ML23045A201
| ML23045A201 | |
| Person / Time | |
|---|---|
| Site: | San Onofre  |
| Issue date: | 06/30/2022 |
| From: | City of Riverside, CA |
| To: | Office of Nuclear Reactor Regulation |
| Shared Package | |
| ML23045A230 | List: |
| References | |
| Download: ML23045A201 (1) | |
Text
CITY OF RIVERSIDE, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT FOR FISCAL YEAR ENDED JUNE 30, 2022 Prepared by the Finance Department Edward Enriquez, Interim Assistant City Manager/Chief Financial Officer/Treasurer 3900 Main Street, Riverside, California 92522 (951) 826-5660 This report was printed on recycled stock
INTRODUCTORY SECTION CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2022 TABLE OF CONTENTS Page Letter of Transmittal.................................................................................................................................................................................................................i GFOA Certificate of Achievement......................................................................................................................................................................................... viii Legislative and City Officials...................................................................................................................................................................................................ix Organizational Chart...............................................................................................................................................................................................................ix FINANCIAL SECTION Independent Auditor's Report.................................................................................................................................................................................................. 1 Management's Discussion and Analysis................................................................................................................................................................................. 5 Basic Financial Statements:
Government-Wide Financial Statements:
Statement of Net Position.............................................................................................................................................................................................. 18 Statement of Activities................................................................................................................................................................................................... 19 Fund Financial Statements:
Balance Sheet - Governmental Funds........................................................................................................................................................................... 20 Reconciliation of the Balance Sheet of Governmental Funds to the Statement of Net Position................................................................................... 21 Statement of Revenues, Expenditures, and Changes in Fund Balances - Governmental Funds................................................................................. 22 Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities.................................................................................................................................................... 23 Statement of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual -
General Fund.............................................................................................................................................................................................................. 24 Statement of Net Position - Proprietary Funds.............................................................................................................................................................. 25 Statement of Revenues, Expenses, and Changes in Net Position - Proprietary Funds................................................................................................ 27 Statement of Cash Flows - Proprietary Funds............................................................................................................................................................... 28 Statement of Net Position - Fiduciary Funds................................................................................................................................................................. 30 Statement of Changes in Net Position - Fiduciary Funds.............................................................................................................................................. 31 Notes to Basic Financial Statements.................................................................................................................................................................................. 32 Required Supplementary Information (Unaudited):
Schedule of Changes in Net Pension Liability and Related Ratios.................................................................................................................................. 81 Schedule of Pension Plan Contributions.......................................................................................................................................................................... 83 Schedule of Changes in Total OPES Liability and Related Ratios.:................................................................................................................................. 84
CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2022 TABLE OF CONTENTS PAGE Combining and Individual Fund Statements and Schedules:
Combining Balance Sheet - Non-Major Governmental Funds......................................................................................................................................... 86 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances - Non-Major Governmental Funds...................................................................................................................................................................................................... 88 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -
Non-Major Special Revenue Funds............................................................................................................................................................................... 90 Schedule of Revenues, Expenditures, and Changes in Fund Balances - Budget and Actual -
Capital Project Funds..................................................................................................................................................................................................... 93 Combining Statement of Net Position - Non-Major Enterprise Funds.............................................................................................................................. 96 Combining Statement of Revenues, Expenses, and Changes in Net Position -
Non-Major Enterprise Funds.......................................................................................................................................................................................... 98 Combining Statement of Cash Flows - Non-Major Enterprise Funds.............................................................................................................................. 99 Combining Statement of Net Position - Internal Service Funds..................................................................................................................................... 102 Combining Statement of Revenues, Expenses, and Changes in Net Position -
Internal Service Funds................................................................................................................................................................................................. 103 Combining Statement of Cash Flows - Internal Service Funds...................................................................................................................................... 104 Balance Sheet - Combining General Fund Schedule..................................................................................................................................................... 106 Statement of Revenues, Expenditures, and Changes in Fund Balances -
Combining General Fund Schedule............................................................................................................................................................................. 107 Balance Sheet - Combining Capital Outlay Fund Schedule........................................................................................................................................... 108 Statement of Revenues, Expenditures, and Changes in Fund Balances -
Combining Capital Outlay Fund Schedule................................................................................................................................................................... 109 STATISTICAL SECTION Net Position by Component.............................................................................................................................................................................................. 111 Changes in Net Position..................................................................................................................................................................................................... 112 Fund Balances - Governmental Funds............................................................................................................................................................................. 114 Changes in Fund Balances - Governmental Funds.......................................................................................................................................................... 115 Business-Type Activities - Electricity Revenues by Source.............................................................................................................................................. 116 Governmental Activities - Tax Revenue by Source.......................................................................................................................................................... 117 Taxable Sales by Category............................................................................................................................................................................................... 118
CITY OF RIVERSIDE COMPREHENSIVE ANNUAL FINANCIAL REPORT YEAR ENDED JUNE 30, 2022 TABLE OF CONTENTS PAGE Assessed Value and Estimated Actual Value of Taxable Property.................................................................................................................................. 119 Direct and Overlapping Property Tax Rates..................................................................................................................................................................... 120 Principal Property Taxpayers............................................................................................................................................................................................ 121 Property Taxes Levies and Collections............................................................................................................................................................................. 122 Electricity Sold by Type of Customer................................................................................................................................................................................ 123 Electricity Rates................................................................................................................................................................................................................ 124 Top 10 Electricity Customers............................................................................................................................................................................................ 125 Ratios of Outstanding Debt by Type................................................................................................................................................................................. 126 Ratios of General Bonded Debt Outstanding.................................................................................................................................................................... 127 Direct and Overlapping Governmental Activities Debt..................................................................................................................................................... 128 Legal Debt Margin lnformation.......................................................................................................................................................................................... 130 Pledged-Revenue Coverage............................................................................................................................................................................................. 131 Demographic and Economic Statistics............................................................................................................................................................................. 132 Principal Employers.......................................................................................................................................................................................................... 133 Full-Time Equivalent City Government Employees by Function....................................................................................................................................... 134 Operating Indicators by Function...................................................................................................................................................................................... 135 Capital Asset Statistics by Function.................................................................................................................................................................................. 136
January 26, 2023 To the Honorable Mayor, Members of the City Council and Citizens of the City of Riverside:
It is our pleasure to submit the Annual Comprehensive Financial Report (ACFR) of the City of Riverside (the City) for the fiscal year ended June 30, 2022.
This report consists of management's representations concerning the finances of the City. Consequently, management assumes full responsibility for the completeness and reliability of all the information presented in this report. To provide a rational basis for making these representations, management has established a comprehensive internal control framework that is designed both to protect the City's assets from loss, theft, or misuse and to compile sufficient reliable information for the preparation of the City's financial statements in conformity with accounting principles generally accepted in the United States of America. Because the cost of internal controls should not outweigh their benefits, internal controls have been designed to provide reasonable rather than absolute assurance that the financial statements will be free from material misstatement. As management, we assert that, to the best of our knowledge and belief, this financial report is complete and reliable in all material respects.
The City's financial statements have been audited by Lance, Soll & Lung hard, LLP a firm of certified public accountants. The independent auditor concluded, based on the audit, that there was a reasonable basis for rendering an unmodified opinion on the City's financial statements for the fiscal year ended June 30, 2022. The independent auditor's report is presented as the first component of the financial section of this ACFR.
The independent audit of the financial statements of the City was part of the federally mandated "Single Audit" designed to meet the special needs of federal grantor agencies. The standards governing Single Audit engagements require the independent auditor to report not only on the fair presentation of the financial statements, but also on internal controls and compliance with legal requirements, with emphasis on those involving the administration of federal awards/grants. These reports will become available in the City's separately issued Single Audit Report.
Management has provided an overall analysis of the financial statements in the form of Management's Discussion and Analysis (MD&A). This letter of transmittal is designed to complement the MD&A and should be read in conjunction with this section. The City's MD&A can be found immediately following the independent auditor's report.
