital facilities needed to operate and improve the City’s water system. The Series 2021A Bonds are secured by a pledge of Net Revenues on a parity with the Series 2020A Bonds, the Series 2020B Bonds, and the 2004 SDWSRF Loan. The Series 2021A Bonds will not be secured by amounts on deposit in the Parity Reserve Fund established under the Indenture, or by any other reserve fund, and amounts on deposit in the Parity Reserve Fund are not pledged to the payment of the Series 2021A Bonds. Interest is payable on May 1 and November 1 of each year. Annual principal payments are due on May 1. The debt is secured and serviced by water system operations. The 2021 Series A Bonds were given an A+ rating by Standard & Poor’s.
The pledge of future net revenues ends upon repayment of the $66,480,400 in remaining debt service on the bonds and loans which is scheduled to occur in 2041. Under the terms of the indenture, net revenues are required to provide a 1.25 debt service coverage ratio.
For fiscal year 202 4, operating revenues, investment income, and capital grants and contributions amount to $62,868,301 and operating costs including operating expenses, but not interest, amounted to $39,788,032. Net Revenues available for debt service amounts to $23,080,269, which represents coverage of 3.56 over the $6,487,079 in combined debt service for the 2020 Series A & B Water Revenue Refunding Bonds, 2021 Series A Water Revenue Bonds and State Safe Drinking Water loans debt service.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
116
2011 Revenue Bonds – the VFWD and the Water Reuse Finance Authority issued 2011 Revenue Bonds in the principal amount of $3,345,000 at a premium of $38,409 in a current refunding (1) to prepay the outstanding principal of 2001 Certificates of Participation, (2) to fund a reserve fund for the bonds, and (3) to pay certain costs of issuing the bonds. The bonds are fully registered with principal due annually on May 1, and interest payable semi-annually on May 1 and November 1. The bonds maturing on or after May 1, 2025 are subject to optional redemption on any date on or after May 1, 2024, together with accrued interest to the redemption date, without a premium.
The transaction paid scheduled principal due on the 2001 Certificates of Participation in the amount of $145,000 and redeemed the remaining principal amounting to $3,315,000 pursuant to notice and exercise of optional prepayment of the Certificates for a total of $3,460,000. The transaction resulted in a deferred amount on refunding of $53,447 and a decrease in total cash flows of $262,952. The deferred amount on refunding is carried as a deferred outflow of resources, and the premium is carried as a net reduction of the 2011 Revenue Bonds.
The deferred amount on refunding and the premium are amortized on a straight-line basis over the life of the bonds as components of interest expense.
2024 Refunding Bonds - The District issued 2024 Wastewater Revenue Refunding Bonds, Series 2024A, in the principal amount of $18,825,000 at a premium of $1,935,011 (1) to refund the outstanding principal of 2011 Revenue Bonds, (2) to refund the outstanding principal of the 2014 Revenue Bonds, and (3) to pay certain costs of issuing the bonds. The bonds are fully registered with principal due annually on May 1, and interest payable semi-annually on May 1 and November 1.
The transaction resulted in a deferred amount on refunding of $1,864,339. The deferred amount on refunding is carried as a deferred inflow of resources, and the premium is carried as a net reduction of the 2024 Revenue Bonds. The deferred amount on refunding and the premium are amortized on a straight-line basis over the life of the bonds as components of interest expense.
F. Other Notes and Loans Payable
State Safe Drinking Water, Water Fund – The loan, with original amount of $68,080, from the State of California, Department of Water Resources was used to finance construction of a project which enables the City to meet safe drinking water standards. The interest rate is 0%. Semiannual principal payments are due on July 1 and January 2, through 2025.
Bank of America Loan for Fleet Purchases – On June 13, 2023, City entered into a loan agreement with Bank of America Public Capital Corp for the amount of $5,000,000 to finance the purchase of new fire, police, and public works fleet vehicles. The rate is 3.96% and semiannual principal payments are due on June 1 and December 1, through 2030.
Vallejo Flood and Wastewater State Clean Water (2008) – During the fiscal year ended June 30, 2008, the District completed a second loan agreement with the State Water Resources Control Board’s Division of Financial Assistance. The loan is dated January 24, 2008 and is in the principal amount of $4,406,072. Payments in the amount of $317,450 with interest at 2.4% commence January 24, 2009 and are due annually thereafter until maturity in 2025.
Vallejo Flood and Wastewater State Clean Water (2021) – During the fiscal year ended June 30, 2022, the District entered into loan agreement with the State Water Resources Control Board’s Division of Financial Assistance. The loan is dated April 26, 2022 and is in the principal amount of up to $40,000,000. The District is drawing down on the loan as the project progresses. There has been no repayment schedule set as of June 30, 2023. Interest is to accrue at a rate of 0.8% per annum and will begin with each disbursement. Final payment date is set at December 31, 2055.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
117
G. Finance Purchase Agreement
Radio Equipment Finance Purchase Agreement
On May 2020, City entered into a finance purchase agreement in the amount of $3,997,967 with Motorola Solutions Inc., for the purchase of radio equipment. The City agreed to make a $1.0 million down payment and annual payments of $425,000 commencing June 26, 2021 until maturity in 2027.
NOTE 8 - DEBT WITHOUT CITY COMMITMENT
Assessment and Improvement Districts
Special Assessment and Improvement Districts in various parts of the City have issued debt to finance infrastructure improvements and facilities within their boundaries. The City is the collecting and paying agent for the debt issued by these Districts but has no direct or contingent liability for the payment of this debt. Therefore, this debt is not reported as long-term debt of the City. The outstanding balance of each of these issues as of June 30, 2024 is as follows:
Improvement Bonds
2004 Hiddenbrooke Improvement District Series A $ 6,090,000 Northeast Improvement District 2003-1 3,885,000
Total $ 9,975,000
NOTE 9 - EMPLOYEE BENEFITS PAYABLE
Employee Benefits Payable reported in the Statement of Net Position includes compensated absences as discussed below.
Compensated absences consist of vested vacation leave, sick leave and compensatory time off. For governmental activities, the portion reported as a liability in the Internal Service Funds primarily represents balances due within 60 days of year end. The remaining governmental activities portion is reported on the Statement of Net Position. The long-term portion of governmental activities employee benefits payable is liquidated primarily by the General Fund. For proprietary activities, which are reported on the accrual basis at the fund level, all earned but unpaid benefits are recorded as an expense and liability of the fund in which it is earned.
Compensated absences have been recorded at the contractual salary rates due to employees at June 30, 2024.
Compensated absences activity for the City and VFWD for the year ended June 30, 2024 is as follows:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 7 - LONG-TERM DEBT (CONTINUED)
118
Governmental
Activities
Business-Type
Activities Total VFWD
Compensated Absences Activity:
Beginning Balance $ 11,180,398 $ 1,474,788 $ 12,655,186 $ 2,066,266 Additions 7,885,882 1,018,745 8,904,627 1,722,367
Deletions (7,101,120) (1,080,599) (8,181,719) (1,372,367) Ending Balance $ 11,965,160 $ 1,412,934 $ 13,378,094 $ 2,416,266 Compensated Absences
Classification Presentation:
Current Portion:
Internal Service Funds - City $ 506,074 $ - $ 506,074 $ - Entity-Wide 6,642,237 1,080,598 7,722,835 -
Vallejo Flood and Wastewater District - - - 966,506 Current Portion 7,148,311 1,080,598 8,228,909 966,506 Noncurrent Portion:
Entity-Wide 4,220,982 332,336 4,553,318 -
Vallejo Flood and Wastewater District - - - 1,449,760 Noncurrent Portion 4,220,982 332,336 4,553,318 1,449,760 Total $ 11,369,293 $ 1,412,934 $ 12,782,227 $ 2,416,266 Noncurrent Employee Benefits Payable:
Compensated Absences $ 4,220,982 $ 332,336 $ 4,553,318 $ 1,449,760 Other Employee Benefits
(1.5% RHSA Contribution set aside by
City) 595,867 - 595,867 -
Noncurrent Portion $ 4,816,849 $ 332,336 $ 5,149,185 $ 1,449,760 NOTE 10 - PENSION PLAN
A. General Information about the City’s Pension Plans
Plan Descriptions – All qualified permanent and probationary employees are eligible to participate in the City’s separate Safety (police and fire) and Miscellaneous (all other) Plans, agent multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. Benefit provisions under the Plans are established by State statute and City resolution. CalPERS issues publicly available reports that include a full description of the pension plans regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. The Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012.
The Plans’ provisions and benefits in effect as of the measurement date, are summarized as follows:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 9 - EMPLOYEE BENEFITS PAYABLE (CONTINUED)
119
Miscellaneous
Classic Tier I PEPRA
Hire date Prior to January 1,
2013
On or After January 1,
2013
Benefit formula 2.7% @55 2% @ 62
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 - 55 52 - 67
Monthly benefits, as a % of eligible compensation 2% to 2.7% 1.0% to 2.5% Required employee contribution rates 8% 7%
Required employer contribution rates (normal cost) 9.65% 10.65% Required Unfunded Accrued Liability Contribution $9,884,433 Safety - Fire
Classic Tier I Classic Tier II PEPRA
Hire date Prior to December 28,
2013
On or After December
28, 2012
On or After
January 1, 2013
Benefit formula 3% @50 2% @ 50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service 5 years service Benefit payments monthly for life monthly for life monthly for life Retirement age 50 50 - 55 50 - 57
Monthly benefits, as a % of eligible compensation 3% 2.0% - 2.7% 2.0% - 2.7% Required employee contribution rates 9% 9% 13.25%
Required employer contribution rates (normal cost) 17.01% 21.41% 21.41% Required Unfunded Accrued Liability Contribution $16,344,866 Safety - Police
Classic Tier I PEPRA
Hire date Prior to January 1,
2013
On or After January 1,
2013
Benefit formula 3% @50 2.7% @ 57
Benefit vesting schedule 5 years service 5 years service Benefit payments monthly for life monthly for life
Retirement age 50 50 - 57
Monthly benefits, as a % of eligible compensation 3% 2.0% - 2.7% Required employee contribution rates 9% 13.25%
Required employer contribution rates 21.41% 21.41%
Included in Fire table above
Employees Covered – At the June 30, 2022 actuarial valuation date, the following employees were covered by the benefit terms for each Plan:
Miscellaneous
Classic Tier I Classic Tier II PEPRA Plan
Inactive employees or beneficiaries currently receiving benefits 604 - 6 Inactive employees eligible to, but not yet receiving benefits 124 - 106 Inactive employees ineligible to, but not yet receiving benefits 80 - 125 Active employees 96 - 227
Total 904 - 464
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
120
Safety
Classic Tier I Classic Tier II PEPRA Plan
Inactive employees or beneficiaries currently receiving benefits 406 - - Inactive employees eligible to, but not yet receiving benefits 42 1 21 Inactive employees ineligible to, but not yet receiving benefits 2 - 32 Active employees 87 1 80
Total 537 2 133
Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for both Plans are determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
Beginning in fiscal year 2016, CalPERS collects employer contributions for each Plan as a percentage of payroll for the normal cost portion and as a dollar amount for contributions toward the unfunded liability (UAL). The dollar amounts are either billed on a monthly basis, or may be paid in a lump sum at discount. During the measurement period, the City’s required UAL contributions were made under the lump sum option.
B. Net Pension Liability
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plans and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. The net pension liability and related deferred outflows/inflows of resources are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities net pension liability is liquidated primarily by the General Fund.
The City’s net pension liability for each Plan is measured as the total pension liability, less the pension plan’s fiduciary net position. The net pension liability of each of the Plans is measured as of June 30, 2023, using an annual actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures.
A summary of principal assumptions and methods used to determine the net pension liability is shown below.
Actuarial Assumptions – For the measurement period ended June 30, 2023, the total pension liabilities were determined by rolling forward the June 30, 2022 total pension liability. The June 30, 2024 total pension liabilities were based on the following actuarial methods and assumptions:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
121
Miscellaneous 1 Safety 1
Valuation Date June 30, 2022 June 30, 2022
Measurement Date June 30, 2023 June 30, 2023
Actuarial Cost Method Entry-Age Normal Cost Method Entry-Age Normal Cost Method Actuarial Assumptions:
Discount Rate 6.90% 6.90%
Inflation 2.30% 2.30%
Payroll Growth Varies by entry age and service Varies by entry age and service Projected Salary Increase Varies by entry age and service Varies by entry age and service Investment Rate of Return 7.00% 2 7.00% 2
Mortality Derived using CalPERS Membership Data for all Fund 3 Post Retirement Benefit Increase
The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter
1 Actuarial assumptions are the same for all benefit tiers (Classic Tier I, Classic Tier II, and PEPRA) 2 Net of pension plan investment and administration expenses, including inflation 3 The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001-2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries
All other actuarial assumptions used in the June 30, 2022 valuation were based on the results of a December 2021 actuarial experience study for the period 2001-2019, including updates to salary increase, mortality and retirement rates. Further details of the Experience Study can be found on the CalPERS website under Forms and Publications.
Discount Rate – The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members.
Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations as well as the expected pension fund cash flows. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach. Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the rounded single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for assumed administrative expenses. The expected real rates of return by asset class are as followed:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
122
Asset Class
Assumed asset
allocation
Real Return
Years 1 - 10 1,2
Global Equity - Cap-weighted 30.00% 4.45%
Global Equity - Non Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortage-backed securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
1 An Expected Inflation of 2.3% used for this period.
2 Figures are based on the 2021-22 Asset Liability Management study.
Subsequent Events - During the time period between the vaulation date and the publication of this report, price inflation has been higher than the assumed rate of 2.3% per annum. Since inflation influences cost of living adjustments for retirees and beneficiaries and active member pay increases, higher inflation is likely to put at least some upward pressure on the pension expense and the net pension liability in future valuations. The actual impact of higher inflation on future valuation results will depend on, among other factors, how long higher inflation persists. At this time, we continue to believe the long-term price inflation assumption of 2.3% per annum is appropriate.
C. Changes in Net Pension Liability
The changes in the Net Pension Liability for each Plan follow:
Miscellaneous Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 (Measurement Date) $ 319,858,085 $ 199,356,850 $ 120,501,235 Changes recognized for the
measurement period:
Service cost 5,113,704 - 5,113,704
Interest on total pension liability 21,812,820 - 21,812,820 Differences between expected and 3,819,680 - 3,819,680 actual experience
Net plan to plan resource movement - (1,853) 1,853
Contributions-employer - 12,706,200 (12,706,200)
Contributions-employee - 2,342,099 (2,342,099)
Net investment income - 12,213,090 (12,213,090)
Benefit payments, including refunds of (20,213,600) (20,213,600) - employee contributions
Administrative expense - (146,598) 146,598
Net changes during 2022-23 10,532,604 6,899,338 3,633,266 Balance at June 30, 2023 (Measurement Date) $ 330,390,689 $ 206,256,188 $ 124,134,501
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
123
Safety Plan:
Total Pension Plan Fiduciary Net Pension
Liability Net Position Liability/(Asset)
(a) (b) (c) = (a) - (b)
Balance at June 30, 2022 (Measurement Date) $ 558,513,862 $ 344,044,391 $ 214,469,471 Changes recognized for the
measurement period:
Service cost 7,175,447 - 7,175,447
Interest on total pension liability 38,158,430 - 38,158,430 Differences between expected and 7,475,497 - 7,475,497 actual experience
Contributions-employer - 20,381,011 (20,381,011)
Contributions-employee - 2,725,868 (2,725,868)
Net investment income - 21,086,111 (21,086,111)
Benefit payments, including refunds of (33,488,367) (33,488,367) - employee contributions
Administrative expense - (252,994) 252,994
Net changes during 2022-23 19,508,845 10,453,482 9,055,363 Balance at June 30, 2023 (Measurement Date) $ 578,022,707 $ 354,497,873 $ 223,524,834 Grand Total Balance at June 30, 2023
Total (Miscellaneous and Safety Plan) $ 908,413,396 $ 560,754,061 $ 347,659,335 Sensitivity of the Net Pension Liability to Changes in the Discount Rate – The following presents the net pension liability of the City for each Plan, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is 1- percentage point lower or 1-percentage point higher than the current rate:
Miscellaneous Safety Total
1% Decrease 5.90 % 5.90 % 5.90 %
Net Pension Liability $ 163,966,398 $ 298,422,915 $ 462,389,313 Current Discount Rate 6.90 % 6.90 % 6.90 %
Net Pension Liability $ 124,134,501 $ 223,524,834 $ 347,659,335 1% Increase 7.90 % 7.90 % 7.90 %
Net Pension Liability $ 91,061,126 $ 162,000,395 $ 253,061,521 Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
D. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2024, the City recognized pension expense of $16,991,996, $29,080,253 for the Miscellaneous and Safety Plans, respectively, for total pension expense of $46,072,249. At June 30, 2024, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
124
Miscellaneous Plan: Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 12,580,393 $ -
Changes of assumptions 2,346,179 -
Differences between expected and
actual experience 2,404,984 602,689
Net difference between projected
and actual earnings on pension
plan investments 9,453,301 -
Total $ 26,784,857 $ 602,689
Safety Plan: Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 20,640,831 $ -
Changes of assumptions 7,098,311 -
Differences between expected and
actual experience 5,354,679 394,673
Net difference between projected
and actual earnings on pension
plan investments 16,421,940 -
Total $ 49,515,761 $ 394,673
Total Miscellaneous and Safety Plans $ 76,300,618 $ 997,362 The $33,221,224 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2025.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
Measurement Periods Ended June 30
Annual Amortizations
Miscellaneous Safety Total
2024 $ 4,832,367 $ 9,764,678 $ 14,597,045
2025 1,909,548 6,391,980 8,301,528
2026 6,592,860 11,871,900 18,464,760
2027 267,000 451,699 718,699
Total $ 13,601,775 $ 28,480,257 $ 42,082,032
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
125
E. Vallejo Flood and Wastewater District Pension Plan
1. General Information about the District’s Pension Plan Plan Descriptions – Eligible employees of the District are provided with pensions through the District’s Miscellaneous Plan, a cost-sharing multiple-employer defined benefit pension plans administered by the California Public Employees’ Retirement System (CalPERS), which acts as a common investment and administrative agent for its participating member employers. The District’s Miscellaneous Plan is part of the public agency cost-sharing multiple-employer defined benefit pension plan (PERF C), which is administered by CalPERS. PERF C consists of a miscellaneous pool and a safety pool (also referred to as “risk pools”), which are comprised of individual employer miscellaneous and safety rate plans, respectively. Individual employers may sponsor more than one miscellaneous and safety rate plan. The employer participates in one cost-sharing multiple-employer defined benefit pension plan regardless of the number of rate plans the employer sponsors. The District sponsors two rate plans within the miscellaneous risk pool. Benefit provisions under the Plan are established by State statute and District resolution. CalPERS issues publicly available reports that include a full description of the pension plan regarding benefit provisions, assumptions and membership information that can be found on the CalPERS website.