Profile of the City of Riverside The City of Riverside, incorporated on October 11, 1883, is located in the western portion of Riverside County, about 60 miles east of Los Angeles. The City currently occupies a land area of 81.507 square miles.
The City operates under the council-manager form of government, with a seven-member council elected by ward for four-year overlapping terms. The mayor is elected at large for a four-year term and is the presiding officer of the Council but does not have a vote except in the case of a tie. The City Council is responsible, among other things, for passing ordinances, adopting the budget, appointing committees, and hiring the City Manager, City Attorney, and City Clerk. The City Manager is responsible for carrying out the policies and ordinances of the Council, for overseeing the day-to-day operations of the City, and for appointing the heads of various departments. The Council is elected on a non-partisan basis.
The City provides a full range of services which include general government, public safety (police, fire, disaster preparedness and building inspection),
construction and maintenance of highways and streets, economic development, culture and recreation, electric, water, airport, refuse, sewer, and senior citizen/handicap transportation. In addition to general City activities, the Council is financially accountable for the Riverside Housing Authority, Riverside Public Financing Authority, Riverside Municipal Improvements Corporation and the Successor Agency, which was formed to hold the assets of the former Redevelopment Agency; therefore, these entities are included as an integral part of the City's financial statements. Additional information on these legally separate entities can be found in Note 1 in the Notes to Basic Financial Statements.
Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for all departments within the general, special revenue, and capital project funds. Formal budgets are not employed for debt service funds because debt indenture provisions specify payments. The permanent fund is not budgeted.
Biennially, during the period December through February, department heads prepare estimates of required appropriations for the following two-year budget cycle. These estimates are compiled into a proposed operating budget that includes a summary of proposed expenditures and financial resources and historical data for the preceding budget cycle. At least thirty-five days prior to the beginning of the fiscal year, City Manager provides the proposed budget, in writing, to the City Council for review. The operating budget is presented by the City Manager to the City Council for review. Following Council review, a public hearing is set to obtain citizen comments. The City Council generally conducts the public hearing and adopts the budget during one of its June meetings. The City Manager is legally authorized to transfer budgeted amounts between divisions and accounts within the same department and fund over the course of the fiscal year. Transfer of appropriations between departments or funds and increased appropriations must be authorized by the City Council.
Expenditures may not legally exceed budgeted appropriations within a fund. All appropriations shall lapse at the end of the fiscal year to the extent they have not been expended or lawfully encumbered, except for appropriations for capital projects which shall continue to their completion. For the general fund, this comparison is presented on page 24 as part of the basic financial statements for the governmental funds. For governmental funds other than the general fund, with appropriated annual budgets, this comparison is presented in the governmental fund subsection of this report, which begins on page 90.
Local economy: The City is located in Inland Southern California, which consists of Riverside and San Bernardino Counties (the "MSA"). The population of Inland Southern California, at,approximately 4.6 million, is larger than 25 states. The City leads the Inland Southern California in most measures of economic power, including population, income, employment, bank deposits, assessed valuation, office space and college enrollment. The population of the City is 317,847 which places it as the 12th largest in California.
The City of Riverside saw a reduction in the unemployment rate from 5.6% as of September 2021 to 3.2% as of September 2022. The City's unemployment rate remains lower than the State of California (3.7%), the County of Riverside (4%), and the United States (3.3%). The primary drivers for the increase in employment in the Riverside metro area nonfarm payrolls were from the trade, transportation, and utilities; leisure and hospitality; professional and business services; and education and health services industries, which saw increases from September 2021 to September 2022.
Consumer prices continue to increase at levels not seen in decades. The Riverside metro area saw an overall increase in the consumer price index of 8.4%
as of September 2022 compared to a 8.2% overall increase in the United States city average. The Riverside metro area saw food prices soar 11.5% and energy prices rise 23.6% as of September 2022 compared with 11.2% and 19.8% for the United States city average, respectively.
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In October 2022, Riverside home prices were up 0.9% compared to last year, selling for a median price of $570,000. However, homes are taking longer to sell and the volume of home sales has decreased. On average, homes in Riverside currently sell after 37 days on the market compared to 28 days last year, and only 203 homes were sold in October 2022, down from 309 last year, a decrease of 34.3%.
- S?OGK SSOOK S500ri S30DK 2018 2019 2020 2021 2022 Goals and Vision: On October 20, 2020, Council approved the Envision Riverside 2025 Strategic Plan, which is comprised of two components:
- 1.
City Council Strategic Policy, which sets forth the priorities and policy direction of the City Council to advance Riverside's potential and to frame the work efforts over the next five years including Vision, Cross-Cutting Threads, Strategic Priorities, Indicators and Goals; and
- 2.
Operational Workplan, which sets forth envisioned actions to be carried out by City staff to implement the City Council Strategic Policy, as well as related metrics to track the trendlines of progress toward achieving City Council priorities and includes the Actions and Performance Measures which will be evaluated and updated by the City Manager on an as-needed basis in conjunction with the City's budget cycle.
Envision Riverside 2025 Strategic Plan Vision: Riverside is a city where every person is respected and cherished, where equity is essential to community well-being, where residents support one another, and where opportunities exist for all to prosper. In Riverside, everyone comes together to help the community, economy and environment reach their fullest potential for the public good.
Cross-Cutting Threads: Major themes that should be reflected in all our outcomes include Community Trust, Equity, Fiscal Responsibility, Innovation, and Sustainability and Resiliency.
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Strategic Priorities and Indicators Arts, Culture and Recreation Indicators:
Lifelong Learning Shared Uses and Partnerships Arts and Cultural Opportunities Access to Parks, Trails and Open Spaces Programs and Amenities Environmental Stewardship Indicators:
Water Quality, Supply, Efficiency and Reliability Climate Resiliency, Carbon Footprint and Air Quality Usage, Condition and Quality of Public Lands Local Food System Vitality Environmental Justice Renewable Resource Usage and Waste Reduction Community Well-Being Indicators:
Housing Supply and Attainability Public Safety Public Health Placemaking Homelessness Household Resilience High Performing Government Indicators:
Community Centered Services Adaptive Organization Financial Health Equity in Delivery of City Services Civic Engagement City Team Engagement Economic Opportunity Indicators:
Workforce Development Business Development and Success Local Investment Regional Partnerships Economic Mobility Infrastructure, Mobility, and Connectivity Indicators:
Access to Transportation Choices Infrastructure Quality and Reliability Outside Investment Smart City Ecosystem Greening Facilities, Fleet and Systems As the City implements Priority Based Budgeting strategies, which will guide the budget development process for future fiscal years, the City Council's Strategic Priorities will play a critical role in helping the City make decisions on how to allocate resources.
Long-term financial planning: The City continues to recover from the COVID-19 pandemic. Sales tax has seen increases in fiscal years 2021 and 2022 following a decrease caused by the pandemic in fiscal year 2020. Service revenues have also seen increases as venues began to fully open throughout the City. However, the increase in revenues have been shadowed by high inflation and corresponding Federal Reserve interest rates hikes used as a tool to reduce the impact of rising prices.
The City proposed the fiscal year 2022-2024 Biennial Budget totals approximately $1.36 billion in fiscal year 2022/23 and $1.32 billion in fiscal year 2023/24, including the City's operating budget and planned capital projects. Two primary goals were established for the fiscal year 2022-2024 budget development cycle:
- 1. Leverage Priority Based Budgeting (PBB) to identify and reallocate funding to critical unfunded needs.
During budget development and departments' evaluation of their operational and financial needs, departments identified additional critical needs. Those needs were described through the lens of PBB, including relating the requests to existing programs and answering fundamental questions to assess the level of criticality of the need:
How is this a critical unfunded need?
What is the impact to operations should this budget request not be approved?
How does this request benefit City stakeholders?
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- 2. Implement a financing strategy of planned contributions and withdrawals to/from the Section 115 Trust to smooth the annual fiscal impact of the combined CalPERS unfunded accrued liability (UAL) and 2020 Pension Obligation Bond payments.
Staff analyzed the unfunded accrued liability (UAL) payment schedule per the CalPERS actuarial report and the pension obligation bond (POB) payment schedule and determined a feasible amount and optimal series of Section 115 Trust contributions and withdrawls to smooth the fiscal impact of the payment obligationss.
The proposed smoothing will result in level payments of $37,925,000 annually for a period of 12 years, from fiscal year 2024/25 through fiscal year 2035/36.
The City Council approved a $10 million contribution to the Section 115 Trust from fiscal year 2020/21 excess reserves. Contributions totaling nearly $12 million are incorporated into the proposed fiscal year 2022-2024 Biennial Budget, with $11 million occurring in fiscal year 2023/24 made possible by the payoff of the 2004 Safety POB in fiscal year 2022/23. The combination of current reserves and the proposed contributions will build the Section 115 Trust Fund to a balance of approximately $40 million which is projected to be sufficient to smooth the volatile required liability payments over the course of 12 years. Contributions totaling $34.4 million over five years are included in the General Fund Five-Year Financial Plan. It is important to note that the required UAL contributions will vary based on actual CalPERS investment returns; Section 115 Trust contributions will help to smooth the fiscal impact of spikes in the required UAL payments in future years.
American Rescue Plan Act (ARPA): On March 11, 2021, President Biden passed the $1.9 trillion American Rescue Plan Act (ARPA) sending checks to families and offering small business support to drive up demand and counter the country's high unemployment. The ARPA established the Coronavirus State Fiscal Recovery Fund and the Coronavirus Local Fiscal Recovery Fund, which provide a combined $350 billion in assistance to eligible state, local, territorial, and Tribal governments to assist in the recovery from economic and health impacts of the COVID-19 pandemic by providing resources to address impacts resulting from the crisis. The City received one-time funding of approximately $73.5 million from ARPA with the first installment of $36.7 million received in June 2021 and $36.8 million received in June 2022. The City may use the funds to best support the needs of the community providing the use of the funds aligns with one of the following four statutory categories:
- 1. To respond to the COVID-19 public health emergency or its negative economic impacts;
- 2.
To respond to workers performing essential work during COVID-19 public health emergency by providing premium pay to eligible workers of the recipient that are performing such essential work, or by providing grants to eligible employers that have eligible workers who perform essential work;
- 3.
For the provision of government services, to the extent of the reduction in the revenue of such recipients due to the COVID-19 public health emergency, relative to revenues collected in the most recent full fiscal year of the recipient prior to the emergency; or
- 4.
To make necessary investments in water, sewer, or broadband infrastructure.
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On November 9, 2021, the City Council approved the ARPA funding Expenditure Category Plan for the first allocation in the amount of $36.7 million following the Interim Final Rule guidelines. The approval by Council for the ARPA funding Expenditure Category Plan for the second allocation of $36.7 million is in progress.
- 1. Public Health 1,086,250 2.95 %
- 2. Negative Economic Impacts 12,270,000 33.37
- 3. Services to Disproportionately Impacted Communities 13,120,000 35.68
- 4. Premium Pay
- 5. Infrastructure 2,500,000 6.80
- 6. Revenue Replacement 7,525,000 20.47
- 7. Administration 266,344 0.72 Total 36,767,594 100.00 %
The Final Rule was issued on January 6, 2022 and became effective on April 1, 2022. Some key changes include:
The final rule offers a standard allowance for revenue loss of $10 million, allowing recipients to select between a standard amount of revenue loss or complete a full revenue loss calculation In some cases, enumerated eligible uses included in the interim final rule under responding to the public health emergency have been re-categorized in the organization of the final rule to enhance clarity In addition to programs and services, the final rule clarifies that recipients can use funds for capital expenditures that support an eligible COVID-19 public health or economic response The final rule provides an expanded set of households and communities that are presumed to be "impacted" and "disproportionately impacted" by the pandemic, thereby allowing recipients to provide responses to a broad set of households and entities without requiring additional analysis The final rule provides a broader set of uses available for these communities as part of COVID-19 public health and economic response in all impacted communities and making certain community development and neighborhood revitalization activities eligible for disproportionately impacted communities The final rule also allows for a broader set of uses to restore and support government employment, including hiring above a recipient's pre-pandemic baseline, providing funds to employees that experienced pay cuts or furloughs, avoiding layoffs, and providing retention incentives.
Awards and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting (Program) to the City for its annual comprehensive financial report (ACFR) for the fiscal year ended June 30, 2021. This was the sixteenth consecutive year that the City has received this prestigious award. The City received this award for publishing an easily readable and efficiently organized ACFR that satisfied both Generally Accepted Accounting Principles (GMP) and applicable legal requirements. This award is valid for a period of one year only. We believe that our current ACFR continues to meet the Program's requirements and we are submitting it to the GFOA again this year.
The Government Finance Officers Association (GFOA) has given an Award for Outstanding Achievement in Popular Annual Financial Reporting to the City vi
for its Popular Annual Financial Report (PAFR) for the fiscal year ended June 30, 2021. The City received the award for the fifth time for the June 30, 2021 report and has continued to prepare an award-winning report. This is a prestigious national award recognizing conformance with the highest standards for preparation of state and local government popular reports. The Award is valid for a period of one year only. We believe that our current PAFR continues to meet the Program's requirements and we are submitting it to the GFOA again this year.
The City received the GFOA's Distinguished Budget Presentation Award for its annual budget document for the fiscal year beginning July 1, 2021. In order to receive this award, a governmental unit must publish a budget document that meets program criteria as a policy document, as an operations guide, as a financial plan, and as a communication device.
The preparation of this report would not have been possible without the efficient and dedicated services of the entire staff of the Finance Department and oversight from the City Manager's Office. We would like to express our appreciation to all members of the department who assisted and contributed to its preparation. Credit also must be given to the Budget Engagement Commission and the Mayor and City Council for their unfailing support for maintaining the highest standards of professionalism in the management of the City's finances.
Respectfully submitted, Edward Enriquez Chief Financial Officer/City Treasurer vii
C'ettificate of
.Aclrievenient
- fot Exe ellence u1 Fina11cfal Rep01ti11g
. Presented to City of Riversid~
'Foe its Awnml Coinprehensi,*e Fini!.llcia1'Rey<>rt For the Fiscal Year Ended
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&!Qai.tiito D:iroctO-r/CEO viii 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 Riverside for our Annual Comprehensive Financial Report for the fiscal year ended June 30, 2021.
In order 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.
A Certificate of Achievement is valid for a period of one year only.
We believe our current report continues to meet the Certificate of Achievement Program requirements, and we are submitting it to GFOA to determine its eligibility for another certificate.
CITY LEADERSHIP Pahlcla Lock Dawson Mayor Chuck Conder Word4 Erin Edwards Word l Gaby Plcscenclc Words Clarissa Cervantes Word2 Jim Perry Ward6 Renaldo flerro Word 3 Steve Hemenway Wa;d7 Phaedra Norton Michael 0. Moore Oonesla Gause City Allorney Interim City Manager City Cl61k I
(-
Community and e 8
General Economic Finance Are Services Development Human e
lnnavation & a, Library 8 Museum Resources Technology e
Parks. Recreation 9 8
Public R,,
Riverside and Community l'ollce Works Public UHIIHes Services ix LEGISLATIVE OFFICIALS Patricia Lock Dawson...................................................................... Mayor Erin Edwards.................................................... Councilmember - Ward 1 Clarissa Cervantes........................................... Councilmember - Ward 2 Ronalda Fierro.................................................. Councilmember - Ward 3 Chuck Conder................................................... Councilmember - Ward 4 Gaby Plascencia............................................... Councilmember - Ward 5 Jim Perry........................................................... Councilmember - Ward 6 Steve Hemenway.............................................. Councilmember - Ward 7 CITY OFFICIALS Michael D. Moore..................................................... Interim City Manager*
Rafael Guzman...................................................... Assistant City Manager Kris Martinez.......................................................... Assistant City Manager Edward Enriquez...................................... Interim Assistant City Manager Donesia Gause.......................................................................... City Clerk*
Phaedra Norton.................................................................... City Attorney*
Todd Corbin.......................................... General Manager - Public Utilities Larry V. Gonzalez................................................................ Chief of Police Carl Carey......................................................... General Services Director Erin Christmas................................................................... Library Director Pamela Galera.................. Parks, Recreation & Community Svcs Director Edward Enriquez.................................. Chief Financial Officer/Treasurer Rene Goldman............................................... Human Resources Director George Khalil....................................................... Chief Innovation Officer Gilbert Hernandez................................................... Public Works Director La Wayne Hearn............................................................. Interim Fire Chief Robyn Peterson.............................................................. Museum Director Chris Christopoulos................................. Interim Community & Economic
................................................................................. Development Director
- Appointed by City Council
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INDEPENDENT AUDITORS' REPORT To the Honorable Mayor and Members of the City Council City of Riverside, California Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, the business-type activities, each major fund, and the aggregate remaining fund information of City of Riverside, California, (the City) as of and for the year ended June 30, 2022, 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 of Riverside, California, as of June 30, 2022, and the respective changes in financial position and, where applicable, cash flows thereof and the budgetary comparison for the general fund for the year then ended in accordance with accounting principles generally accepted in the United States of America.
Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America (GAAS) 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 audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions.
Emphasis of Matter Change in Accounting Principle As described in Note 1 to the financial statements, in the fiscal year ended June 30, 2022, the City adopted new accounting guidance, GASB Statement No. 87, Leases. Our opinion is not modified with respect to this matter.
Lanoe, Soll & Lunghard, LLP 20fl N. Brea Blvd, Suita203 I
Brea, CA 92821 I
Phone* 714.672JJ022 1
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To the Honorable Mayor and Members of the City Council City of Riverside, California Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of these financial statements in accordance with accounting principles generally accepted in the United States of America; and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to 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.
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 opinion. 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 GAAS 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 GAAS and Government Auditing Standards, we:
Exercise professional judgment and maintain professional skepticism throughout the audit.
Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.
Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City's internal control. Accordingly, no such opinion is expressed.
Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.
Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City's ability to continue as a going concern for a reasonable period of time.
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To the Honorable Mayor and Members of the City Council City of Riverside, California 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.
Other Reporting Responsibilities Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management's discussion and analysis, the schedule of changes in net pension liability and related ratios, the schedule of pension plan contributions, and the schedule of changes in total OPEB liability and related ratios, 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.
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 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 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 section and statistical section but does not include the basic financial statements and our auditor's report thereon. Our opinions on the financial statements does 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 financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the 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.
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To the Honorable Mayor and Members of the City Council City of Riverside, California Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 26, 2023, 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 the City's internal control over financial reporting and compliance.
Brea, California January 26, 2023 4
Management's Discussion and Analysis (Unaudited)
As management of the City, we offer this narrative overview and analysis of financial activities for the fiscal year ended June 30, 2022. We encourage readers to consider the information presented here in conjunction with additional information furnished in our letter of transmittal, which can be found on page i of this report.
All amounts, unless otherwise indicated, are expressed in thousands of dollars (0,000).
Overview of the Financial Statements This discussion and analysis is intended to serve as an introduction to the City's basic financial statements, comprised of three components: 1) government-wide financial statements, 2) fund financial statements, and 3) notes to basic financial statements. This report also contains certain supplementary information.
Government-wide financial statements The government-wide financial statements are designed to provide readers with a broad overview of the City's finances, in a manner similar to a private-sector business.
The statement of net position presents information on all of the City's assets, liabilities, and deferred inflows and outflows of resources, with the difference reported as net position. Over time, increases or decreases in the City's net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities presents information showing how the City's net position changed during the most recent fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of related cash flows. Thus, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (e.g., uncollected taxes and earned but unused vacation leave).
The government-wide financial statements distinguish functions of the City that are principally supported by taxes and intergovernmental revenues (governmental activities) from other functions that are intended to recover all or a significant portion of their costs through user fees and charges (business-type activities). The governmental activities of the City include general government, public safety, highways and streets, and culture and recreation. The business-type activities of the City include Electric, Water, Sewer, Airport, Refuse, Transportation, Public Parking, and Civic Entertainment Funds.
The government-wide financial statements include the activities of the City and three blended component units, which consist of the Riverside Housing Authority, Riverside Public Financing Authority, and the Riverside Municipal Improvements Corporation. Although legally separate, these entities function for all practical purposes as departments of the City and therefore have been blended as part of the primary government. The Successor Agency to the Redevelopment Agency of the City of Riverside (Successor Agency) is also included as a fiduciary component unit since it would be misleading to exclude the Successor Agency due to the nature and significance of the relationship between the City and the Successor Agency. The activity of the Successor Agency is reported with the City's fiduciary funds, which is not included in the government-wide statements since the resources of those funds are not available to support the City's own programs.
Both the Governmental Activities and the Business-Type Activities are presented on the accrual basis of accounting, a basis of accounting that differs from the modified accrual basis of accounting used in presenting governmental fund financial statements. Note 1 of the Notes to Basic Financial Statements fully describe these bases of accounting. Proprietary funds, discussed below, also follow the accrual basis of accounting.
The government-wide financial statements can be found on pages 18 - 19 of this report.
Fund financial statements A fund is a grouping of related accounts that is used to maintain control over resources that have been segregated for specific activities or objectives. The City, like other state and local governments, uses fund accounting to ensure and demonstrate compliance with finance-related legal requirements. All of the funds of the City can be divided into three categories: governmental, proprietary, and fiduciary.
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Governmental funds Governmental funds are used to account for the same functions reported as governmental activities in the government-wide financial statements. However, unlike the government-wide financial statements, governmental fund financial statements focus on near-term inflows and outflows of spendable resources as well as on balances of spendable resources available at the end of the fiscal year.
It is useful to compare the information presented for governmental funds with similar information presented for governmental activities in the government-wide financial statements. Reconciliations to facilitate this comparison are provided for both the governmental fund balance sheet and the governmental fund statement of revenues, expenditures, and changes in fund balances. The major reconciling items relate to capital assets and debt. In the Governmental Funds, acquisitions of capital assets are treated as "expenditures" because upon purchase of a capital assets, cash used for the acquisition is no longer available for other purposes.
The issuance of debt provides cash, which is now available for specified purposes. Accordingly, at the end of the fiscal year, the unrestricted fund balances of the Governmental Funds reflect spendable resources available for appropriation by the City Council. Spendable balances are not presented on the face of the government-wide financial statements.
The City maintains fifteen individual governmental funds. Information is presented separately in the governmental fund balance sheet and in the governmental fund statement of revenues, expenditures, and changes in fund balances for the General Fund, Capital Outlay Fund, and General Debt Service Fund which are major funds. Data from the other twelve governmental funds are combined into a single, aggregated presentation. Individual fund data for each of these non-major governmental funds is provided in the form of combining statements and can be found on pages 86 - 94 in this report.
The City adopted an annual appropriated budget for its General Fund for the Year ended June 30, 2022. A budgetary comparison statement has been provided to demonstrate compliance with this budget.
The governmental fund financial statements can be found on pages 20 - 23 of this report.
Proprietary funds The City maintains two different types of proprietary funds, enterprise and internal service funds. Enterprise funds are used to report the same functions presented as business-type activities in the government-wide financial statements. The City uses enterprise funds to account for Electric, Water, Sewer, Airport, Refuse, Transportation, Public Parking and Civic Entertainment services. Internal service funds are an accounting device used to accumulate and allocate costs internally among the City's various functions. The City uses internal service funds to account for self-insured insurance programs, central stores and its fleet of vehicles. Because these services predominantly benefit governmental rather than business-type functions, they have been included within governmental activities in the government-wide financial statements. Internal service funds are presented as proprietary funds because both enterprise and internal service funds follow the accrual basis of accounting.