Benefits Provided – CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 with statutorily reduced benefits. All members are eligible for non-duty disability benefits after 10 years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit, or the Optional Settlement 2W Death Benefit. The cost of living adjustments for the Plan are applied as specified by the Public Employees’ Retirement Law. The Pension Reform Act of 2013 (PEPRA), Assembly Bill 340, is applicable to employees new to CalPERS and hired after December 31, 2012.
The Plan’s provisions and benefits in effect at June 30, 2024, are summarized as follows:
Miscellaneous
Classic Tier I PEPRA
Hire Date Prior to January 1, 2013 On or After January 1, 2013 Benefit Formula 2.7% @ 55 2% @ 62
Benefit Vesting Schedule 5 years of service 5 years of service Benefit Payments monthly for life monthly for life
Retirement Age 50 - 55 52 - 67
Monthly Benefits, as a % of eligible compensation 2.0% - 2.7% 1.0% - 2.5% Required Employee Contribution Rates 8.00% 6.25%
Required Employer Contribution Rates* 15.950% 7.680%
$ 2,214,739 $ -
Required Contributions – Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers be determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. Funding contributions for the Plan is determined annually on an actuarial basis as of June 30 by CalPERS. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The District is required to contribute the difference between the actuarially determined rate and the contribution rate of employees.
For the year ended June 30, 2024, the District’s contributions to the Plan were $3,696,267.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
126
2. Pension liabilities, Pension Expenses, and Deferred Outflows/Inflows of Resources Related to Pensions
For purposes of measuring the net pension liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the Plan and additions to/deductions from the Plan’s fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value.
As of June 30, 2024, the District reported its proportionate share of the net pension liability of the Plan of $32,598,425.
The District’s net pension liability is measured as the proportionate share of the net pension liability. The net pension liability of the Plan is measured as of June 30, 2023, and the total pension liability for the Plan used to calculate the net pension liability was determined by an actuarial valuation as of June 30, 2022 rolled forward to June 30, 2023 using standard update procedures. The District’s proportion of the net pension liability was based on a projection of the District’s long-term share of contributions to the pension plans relative to the projected contributions of all participating employers, actuarially determined. The District’s proportionate share of the net pension liability for the Plan as of June 30, 2024 and 2023 was as follows:
Proportion - June 30, 2023 0.65022 %
Proportion - June 30, 2024 0.65191 %
Change - Increase (Decrease) 0.00169 %
For the year ended June 30, 2024, the District recognized pension expense of $4,796,152. At June 30, 2024, the District reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous Plan - VFWD
Deferred Outflows Deferred Inflows
of Resources of Resources
Pension contributions subsequent to the
measurement date $ 3,696,267 $ -
Change in employer's proportion 114,126 1,051,118
Differences between expected and actual
experience 1,665,304 258,329
Changes in assumptions 1,968,114 -
Difference between employer contributions
and the employer's
proportionate share of the risk pool's
contributions 251,266 288,665
Net difference between projected and actual
earnings on plan investments 5,277,977 -
Total $ 12,973,054 $ 1,598,112
The $3,696,267 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the year ended June 30, 2024.
Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
127
Year Ended
June 30 Annual Amortization
2025 $ 2,008,665
2026 1,428,916
2027 4,089,651
2028 151,443
$ 7,678,675
Changes in assumptions – Effective with the June 30, 2022 valuation date (2023 measurement date), there were no changes to the actuarial assumptions or methods in relation to financial reporting.
Discount Rate – The discount rate used to measure the total pension liability for the Plan was 6.90%. The projection of cash flows used to determine the discount rate for the Plan assumed that contributions from all plan members in the Public Employees Retirement Fund (PERF) will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members for all plans in the PERF. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefits payments to determine the total pension liability for the Plan.
The long-term expected rate of return on pension plan investments was determined using a building-block method in which best-estimate ranges of expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class.
In determining the long-term expected rate of return, CalPERS took into account both short-term and long- term market return expectations as well as the expected pension fund cash flows. Such cash flows were developed assuming that both members and employers will make their required contributions on time and as scheduled in all future years. Using historical returns of all the funds’ asset classes, expected compound (geometric) returns were calculated over the short-term (first 10 years) and the long-term (11+ years) using a building-block approach.
Using the expected nominal returns for both short-term and long-term, the present value of benefits was calculated for each fund. The expected rate of return was set by calculating the single equivalent expected return that arrived at the same present value of benefits for cash flows as the one calculated using both short-term and long-term returns. The expected rate of return was then set equal to the single equivalent rate calculated above and adjusted to account for the assumed administrative expenses.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
128
The expected real rates of return by asset class are as follows:
Asset Class
Assumed asset
allocation
Real Return
Years 1 - 10 1,2
Global Equity - Cap-weighted 30.00% 4.45%
Global Equity - Non Cap-weighted 12.00% 3.84%
Private Equity 13.00% 7.28%
Treasury 5.00% 0.27%
Mortage-backed securities 5.00% 0.50%
Investment Grade Corporates 10.00% 1.56%
High Yield 5.00% 2.27%
Emerging Market Debt 5.00% 2.48%
Private Debt 5.00% 3.57%
Real Assets 15.00% 3.21%
Leverage -5.00% -0.59%
Total 100.00%
1 An Expected Inflation of 2.3% used for this period.
2 Figures are based on the 2021-22 Asset Liability Management study.
Sensitivity of the Proportionate Share of the Net Pension Liability to Changes in the Discount Rate – The following presents the District’s proportionate share of the net pension liability for the Plan, calculated using the discount rate for the Plan, as well as what the District’s proportionate share of the net pension liability would be if it were calculated using a discount rate that is 1-percentage point lower or 1-percentage point higher than the current rate:
Miscellaneous
1% Decrease 5.90 %
Net Pension Liability $ 47,602,696
Current Discount Rate 6.90 %
Net Pension Liability $ 32,598,425
1% Increase 7.90 %
Net Pension Liability $ 20,248,622
Pension Plan Fiduciary Net Position – Detailed information about each pension plan’s fiduciary net position is available in the separately issued CalPERS financial reports.
1. Temporary and Seasonal Employees
Federal law requires that employees not covered by an employer retirement system be covered by Social Security or an alternative plan. The District hires temporary employees whose positions are exempt from PERS membership and utilizes Social Security for these positions.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 10 - PENSION PLAN (CONTINUED)
129
NOTE 11 - POSTEMPLOYMENT BENEFITS
A. Post Retirement Health Benefits - City
1. Plan Description
The City’s Post-Employment Benefit Plan is an Agent Multiple-Employer Plan. Employees and their dependents are eligible for the CalPERS post-retirement health benefits if they retire directly from the City retaining the Public Employees Medical and Hospital Care Act (PEMHCA) health benefits. The City pays the retiree and eligible dependent premiums up to benefit level established in the collective bargaining agreement for each employee organization.
The following is a summary of benefits by employee group as of June 30, 2024:
Employee Group Contractual Benefit at June 30, 2024
Vallejo Police Officers Association (VPOA) (imposed) Retired prior to 7/1/2000 - up to 75% of Kaiser Bay Area non-Medicare Premium
Retired on or after 7/1/2000 and hired before 1/1/2014 - up to $300 per month, but not less than PEMHCA minimum
Hired on or after 1/1/14 - PEMHCA minimum plus 1.5% of
employee's base monthly salary Retiree Health Savings
Account (RHSA) contribution
International Association of Fire Fighters (IAFF) Retired prior to 7/1/2000 - up to 75% of Kaiser Bay Area non-Medicare Premium
Retired on or after 7/1/2000 - up to $300 per month, but not less than PEMHCA minimum
Council and Unrepresented Up to $300 per month, but not less than PEMHCA minimum Confidential, Administrative, Management, and
Professional Employees Association (CAMP)
Hired before 7/1/2013 - up to $300 per month, but not less than PEMHCA minimum (with the option of electing, no later than 7/1/2016, the RHSA benefit available to CAMP employees hired on or after 7/1/2013)
Hired on or after 7/1/2013 - PEMHCA minimum plus 1.5% of employee's base monthly salary RHSA contribution
International Brotherhood of Electrical Workers
(IBEW)
Hired before 7/1/2014 - up to $300 per month, but not less than PEMHCA minimum (with the option of electing, no later than 10/31/2016, the RHSA benefit available to CAMP employees hired on or after 7/1/2014)
Hired on or after 7/1/2014 - PEMHCA minimum plus 1.5% of employee's base monthly salary RHSA contribution
The PEMHCA minimum in 2024 is $157 per month.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS
130
2. Funding Policy
In 2013, the City has established an irrevocable trust with California Employer's Retiree Benefit Trust (CERBT), an agent multiple-employer plan administered by CALPERS. CERBT is funded by employer contributions for the purpose of prefunding the City's OPEB obligations. CERBT provides an annual financial report that may be obtained from the California Public Employees’ Retirement System, CERBT, P.O. Box 942703, Sacramento, California 94229-2703.
For the year ended June 30, 2024, the City’s contributions to the Plan were $2,582,000.
3. General Information About City’s OPEB Plan
Employees Covered by Benefit Terms – Membership in the plan consisted of the following at the measurement date of June 30, 2023:
Active Employees 487
Inactive Employees or beneficiaries currently
receiving benefit payments 457
Inactive employees entitled to but not yet
receiving benefit payments 209
Total 1,153
Net OPEB Liability – The City’s net OPEB liability was measured as of June 30, 2023 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated June 30, 2022, based on the following actuarial methods and assumptions:
The net OPEB liability was determined as part of a June 30, 2022 actuarial valuation using the entry age normal actuarial cost method. This is a projected benefit cost method, which takes into account those benefits that are expected to be earned in the future as well as those already accrued. The actuarial assumptions included (a)
6.25% investment rate of return, (b) 2.50% general inflation rate, and (c) 8.50% (non-Medicare) and 7.50% (Medicare) in 2024, decreasing to an ultimate rate of 3.45% in 2076 medical trend. The actuarial methods and assumptions used include techniques that smooth the effects of short-term volatility in actuarial accrued liabilities and the actuarial value of assets. Actuarial calculations reflect a long-term perspective and actuarial valuations involve estimates of the value of reported amounts and assumptions about the probability of events far into the future. Actuarially determined amounts are subject to revision at least biannually as results are compared to past expectations and new estimates are made about the future. The actuarial accrued liability (AAL) representing the present value of future benefits, is being amortized as a level percentage of projected payroll using a 30-year amortization period.
The underlying mortality assumptions were based on the CalPERS 2000-2019 experience study and all other actuarial assumptions used in the June 30, 2022 valuation were based on the results of the actuarial experience study for the period.
The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
131
The target allocation and best estimates of arithmetic real rates of return for each major asset class are summarized in the following table:
Asset Class
Target
Allocation
CERBT -
Strategy 1
Expected
Real Rate
of Return
Global Equity 49.0% 4.56%
Fixed Income 23.0% 1.56%
TIPS 5.0% -0.08%
Commodities 3.0% 1.22%
REITs 20.0% 4.06%
Discount Rate – The discount rate used to measure the total OPEB liability was updated from 6.75% to 6.25%.
The projection of cash flows used to determine the discount rate assumed that City contributions will be made at rates equal to the actuarially determined contribution rates. Based on those assumptions, the OPEB plan’s fiduciary net position was projected to be available to make all projected OPEB payments for current active and inactive employees and beneficiaries. Therefore, the long-term expected rate of return on OPEB plan investments was applied to all periods of projected benefit payments to determine the total OPEB liability.
4. Changes in Net OPEB liability follows:
Increase (Decrease)
Total OPEB
Liability (a)
Plan Fiduciary
Net Position
(b)
Net OPEB
Liability (a)-(b)
Balance at 6/30/23 $ 33,783,000 $ 25,079,000 $ 8,704,000 Changes Recognized for the Measurement Period:
Service Cost 614,000 - 614,000
Interest 2,062,000 - 2,062,000
Contributions from the Employer - 2,821,000 (2,821,000) Net Investment Income - 1,611,000 (1,611,000)
Administrative Expenses - (36,000) 36,000
Benefit Payments (2,792,000) (2,792,000) -
Net Changes (116,000) 1,604,000 (1,720,000)
Balance at 6/30/24 $ 33,667,000 $ 26,683,000 $ 6,984,000 Detailed information about the OPEB plan’s fiduciary net position is available in the separately issued plan financial report that may be obtained from CERBT. The benefit payments and refunds noted above include implied subsidy benefit payments in the amount of $737,000. The net OPEB liability and related deferred outflows/inflows of resources are liquidated by the fund that has recorded the liability. The long-term portion of governmental activities net OPEB liability is liquidated primarily by the General Fund.
5. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate and Healthcare Cost Trend Rates
The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage-point higher than the current discount rate:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
132
Net OPEB Liability
Discount Rate
1% (5.25%)
Discount Rate
(6.25%)
Discount Rate
1% (7.25%)
$ 10,338,000 $ 6,984,000 $ 4,139,000
The following presents the net OPEB liability of the City, as well as what the City's net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage-point higher than the current healthcare cost trend rates:
Net OPEB Liability
Healthcare Trend Rate
1% Decrease Current Trend 1% Increase
$ 4,932,000 $ 6,984,000 $ 9,828,000
6. OPEB Expense and Deferred Outflows of Resources Related to OPEB For the year ended June 30, 2024, the City recognized OPEB income of $754,000. At June 30, 2024, the City reported deferred outflows and inflows of resources related to OPEB from the following sources:
Deferred Outflows Deferred Inflows
of Resources of Resources
Contributions subsequent to the
measurement date $ 2,582,000 $ -
Changes of assumptions 315,000 845,000
Differences between expected and
actual experience - 4,467,000
Net difference between projected
and actual earnings on OPEB
plan investments 1,720,000 -
Total $ 4,617,000 $ 5,312,000
The $2,582,000 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ended June 30, 2025. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:
Deferred
Outflows/(Inflows)
Fiscal year ended June 30, of Resources
2025 $ (953,000)
2026 (1,095,000)
2027 148,000
2028 (984,000)
2029 (393,000)
Total $ (3,277,000)
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
133
B. Post-Retirement Health Benefits - VFWD
1. Plan Description
The District’s defined benefit post-employment healthcare plan, Public Agency Post Retirement Health Care Plan (the Plan), provides medical benefits to eligible retired employees and their beneficiaries. The California Employers’ Retiree Benefit Trust (CERBT) Fund administers the Plan, an agent multiple-employer trust arrangement established to provide economies of scale and efficiency of administration to public agencies that hold assets used to fund OPEB obligations. Plan benefits were established in accordance with Board policy and Memorandums of Understanding for respective employee groups, and may be amended by the Board of Trustees. CERBT provides an annual financial report that can be found on the CalPERS website.
2. Funding Policy
The Plan is funded by employer contributions plus a retirement for employee matching in the amount of 2% of gross salary for all employees. As the plan’s sponsor, the District establishes and may amend employee and employer contribution requirements.
3. Benefits Provided
The following is a summary of Plan benefits by employee group as of June 30, 2024:
Eligibility Attained age 50
Completed 5 years of District service (if hired after 11/1/13) Retire concurrently from both District and CalPERS after leaving District employment
Benefit The District will pay the retired employee's entire monthly medical premium which may include his/her spouse and/or dependents, up to the highest costs local HMO.
Hired prior to 11/1/2013
Hired on or after 11/1/2013 Follows State of California Vesting Schedule, employer pays:
10 years (PERS covered service): 50%
Each additional year, add: 5%
20+ years: 100%
Membership in the plan consisted of the following at the measurement date of June 30, 2024:
Active plan member electing coverage 92
Retiree electing coverage 89
181
4. Net OPEB Liability
Actuarial Assumptions – The District’s net OPEB liability was measured as of June 30, 2024 and the total OPEB liability used to calculate the net OPEB liability was determined by an actuarial valuation dated January 1, 2022 that was rolled forward using standard update procedures to determine the total OPEB liability as of June 30, 2022 based on the following actuarial methods and assumptions:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
134
Actuarial Assumptions
Valuation Date June 30, 2022
Measurement Date June 30, 2024
Actuarial Cost Method Entry Age Method
Actuarial Assumptions:
Discount Rate 6.00%
Inflation 2.30%
Investment Rate of Return 5.10% for 1-5 years; 6.30% for 6+ years Mortality Rate Based on assumptions for Public Agency
Miscellaneous members published in November
2021 CalPERS Experience Study.
Healthcare Trend Rate
Pre-Medicare 6.00%*
Medicare 5.30%*
*Trending down to 3.73% over 52 years
The long-term expected rate of return on OPEB plan investments was determined using a building-block method in which best-estimates of expected future real rates of return (expected returns, net of OPEB plan investment expense and inflation) are developed for each major asset class. These ranges are combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and be adding expected inflation. The assumed asset weighting is based on target allocations published by CERBT.
Expected future asset class returns were published in the 2021 Survey of Capital Market Assumptions produced by Horizon Actuarial Services. The expected returns, along with expected asset c lass standard deviations and correlation coefficients, are based on Horizon’s annual survey of investment advisory firms. The expected inflation assumption was developed based on an analysis the historical experience blended with forward-looking expectations available in market data.
Estimated geometric real and nominal rates of return for each major asset class included in the OPEB Plan’s asset allocation as of the measurement date are summarized in the following table:
Allocation
Asset Class
1 - 20 Year Projected
Compound Return Strategy I Strategy II Strategy III
Global Equity 6.8 % 49 % 34 % 23 %
Fixed Income 3.7 % 23 % 41 % 51 %
Global Equity (REITs) 6.0 % 20 % 17 % 14 %
Treasury Inflation-Protected Securities (TIPS) 2.8 % 5 % 5 % 9 % Commodities 3.4 % 3 % 3 % 3 %
Total 100 % 100 % 100 %
CERBT Inflation Expected Compound Return
Expected Compound Return (1-5 Years) 2.4 % 5.1 % 4.2 % 3.5 % Expected Compound Return (6-20 Years) 2.3 % 6.3 % 5.9 % 5.5 % Expected Compound Return (1-20 Years) 2.3 % 6.0 % 5.5 % 5.0 % Expected Volatility 12.1 % 9.9 % 8.4 %
Plan
Expected Compound Return (1-20 Years) 2.3 % 6.0 % N/A N/A The Plan's expected return is weighted by the Plan's expected cash flow
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
135
Discount Rate – The final equivalent single discount rate used for accounting is 6.00 percent with the expectation that the Plan Sponsor will contribute in accordance with the Funding Policy. Under this Funding Policy, the OPEB Trust is not expected to be depleted in the future.
Investment Rate of Return – For the year ended June 30, 2023, the annual money-weighted rate of return on investments, net of investment expense, was 6.00%. The money-weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested.
Changes in Net OPEB Liability – The changes in the net OPEB liability were as follows:
Increase (Decrease)
Total OPEB
Liability (a)
Plan Fiduciary
Net Position (b)
Net OPEB
Liability (a)-(b)
Balance at 6/30/23 (Measurement Date) $ 23,374,678 $ 15,230,468 $ 8,144,210 Changes Recognized for the Measurement Period:
Service Cost 821,747 - 821,747
Interest on the total OPEB liability 1,407,369 - 1,407,369 Differences between expected and actual experience 111,792 - 111,792 Contributions from the Employer - 1,500,570 (1,500,570) Contributions from the Employee - 239,050 (239,050)
Net Investment Income - 1,690,349 (1,690,349)
Administrative Expenses - (7,799) 7,799
Benefit Payments (1,480,570) (1,480,570) -
Net Changes 860,338 1,941,600 (1,081,262)
Balance at 6/30/24 (Measurement Date) $ 24,235,016 $ 17,172,068 $ 7,062,948 Sensitivity of the Net OPEB Liability to Changes in the Discount Rate – The following presents the net OPEB liability of the District, as well as what the District’s net OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower or 1-percentage point higher than the current discount rate:
Plan's Net OPEB Liability
Discount Rate
1% (5.00%)
Discount Rate
(6.00%)
Discount Rate
1% (7.00%)
$ 9,795,393 $ 7,062,948 $ 4,767,751
Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rate - The following presents the net OPEB liability of the District, as well as what the District’s net OPEB liability would be if it were calculated using healthcare cost trend rates that are 1-percentage-point lower or 1-percentage- point higher than the current healthcare cost trend rates:
Plan's Net OPEB Liability
Healthcare Trend Rate
1% Decrease
Current Trend
(6.70% to 3.80%) 1% Increase
$ 4,043,433 $ 7,062,948 $ 10,744,460
OPEB Expense and Deferred Outflows/Inflows of Resources related to OPEB - For the year ended June 30, 2024, the District recognized OPEB expense of $1,589,686. At June 30, 2024, the District reported deferred outflows and inflows of resources related to OPEB from the following sources:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
136
Deferred Outflows of
Resources
Deferred Inflows of
Resources
Differences Between Expected and Actual Experience $ 412,974 $ 1,687,564 Changes in assumptions 1,018,556 102,140
Net Differences Between Projected and Actual Earnings on OPEB Plan Investments 38,508 -
Total $ 1,470,038 $ 1,789,704
Amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized as part of OPEB expense as follows:
Deferred
Fiscal year ended Outflows/(Inflows)
June 30, of Resources
2025 $ 426,737
2026 333,016
2027 (553,492)
2028 (541,345)
2029 15,418
Total $ (319,666)
NOTE 12 - NET POSITION AND FUND BALANCES
A. Net Position - Statement of Net Position
Net Position is the excess of all assets and deferred outflows of resources over all liabilities and deferred inflows of resources. Net Position is divided into three captions. These captions apply only to Net Position, which is determined only at the Government-wide level, proprietary fund level, and fiduciary fund level and are described below:
Net investment in capital assets, describes the portion of Net Position which is represented by the current net book value of capital assets, less the outstanding balance of any debt issued to finance these assets.
At June 30, 2024, the City’s net investment in capital assets is calculated as follows:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 11 - POSTEMPLOYMENT BENEFITS (CONTINUED)
137
Business-Type Activities Total
Governmental Water Marina Golf Vallejo Station Fiber Optic Business-Type Internal Activities Fund Fund Fund Parking Fund Fund Activities Service Funds Capital assets, net of
accumulated depreciation $ 360,920,317 $ 94,146,537 $ 12,111,637 $ 8,335,459 $ 545,204 $ 428,299 $ 115,567,136 $ 7,987,123 Less:
Bonds, notes and finance
purchase agreements (A) (16,692,998) (69,386,174) (10,360,143) (5,495,570) - - (85,241,887) (4,400,000) Leases payable (3,586,171) (36,744) - - - - (36,744) - Subscription payable (504,039) (282,832) - - - - (282,832) - Add:
Deferred charges - 907,658 - - - - 907,658 -
Negative accreted interest (A) 624,410 - 1,299,057 797,895 - - 2,096,952 - Unspent Bond Proceeds 5,109,068 45,547,878 - - - - 45,547,878 5,109,068 Net investment in capital assets $ 345,870,587 $ 70,896,323 $ 3,050,551 $ 3,637,784 $ 545,204 $ 428,299 $ 78,558,161 $ 8,696,191 (A) Bonds, notes and finance purchase agreements include accreted interest. Since interest on long-term debt is excluded in the calculation of the net investment in capital assets, the accreted interest portion of the debt is added back.
Restricted describes the portion of Net Position which is restricted as to use by the terms and conditions of agreements with outside parties, governmental regulations, laws, or other restrictions which the City cannot unilaterally alter.
Unrestricted describes the portion of Net Position which is not restricted to use.
B. Fund Balance - Governmental Funds Balance Sheet
Governmental fund balances represent the net current assets of each fund. Net current assets generally represent a fund’s cash and receivables, less its liabilities.
The City’s fund balances are classified based on spending constraints imposed on the use of resources. For programs with multiple funding sources, the City prioritizes and expends funds in the following order: Restricted, Committed, Assigned, and Unassigned. Each category in the following hierarchy is ranked according to the degree of spending constraint:
Nonspendable represents balances set aside to indicate items do not represent available, spendable resources even though they are a component of assets. Fund balances required to be maintained intact, such as Permanent Funds, and assets not expected to be converted to cash, such as prepaids, notes receivable, and land held for redevelopment are included. However, if proceeds realized from the sale or collection of non-spendable assets are restricted, committed or assigned, then non-spendable amounts are required to be presented as a component of the applicable category.
Restricted fund balances have external restrictions imposed by creditors, grantors, contributors, laws, regulations, or enabling legislation which requires the resources to be used only for a specific purpose. Encumbrances and non-spendable amounts subject to restrictions are included along with spendable resources.
Committed fund balances have constraints imposed by formal action of the City Council which may be altered only by resolution of the City Council. Encumbrances and non-spendable amounts subject to council commitments are included along with spendable resources.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 12 - NET POSITION AND FUND BALANCES (CONTINUED)
138
Assigned fund balances are amounts constrained by the City’s intent to be used for a specific purpose but are neither restricted nor committed. Intent is expressed by the City Council or its designee and may be changed at the discretion of the City Council or its designee. This category includes encumbrances; non-spendables, when it is the City’s intent to use proceeds or collections for a specific purpose, and residual fund balances, if any, of Special Revenue, Capital Projects and Debt Service Funds which have not been restricted or committed.
Unassigned fund balance represents residual amounts that have not been restricted, committed, or assigned.
This includes the residual General Fund balance and residual fund deficits, if any, of other governmental funds.
Detailed classifications of the City’s Fund Balances, as of June 30, 2024, are below:
Fund Balance Classifications
General
Fund
Housing
Authority
Fund
Capital
Outlay Fund
#201
Mare Island
Conversion
Fund #106
Non Major
Government
al Funds Total
Nonspendable:
Items not in spendable form:
Prepaids and deposits $ 83,535 $ - $ 534,867 $ - $ - $ 618,402 Notes Receivable 2,809,183 - - - - 2,809,183
Advance to other funds 680,000 - - - - 680,000
Land Held for Redevelopment 499,684 - - - - 499,684 Materials, Parts and Supplies 1,185 - - - - 1,185 Subtotal 4,073,587 - 534,867 - - 4,608,454
Amounts required to be maintained intact:
Permanent Funds - - - - 64,625 64,625
Total Nonspendable Fund Balances 4,073,587 - 534,867 - 64,625 4,673,079 Restricted for:
Bond indentures - - - - 289,677 289,677
Streets and Highways - - - - 39,090,943 39,090,943 Community Development and Housing - 12,381,175 - 4,333,793 8,021,150 24,736,118 Pension Benefits 22,162,616 - - - - 22,162,616
Public Safety Programs 557,787 - - - 1,140,024 1,697,811 Settlement 4,153,222 - - - - 4,153,222
Public Facilities Projects - - 4,715,806 - 22,754,230 27,470,036 Hiddenbrooke Overpass - - - - 6,912,191 6,912,191 Total Restricted Fund Balances 26,873,625 12,381,175 4,715,806 4,333,793 78,208,215 126,512,614 Committed to:
Mare Island Development - - - - 423,363 423,363
Public Facilities Projects
(funded by General Fund) - - - - 788,154 788,154
Capital outlay development - - 23,259,058 - - 23,259,058 Community Development and
Housing - 1,284,722 - - - 1,284,722
Public Facilities Projects (other funds) - - - - 4,292,114 4,292,114 Total Committed Fund Balances - 1,284,722 23,259,058 - 5,503,631 30,047,411
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 12 - NET POSITION AND FUND BALANCES (CONTINUED)
139
Fund Balance Classifications
General
Fund
Housing
Authority
Fund
Capital
Outlay Fund
#201
Mare Island
Conversion
Fund #106
Non Major
Government
al Funds Total
Assigned to:
General Fund Programs (Subsequent
year's budget) - - - - 149,271 149,271
Measure P 15,025,253 - - - - 15,025,253
Arts and Convention Center - - - - 284,110 284,110 Public Facilities Maintenance - - - - 157,797 157,797 Other Contracts 963,299 - - - - 963,299
Staffing Support 2,000,000 - - - - 2,000,000
Community Development and Housing - 2,869,892 - - - 2,869,892 Total Assigned Fund Balances 17,988,552 2,869,892 - - 591,178 21,449,622 Unassigned:
General Fund 29,981,940 - - - - 29,981,940
Other governmental fund deficit
residuals - - - - (276,216) (276,216)
Total Unassigned Fund Balances 29,981,940 - - - (276,216) 29,705,724 Total Fund Balances $ 78,917,704 $ 16,535,789 $ 28,509,731 $ 4,333,793 $ 84,091,433 $ 212,388,450 C. Minimum Fund Balances
The City’s Budget and Fiscal Policy requires the City to strive to maintain two months of annual appropriations in the General Fund’s Unassigned Fund Balance. As of June 30, 2024, the Unassigned Fund Balance reached $29,981,940, which is 2.6 months of 2024-25 annual appropriations of $138 million, including Measure B.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 12 - NET POSITION AND FUND BALANCES (CONTINUED)
140
D. Deficits
The funds below had fund balance or net position deficits at June 30, 2024:
Special Revenue Fund
Justice Assistant Grant Fund #149 (A) 78,660
Capital Projects Fund
Capital Grant & Contribution Fund #221 (A) 197,556
Enterprise Funds
Fiber Optic Fund (B) 98,288
Internal Service Funds:
Retiree Health Benefits (C) 5,647,504
Fiduciary Funds
Hiddenbrooke Improvement District (D) 2,185,835
NE Quadrant Improvement District (D) 2,822,944
Successor Agency (D) 3,726,257
(A) The net position deficit is due to grant reimbursements not received within the City’s availability period. (B) The net position of the Fiber Optic Funds are anticipated to gradually improve over time with the revamp of the City's broadband infrastructure.
(C) The Retiree Health Benefits Internal Service Fund had a net position deficit of $ 5,647,504 due to recognition of the net OPEB liability. The City had established an irrevocable trust plan to prefund the liability and reduce the deficit.
(D) The net position deficits in fiduciary funds are mainly due to the recognition of the long-term of Assessment Districts and Successor Agency. The special assessments and Redevelopment Property Tax Trust Fund (RPTTF) received by the City on behalf of the bondholders continued to provide sufficient resources for these funds to cover the required annual debt service.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 12 - NET POSITION AND FUND BALANCES (CONTINUED)
141
E. Restatement of Net Position - Prior Period Adjustments Changes to or within the Reporting Entity
The Capital Outlay Fund was previously reported as a nonmajor governmental fund during the prior fiscal year.
Due to a significant increase in assets of the fund during the year, it met the requirements of being presented as a major fund, in accordance with GASB Statement No. 34, during the fiscal year ended June 30, 2024. The effects of that change to or within the reporting entity are shown below.