Proprietary funds provide the same type of information as the government-wide financial statements (business-type activities), only in more detail. The proprietary fund financial statements provide separate information for the Electric, Water and Sewer operations, all of which are considered to be major funds of the City. The five remaining proprietary funds noted above are combined into a single, aggregated presentation. All internal service funds are also combined into a single, aggregated presentation in the proprietary fund financial statements. Individual fund data for the non-major enterprise funds and the internal service funds is provided in the form of combining statements and can be found on pages 96 - 104 in this report.
The basic proprietary fund financial statements can be found on pages 25 - 29 of this report.
Fiduciary fund Fiduciary funds are used to account for situations where the City's role is purely custodial. Fiduciary funds are not reflected in the government-wide financial statement because the resources of those funds are not available to support the City's own programs. The accounting used for fiduciary funds is much like that used for proprietary funds.
The fiduciary fund financial statements can be found on page 30 - 31 of this report.
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Notes to Basic 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 Basic Financial Statements begin on page 32 of this report.
Governmental Accounting Standards Board No. 87, Lease (GASB 87) For the year ended June 30, 2022, the financial statements include the adoption of GASB Statement No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset.
Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For additional information, refer to Notes 1, 5, 6, and 27.
Government-wide Financial Analysis The following table presents a summarization of the City's assets, liabilities, deferred inflows and outflows, and net position for its governmental and business-type activities. As noted earlier, a government's net position may serve over time as a useful indicator of its financial position.
(in thousands)
Governmental Business-Type Activities Activities Total 2022 2021 2022 2021 2022 2021 Assets:
Current and other assets 711,511 $
503,107 $
856,015 $
724,367 $
1,567,526 $
1,227,474 Capital and leased assets, net 1,330,850 1,337,100 1,975,600 1,976,364 3,306,450 3,313,464 Total assets 2,042,361 1,840,207 2,831,615 2,700,731 4,873,976 4,540,938 Deferred Outflows of Resources 67,430 100,355 41,648 70,694 109,078 171,049 Liabilities:
Current liabilities 146,784 112,061 71,696 57,503 218,480 169,564 Long-term liabilities 664,444 854,428 1,480,313 1,610,535 2,144,757 2,464,963 Total liabilities 811,228 966,489 1,552,009 1,668,038 2,363,237 2,634,527 Deferred Inflows of Resources 204,023 5,745 176,142 4,549 380,165 10,294 Net Position Net investment in capital assets 1,176,215 1,170,232 774,469 756,116 1,950,684 1,926,348 Restricted 199,456 164,809 85,666 78,885 285,122 243,694 Nonspendable 3,582 3,582 Unrestricted/(deficit)
{284,713}
{366,713}
284,977 263,837 264
{102,876}
Total net position 1,094!540 $
968!328 $
1,145!112 $
1,098,838 $
2!239,652 $
2,067,166 The City's assets and deferred outflows of resources exceeded liabilities and deferred inflows of resources by $2,239,652 at June 30, 2022, an increase of
$172,486 from June 30, 2021.
The City's net position reflects its investment in capital assets (i.e., land, buildings, machinery, equipment and infrastructure), net of any related debt that is still outstanding used to acquire those assets and net of unspent bond proceeds and cash held in bond reserve accounts. The City uses these capital assets to provide services to citizens; consequently, these assets are not available for future spending.
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An additional portion of the City's net position 13% represents resources that are subject to external restrictions on how they may be used. The remaining unrestricted net position may be used to meet the government's ongoing obligations to citizens and creditors. Of this amount, $(284,713) net deficit is held by the governmental activities and $284,977 is held by the business-type activities.
Unrestricted net position in the amount of $264, a net position increase of 100% from prior year, is the change in resources available to fund City programs to citizens and debt obligations to creditors. The positive increase in unrestricted net position is primarily the result of the reporting of the City's net pension asset, which was a liability in prior year, in accordance with an accounting standard issued by the Government Accounting Standards Board (GASB) that relates to pension activity; Statement No. 68, "Accounting and Financial Reporting for Pensions - an amendment of GASB Statement No. 27."
Governmental activities increased the City's net position by $126,212 to $1,094,540 for the year ended June 30, 2022.
On the following page is a condensed summary of activities of the City's governmental and business-type operations for the period ended June 30, 2022 with the prior fiscal year presented for comparative purposes. Also included in the following analysis are revenue and expense graphs to aid in understanding the results of the current year's activities.
(Balance of page intentionally left blank) 8
(in thousands)
Governmental Business-Type Activities Activities Total 2022 2021 2022 2021 2022 2021 Revenues:
Program revenues:
Charges for services 41,072 $
34,106 $
598,474 $
555,267 $
639,546 $
589,373 Operating grants and contributions 50,378 64,405 5,866 3,976 56,244 68,381 Capital grants and contributions 38,508 28,284 20,527 12,273 59,035 40,557 General revenues:
Sales taxes 173,933 150,321 173,933 150,321 Property taxes 79,790 71,986 79,790 71,986 Other taxes and fees 47,183 41,905 47,183 41,905 Intergovernmental, unrestricted 661 499 661 499 Investment income (7,613) 4,969 (13,324) 681 (20,937) 5,650 Miscellaneous 3,880 5,988 12,639 11,986 16,519 17,974 Total revenues 427,792 4021463 624,182 584,183 1,051,974 986,646 Expenses:
General government 66,937 97,927 66,937 97,927 Public safety 169,742 219,136 169,742 219,136 Highways and streets 41,125 42,034 41,125 42,034 Cultural and recreation 38,885 37,693 38,885 37,693 Interest on long-term debt and fiscal charges 19,806 19,083 19,806 19,083 Electric 349,004 366,165 349,004 366,165 Water 69,303 71,738 69,303 71,738 Sewer 59,060 61,029 59,060 61,029 Airport 1,944 2,326 1,944 2,326 Refuse 28,449 28,428 28,449 28,428 Transportation 3,758 4,623 3,758 4,623 Public Parking 4,566 4,684 4,566 4,684 Civic Entertainment 21,804 11,885 21,804 11,885 Total expenses 336,495 4151873 537,888 550,878 874,383 966,751 Increase (decrease) in net position 91,297 (13,410) 86,294 33,305 177,591 19*,895 Extraordinary items (5,748)
(5,748)
Transfers, net 34,915 34 879
{34,915}
{34,278}
601 Changes in net position 126,212 21,469 45,631 (973) 171,843 20,496 Net Position:
Beginning of year, as previously stated 968,328 866,575 1,098,838 1,099,811 2,067,166 1,966,386 Prior period adjustment 80 284 643 643 80,284 Beginning of year, as restated 968,328 946,859 1,099,481
. 1,099,811 2,067,809 2,046,670 End of year 1,094,540 $
968,328 $
1,145,112 $
1,098,838 $
2,239,652 $
2,067,166 9
Governmental Activities - Total change in net position for governmental activities increased by $104.7 million while prior fiscal year increased by $21.5 million.
Key elements of this year's activity in relation to the prior year are as follows:
Revenues:
While variances between years exist for the various revenue categories, the total net increase was approximately $25.3 million or 6%. Precipitated by an infusion of federal stimulus funding and inflationary factors and is largely attributable to the increase to sales taxes of $23.6 million which was primarily from increased sales price of fuel and service stations; autos and transportation; general consumer goods; building and construction; and restaurants and hotels.
The increase of property taxes of $7,804 was mainly due to increased property values and sales. Program revenue groupings were updated in fiscal year 2022 and are the primary reason for the $14,027 decrease in operating grants and contributions and the $10,224 increase in capital grants and contributions.
Expenses:
While variances between years exist for the various expense functions, the total net decrease was approximately $79.4 million or 19%. This is primarily related to one time expenditures in fiscal year 2021 for the Parada II Litigation settlement of $24 million and various grant expenditures for the CARES grant, which were nonrecurring in fiscal year 2022, as well as a decrease to personnel related costs of $48 million resulting from the elimination of the prior year net pension liability and generation of a net pension asset in fiscal year 2022.
$250.000
$200,000
$1 50,000
$1 00,000
$50,000
$0 Program Revenues and Expenses - Governmental Activities - Fiscal Year Comparison 2022 vs. 2021 General government Public safety Highways and streets Culture and recreation Interest on long-term debt 10 I 2022 Expenses 2021 Expenses I 2022 Program revenues I 2021 Program revenues
Property Tues 18.32'6,
- Z..,o O.ia. lnvutment lncom.
Revenues by Source - Governmental Activities - Fiscal Year Comparison 2022 vs. 2021 2022 7.45.. Utiiyl.JHB' HH Prop* riy Taxu 17.19~
2.01" Tran114tnl Occopancylaxu.
11.57,., ()pernng Grant. *nd Contr'bunons S*"s T*xH 37.35¥1 2021 8.4711\\ Cha.r;u forSel'Yloas 7.03" Capul Grants and Contrinrtions
---16.00"9 Oo*rshng Gr11nu and Controuuons
~
'\\..
1.23~ tnve:stment lncomR
\\ ~1.37~ F,.nc:h11 ans 0.12~ lnte,gowmrNntal unr-..tnctad 1.49,W. J.~ neou.s Business-Type Activities - Total net position for business-type activities increased by $46.3 million while prior fiscal year decreased by $973. Key elements of this year's activity in relation to the prior year are as follows:
Charges for services slightly increased from prior year resulting in an increase of $43.2 million or 8%. Electric Fund charges for services increased by
$21.8 million primarily due to the rate plan increases and decreased uncollectibles. The Civic Entertainment Fund charges for services increased by $10.5 million due to the reopening of various entertainment venues caused by the COVID-19 pandemic.
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Overall expenses decreased by $13.0 million or 2.4%. The Electric Fund, Water Fund and Sewer Fund had decreased operating expenses of $16.3 million, $2.2 million and 1.3 million, respectively, primarily due to reduction in personnel related costs resulting from the elimination of the prior year net pension liability and generation of a net pension asset in fiscal year 2022.
Revenues by Source - Business-Type Activities - Fiscal Year Comparison 2022 2021 Charges for Services 91.0'Y,
- harges for Services 95.1 %
Operating Grants and Contributions 0.9% I 3.1% Caprtat Grants and Contributions J.1 'Y, Investment Income
\\
2.1 'Y, Miscellaneous 0.6% Operating Grants and Contrib 12
Financial Analysis of the City's Funds Governmental funds. The focus of the City's governmental funds is to provide information on near-term inflows, outflows, and balances of spendable resources.
Such information is useful in assessing the City's financing requirements. In particular, unassigned fund balance may serve as a useful measure of a government's net resources available for spending at the end of the fiscal year.
The following table summarizes the balance sheet of the City's General Fund, Capital Outlay Fund, and Non-Major Governmental Funds. As noted earlier, the City uses fund accounting to ensure and demonstrate compliance with finance related legal requirements.
(in thousands)
General Debt Service Non-Major Total General Fund Caeital Outlal Fund Fund Governmental Funds Governmental Funds 2022 2021 2022 2021 2022 2021 2022 2021 2022 2021 Assets
$ 280,565 $ 201,980 $
57,636 $
54!804 $
13!231 $
13!165 $ 201,206 $ 169,940 $ 552,638 $ 439,889 Liabilities 42!541 $
38,774 $
4!612 $
3,674 $
1,552 $
1!873 $
96,882 $
67,553 $ 145,587 $ 111,874 Deferred inflows of resources 10,806 3,559 520 772 49,832 47,556 61,158 51,887 Fund Balances Nonspendable 2,087 1,870 1,495 1,477 3,582 3,347 Restricted 30,715 10,697 52,504 50,358 11,679 11,292 54,212 53,354 149,110 125,701 Committed 82,801 62,400 82,801 62,400 Assigned 41,707 24,890 41,707 24,890 Unassigned 69,908 59,790 (1,215) 68,693 59,790 Total fund balances 227,218 159,647 52,504 50,358 11,679 11!292 54,492 54,831 345,893 276,128 Total liabilities, deferred inflows, and fund balances
$ 280,565 $ 201,980 $
57,636 $
54,804 $
13,231 $
13!165 $ 201,206 $
169,940 $ 552,638 $ 439,889 As of the end of the current fiscal year, the City's governmental funds reported combined ending fund balances of $345,893 an increase of $69,765 compared to the prior year. Additionally, 1 % of the fund balance $3,582 is nonspendable, which comprises the portion of fund balance that cannot be spent due to form.
$149,110 or 43% of fund balance is restricted, which represents the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or granters. Committed fund balance of $82,801 or 24% of the fund balance was set aside for economic contingencies. Committed for economic contingencies consists of 20% of the 2022-23 General Fund adopted expenditure budget of $306 million or $61,000,
$5,000 for General Fund - Measure Z, $10,801 for future capital projects, and $6,000 for balancing measures. $41,707 or 12% of fund balance is constrained by the City's intent to utilize fund balance for specific purposes, which is reported within the fund balance classification assigned. The remainder of the fund balance
$68,693 or 20% is unassigned, meaning it is available for spending at the City's discretion. The City's governmental funds reported combined total assets of
$552,638 at June 30, 2022, an increase of $112,749 compared to the prior year. Liabilities and deferred inflows of resources amounted to $206,745, an increase of
$42,984 from prior year.
The General Fund is the principal operating fund of the City. At the end of the current fiscal year, total fund balance equaled $227,218, in comparison to $159,647 in the prior year. The increased in fund balance is primarily due to increased sales and use tax as well as the decrease in grant expenditures. The Capital Outlay Fund is used to account for the acquisition or construction of major capital facilities. The total fund balance was $52,504, compared to $50,358 in prior year. The increased was due to decreased capital projects. The General Debt Service Fund accounts for the accumulation of resources and payment of long-term debt principal and interest. The total fund balance was $11,679, compared to $11,292 in prior year. The Non-Major Governmental Funds fund balance was $54,492, compared to $54,831 in prior year.
Proprietary funds. The City's proprietary funds provide the same type of information found in the government-wide financial statements, but in more detail.
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Unrestricted net position of the Electric, Water and Sewer Funds at the end of the year amounted to $194,443, $17,675, and $74,034, respectively. The unrestricted net position for the Electric, Water and Sewer Funds in the prior year was $201,521, $6,220, and $63,285, respectively. The decrease in unrestricted net position of the Electric Fund $(7,078) was primarily attributable to a reduction of investment income due to a market value adjustment done at fiscal year end as prescribed by accounting standards. The increase in unrestricted net position of the Water Fund $11,455 was primarily attributable to positive operating results. The increase in unrestricted net position for the Sewer Fund $10,749 is primarily a result of increased charge for services and reduced personnel service costs.
General Fund Budgetary Highlights Revenues Expenditures:
Current:
General government Public safety Highways and streets Culture and recreation Capital outlay Debt service Total expenditures Excess/(deficiency) of revenues over/(under) expenditures Other Financing Sources/(Uses):
Net change in fund balance Fund Balance:
Beginning of year, as previously stated End of year Original Budget 285,299 $
19,669 196,249 21,854 35,270 3,630 276,672 8,627 (7,393) 1,234 159,647 160,881 $
Final Budget 308,880 $
30,867 202,627 22,763 35,043 20,301 311,601 (2,721)
(18,425)
(21,146) 159,647 138,501 $
Variance to Final Budget Actual Positive Amounts (Negative) 329,317.:...$ __
____;;2;;;.;;0..,_;,4;.;;;.3.;....7 8,197 193,369 17,935 30,882 3,262 771 254,416 74,901 (7,330) 67,571 159,647 227,218 $
22,670 9,258 4,828 4,161 17,039 (771) 57,185 77,622 11,095 88,717 88,717 The primary reason for final budgeted revenues and expenditures increasing from the Original Budget is due to increased sales and use tax as well as increased Measure Z funding for encumbrance rollovers, carryover budgets and capital projects.