The Marina Fund, Golf Fund, Vallejo Station Parking Fund and Fiber Optic Funds were previously reported as a major proprietary funds during the prior fiscal year. Due to a significant decrease in activity the City has elected to no longer present as major and are in accordance with GASB Statement No. 34, during the fiscal year ended June 30, 2024. The effects of that change to or within the reporting entity are shown below. 6/30/2023 Changes to or
As Previously within the 6/30/2023
Reported Reporting Entity As Restated
Government-wide
Governmental activities $ 280,170,665 $ - $ 280,170,665 Business-type activities 94,226,535 - 94,226,535
Total government-wide 374,397,200 - 374,397,200
Governmental funds
Major funds
General fund 64,579,600 - 64,579,600
Housing Authority 16,711,710 - 16,711,710
Mare Island Conversion 3,441,689 - 3,441,689
Capital Outlay Fund - 19,552,696 19,552,696
Nonmajor funds 97,867,824 (19,552,696) 78,315,128
Total governmental funds 182,600,823 - 182,600,823
Proprietary funds
Major funds
Water Fund 86,709,616 - 86,709,616
Marina Fund 1,911,600 (1,911,600) -
Golf Fund 5,004,618 (5,004,618) -
Vallejo Station Parking Fund 817,367 (817,367) -
Fiber Optic Fund (216,666) 216,666 -
Nonmajor funds - 7,516,919 7,516,919
Total proprietary funds $ 94,226,535 $ - $ 94,226,535
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 12 - NET POSITION AND FUND BALANCES (CONTINUED)
142
NOTE 13 - SELF-INSURANCE PROGRAM
The City manages risk by participating in the public entity risk pools described below and by retaining certain risks.
Public entity risk pools are formally organized and separate entities established under the Joint Exercise of Powers Act of the State of California. As separate legal entities, those entities exercise full powers and authorities within the scope of the related Joint Powers Agreements including the preparation of annual budgets, accountability for all funds, the power to make and execute contracts and the right to sue and be sued. Each risk pool is governed by a board consisting of representatives from member municipalities. Each board controls the operations of the respective risk pool, including selection of management and approval of operating budgets, independent of any influence by members beyond their representation on that board. Obligations and liabilities of these risk pools are not the City’s responsibility.
A. Risk Coverage
City – The City of Vallejo h as operated a self-insured liability program for many years. Its self-insured retention (SIR) for 2023-24 was $1,000,000, with an additional $1,000,000 corridor deductible. Public Risk Innovation, Solutions and Management (PRISM), formerly known as the California State Association of Counties Excess Insurance Authority (CSAC-EIA) provides coverage in excess of the City’s SIR. During the fiscal year ended June 30, 2024, the City contributed $2,448,022 for general liability coverage during the current year.
PRISM also covers the City’s workers' compensation claims up to statutory limits. The City has an SIR of $500,000 per claim. During the fiscal year ended June 30, 2024, the City contributed $642,537 for current year coverage.
The contributions made to each risk pool equal the ratio of their respective payrolls to the total payrolls of all entities participating in the same layer of each program, in each program year. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating.
The City has also purchased a Difference in Conditions insurance policy that includes earthquake coverage and provides coverage up to $25,000,000 per occurrence with a general deductible of $25,000 for claims other than flood and earthquake. Flood claims are subject to a minimum of $100,000 and earthquake claims have a deductible of 5% of the insured value with a minimum deductible of $100,000. The City also has ancillary insurance policies, including Cyber Liability.
Vallejo Flood and Wastewater District — VFWD is a member of the California Sanitation Risk Management Authority which provides coverage up to $450,000 for general liability claims, subject to a deductible of $2,500.
Excess public entity general liability insurance is obtained for coverage up to $15,500,000 associated with either sanitary sewer or storm drain operations. Auto liability is subject to a deductible of $1,000 with coverage up to $3,563,285.
California Sanitation Risk Management Authority also provides coverage up to $750,000 for workers’ compensation. Excess workers compensation insurance provides coverage up to $1,000,000. Pollution remediation insurance provides coverage up to $1,000,000 and $5,000,000 in the aggregate, with a deductible of $25,000. Property insurance provides coverage up to $187,777,466 with a deductible of $10,000.
B. Liability for Uninsured Claims
The following is a summary of changes in the City’s recorded claims liabilities during the years ended June 30, 2024:
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 13 - SELF-INSURANCE PROGRAM
143
2024 2023
Beginning Balance $ 28,391,000 $ 25,209,000
Current year claims and increase (decrease)
in prior estimates 7,548,285 8,396,986
Claims paid (7,407,285) (5,214,986)
Ending Balance $ 28,532,000 $ 28,391,000
Current Portion $ 6,938,010 $ 7,158,378
The claims payable are reported at their present value using expected future investment yield assumption of 3%.
The undiscounted claims totaled $32,875,000 at June 30, 2024.
The City and VFWD have not significantly reduced insurance coverage from the prior year. Furthermore, settlements have not exceeded insurance coverage for the past three fiscal years.
NOTE 14 - COMMITMENTS AND CONTINGENCIES
A. Litigation
The City is involved in various claims and litigation resulting from its normal operations. The ultimate outcome of these matters is not presently determinable. In City management’s opinion these matters will not have significant adverse effect of the City’s financial position.
B. Federal and State Grant Programs
The City participates in several federal and State grant programs. These programs are subject to further examination by the grantors and the amount, if any, of expenditures which may be disallowed by the granting agencies cannot be determined at this time. The City expects such amounts, if any, to be immaterial.
C. Encumbrances
The City uses an encumbrance system as an extension of normal budgetary accounting for governmental funds.
Under this system, purchase orders, contracts, and other commitments for the expenditure of monies are recorded in order to reserve that portion of applicable appropriations. Encumbrances outstanding at year end are recorded as restricted, committed or assigned fund balance, depending on the classification of the resources to be used to liquidate the encumbrance, since they do not constitute expenditures or liabilities. Outstanding encumbrances at year-end are automatically reappropriated for the following year. Unencumbered and unexpended appropriations lapse at year-end. Encumbrances outstanding by fund as of June 30, 2024 were as follows:
Major Governmental Funds:
General Fund $ 963,299
Housing Authority 932,936
Capital Outlay #201 4,010,301
Mare Island Conversion #106 28,152
Non-major Governmental Funds 1,929,944
D. Long Term Construction Contracts
In addition to the encumbrances discussed above, the City and Vallejo Flood and Wastewater District have various ongoing capital projects that involve long-term construction contracts with progress payments billed and paid on a percentage-of-completion basis. Construction commitments related to these contracts at June 30, 2024 of City and VFWD amounted to approximately $6.3 million and $26.6 million, respectively.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 13 - SELF-INSURANCE PROGRAM (CONTINUED)
144
NOTE 15 - REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES The City Council assumed the duties of the Successor Agency to the Former Vallejo Redevelopment Agency (Successor Agency) upon State redevelopment dissolution on February 1, 2012. Amendments to the State Health and Safety Code, enacted through ABx1 26 on June 28, 2011, AB1484 on June 27, 2012, and SB107 on September 11, 2015 suspended most redevelopment activities and charged successor agencies to retire redevelopment obligations and dispose of assets.
The activities of the Successor Agency are subject to review and approval of an Oversight Board, which is comprised of seven members, including one member representing the City Council, one representing the former Redevelopment Agency (RDA) employees, and five members representing other taxing agencies within the County. Oversight Board actions are further subject to review and approval by the State Department of Finance (DOF).
The activities of the Successor Agency are reported in the Successor Agency to the Former Redevelopment Agency Private-Purpose Trust Fund, because activities are under the control of the Oversight Board. The City provides administrative services to the Successor Agency.
Cash and investments of the Successor Agency as of June 30, 2024 are discussed in Note 2. Information about other assets and liabilities of the Successor Agency as of June 30, 2024 is presented on the following pages.
A. Notes and Loans Receivable
Meyer Cookware Industries, Inc.
Pursuant to a Disposition and Development Agreement between the RDA and Meyer Cookware Industries, Inc., the former RDA paid certain development fees on behalf of Meyer totaling $1,500,000. Meyer agreed to repay $500,000 of these fees to the RDA over a 24-year period commencing in 1998. This loan to Meyer is secured by a corporate guarantee and is non-interest bearing. The final payment was made in the fiscal year ending June 30, 2018.
The obligation of Meyer to repay the remaining $1,000,000 is contingent upon either on the sale of the property or the refinancing of the existing debt. As a result, the $1,000,000 is not included as a receivable in the accompanying basic financial statements. Meyer has agreed to pay the RDA either 9% of the net sale proceeds upon any sale of the property as satisfaction in full of the development contribution, or net refinancing proceeds if such a refinancing should occur. Ten years following the issuance of the Certificate of Occupancy (1995), the participation in proceeds from the sale of property or refinancing has been reduced from 9% to 5%.
B. Capital Assets
The Successor Agency assumed the capital assets of the RDA as of February 2012. All capital assets are valued at historical cost or estimated historical cost if actual historical cost is not available. Contributed capital assets are valued at their estimated fair market value on the date contributed. The Successor Agency’s policy is to capitalize all assets with costs exceeding certain minimum thresholds and with useful lives exceeding two years. Capital assets at June 30, 2024 were comprised of land of $189,226 and Building and Improvements, net of accumulated depreciation, of $35,643. Current year additions to accumulated depreciation were $4,193.
C. Long-Term Obligations
The Successor Agency assumed the long-term obligations of the former RDA as of February 2012.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 15 - REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES 145
1. Current Year Transactions and Balances
Original Issue
Amount
Balance
June 30, 2023
Retirements/
Adjustments
Balance
June 30, 2024 Current Portion
Tax Allocation Bonds:
Housing Set Aside 7.0%,
due 10/1/2031 $ 5,410,000 $ 2,135,000 $ 180,000 $ 1,955,000 $ 190,000 Total Tax Allocation Bonds 5,410,000 2,135,000 180,000 1,955,000 190,000 Other Obligations:
Advances from the City of Vallejo 4,436,351 3,526,543 1,022,615 2,503,928 - Total Other Obligations 4,436,351 3,526,543 1,022,615 2,503,928 - Total Successor Agency Debt $ 9,846,351 $ 5,661,543 $ 1,202,615 $ 4,458,928 $ 190,000
2. Tax Allocation Bonds
Vallejo Housing Set Aside – In August 2001, the RDA issued Tax Allocation Bonds in the amount of $5,410,000 to finance housing activities of the RDA and to repay a loan from the PFA. Semi-annual interest payments are due on April 1 and October 1 and annual principal payments are due October 1. The bonds are subject to mandatory sinking fund redemption and payment is made solely from, and secured by, housing set-aside tax increment revenues generated within the redevelopment project areas.
Pledge of Tax Revenues – As discussed above, the RDA has pledged all future tax increment revenues, less amounts required to be set aside in the RDA’s Low and Moderate Income Housing Fund, for the repayment of the Tax Allocation Bonds. The pledge of all future tax increment revenues ends upon repayment of $2,872,975 debt service on the Bonds above, which is scheduled to occur in 2032. With the dissolution of the RDA discussed above, Tax Increment is no longer distributed and instead the Successor Agency receives payments from the County’s Redevelopment Property Tax Trust fund (RPTTF) that are to be used to fund debt service on the Bonds, with no distinction between housing and non-housing revenues. In fiscal year 2024, the Successor Agency received sufficient RPTTF distributions to meet all bond obligations for the year.
3. Advances from the City
The loan balances as of June 30, 2024 are as follows:
Principal Accrued Interest Total
Hiddenbrooke Overpass Capital Project Fund $ 46,455 $ 202,419 $ 248,874 Bridge Construction Capital Projects Fund 27,512 230,450 257,962 Arts and Convention Center Capital Projects 201,080 1,796,012 1,997,092 General Fund:
Waterfront 162,805 889,915 1,052,720
Marina Vista - 647,510 647,510
Central 708,372 1,016,227 1,724,599
Less: Allowance for Doubtful Accounts (871,177) (2,553,652) (3,424,829) $ 275,047 $ 2,228,881 $ 2,503,928
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 15 - REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (CONTINUED) 146
The loans bear simple interest of 3.00%. Repayment of these loans is governed by Health and Safety Code Section 34176(e)(6) and the maximum annual repayment is limited based on calculations in that Code Section.
Repayment installments were approved by the State Department of Finance starting fiscal year 2016-17 through the annual ROPS process. Additional information about these advances can be found in Note 4h.
4. Debt Service Requirements
Debt service requirements to maturity are shown below for all long-term debt, except the advances from the City, because the ultimate repayment terms cannot be determined at this time, as discussed above:
Ending June 30, Principal Accrued Interest
2025 $ 190,000 $ 130,200
2026 205,000 116,375
2027 220,000 101,500
2028 235,000 85,575
2029 250,000 68,600
2030-2034 855,000 92,575
Total $ 1,955,000 $ 594,825
D. Commitments and Contingencies
1. Oversight Board and State Approval of Enforceable Obligations The Successor Agency prepares an annual Recognized Obligation Payment Schedule (ROPS) that contains proposed expenditures for the upcoming fiscal year. All payment obligations are subject to annual review and re- approval by the Oversight Board and the State DOF. The City expects future adjustments by the Oversight Board and State DOF, if any, to be immaterial.
NOTE 16: SUBSEQUENT EVENTS
The City evaluated subsequent events for recognition and disclosure through February 26, 2025, the date on which these financial statements were available to be issued. Management concluded that no material subsequent events have occurred since June 30, 2024, that required recognition or disclosure in these financial statements.
CITY OF VALLEJO
Notes to Financial Statements
For the Year Ended June 30, 2024
NOTE 15 - REDEVELOPMENT AGENCY DISSOLUTION AND SUCCESSOR AGENCY ACTIVITIES (CONTINUED) 147
Required Supplementary Information
148
Budgetary Information
149
This page left intentionally blank.