Actual amounts differed from the final fund budget are as follows:
Actual expenditures were less than final budgeted amounts by approximately $57.2 million. This is primarily associated with unspent appropriations for projects that were not completed during the year (which are carried over to the next fiscal year) as well as the cost saving efforts by City Departments.
Capital Assets and Debt Administration Capital Assets - The City's investment in capital assets for governmental and business-type activities as of June 30, 2022 amounted to $3,304,620 (net of accumulated depreciation). This investment includes land, intangibles, buildings and improvements, machinery and equipment, park facilities, roads, highways, and bridges. The total decrease in the City's net capital assets for the current fiscal year was $8,844; a decrease of $7,302 for governmental activities and a decrease 14
of $1,542 for business-type activities primarily caused by depreciation expense exceeding capital asset additions.
Major capital improvements during the current fiscal year included ongoing projects: Consisting primarily of roads of $22.5 million; Storm drains of $8.6 million; and the Youth Innovation Center of $7.1 million for governmental activities. $26.4 million in Electric Utility capital improvements primarily related to transformer replacements, improvements to communications network, underground improvements, metering infrastructure, and major streetlight projects; $15.2 million in Water Utility projects primarily related to main replacements, system expansion, transmission pipelines, distribution facilities, and well projects; and The Cheech Marin Center of $11 million grant funded for business-type activities.
Additional information on the City's capital assets can be found in Note 5 on page 47 of this report.
City of Riverside's Capital Assets (net of depreciation)
(in thousands)
Governmental Business-Type Land Construction in progress Buildings Improvements other than buildings Machinery and equipment Intangibles Infrastructure Activities 2022 376,787 $
52,051 106,726 103,649 32,060 658,525 1,329,798 $
Total
$==========
2021 376,616 30,820 111,601 107,316 33,113 677,634 1,337,100 Activities 2022 2021 100,111 $
100,111 128,123 126,187 465,740 473,476 1,216,016 1,213,090 32,994 32,712 31,838 30,788 1,974,822 $
1,976,364 Total 2022 2021 476,898 $
476,727 180,174 157,007 572,466 585,077 1,319,665 1,320,406 65,054 65,825 31,838 30,788 658,525 677,634 3,304,620 $
3,313,464 Right to Use Assets - The City's investment in right to use assets for governmental and business-type activities as of June 30, 2022 amounted to $1,830 (net of accumulated amortization). This investment includes right to use land, buildings and machinery and equipment, which were added due to the implementation of GASB issued Statement No. 87, Leases.
Additional information on the City's right to usel assets can be found in Note 5 on page 47 of this report.
Land - right to use Buildings - right to use Machinery and equipment - right to use Total City of Riverside's Right to Use Assets (net of amortization)
(in thousands)
Governmental Business-Type Activities Activities 2022 2021 2022 2021 238 $
617 273 435 267 1,052 $
778 $
15 Total 2022 2021 238 $
890 702 1,830 $
Long-term debt. At the end of the current fiscal year, the City had total debt outstanding of $1,997,595 which includes bonded debt of $1,779,938.
City of Riverside's Long-Term Debt (in thousands)
Governmental Business-Type Activities Activities Total 2022 2021 2022 2021 2022 2021 Lease revenue bonds 68,855 $
72,471 $
6,625 $
7,059 $
75,480 $
79,530 General obligation bonds 4,987 6,478 4,987 6,478 Pension obligation bonds 338,264 352,824 110,718 116,227 448,982 469,051 Certificates of participation 85,477 90,215 25,912 27,213 111,389 117,428 Revenue bonds 1,139,100 1,176,605 1,139,100 1,176,605 Loans payable 457 457 Notes payable 59,948 64,678 59,948 64,678 Contracts payable 933 1,067 933 1,067 Financed purchased 22,294 14,922 2,176 2,354 24,470 17,276 Compensated absences 29,994 30,901 11,855 12,005 41,849 42,906 Claims and judgments 78,790 76,603 78,790 76,603 Landfill capping 9,820 10,419 9,820 10,419 Lease liability 1,060 787 1,847 Total 629,721 $
644!871 $
1,367,874 $
1,417,627 $
1,997,595 $
2,062,498 The City's total debt decrease by $64,903 or 3.2% during the current fiscal year. The net decrease is primarily related to payments on long-term debt.
The City's Water Utility maintains "AA+" and "AA+" ratings, from S&P Global Ratings and Fitch, respectively, for their revenue bonds, while the Electric Utility maintains "AA-" ratings from both rating agencies for fixed rate bonds. The City's general obligation bond ratings from S&P Global Ratings and Fitch are "AA" and "AA," respectively.
State statutes limit the amount of general obligation debt a governmental entity may issue to 15 percent of its total adjusted assessed valuation. The legal debt limit was $907,813 at June 30, 2022, which applies only to general obligation debt. At June 30, 2022, the City had $4,987 of general obligation debt, resulting in available legal debt capacity of $902,826.
Additional information on the City's long-term debt can be found in Note 9 beginning on page 52 of this report.
Economic Factors and Next Year's Budget Unemployment in the City of Riverside is 3.2% compared to 5.6% for the prior year as of September, 2022. Unemployment decreased mainly due to the end of COVID-19 shutdowns.
The largest impact to the City's long-term financial stability relates to pension costs from CalPERS.
The cost increases are mainly due to investment losses by CalPERS during the Great Recession as well as demographic changes, which impacted all the California agencies' retirement plans managed by CalPERS. Additional factors causing cost increases, which impact all or many agencies include:
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Retroactive retirement benefit enhancements for City employees between 2001 and 2006.
Long-term investment returns not meeting expectations.
Increased contributions resulting from the CalPERS anticipated discount rate, or assumed rate of return, over the past 15 years.
CalPERS expects retirees to live longer.
As of June 30, 2022, CalPERS reported a preliminary negative 6.1 % net return on investment in the 12-month period, which is above the fiscal year total fund policy benchmark of negative 7.0%. This return was far below the prior year positive return of 21.3%.
Volatile global financial markets, geopolitical instability, domestic interest rate hikes, and inflation all have had an impact on public market returns. CalPERS' investments in global public stocks returned negative 13.1 %, while fixed income investments returned negative 14.5%. Public market investments make up roughly 79% of the CalPERS' total fund. CalPERS' private market investments fared much better, with private equity and real assets sectors returning 21.3%
and 24.1 %, respectively.
With Cal PERS' discount rate of 6.8% and this year's preliminary return of negative 6.1 %, the estimated overall funded status stands at 72%.
As of June 30, 2022, total fund annualized returns for the 5-year period stood at 6.7%, the 10-year period at 7.7%, the 20-year period at 6.9%, and the 30-year period at 7.7%.
CalPERS began to collect employer contributions toward the plan's unfunded liability as dollar amounts instead of prior method of a contribution rate combined with the normal cost rate effective July 1, 2018. Additionally, in the fiscal year 2019-20, The City issued a pension obligation bond to help reduce future pension contributions. The following lists the required unfunded liability contribution component per plan for fiscal year 2022-23:
Miscellaneous Plan - Unfunded Liability Payment of $11,466 Safety Plan - Unfunded Liability Payment of $12,416 On June 21, 2022, the City Council adopted the City's Fiscal Year 2022-24 Biennial Budget comprised of $1.4 billion in funding for citywide operations including
$163 million for capital projects for fiscal year 2022-23 and $1.3 billion in funding for citywide operations including $115 million for capital projects for fiscal year 2023-24.
The General Fund Budget for fiscal year 2022-23 and 2023-24 of approximately $306 million and $311 million, respectively, was adopted. The fiscal year 2022-23 budget represents an increase from the prior year of approximately 6.6%.
Request for information This financial report is designed to provide a general overview of the City's finances for all those with an interest in the City's finances. Questions concerning any of the information provided in this report or requests for additional financial information should be addressed to the Finance Department, 3900 Main Street City of Riverside, California 92522.