150
Schedules of Revenues, Expenditures, and Changes in Fund Balances:
Budget and Actual - General Fund and Major Special Revenue Funds 151
General Fund
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Taxes $ 127,176,744 $ 126,049,859 $ 126,228,409 $ 178,550 Licenses and permits 5,168,125 5,386,871 4,582,940 (803,931) Intergovernmental revenues 4,239,749 23,113,143 12,811,260 (10,301,883) Charges for services 10,119,354 9,992,310 9,017,870 (974,440) Use of money and property 2,264,875 2,264,875 6,321,330 4,056,455 Fines and forfeitures 1,031,933 1,048,221 864,480 (183,741) Contribution revenue - - 2,166,494 2,166,494
Other 402,366 369,399 278,366 (91,033)
Total revenues 150,403,146 168,224,678 162,271,149 (5,953,529)
EXPENDITURES
Current:
Legislative and advisory 308,279 310,079 320,378 (10,299) Executive 3,153,422 3,417,279 2,739,860 677,419
Finance 2,623,734 2,806,679 2,385,419 421,260
Human resources 2,522,818 2,512,187 1,809,149 703,038 Law 2,157,405 1,975,944 1,579,391 396,553
Economic development 2,121,876 1,912,564 1,653,183 259,381 Planning and development services 6,353,901 6,410,890 5,236,955 1,173,935 Fire services 32,845,610 32,564,821 34,197,102 (1,632,281) Police services 57,821,656 55,602,652 53,908,951 1,693,701 Public works 10,366,766 9,931,498 9,235,273 696,225 Non departmental 1,632,589 9,418,477 6,542,651 2,875,826 Information technology 1,770,381 1,735,863 1,834,671 (98,808) Capital outlay - - 63,391 (63,391)
Debt service:
Principal long term debt payments 1,500 1,500 - 1,500 Principal - lease payments - - 25,168 (25,168)
Interest and fiscal charges - - 1,096 (1,096)
Total expenditures 123,679,937 128,600,433 121,532,638 7,067,795 Excess (deficiency) of revenues
over (under) expenditures 26,723,209 39,624,245 40,738,511 1,114,266
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) 576,295 576,295 664,414 88,119 Transfers out (Note 3a) (9,753,391) (38,507,474) (27,128,212) 11,379,262 Lease proceeds - - 63,391 63,391
Total other financing sources (uses) (9,177,096) (37,931,179) (26,400,407) 11,530,772 Net change in fund balance $ 17,546,113 $ 1,693,066 14,338,104 $ 12,645,038 Fund balance-beginning 64,579,600
Fund balance-ending $ 78,917,704
CITY OF VALLEJO
Required Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual General Fund
For the Year Ended June 30, 2024
152
Required Supplementary Information
Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Housing Authority
For the Year Ended June 30, 2024
Variance with
Final Budget
Budget Amounts Actual Positive
Original Final Amounts (Negative)
REVENUES
Intergovernmental revenues $ 23,895,586 $ 23,957,601 $ 23,470,562 $ (487,039) Use of money and property - - 227,145 227,145
Other 16,600 16,600 123,460 106,860
Total revenues 23,912,186 23,974,201 23,821,167 (153,034)
EXPENDITURES
Current:
Community services 22,867,025 26,255,668 24,154,207 2,101,461 Debt service:
Principal - lease payments - - 2,876 (2,876)
Interest and fiscal charges - - 5 (5)
Total expenditures 22,867,025 26,255,668 24,157,088 2,098,580 Excess (deficiency) of revenues
over (under) expenditures 1,045,161 (2,281,467) (335,921) 1,945,546
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) 160,000 160,000 160,000 -
Total other financing sources (uses) 160,000 160,000 160,000 - Net change in fund balance $ 1,205,161 $ (2,121,467) (175,921) $ 1,945,546 Fund balance-beginning 16,711,710
Fund balance-ending $ 16,535,789
CITY OF VALLEJO
153
City's Retiree Medical Benefits (OPEB) Schedule of Changes in the Net OPEB Liability and Related Ratios 2024 2023 2022 2021
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Total OPEB Liability
Service cost $ 614,000 $ 946,000 $ 919,000 $ 912,000
Interest on the total OPEB liability 2,062,000 2,621,000 2,576,000 2,668,000 Differences between expected and actual experiences - (5,020,000) - (2,947,000) Changes in assumptions - (1,229,000) - 911,000
Benefit payments (2,792,000) (2,835,000) (2,893,000) (2,886,000) Net change in total OPEB liability (116,000) (5,517,000) 602,000 (1,342,000) Total OPEB liability - beginning 33,783,000 39,300,000 38,698,000 40,040,000 Total OPEB liability - ending (a) 33,667,000 33,783,000 39,300,000 38,698,000 Plan Fiduciary Net Position
Contribution - employer 2,821,000 2,860,000 2,919,000 2,914,000 Net investment income 1,611,000 (3,878,000) 6,249,000 776,000 Benefit payments (2,792,000) (2,835,000) (2,893,000) (2,886,000) Administrative expense (36,000) (32,000) (35,000) (39,000) Net change in plan fiduciary net position 1,604,000 (3,885,000) 6,240,000 765,000 Plan fiduciary net position - beginning 25,079,000 28,964,000 22,724,000 21,959,000 Plan fiduciary net position - ending (b) 26,683,000 25,079,000 28,964,000 22,724,000 Net OPEB Liability/(Assets) - ending (a) - (b) $ 6,984,000 $ 8,704,000 $ 10,336,000 $ 15,974,000 Plan fiduciary net position as a percentage of the
total OPEB liability
79.26% 74.24% 73.70% 58.72%
Covered-employee payroll $ 67,500,000 $ 64,940,000 $ 64,879,000 $ 61,630,000 Net OPEB liability as a percentage of covered-
employee payroll
10.35% 13.40% 15.93% 25.92%
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios City's Retiree Medical Benefits (OPEB) Agent Multiple-Employer Plan As of June 30, for the Last Ten Fiscal Years (1)
154
2020 2019 2018
Measurement Period June 30, 2019 June 30, 2018 June 30, 2017 Total OPEB Liability
Service cost $ 889,000 $ 988,000 $ 965,000
Interest on the total OPEB liability 2,624,000 2,886,000 2,831,000 Differences between expected and actual experiences - (5,289,000) - Changes in assumptions - (1,054,000) -
Benefit payments (2,909,000) (2,997,000) (2,957,000) Net change in total OPEB liability 604,000 (5,466,000) 839,000 Total OPEB liability - beginning 39,436,000 44,902,000 44,063,000 Total OPEB liability - ending (a) 40,040,000 39,436,000 44,902,000 Plan Fiduciary Net Position
Contribution - employer 2,941,000 4,340,000 6,468,000 Net investment income 1,277,000 1,437,000 1,479,000
Benefit payments (2,909,000) (2,997,000) (2,957,000) Administrative expense (36,000) (76,000) (42,000)
Net change in plan fiduciary net position 1,273,000 2,704,000 4,948,000 Plan fiduciary net position - beginning 20,686,000 17,982,000 13,034,000 Plan fiduciary net position - ending (b) 21,959,000 20,686,000 17,982,000 Net OPEB Liability/(Assets) - ending (a) - (b) $ 18,081,000 $ 18,750,000 $ 26,920,000 Plan fiduciary net position as a percentage of the
total OPEB liability
54.84% 52.45% 40.05%
Covered-employee payroll $ 58,767,558 $ 55,348,748 $ 54,537,858 Net OPEB liability as a percentage of covered-
employee payroll
30.77% 33.88% 49.36%
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF VALLEJO
Schedule of Changes in the Net OPEB Liability and Related Ratios (Continued) Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
155
City's Retiree Medical Benefits (OPEB) Schedule of Contributions 2024 2023 2022 2021
Actuarially Determined Contribution $ 1,178,000 $ 2,038,000 $ 2,114,000 $ 2,442,000 Contribution in Relation to the Actuarially
Determined Contributions
(2,582,000) (2,821,000) (2,860,000) (2,919,000)
Contribution Deficiency (Excess) $ (1,404,000) $ (783,000) $ (746,000) $ (477,000) Covered-employee payroll $ 71,494,000 $ 67,500,000 $ 64,940,000 $ 64,879,000 Contributions as a percentage of covered-
employee payroll
3.61% 4.18% 4.40% 4.50%
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable.
Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
Notes to Schedule:
*Actuarial methods and assumptions used to set the actuarially determined contribution for Fiscal Year 2024 were from the June 30, 2022 actuarial valuation.
Methods and
assumptions used to
determine
contributions:
Actuarial Cost Method Entry Age Normal, level percent of payroll Amortization Method Level percent of pay
Amortization Period 16-year fixed period on average for FY2023/24 Asset Valuation
Method
Investment gains and losses spread over 5 year rolling period Discount rate 6.25%
Inflation 2.50%
Medical Trend Non-Medicare -8.50% for 2024, decreasing to an ultimate rate of 3.45% in 2076 Medicare (Non-Kaiser) - 7.50% for 2024, decreasing to an ultimate rate of 3.45% in 2076
Medicare (Kaiser) - 6.25% for 2024, decreasing to an ultimate rate of 3.45% in 2076 Mortality CalPERS 2000-2019 Experience study
Mortality Improvement Post-retirement mortality projected fully generational with Scale MP-2021 All Other Assumptions Same as those used to determine the total OPEB liability
CITY OF VALLEJO
Required Supplementary Information
Schedule of Contributions
City's Retiree Medical Benefits (OPEB)
Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
156
2020 2019 2018
Actuarially Determined Contribution $ 2,382,000 $ 2,321,000 $ 2,994,000 Contribution in Relation to the Actuarially
Determined Contributions
(2,914,000) (2,941,000) (4,340,000)
Contribution Deficiency (Excess) $ (532,000) $ (620,000) $ (1,346,000) Covered-employee payroll $ 61,630,000 $ 58,767,558 $ 55,348,748 Contributions as a percentage of covered-
employee payroll
4.73 % 5.00 % 7.84 %
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF VALLEJO
Schedule of Contributions (Continued)
City's Retiree Medical Benefits (OPEB)
Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
157
VFWD’s Schedule of Changes in the Net OPEB Liability and Related Ratios 2024 2023 2022 2021
Measurement Period June 30, 2024 June 30, 2023 June 30, 2022 June 30, 2021 Total OPEB Liability
Service cost $ 821,747 $ 950,869 $ 916,059 $ 352,376
Interest on the total OPEB liability 1,407,369 1,443,515 1,388,866 1,456,214 Differences between expected and actual
experiences
111,792 (2,280,906) 73,206 (603,460)
Changes in assumptions - (153,210) - 3,681,452
Benefit payments (1,480,570) (1,458,265) (1,487,182) (1,276,392) Net change in total OPEB liability 860,338 (1,497,997) 890,949 3,610,190 Total OPEB liability - beginning 23,374,678 24,872,675 23,981,726 20,371,536 Total OPEB liability - ending (a) 24,235,016 23,374,678 24,872,675 23,981,726 Plan Fiduciary Net Position
Contribution - employer 1,500,570 1,958,265 1,987,182 1,776,392 Contribution - member 239,050 222,071 210,111 214,047 Net investment income 1,690,349 899,005 (2,056,062) 3,091,825 Benefit payments (1,480,570) (1,458,265) (1,487,182) (1,276,392) Administrative expense (7,799) (6,872) (2,780) (2,635) Other changes in net position - - - (589)
Net change in plan fiduciary net position 1,941,600 1,614,204 (1,348,731) 3,802,648 Plan fiduciary net position - beginning 15,230,468 13,616,264 14,964,995 11,162,347 Plan fiduciary net position - ending (b) 17,172,068 15,230,468 13,616,264 14,964,995 Net OPEB Liability/(Assets) - ending (a) -
(b)
$ 7,062,948 $ 8,144,210 $ 11,256,411 $ 9,016,731
Plan fiduciary net position as a
percentage of the total OPEB liability
65.20 % 65.20 % 54.74 % 62.40 %
Covered-employee payroll $ 12,160,640 $ 11,699,877 $ 10,603,644 $ 10,393,617 Net OPEB liability as a percentage of
covered-employee payroll
58.08 % 69.61 % 106.16 % 86.75 %
Notes to Schedule:
Changes of assumptions: For the measurement period ended June 30, 2024, there were no changes in assumptions. For the measurement period June 30, 2023, the discount rate was increased from 5.75 percent to
6.00 percent. For the measurement period ended June 30, 2022, there were no changes in assumptions. For measurement period ended June 30,2021, the discount rate was changed from 7.25 percent (net of administrative expenses) to 5.75 percent and the inflation rate changed from 2.75 percent to 2.25 percent. For the measurement period ended June 30, 2020, to maintain consistency with CalPERS demographic rates, rates of retirement, termination, disability, and mortality were updated. For the measurement period ended June 30, 208, the discount rate was changed from 5.09 percent (net of administrative expense) to 5.52 percent. (1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2017 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios Vallejo Flood and Wastewater District
Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
158
2020 2019 2018 2017
Measurement Period June 30, 2020 June 30, 2019 June 30, 2018 June 30, 2017 Total OPEB Liability
Service cost $ 362,299 $ 351,747 $ 341,502 $ 323,479
Interest on the total OPEB liability 1,296,524 1,252,722 1,209,603 1,166,959 Differences between expected and actual
experiences
1,721,805 - (6,230) -
Changes in assumptions - - - -
Benefit payments (1,041,544) (981,223) (940,234) (836,221) Net change in total OPEB liability 2,339,084 623,246 604,641 654,217 Total OPEB liability - beginning 18,032,452 17,409,206 16,804,565 16,150,348 Total OPEB liability - ending (a) 20,371,536 18,032,452 17,409,206 16,804,565 Plan Fiduciary Net Position
Contribution - employer 1,541,544 1,481,223 1,440,234 1,336,221 Contribution - member 191,439 173,100 156,902 171,665 Net investment income 352,141 1,070,440 83,311 794,510 Benefit payments (1,041,544) (981,223) (940,234) (836,221) Administrative expense (2,780) (2,348) (3,094) (36,633) Other changes in net position (84,912) - - -
Net change in plan fiduciary net position 955,888 1,741,192 737,119 1,429,542 Plan fiduciary net position - beginning 10,206,459 8,465,267 7,728,148 6,298,606 Plan fiduciary net position - ending (b) 11,162,347 10,206,459 8,465,267 7,728,148 Net OPEB Liability/(Assets) - ending (a) -
(b)
$ 9,209,189 $ 7,825,993 $ 8,943,939 $ 9,076,417
Plan fiduciary net position as a
percentage of the total OPEB liability
54.79 % 56.60 % 48.63 % 45.99 %
Covered-employee payroll $ 9,670,727 $ 10,102,073 $ 8,334,837 $ 8,022,329 Net OPEB liability as a percentage of
covered-employee payroll
95.23 % 77.47 % 107.31 % 113.14 %
(1) Historical information is required only for the measurement periods for which GASB 75 is applicable. Fiscal Year 2018 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Changes in the Net OPEB Liability and Related Ratios (Continued) Vallejo Flood and Wastewater District
Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
159
VFWD’s Schedule of Contributions
2024 2023 2022 2021
Actuarially Determined Contribution $ 1,437,491 $ 1,788,161 $ 1,740,303 $ 1,143,845 Contribution in Relation to the Actuarially
Determined Contributions
(1,500,570) (1,958,265) (1,987,182) (1,776,392)
Contribution Deficiency (Excess) $ (63,079) $ (170,104) $ (246,879) $ (632,547) Covered-employee payroll $ 12,160,640 $ 11,699,877 $ 10,603,644 $ 10,393,617 Contributions as a percentage of covered-
employee payroll
12.34 % 16.74 % 18.74 % 17.09 %
(1) Schedule is intended to show information for ten years. Fiscal year 2017 was the first year of implementation, therefore only seven years are shown. Additional years' information will be displayed as it becomes available.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Contributions
Vallejo Flood and Wastewater District
Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
160
2020 2019 2018 2017
Actuarially Determined Contribution $ 1,110,529 $ 1,082,230 $ 1,050,709 $ 1,092,974 Contribution in Relation to the Actuarially
Determined Contributions
(1,541,544) (1,481,223) (1,440,234) (1,336,221)
Contribution Deficiency (Excess) $ (431,015) $ (398,993) $ (389,525) $ (243,247) Covered-employee payroll $ 9,670,727 $ 10,102,073 $ 8,334,837 $ 8,022,329 Contributions as a percentage of covered-
employee payroll
15.94 % 14.66 % 17.28 % 16.66 %
(1) Schedule is intended to show information for ten years. Fiscal year 2017 was the first year of implementation, therefore only seven years are shown. Additional years' information will be displayed as it becomes available.
CITY OF VALLEJO
Schedule of Contributions (Continued)
Vallejo Flood and Wastewater District
Agent Multiple-Employer Plan
As of June 30, for the Last Ten Fiscal Years (1)
161
Schedule of Changes in the Net Pension Liability and Related Ratios (Miscellaneous Plan) 2024 2023 2022 2021
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Total Pension Liability
Service Cost $ 5,113,704 $ 5,054,977 $ 4,651,311 $ 4,388,206 Interest on total pension liability 21,812,820 21,094,227 20,921,652 20,357,309 Differences between expected and actual
experience 3,819,680 (2,109,415) 1,213,833 (7,463)
Changes in assumptions - 8,211,629 - -
Benefit payments, including refunds of
employee contributions (20,213,600) (18,954,164) (18,594,010) (17,801,978) Net change in total pension liability 10,532,604 13,297,254 8,192,786 6,936,074 Total Pension Liability-beginning 319,858,085 306,560,831 298,368,045 291,431,971 Total Pension Liability-ending (a) $ 330,390,689 $ 319,858,085 $ 306,560,831 $ 298,368,045 Plan Fiduciary Net Position
Contributions-employer $ 12,706,200 $ 11,645,027 $ 11,062,044 $ 10,258,622 Contributions-employee 2,342,099 2,104,544 2,145,220 2,184,791 Net investment income 12,213,090 (16,576,076) 41,389,429 8,999,002 Benefit payments (20,213,600) (18,954,164) (18,594,010) (17,801,978) Plan to plan resource movement (1,853) - - -
Other miscellaneous expense - - - -
Administrative expense (146,598) (137,841) (185,261) (256,680) Net change in plan fiduciary net
position
6,899,338 (21,918,510) 35,817,422 3,383,757
Plan Fiduciary Net Position-beginning 199,356,850 221,275,360 185,457,938 182,074,181 Plan Fiduciary Net Position-ending (b) $ 206,256,188 $ 199,356,850 $ 221,275,360 $ 185,457,938 Net pension liability-ending (a) - (b) $ 124,134,501 $ 120,501,235 $ 85,285,471 $ 112,910,107 Plan fiduciary net position as a percentage
of the total pension liability 62.43 % 62.33 % 72.18 % 62.16 % Covered payroll $ 28,054,444 $ 26,874,700 $ 27,081,533 $ 26,137,221 Net pension liability as a percentage of
covered payroll
442.48 % 448.38 % 314.92 % 431.99 %
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after June 30, 2022. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was
7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios Miscellaneous Plan - Agent Multiple-Employer Defined Benefit Pension Plan Last 10 Years
162
2019 2018 2017 2016 2015
June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 $ 4,397,962 $ 4,404,558 $ 3,796,340 $ 3,687,869 $ 3,707,801 19,468,568 19,104,676 18,913,669 18,270,528 17,746,245 (1,082,338) (2,220,738) 1,132,193 (1,151,730) -
(1,680,478) 14,463,351 - (4,077,633) -
(15,819,384) (15,488,076) (15,103,869) (14,371,625) (13,630,142) 5,284,330 20,263,771 8,738,333 2,357,409 7,823,904
280,761,182 260,497,411 251,759,078 249,401,669 241,577,765 $ 286,045,512 $ 280,761,182 $ 260,497,411 $ 251,759,078 $ 249,401,669 $ 7,923,395 $ 7,619,965 $ 6,951,327 $ 5,947,979 $ 5,801,786 1,839,196 1,922,977 1,920,952 1,825,329 1,849,941
14,227,594 17,221,783 810,323 3,661,248 24,872,487
(15,819,384) (15,488,076) (15,103,869) (14,371,625) (13,630,142) (413) - (576) - -
(501,696) - - - -
(264,187) (230,440) (99,958) (184,697) -
7,404,505 11,046,209 (5,521,801) (3,121,766) 18,894,072 169,538,357 158,492,148 164,013,949 167,135,715 148,241,643 $ 176,942,862 $ 169,538,357 $ 158,492,148 $ 164,013,949 $ 167,135,715 $ 109,102,650 $ 111,222,825 $ 102,005,263 $ 87,745,129 $ 82,265,954
61.86 % 60.39 % 60.84 % 65.15 % 67.01 %
$ 22,403,043 $ 20,887,797 $ 21,778,435 $ 20,358,941 $ 19,462,126 487.00 % 532.48 % 468.38 % 430.99 % 422.70 %
CITY OF VALLEJO
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) Miscellaneous Plan - Agent Multiple-Employer Defined Benefit Pension Plan Last 10 Years
163
Schedule of Plan Contributions (Miscellaneous Plan)
2024 2023 2022 2021 2020
Actuarial Determined Contribution $ 12,580,393 $ 12,579,782 $ 11,568,843 $ 10,944,409 $ 10,259,296 Contribution in relation to the
Actuarially Determined Contribution (12,580,393) (12,579,782) (11,568,843) (10,944,409) (10,259,296) Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered payroll $ 30,209,748 $ 28,054,444 $ 26,874,700 $ 27,081,533 $ 26,137,221 Contributions as a percentage of
covered payroll
41.64% 44.84% 43.05% 40.41% 39.25%
Notes to Schedule:
Valuation date June 30, 2022
Methods and assumptions used
to determine contribution rates:
Actuarial cost method Entry age normal cost method
Amortization method Level percentage of pay, a summary of the current policy is provided in the table below:
Driver
Source
(Gain)/Loss) Assumption/
Method
Change Benefit Change
Golden
HandshakeInvestment Non-investment
Amortization Period 30 years 30 years 20 years 20 years 5 years Escalation Rate
Active Plans 2.75 % 2.75 % 2.75 % 2.75 % 2.75 %
Inactive Plans - % - % - % - % - %
Ramp Up 5 % 5 % 5 % - % - %
Ramp Down 5 % 5 % 5 % - % - %
Asset valuation method Market Value
Inflation 2.50%
Salary increases Varies by Entry Age and Service
Payroll growth 2.75%
Investment rate of return 7.00%, net of pension plan investment expenses, including inflation.
Retirement age All other actuarial assumptions used in the June 30, 2020 valuation were based on the results of an actuarial experience study for the period from 1997 to 2015, including updates to salary increase, mortality and retirement rates. The Experience Study report may be accessed on the CalPERS website at www.calpers.ca.gov under Forms and Publications.
Mortality The mortality table used was developed based on CalPERS’ specific data. The table includes 15 years of mortality improvements using 90 percent of Society of Actuaries' Scale 2016. For more details on this table, please refer to the 2017 experience study report.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Plan Contributions
Miscellaneous Plan
Agent Multiple-Employer Defined Benefit Pension Plan
Last 10 Years
164
2019 2018 2017 2016 2015
Actuarial Determined Contribution $ 9,183,028 $ 7,920,957 $ 7,641,298 $ 6,951,327 $ 5,947,949 Contribution in relation to the
Actuarially Determined Contribution (9,183,028) (7,920,957) (7,641,298) (6,951,327) (5,947,949) Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered payroll $ 22,605,141 $ 22,403,043 $ 20,887,797 $ 21,778,435 $ 20,358,941 Contributions as a percentage of
covered payroll
40.62% 35.36% 36.58% 31.92% 29.22%
CITY OF VALLEJO
Schedule of Plan Contributions (Continued)
Miscellaneous Plan
Agent Multiple-Employer Defined Benefit Pension Plan
Last 10 Years
165
Schedule of Changes in the Net Pension Liability and Related Ratios (Safety Plan) 2024 2023 2022 2021
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Total Pension Liability
Service Cost $ 7,175,447 $ 7,679,475 $ 6,840,081 $ 6,916,858 Interest on total pension liability 38,158,430 36,816,284 36,031,428 35,436,006 Changes in benefit terms 187,838 - - -
Differences between expected and actual
experience
7,475,497 502,309 (4,341,410) 1,732,575
Changes in assumptions - 16,562,725 - -
Benefit payments, including refunds of employee
contributions (33,488,367) (31,423,005) (30,022,902) (29,268,078) Net change in total pension liability 19,508,845 30,137,788 8,507,197 14,817,361 Total Pension Liability-beginning 558,513,862 528,376,074 519,868,877 505,051,516 Total Pension Liability-ending (a) $ 578,022,707 $ 558,513,862 $ 528,376,074 $ 519,868,877 Plan Fiduciary Net Position
Contributions-employer $ 20,381,011 $ 19,583,204 $ 18,763,982 $ 16,867,013 Contributions-employee 2,725,868 2,680,187 2,880,179 2,495,800 Net investment income 21,086,111 (28,754,756) 71,416,960 15,405,724 Benefit payments (33,488,367) (31,423,005) (30,022,902) (29,268,078) Plan to plan resource movement 1,853 - - -
Other miscellaneous expense - - - -
Administrative expense (252,994) (238,086) (319,139) (443,256) Net change in plan fiduciary net position 10,453,482 (38,152,456) 62,719,080 5,057,203 Plan Fiduciary Net Position-beginning 344,044,391 382,196,847 319,477,767 314,420,564 Plan Fiduciary Net Position-ending (b) $ 354,497,873 $ 344,044,391 $ 382,196,847 $ 319,477,767 Net pension liability-ending (a) - (b) $ 223,524,834 $ 214,469,471 $ 146,179,227 $ 200,391,110 Plan fiduciary net position as a percentage of the
total pension liability
61.33 % 61.60 % 72.33 % 61.45 %
Covered payroll $ 21,042,205 $ 22,045,380 $ 23,926,199 $ 21,941,307 Net pension liability as a percentage of covered
payroll
1062.27 % 972.85 % 610.96 % 913.31 %
Notes to Schedule:
Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred on or before the Measurement Date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes).
Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15% to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compount (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The accounting discount rate was 7.15% for measurement dates 2017 through 2021,
7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Changes in the Net Pension Liability and Related Ratios Safety Plan
Agent Multiple-Employer Defined Benefit Pension Plan
Last 10 Years
166
2020 2019 2018 2017 2016 2015
June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014 $ 6,733,397 $ 6,785,852 $ 7,141,768 $ 6,037,920 $ 5,665,531 $ 5,410,714 34,420,847 33,457,665 32,842,161 32,721,025 31,830,406 30,833,294 1,076,363 (2,324,275) (8,355,331) (675,259) 463,336 - - (2,031,814) 26,697,946 - (7,623,305) -
(28,292,968) (27,352,200) (26,330,644) (25,766,118) (24,963,470) (23,513,099) 13,937,639 8,535,228 31,995,900 12,317,568 5,372,498 12,730,909 491,113,877 482,578,649 450,582,749 438,265,181 432,892,683 420,161,774 $ 505,051,516 $ 491,113,877 $ 482,578,649 $ 450,582,749 $ 438,265,181 $ 432,892,683 $ 15,651,082 $ 13,510,984 $ 12,539,589 $ 12,077,355 $ 10,188,345 $ 9,034,348 2,495,658 2,402,540 2,468,689 2,498,407 2,574,737 2,517,611 19,716,865 24,365,266 29,790,194 1,329,651 6,292,622 43,593,695 (28,292,968) (27,352,200) (26,330,644) (25,766,118) (24,963,470) (23,513,099) 150,117 (712) - - (115) -
712 (867,978) - - - -
(217,595) (457,067) (400,264) (173,865) (320,958) - 9,503,871 11,600,833 18,067,564 (10,034,570) (6,228,839) 31,632,555 304,916,693 293,315,860 275,248,296 285,282,866 291,511,705 259,879,150 $ 314,420,564 $ 304,916,693 $ 293,315,860 $ 275,248,296 $ 285,282,866 $ 291,511,705 $ 190,630,952 $ 186,197,184 $ 189,262,789 $ 175,334,453 $ 152,982,315 $ 141,380,978
62.26 % 62.09 % 60.78 % 61.09 % 65.09 % 67.34 %
$ 21,152,620 $ 20,349,393 $ 19,733,377 $ 21,563,045 $ 20,922,604 $ 19,082,521 901.22 % 915.00 % 959.10 % 813.12 % 731.18 % 740.89 %
CITY OF VALLEJO
Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) Safety Plan
Agent Multiple-Employer Defined Benefit Pension Plan
Last 10 Years
167
Schedule of Plan Contributions (Safety Plan)
2024 2023 2022 2021 2020
Actuarial Determined
Contribution
$ 20,640,831 $ 20,200,335 $ 19,484,048 $ 18,444,829 $ 16,924,131 Contribution in relation to
the Actuarially Determined
Contribution (20,640,831) (20,200,335) (19,484,048) (18,444,829) (16,924,131) Contribution Deficiency
(Excess) $ - $ - $ - $ - $ -
Covered payroll $ 21,077,780 $ 21,042,205 $ 22,045,380 $ 23,926,199 $ 21,941,307 Contributions as a
percentage of covered
payroll
97.93% 96.00% 88.38% 77.09% 77.13%
Notes to Schedule:
Valuation date June 30, 2022
Methods and assumptions
used to determine
contribution rates:
Actuarial cost method Entry age normal cost method
Amortization method Level percentage of pay, a summary of the current policy is provided in the table below:
Driver
Source
(Gain)/Loss) Assumption/Method
Change
Benefit
Change
Golden Handshake
Investment Non-investment
Amortization
Period
30 years 30 years 20 years 20 years 5 years
Escalation Rate
Active Plans 2.750 % 2.750 % 2.750 % 2.750 % 2.750 % Inactive Plans 0 % 0 % 0 % 0 % 0 %
Ramp Up 5 5 5 0 0
Ramp Down 5 5 5 0 0
Asset valuation method Market Value
Inflation 2.50%
Salary increases Varies by Entry Age and Service
Payroll growth 2.75%
Investment rate of
return
7.00%, net of pension plan investment expenses, including inflation.
Retirement age The probabilities of retirement are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015.
Mortality The mortality table used was developed based on CalPERS’ specific data. The table includes 15 years of mortality improvements using 90 percent of Society of Actuaries' Scale 2016. For more details on this table, please refer to the 2017 experience study report.
**Historical information is required only for measurement periods for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation, therefore only nine years are shown.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Plan Contributions
Safety Plan
Agent Multiple-Employer Defined Benefit Pension Plan
Last 10 Years
168
2019 2018 2017 2016 2015
Actuarial Determined
Contribution
$ 15,641,590 $ 13,511,840 $ 12,582,017 $ 12,077,355 $ 10,188,345 Contribution in relation to
the Actuarially Determined
Contribution (15,641,590) (13,511,840) (12,582,017) (12,077,355) (10,188,345) Contribution Deficiency
(Excess)
$ - $ - $ - $ - $ -
Covered payroll $ 21,152,620 $ 20,349,393 $ 19,733,377 $ 21,563,045 $ 20,922,604 Contributions as a
percentage of covered
payroll
73.95 % 66.40 % 63.76 % 56.01 % 48.70 %
CITY OF VALLEJO
Required Supplementary Information
Schedule of Plan Contributions (Continued)
Safety Plan
Agent Multiple-Employer Defined Benefit Pension Plan
Last 10 Years
169
Schedule of the Plan's Proportionate Share of the Net Pension Liability and Related Ratios (VFWD) 2024 2023 2022 2021
Measurement Period June 30, 2023 June 30, 2022 June 30, 2021 June 30, 2020 Plan Proportion of the Net Pension Liability 0.65191 % 0.65022 % 0.86588 % 0.61886 % Plan Proportionate Share of the Net
Pension Liability $ 32,598,425 $ 30,425,186 $ 16,441,417 $ 26,104,014 Plan Covered Payroll $ 11,699,877 $ 10,603,644 $ 10,393,617 $ 8,773,461 Plan Proportionate Share of the Net
Pension Liability
as Percentage of Covered Payroll 278.62 % 286.93 % 158.19 % 297.53 % The Pension Plan's (PERF-C) Fiduciary Net
Position as a Percentage of the Total
Pension Liability 76.21 % 76.68 % 90.49 % 75.10 %
Notes to Schedule:
Benefit Changes: In 2015, benefit terms were modified to base public safety employee pensions on a final three- year average salary instead of a final five-year average salary.
Changes of Assumptions: In 2023, there were no changes. In 2022, the accounting discount rate was reduced from 7.15 percent to 6.90 percent. In 2021, 2020 and 2019, there were no changes. In 2018, the demographic assumptions and inflation rate were changed in accordance with the CalPERS Experience Study and Review of Actuarial Assumptions December 2017. In 2017, the accounting discount rate was reduced from 7.65 percent to
7.15 percent. In 2016, there were no changes. In 2015, amounts reported reflect an adjustment of the discount rate from 7.50 percent (net of administrative expense) to 7.65 percent (without a reduction for pension plan administrative expense). In 2014, amounts reported were based on the 7.50 percent discount rate.
CITY OF VALLEJO
Required Supplementary Information
Schedule of the Plan's Proportionate Share
of the Net Pension Liability and Related Ratios
Vallejo Flood and Wastewater District
Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Years
170
2020 2019 2018 2017 2016 2015
June 30, 2019 June 30, 2018 June 30, 2017 June 30, 2016 June 30, 2015 June 30, 2014
0.60568 % 0.59373 % 0.57650 % 0.56725 % 0.14712 % 0.18915 % $ 24,254,485 $ 22,376,039 $ 22,725,984 $ 19,705,443 $ 15,432,136 $ 11,769,980 $ 10,102,073 $ 8,773,484 $ 8,334,837 $ 8,022,329 $ 7,940,275 $ 7,602,013 240.09 % 255.04 % 272.66 % 245.63 % 194.35 % 154.83 %
75.30 % 73.69 % 73.31 % 74.06 % 78.40 % 79.82 %
CITY OF VALLEJO
Required Supplementary Information
Schedule of the Plan's Proportionate Share
of the Net Pension Liability and Related Ratios (Continued) Vallejo Flood and Wastewater District
Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Years
171
Schedule of Plan Contributions (VFWD)
2024 2023 2022 2021 2020
Actuarially Determined
Contribution $ 3,696,267 $ 3,597,832 $ 3,307,047 $ 3,026,216 $ 2,668,281 Contribution in Relation to the
Actuarially Determined
Contribution (3,696,267) (3,597,832) (3,307,047) (3,026,216) (2,668,281) Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 12,160,640 $ 11,699,877 $ 10,603,644 $ 10,393,617 $ 9,670,727 Contributions as a Percentage of
Covered Payroll 30.40% 30.75% 31.19% 29.12% 27.59%
Note: Contractually required contributions and contributions in relation to the actuarially determined contributions for fiscal year 2017 and prior do not include payments toward the District's unfunded accrued liability.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Plan Contributions
Vallejo Flood and Wastewater District
Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Years
172
2019 2018 2017 2016 2015
Actuarially Determined Contribution $ 2,253,819 $ 1,944,314 $ 899,758 $ 1,064,678 $ 1,274,837 Contribution in Relation to the
Actuarially Determined Contribution (2,253,819) (1,944,314) (899,758) (1,064,678) (1,274,837) Contribution Deficiency (Excess) $ - $ - $ - $ - $ -
Covered Payroll $ 8,773,484 $ 8,334,837 $ 8,022,329 $ 7,924,588 $ 7,693,775 Contributions as a Percentage of
Covered Payroll 25.69% 23.33% 11.22% 13.44% 16.57%
Note: Contractually required contributions and contributions in relation to the actuarially determined contributions for fiscal year 2017 and prior do not include payments toward the District's unfunded accrued liability.
CITY OF VALLEJO
Required Supplementary Information
Schedule of Plan Contributions (Continued)
Vallejo Flood and Wastewater District
Cost-Sharing Multiple-Employer Defined Benefit Pension Plan Last 10 Years
173
This page left intentionally blank.
174
Supplementary Information
175
Nonmajor Governmental Funds
Special Revenue Funds
Solid Waste Disposal Fund #135 accounts for monies received from garbage collection fines and expended on enforcing major portions of the mandatory garbage subscription ordinance. This fund is also used for the mandatory city-wide recycling program and related recycling program grants.
State Gas Tax Fund #133 accounts for monies received from the state gas tax allocation and expended on construction, improvement and maintenance of public streets and related infrastructure.
Community Development Block Grant Fund #101 accounts for monies received and expended by the City as a participant in the Federal Community Development Block Grant program.
HOME Program Fund #102 accounts for monies received and expended by the City as a participant in the Federal HOME Grant program.
Hiddenbrooke Community Services District Fund #138 accounts for monies collected as the result of special taxes which are used to fund a variety of municipal services provided to the residents of the Hiddenbrooke development.
Mare Island Base Reuse Fund #107 accounts for monies received from tenants placed on the former Mare Island Naval Shipyard during the conversion process. It also accounts for operating costs to support ongoing development programs on the island. Funds are restricted for use on the island.
Mare Island CFD 2002 Fund #112 accounts for monies received from general taxes and from property owner assessments for maintenance and repair of infrastructure and facilities on the former Mare Island Naval Shipyard.
Mare Island CFD 2005 1A (State) Fund #113 accounts for transactions of this district formed under state statute to provide municipal services within the district.
Mare Island CFD 2005 1B (Local) Fund #114 accounts for transactions of this district formed under local statute to provide municipal services within the district.
Hazmat Revolving Fund #143 accounts for monies received and expended for hazardous material removal.
Justice Assistance Grant Fund #149 accounts for revenues received from the Justice Assistance Grant.
Supplemental Law Enforcement Grant Fund #151 accounts for revenues received from the Supplemental Law Enforcement Services Grant.
Traffic Offender Vehicle Impound Program Fund #140 accounts for monies received and expended from vehicle impound fees.
Landscape Maintenance Districts Fund #161-188 accounts for special assessments on property within district boundaries for the restricted purpose of providing landscape services within the specified districts.
Emergency Disaster Fund #109 accounts for monies received and expended for activities related to damages from the 2014 South Napa earthquake and other emergency disaster funds, including federal and State grant revenues.
Office of Traffic Safety Fund #146 accounts for the award and expenditure of grants from the California Office of Traffic Safety.
Outside Services Fund #129 accounts for one-time billings to third parties and the related expenditures of these funds. The primary activity is development review.
Administrative Trust Fund #601 accounts for funds held for special programs, including performance bonds for construction projects.
State Lands Fund #134 accounts for lease rentals generated from City-owned waterfront property subject to State Lands Commission restrictions.
Neighborhood Stabilization Program Fund #103 accounts for monies received and expended by the City as a participant in the Federal NSP Grant.
Navigation Center Fund #191 accounts for monies received and administration of the Vallejo Homeless Navigation Center.
176
NLP Nuisance Abatement Fund #147 accounts for monies received and used to demolish dangerous buildings or prevent escalating nuisance conditions.
Capital Projects Fund
Neighborhood Parks (GVRD) Fund #137 accounts for park development impact fee revenue and for contributions to the Greater Vallejo Recreation District for park improvements.
Transportation Impact Mitigation Fund #203 accounts for monies received from the Transportation Impact fee imposed on commercial and residential development and expended on transportation improvements necessitated by such development.
Bridge Construction Fund #204 accounts for monies received from the Bridge Construction Development Tax Ordinance.
Arts and Convention Center Fund #206 accounts for the Empress Theatre advances to the former Redevelopment Agency.
Northgate Fee & Benefit District #94-1 Fund #208 accounts for monies received from the development of the Northgate District #94-1 and expended for public improvements within that development area.
Hiddenbrooke Overpass Fund #211 accounts for monies received from the Hiddenbrooke Overpass fee imposed on commercial and residential development within the Hiddenbrooke development area. These funds will be used to renovate the existing Hiddenbrooke overpass.
Mare Island CFD 2005 1A Facilities Fund #213 accounts for transactions of this district formed under state statute to provide municipal facilities within the district.
Traffic Congestion Relief Fund #219 accounts for street maintenance and capital expenditures to be paid from State Proposition 42 allocations.
Capital Grants & Contributions Fund #221 accounts for capital project expenditures to be reimbursed from by granting agencies, developers, or other third parties.
Long-Term Maintenance Fund #223 accounts for revenues received from cell tower leases for use on long term repairs and maintenance expenditures.
Columbus Parkway Improvements Fund #224 accounts for monies received from a developer for the Columbus Parkway widening project.
Empress Theater Fund #225 accounts for the maintenance of Empress Theater.
Road Maintenance and Rehabilitation Act Fund #226 accounts for street maintenance and capital projects to be paid from Senate Bill (SB) 1 allocation.
Waterfront History Park Capital Project Fund #227 accounts for the administration of funds allocated by City Council and donations made to the Waterfront History Park Project.
Debt Service Fund
Certificates of Participation Fund #-Various accounts for the accumulation of lease revenue and the payments of annual General Fund debt service requirements. Debt issues include the 1999, 2000, 2002, and 2003 certificates of participation, which were restructured in 2011 into UBOC Reimbursement Loan Obligations A and B.
Permanent Fund
McCune Collection Fund #603 accounts for monies held for the Library which consists of donations and sales of rare books to maintain the McCune book collection. The principal is invested and interest earnings are available to support the McCune Fund Activities.
177
Combining Balance Sheet
Special Revenue Funds
Solid Waste
Disposal Fund
#135
State Gas Tax
Fund #133
Community
Development
Block Grant Fund
#101
HOME Program
Fund #102
ASSETS
Cash and investments $ 2,497,475 $ 46,908 $ - $ 783,377 Receivables (net of allowance for uncollectible):
Accounts receivable 39,568 863,982 506 30,700
Notes and loans receivable - - 1,805,851 4,175,863
Interest and dividends receivable - - - -
Leases - - - -
Due from other governments, current - - 459,158 13,457 Restricted assets:
Cash with fiscal agent - - - -
Total assets $ 2,537,043 $ 910,890 $ 2,265,515 $ 5,003,397
LIABILITIES
Accounts payable and accrued liabilities $ 1,652,985 $ 412,007 $ 305,461 $ 916 Deposits payable - - - -
Due to other governments - - - 983,274
Unearned revenues 703,589 - - -
Due to other funds - - 154,203 -
Total liabilities 2,356,574 412,007 459,664 984,190
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - 23,750
Deferred inflows for leases - - - -
Total deferred inflows of resources - - - 23,750
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted 180,469 498,883 1,805,851 3,995,457
Committed - - - -
Assigned - - - -
Unassigned - - - -
Total fund balances (deficits) 180,469 498,883 1,805,851 3,995,457 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 2,537,043 $ 910,890 $ 2,265,515 $ 5,003,397
CITY OF VALLEJO
Combining Balance Sheet
Nonmajor Governmental Funds
June 30, 2024
178
Special Revenue Funds
Hiddenbrooke
Community
Services
District Fund
#138
Mare Island
Base Reuse
Fund #107
Mare Island
CFD 2002
Fund #112
Mare Island
CFD 2005 1A
(State) Fund
#113
Mare Island
CFD 2005 1B
(Local) Fund
#114
ASSETS
Cash and investments $ 3,973,316 $ 466,517 $ 5,391,571 $ 534,708 $ 1,009,711 Receivables (net of allowance for uncollectible):
Accounts receivable - - 162,576 - -
Notes and loans receivable - - - - -
Interest and dividends receivable - 982 - - -
Leases - 103,135 - - -
Due from other governments, current - - - - -
Restricted assets:
Cash with fiscal agent - - - - -
Total assets $ 3,973,316 $ 570,634 $ 5,554,147 $ 534,708 $ 1,009,711
LIABILITIES
Accounts payable and accrued liabilities $ 147,148 $ 55,561 $ 146,782 $ 17,080 $ - Deposits payable - 7,785 - - -
Due to other governments - - - - -
Unearned revenues 299,632 - - - -
Due to other funds - - - - -
Total liabilities 446,780 63,346 146,782 17,080 -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - - -
Deferred inflows for leases - 83,925 - - -
Total deferred inflows of resources - 83,925 - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 3,526,536 - 5,407,365 517,628 1,009,711 Committed - 423,363 - - -
Assigned - - - - -
Unassigned - - - - -
Total fund balances (deficits) 3,526,536 423,363 5,407,365 517,628 1,009,711 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 3,973,316 $ 570,634 $ 5,554,147 $ 534,708 $ 1,009,711
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
179
Special Revenue Funds
Hazmat
Revolving
Fund #143
Justice
Assistance
Grant Fund
#149
Supplemental
Law
Enforcement
Grant Fund
#151
Traffic
Offender /
Vehicle
Impound
Program Fund
#140
Landscape
Maintenance
Districts Fund
#161-188
ASSETS
Cash and investments $ 126,952 $ - $ 807,836 $ 120,121 $ 20,887,288 Receivables (net of allowance for uncollectible):
Accounts receivable 12,462 - - 678 -
Notes and loans receivable - - - - -
Interest and dividends receivable - - - - -
Leases - - - - -
Due from other governments, current - 681,815 163,711 - - Restricted assets:
Cash with fiscal agent - - - - -
Total assets $ 139,414 $ 681,815 $ 971,547 $ 120,799 $ 20,887,288
LIABILITIES
Accounts payable and accrued liabilities $ 12,770 $ 341,437 $ 77,871 $ 1,095 $ 500,267 Deposits payable - - - - -
Due to other governments - - - - -
Unearned revenues - - - - -
Due to other funds - 340,379 - - -
Total liabilities 12,770 681,816 77,871 1,095 500,267
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 78,659 - - -
Deferred inflows for leases - - - - -
Total deferred inflows of resources - 78,659 - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 126,644 - 893,676 119,704 20,387,021
Committed - - - - -
Assigned - - - - -
Unassigned - (78,660) - - -
Total fund balances (deficits) 126,644 (78,660) 893,676 119,704 20,387,021 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 139,414 $ 681,815 $ 971,547 $ 120,799 $ 20,887,288
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
180
Special Revenue Funds
Emergency
Disaster Fund
#109
Office of Traffic
Safety Fund #146
Outside Services
Fund #129
Administrative
Trust Fund #601
ASSETS
Cash and investments $ 939,672 $ - $ 1,095,264 $ 222,001 Receivables (net of allowance for uncollectible):
Accounts receivable - - 28,142 13,434
Notes and loans receivable - - - -
Interest and dividends receivable - - - -
Leases - - - -
Due from other governments, current 148,861 7,772 - - Restricted assets:
Cash with fiscal agent - - - -
Total assets $ 1,088,533 $ 7,772 $ 1,123,406 $ 235,435
LIABILITIES
Accounts payable and accrued liabilities $ - $ - $ 62,958 $ - Deposits payable - - 911,177 235,435
Due to other governments - - - -
Unearned revenues 373,053 - - -
Due to other funds - 7,772 - -
Total liabilities 373,053 7,772 974,135 235,435
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - -
Deferred inflows for leases - - - -
Total deferred inflows of resources - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted - - - -
Committed 715,480 - - -
Assigned - - 149,271 -
Unassigned - - - -
Total fund balances (deficits) 715,480 - 149,271 -
Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 1,088,533 $ 7,772 $ 1,123,406 $ 235,435
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
181
Special Revenue Funds
State Lands Fund
#134
Neighborhood
Stabilization
Program Fund
#103
Navigation Center
#191
NLP Nuisance
Abatement Fund
#147
ASSETS
Cash and investments $ 1,122,912 $ 14,526 $ 6,390,070 $ 236,009 Receivables (net of allowance for uncollectible):
Accounts receivable 3,250 951 - -
Notes and loans receivable - 2,204,804 - -
Interest and dividends receivable 45,395 - - -
Leases 4,715,451 - - -
Due from other governments, current - - - -
Restricted assets:
Cash with fiscal agent - - - -
Total assets $ 5,887,008 $ 2,220,281 $ 6,390,070 $ 236,009
LIABILITIES
Accounts payable and accrued liabilities $ - $ 439 $ - $ - Deposits payable 1,387 - - -
Due to other governments - - - -
Unearned revenues - - - -
Due to other funds - - - -
Total liabilities 1,387 439 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - -
Deferred inflows for leases 4,514,217 - - -
Total deferred inflows of resources 4,514,217 - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted 1,371,404 2,219,842 6,390,070 -
Committed - - - 236,009
Assigned - - - -
Unassigned - - - -
Total fund balances (deficits) 1,371,404 2,219,842 6,390,070 236,009 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 5,887,008 $ 2,220,281 $ 6,390,070 $ 236,009
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
182
Capital Projects Funds
Neighborhood
Park-Dev Fee
Fund #137
Transportation
Impact Mitigation
Fund #203
Bridge
Construction
Fund #204
Arts and
Convention
Center Fund #206
ASSETS
Cash and investments $ 3,139,570 $ 5,696,231 $ 298,563 $ 83,026 Receivables (net of allowance for uncollectible):
Accounts receivable - - - -
Notes and loans receivable 195,990 89,088 257,962 1,997,092 Interest and dividends receivable - - - -
Leases - - - -
Due from other governments, current - - - -
Restricted assets:
Cash with fiscal agent - - - -
Total assets $ 3,335,560 $ 5,785,319 $ 556,525 $ 2,080,118
LIABILITIES
Accounts payable and accrued liabilities $ - $ 93,868 $ - $ - Deposits payable - - - -
Due to other governments - - - -
Unearned revenues - - - -
Due to other funds - - - -
Total liabilities - 93,868 - -
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues 57,230 - 230,450 1,796,008
Deferred inflows for leases - - - -
Total deferred inflows of resources 57,230 - 230,450 1,796,008
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted 3,278,330 5,691,451 326,075 -
Committed - - - -
Assigned - - - 284,110
Unassigned - - - -
Total fund balances (deficits) 3,278,330 5,691,451 326,075 284,110 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 3,335,560 $ 5,785,319 $ 556,525 $ 2,080,118
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
183
Capital Projects Funds
Northgate Fee &
Benefit District
#94-1 Fund
#208
Hiddenbrooke
Overpass Fund
#211
Mare Island
CFD 2005 1A
Facilities Fund
#213
Traffic
Congestion
Relief Fund
#219
Capital Grant &
Contribution
Fund #221
ASSETS
Cash and investments $ 243,781 $ 7,000,308 $ 2,014,962 $ 2,930,704 $ 659,958 Receivables (net of allowance for
uncollectible):
Accounts receivable - - - - 30,990
Notes and loans receivable - 248,874 - - -
Interest and dividends receivable - - - - -
Leases - - - - -
Due from other governments, current - - - - 9,230,595 Restricted assets:
Cash with fiscal agent - - - - -
Total assets $ 243,781 $ 7,249,182 $ 2,014,962 $ 2,930,704 $ 9,921,543
LIABILITIES
Accounts payable and accrued liabilities $ - $ 134,572 $ - $ 609,020 $ 6,608,258 Deposits payable - - - - -
Due to other governments - - - - -
Unearned revenues - - - - 652,463
Due to other funds - - - - 2,653,328
Total liabilities - 134,572 - 609,020 9,914,049
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - 202,419 - - 205,050
Deferred inflows for leases - - - - -
Total deferred inflows of resources - 202,419 - - 205,050
FUND BALANCES (DEFICITS)
Nonspendable - - - - -
Restricted 243,781 6,912,191 2,014,962 2,321,684 - Committed - - - - -
Assigned - - - - -
Unassigned - - - - (197,556)
Total fund balances (deficits) 243,781 6,912,191 2,014,962 2,321,684 (197,556) Total liabilities, deferred inflows of
resources,
and fund balances (deficits) $ 243,781 $ 7,249,182 $ 2,014,962 $ 2,930,704 $ 9,921,543
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
184
Capital Projects Funds
Longterm
Maintenance
Fund #223
Columbus
Parkway
Improvement
Fund #224
Empress Theater
Fund #225
Road Maint/
Rehab Act Fund
#226
ASSETS
Cash and investments $ 228,871 $ 3,940,201 $ 72,674 $ 8,119,207 Receivables (net of allowance for uncollectible):
Accounts receivable - - - -
Notes and loans receivable - - - -
Interest and dividends receivable - - - -
Leases - - - -
Due from other governments, current - - - 565,736
Restricted assets:
Cash with fiscal agent - - - -
Total assets $ 228,871 $ 3,940,201 $ 72,674 $ 8,684,943
LIABILITIES
Accounts payable and accrued liabilities $ 33,412 $ 2,819 $ - $ 50,894 Deposits payable - - - -
Due to other governments - - - -
Unearned revenues - - - -
Due to other funds - - - -
Total liabilities 33,412 2,819 - 50,894
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - -
Deferred inflows for leases - - - -
Total deferred inflows of resources - - - -
FUND BALANCES (DEFICITS)
Nonspendable - - - -
Restricted - - - 8,634,049
Committed 37,662 3,937,382 72,674 -
Assigned 157,797 - - -
Unassigned - - - -
Total fund balances (deficits) 195,459 3,937,382 72,674 8,634,049 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 228,871 $ 3,940,201 $ 72,674 $ 8,684,943
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
185
Capital Projects
Funds
Debt Service
Funds Permanent Funds
Waterfront
History Park
Fund #227
Certificates of
Participation
Fund #-Various
McCune
Collection Fund
#603
Total
Nonmajor
Funds
ASSETS
Cash and investments $ 81,061 $ - $ 110,816 $ 81,286,167 Receivables (net of allowance for uncollectible):
Accounts receivable - - - 1,187,239
Notes and loans receivable - - - 10,975,524
Interest and dividends receivable - - - 46,377
Leases - - - 4,818,586
Due from other governments, current - - - 11,271,105 Restricted assets:
Cash with fiscal agent - 289,677 - 289,677
Total assets $ 81,061 $ 289,677 $ 110,816 $ 109,874,675
LIABILITIES
Accounts payable and accrued liabilities $ - $ - $ 437 $ 11,268,057 Deposits payable - - - 1,155,784
Due to other governments - - - 983,274
Unearned revenues - - - 2,028,737
Due to other funds - - - 3,155,682
Total liabilities - - 437 18,591,534
DEFERRED INFLOWS OF RESOURCES
Unavailable revenues - - - 2,593,566
Deferred inflows for leases - - - 4,598,142
Total deferred inflows of resources - - - 7,191,708
FUND BALANCES (DEFICITS)
Nonspendable - - 64,625 64,625
Restricted - 289,677 45,754 78,208,215
Committed 81,061 - - 5,503,631
Assigned - - - 591,178
Unassigned - - - (276,216)
Total fund balances (deficits) 81,061 289,677 110,379 84,091,433 Total liabilities, deferred inflows of resources,
and fund balances (deficits) $ 81,061 $ 289,677 $ 110,816 $ 109,874,675
CITY OF VALLEJO
Combining Balance Sheet (Continued)
Nonmajor Governmental Funds
June 30, 2024
186
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Special Revenue Funds
Solid Waste
Disposal Fund
#135
State Gas Tax
Fund #133
Community
Development
Block Grant Fund
#101
HOME Program
Fund #102
REVENUES
Taxes $ - $ - $ - $ -
Licenses and permits 20,956 - - -
Intergovernmental revenues 151,291 3,438,940 1,980,857 13,457 Charges for services 1,863,656 1,710,560 - -
Use of money and property 54,032 30,398 10,366 (4,952) Fines and forfeitures 35,160 - - -
Contribution revenue - - - -
Other - 15,038 - -
Total revenues 2,125,095 5,194,936 1,991,223 8,505
EXPENDITURES
Current:
Community services - - 2,030,697 1,038,158
Planning and development services - - - -
Fire services - - - -
Police services - - - -
Public works 1,967,859 4,148,559 - -
Economic development - - - -
Capital outlay - - - -
Debt service:
Principal long term debt payments - - - -
Principal - lease payments 24,229 - - -
Principal - subscription payments - 13,775 - -
Interest and fiscal charges 1,096 1,075 - -
Total expenditures 1,993,184 4,163,409 2,030,697 1,038,158 Excess (deficiency) of revenues
over (under) expenditures 131,911 1,031,527 (39,474) (1,029,653)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - - - -
Transfers out (Note 3a) - (769,000) - -
Total other financing sources (uses) - (769,000) - - Net change in fund balances 131,911 262,527 (39,474) (1,029,653) Fund balances-beginning 48,558 236,356 1,845,325 5,025,110 Restatements - change in reporting entity - - - -
Fund balances (deficit)-beginning 48,558 236,356 1,845,325 5,025,110 Fund balances (deficit)-ending $ 180,469 $ 498,883 $ 1,805,851 $ 3,995,457
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds
For the Year Ended June 30, 2024
187
Special Revenue Funds
Hiddenbrooke
Community
Services
District Fund
#138
Mare Island
Base Reuse
Fund #107
Mare Island
CFD 2002 Fund
#112
Mare Island
CFD 2005 1A
(State) Fund
#113
Mare Island
CFD 2005 1B
(Local) Fund
#114
REVENUES
Taxes $ - $ - $ 2,125,646 $ - $ -
Licenses and permits - - - - -
Intergovernmental revenues - - - - -
Charges for services 683,766 - 2,093,959 281,574 - Use of money and property 193,484 58,913 212,533 22,319 52,275 Fines and forfeitures - - - - -
Contribution revenue - - - - -
Other - - - - -
Total revenues 877,250 58,913 4,432,138 303,893 52,275
EXPENDITURES
Current:
Community services - - - - -
Planning and development services - - - - -
Fire services - - 2,542,951 - -
Police services - - 789,000 - -
Public works 809,589 - 1,186,488 193,112 123,700
Economic development - 151,953 - - -
Capital outlay 20,926 - 2,615 - -
Debt service:
Principal long term debt payments - - - - -
Principal - lease payments - - - - -
Principal - subscription payments - - - - -
Interest and fiscal charges - - - - -
Total expenditures 830,515 151,953 4,521,054 193,112 123,700 Excess (deficiency) of revenues
over (under) expenditures 46,735 (93,040) (88,916) 110,781 (71,425)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - 100,000 - - -
Transfers out (Note 3a) - - - - -
Total other financing sources (uses) - 100,000 - - - Net change in fund balances 46,735 6,960 (88,916) 110,781 (71,425) Fund balances-beginning 3,479,801 416,403 5,496,281 406,847 1,081,136 Restatements - change in reporting entity - - - - - Fund balances (deficit)-beginning 3,479,801 416,403 5,496,281 406,847 1,081,136 Fund balances (deficit)-ending $ 3,526,536 $ 423,363 $ 5,407,365 $ 517,628 $ 1,009,711
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
188
Special Revenue Funds
Hazmat
Revolving Fund
#143
Justice
Assistance
Grant Fund
#149
Supplemental
Law
Enforcement
Grant Fund
#151
Traffic
Offender /
Vehicle
Impound
Program Fund
#140
Landscape
Maintenance
Districts Fund
#161-188
REVENUES
Taxes $ - $ - $ - $ - $ -
Licenses and permits - - - 30,992 -
Intergovernmental revenues - 524,498 536,723 - -
Charges for services 48,663 - - - 4,281,623
Use of money and property 5,332 - 32,535 6,202 957,729 Fines and forfeitures - - - - -
Contribution revenue - - - - -
Other - - - - -
Total revenues 53,995 524,498 569,258 37,194 5,239,352
EXPENDITURES
Current:
Community services - - - - -
Planning and development services - - - - -
Fire services - - - - -
Police services - 603,158 119,276 28,257 -
Public works 24,645 - - - 3,026,064
Economic development - - - - -
Capital outlay - - - - 3,769
Debt service:
Principal long term debt payments - - - - -
Principal - lease payments - - - - -
Principal - subscription payments - - - - -
Interest and fiscal charges - - - - -
Total expenditures 24,645 603,158 119,276 28,257 3,029,833 Excess (deficiency) of revenues
over (under) expenditures 29,350 (78,660) 449,982 8,937 2,209,519
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - - - - -
Transfers out (Note 3a) - - - - -
Total other financing sources (uses) - - - - -
Net change in fund balances 29,350 (78,660) 449,982 8,937 2,209,519 Fund balances-beginning 97,294 - 443,694 110,767 18,177,502 Restatements - change in reporting entity - - - - - Fund balances (deficit)-beginning 97,294 - 443,694 110,767 18,177,502 Fund balances (deficit)-ending $ 126,644 $ (78,660) $ 893,676 $ 119,704 $ 20,387,021
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
189
Special Revenue Funds
Emergency
Disaster Fund
#109
Office of Traffic
Safety Fund
#146
Outside
Services Fund
#129
Administrative
Trust Fund #601
State Lands
Fund #134
REVENUES
Taxes $ - $ - $ - $ - $ -
Licenses and permits - - - - -
Intergovernmental revenues 437,250 18,052 - - -
Charges for services - - 400,521 - -
Use of money and property - - 54,094 5,919 719,633 Fines and forfeitures - - - - -
Contribution revenue - - - 741 -
Other - - - - -
Total revenues 437,250 18,052 454,615 6,660 719,633
EXPENDITURES
Current:
Community services 301,201 - - - -
Planning and development services - - 309,014 - -
Fire services - - - - -
Police services - 18,052 - 741 -
Public works - - 46,837 - -
Economic development - - 91,150 - 37,738
Capital outlay - - - - -
Debt service:
Principal long term debt payments - - - - -
Principal - lease payments - - - - -
Principal - subscription payments - - - - -
Interest and fiscal charges - - - - -
Total expenditures 301,201 18,052 447,001 741 37,738 Excess (deficiency) of revenues
over (under) expenditures 136,049 - 7,614 5,919 681,895
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - - - - -
Transfers out (Note 3a) - - (49,593) (5,919) -
Total other financing sources (uses) - - (49,593) (5,919) - Net change in fund balances 136,049 - (41,979) - 681,895 Fund balances-beginning 579,431 - 191,250 - 689,509 Restatements - change in reporting entity - - - - - Fund balances (deficit)-beginning 579,431 - 191,250 - 689,509 Fund balances (deficit)-ending $ 715,480 $ - $ 149,271 $ - $ 1,371,404
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
190
Special Revenue Funds Capital Projects Fund
Neighborhood
Stabilization
Program Fund
#103
Navigation
Center #191
NLP
Nuisance
Abatement
Fund #147
Formerly
Nonmajor -
Capital
Outlay Fund
#201
Neighborhood
Park-Dev Fee
Fund #137
Transportation
Impact
Mitigation
Fund #203
REVENUES
Taxes $ - $ - $ - $ - $ - $ -
Licenses and permits - - - - 53,700 645,220
Intergovernmental revenues - - - - - -
Charges for services - - - - - -
Use of money and property 6,709 283,691 11,540 - 151,264 258,991 Fines and forfeitures - - - - - -
Contribution revenue - 1,000,000 - - - -
Other - - - - - -
Total revenues 6,709 1,283,691 11,540 - 204,964 904,211
EXPENDITURES
Current:
Community services 1,183 - - - - -
Planning and development services - - - - - -
Fire services - - - - - -
Police services - - - - - -
Public works - - - - - 4,596
Economic development - - - - - -
Capital outlay - - - - - 183,115
Debt service:
Principal long term debt payments - - - - - -
Principal - lease payments - - - - - -
Principal - subscription payments - - - - - -
Interest and fiscal charges - - - - - -
Total expenditures 1,183 - - - - 187,711
Excess (deficiency) of revenues
over (under) expenditures 5,526 1,283,691 11,540 - 204,964 716,500
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - - - - - -
Transfers out (Note 3a) - - - - - -
Total other financing sources (uses) - - - - - -
Net change in fund balances 5,526 1,283,691 11,540 - 204,964 716,500 Fund balances-beginning 2,214,316 5,106,379 224,469 19,552,696 3,073,366 4,974,951 Restatements - change in reporting entity - - - (19,552,696) - - Fund balances (deficit)-beginning 2,214,316 5,106,379 224,469 - 3,073,366 4,974,951 Fund balances (deficit)-ending $ 2,219,842 $ 6,390,070 $ 236,009 $ - $ 3,278,330 $ 5,691,451
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
191
Capital Projects Funds
Bridge
Construction
Fund #204
Arts and
Convention
Center Fund
#206
Northgate Fee &
Benefit District
#94-1 Fund
#208
Hiddenbrooke
Overpass Fund
#211
Mare Island
CFD 2005 1A
Facilities Fund
#213
REVENUES
Taxes $ - $ - $ - $ - $ -
Licenses and permits - - - 6,346 -
Intergovernmental revenues - - - 601 -
Charges for services - - - - 100,003
Use of money and property 12,900 (110,939) 12,041 348,650 95,422 Fines and forfeitures - - - - -
Contribution revenue - - - - -
Other - - - - -
Total revenues 12,900 (110,939) 12,041 355,597 195,425
EXPENDITURES
Current:
Community services - - - - -
Planning and development services - - - - -
Fire services - - - - -
Police services - - - - -
Public works 4,596 - 4,596 4,596 10,351
Economic development - - - - -
Capital outlay 1,316 - - 779,051 -
Debt service:
Principal long term debt payments - - - - -
Principal - lease payments - - - - -
Principal - subscription payments - - - - -
Interest and fiscal charges - - - - -
Total expenditures 5,912 - 4,596 783,647 10,351
Excess (deficiency) of revenues
over (under) expenditures 6,988 (110,939) 7,445 (428,050) 185,074
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) - - - - -
Transfers out (Note 3a) (16,176) (638,640) - (16,096) - Total other financing sources (uses) (16,176) (638,640) - (16,096) - Net change in fund balances (9,188) (749,579) 7,445 (444,146) 185,074 Fund balances-beginning 335,263 1,033,689 236,336 7,356,337 1,829,888 Restatements - change in reporting entity - - - - - Fund balances (deficit)-beginning 335,263 1,033,689 236,336 7,356,337 1,829,888 Fund balances (deficit)-ending $ 326,075 $ 284,110 $ 243,781 $ 6,912,191 $ 2,014,962
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
192
Capital Projects Funds
Traffic
Congestion
Relief Fund
#219
Capital Grant &
Contribution
Fund #221
Longterm
Maintenance
Fund #223
Columbus
Parkway
Improvement
Fund #224
Empress
Theater Fund
#225
REVENUES
Taxes $ - $ - $ - $ - $ -
Licenses and permits - - - - -
Intergovernmental revenues - 14,961,198 - - -
Charges for services - - - 1,382,599 -
Use of money and property 155,251 7,493 13,511 146,498 2,151 Fines and forfeitures - - - - -
Contribution revenue - - - - -
Other - 341,103 - - -
Total revenues 155,251 15,309,794 13,511 1,529,097 2,151
EXPENDITURES
Current:
Community services - - - - -
Planning and development services - - - - -
Fire services - - - - -
Police services - 179,803 - - -
Public works - - - 18,221 4,596
Economic development - 1,483,127 - - -
Capital outlay 1,843,175 13,630,301 88,195 - -
Debt service:
Principal long term debt payments - - - - -
Principal - lease payments - - - - -
Principal - subscription payments - - - - -
Interest and fiscal charges - - - - -
Total expenditures 1,843,175 15,293,231 88,195 18,221 4,596 Excess (deficiency) of revenues
over (under) expenditures (1,687,924) 16,563 (74,684) 1,510,876 (2,445)
OTHER FINANCING SOURCES (USES)
Transfers in (Note 3a) 769,000 - - - 31,000
Transfers out (Note 3a) - (97,990) - - -
Total other financing sources (uses) 769,000 (97,990) - - 31,000 Net change in fund balances (918,924) (81,427) (74,684) 1,510,876 28,555 Fund balances-beginning 3,240,608 (116,129) 270,143 2,426,506 44,119 Restatements - change in reporting entity - - - - - Fund balances (deficit)-beginning 3,240,608 (116,129) 270,143 2,426,506 44,119 Fund balances (deficit)-ending $ 2,321,684 $ (197,556) $ 195,459 $ 3,937,382 $ 72,674
CITY OF VALLEJO
Combining Statement of Revenues, Expenditures, and Changes in Fund Balances(Continued) Nonmajor Governmental Funds
For the Year Ended June 30, 2024
193
Capital Projects Funds
Debt Service
Funds
Permanent
Funds
Road Maint/
Rehab Act
Fund #226
Waterfront
History Park
Fund #227
Certificates of
Participation
Fund #-Various
McCune
Collection
Fund #603
Total
Nonmajor
Funds
REVENUES
Taxes $ 3,246,169 $ - $ - $ - $ 5,371,815
Licenses and permits - - - - 757,214
Intergovernmental revenues - - - - 22,062,867
Charges for services - - - - 12,846,924
Use of money and property 356,570 4,087 7,752 5,423 4,179,817 Fines and forfeitures - - - - 35,160
Contribution revenue - - - - 1,000,741
Other - - - - 356,141
Total revenues 3,602,739 4,087 7,752 5,423 46,610,679
EXPENDITURES
Current:
Community services - - - - 3,371,239
Planning and development services - - - 529 309,543 Fire services - - - - 2,542,951
Police services - - - - 1,738,287
Public works 4,596 4,596 9,000 - 11,596,597
Economic development - - - - 1,763,968
Capital outlay 2,238,830 - - - 18,791,293
Debt service:
Principal long term debt payments - - 962,276 - 962,276 Principal - lease payments - - - - 24,229
Principal - subscription payments - - - - 13,775
Interest and fiscal charges - - 167,194 - 169,365
Total expenditures 2,243,426 4,596 1,138,470 529 41,283,523 Excess (deficiency) of revenues
over (under) expenditures 1,359,313 (509) (1,130,718) 4,894 5,327,156