17
CITY OF RIVERSIDE STATEMENT OF NET POSITION JUNE 30, 2022 (amounts expressed in thousands)
Prima~ Government Governmental Business-Type Activities Activities Total Assets:
Cash and investments 442,633 $
443,553 $
886,186 Receivables, net of allowance for uncollectible 114,146 87,877 202,023 Lease receivable 7,501 97,294 104,795 Inventory 8,197 3,684 11,881 Prepaid items 2,256 18,029 20,285 Deposits 1,640 1,640 Other assets 3,225 3,225 Internal balances (1,442) 1,442 Restricted assets:
Cash and cash equivalents 77,945 77,945 Cash and investments with fiscal agent 40,083 58,456 98,539 Benefit/Conservation Programs receivable 1,657 1,657 Regulatory assets 13,324 13,324 Derivative instruments 269 269 Land and improvements held for resale 3,010 3,010 Advances to Successor Agency Trust Fund 2,454 2,454 Net pension asset 95,127 45,166 140,293 Capital assets, not depreciated 428,838 249,729 678,567 Capital assets, net of depreciation 900,960 1,725,093 2,626,053 Right to use assets, net of amortization 1,052 778 1,830 Total assets 2,042,361 2,831,615 4,873,976 Deferred Outflows of Resources:
Changes in derivative values 4,574 8,719 13,293 Deferred charge on refunding 2,094 13,720 15,814 Pension related items 54,258 15,793 70,051 OPEB related items 6,504 3,416 9,920 Total deferred outflows of resources 67,430 41,648 109,078 Liabilities:
Current liabilities:
Accounts payable and other current liabilities 46,558 35,269 81,827 Unearned revenue 86,911 8,709 95,620 Deposits 11,459 13,564 25,023 Accrued interest 1,856 14,154 16,010 Non-current liabilities:
Due within one year:
Long-term obligations 30,158 47,964 78,122 Compensated absences 16,600 8,402 25,002 Claims liability 15,304 15,304 Landfill capping 559 559 Decommissioning liability 8,813 8,813 Lease liability 443 223 666 Due in more than one year:
Long-term obligations 489,719 1,297,448 1,787,167 Compensated absences 13,394 3,453 16,847 Claims and judgments 63,486 63,486 Landfill capping 9,261 9,261 Decommissioning liability 44,497 44,497 Regulatory liability 24,517 24,517 Derivative instruments 6,288 14,277 20,565 OPEB liability 28,435 20,335 48,770 Lease liability 617 564 1,181 Total liabilities 811,228 11ss2,oos 2,363,237 Deferred Inflows of Resources Change in derivative values 252 252 Deferred charges on refunding 616 616 Pension related items 191,492 75,950 267,442 OPEB related items 4,807 2,652 7,459 Lease related items 7,724 96,672 104,396 Total deferred inflows of resources 204,023 176 142 380,165 Net Position:
Net investment in capital assets 1,176,215 774,469 1,950,684 Restricted:
Housing 43,749 43,749 Debt service 22,971 31,824 54,795 Public works 36,384 36,384 Capital projects 60,373 60,373 Landfill capping 2,500 2,500 Programs and regulatory reguirements 51,342 51,342 Economic development 16,556 16,556 Unfunded accrued liability 19,423 19,423 Nonspendable 3,582 3,582 Unrestricted/(deficit)
(284,713) 284,977 264 Total net position 1,094,540 $
1,145,112 $
2,239,652 See Notes to Financial Statements 18
CITY OF RIVERSIDE STATEMENT OF ACTIVITIES FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Exeenses Function/Programs Primary Government:
Governmental Activities:
General government 66,937 Public safety 169,742 Highways and streets 41,125 Culture and recreation 38,885 Interest on long-term debt and fiscal charges 19 806 Total governmental activities 3361495 Business-Type Activities:
Electric 349,004 Water 69,303 Sewer 59,060 Airport 1,944 Refuse 28,449 Transportation 3,758 Public Parking 4,566 Civic Entertainment 21,804 Total business-type activities 5371888 Total primary government 874,383 See Notes to Financial Statements Program Revenues Operating Capital Indirect Expenses Charges for Contributions Contributions Allocation Services and Grants and Grants (18,804) $
13,721 12,496 14,491 3,175 6,090 3,133 6,770 41 072 397,947 80,535 71,557 1,728 29,768 168 4,888 11,883 5981474 6391546 General Revenues:
Taxes:
Sales taxes Property taxes Utility users' taxes Franchise taxes Transient occupancy taxes Intergovernmental, unrestricted Investment income Miscellaneous Transfers Extraordinary items 39,006 $
10,386 745 241 501378 7
2,379 3,480 5 866 56,244 $
Total general revenues, extraordinary items, and transfers Change in net position Net Position:
Beginning of year, as previously stated Prior period adjustments Beginning of year, as restated End of year 19 784 36,406 1,318 38,508 7,667 5,693 128 52 293 6,694 201527 59,035 Net (Exeenses} Revenues and Changes in Net Position Prima!l Government Governmental Business-Type Activities Activities Total 5,378 $
5,378 (157,361)
(157,361)
(1,059)
(1,059)
(33,689)
(33,689)
{19,806)
{19,806)
(206!537)
(206,537) 56,610 56,610 16,925 16,925 12,625 12,625 (157)
(157) 1,319 1,319 (918)
(918) 322 322 253 253 861979 861979
{206,537) $
86,979 $
{119,558) 173,933 173,933 79,790 79,790 32,464 32,464 5,955 5,955 8,764 8,764 661 661 (7,613)
(13,324)
(20,937) 3,880 12,639 16,519 34,915 (34,915)
(5,748)
(5,748) 332,749 (41,348) 291,401 126,212 45,631 171,843 968,328 1,098,838 2,067,166 643 643 968,328 $
1,099,481 $
2,067,809 1,094,540 $
1,145,112 $
2,239,652
CITY OF RIVERSIDE BALANCE SHEET GOVERNMENTAL FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Non-Major Total Capital Outlay General Debt Governmental Governmental General Fund Fund Service Fund Funds Funds Assets:
Cash and investments 192,195 $
52,355 $
4,389 $
136,492 $
385,431 Cash and investments with fiscal agent 30,715 8,703 665 40,083 Receivables, net of allowance for uncollectible Interest 401 111 4
223 739 Property taxes 1,544 42 98 1,684 Sales taxes 30,395 30,395 Utility billed 3,350 3,350 Accounts 7,063 451 121 7,635 Intergovernmental 4,444 4,700 14,966 24,110 Notes 45,576 45,576 Lease receivable 7,501 7,501 Prepaid items 1,912 19 93 230 2,254 Due from other funds 870 870 Land and improvements held for resale 175 2,835 3,010 Total assets 280,565 $
57,636 $
13,231 $
201,206 $
552,638 Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable 9,494 $
2,762 $
110 $
9,577 $
21,943 Accrued payroll 21,433 39 21,472 Retainage payable 2
348 1,025 1,375 Intergovernmental 153 1
154 Unearned revenue 1,502 85,409 86,911 Deposits 11,459 11,459 Due to other funds 831 831 Advances from other funds 1,442 1,442 Total liabilities 42,541 4 612 1,552 96,882 145,587 Deferred Inflows of Resources:
Unavailable revenue 3,082 520 49,832 53,434 Lease related items 7,724 7,724 Total deferred inflows of resources 101ao6 520 49,832 61,158 Fund Balances:
Nonspendable:
Inventories, prepaids, and deposits 1,912 1,912 Land and improvements held for resale 175 175 Permanent fund principal 1,495 1,495 Restricted:
Housing and redevelopment 12,292 12,292 Debt service 11,292 11,679 22,971 Transportation and public works 52,504 34,569 87,073 Other purposes 7,351 7,351 Unfunded accrued liability 19,423 19,423 Committed:
Economic contingency 66,000 66,000 Other purposes 16,801 16,801 Assigned:
General government 5,160 5,160 Public safety 12,319 12,319 Highways and streets 3,066 3,066 Culture and recreation 1,509 1,509 Continuing projects 19,653 19,653 Unassigned 69,908 (1,215) 68,693 Total fund balances 227,218 52,504 11,679 54,492 345,893 Total liabilities, deferred inflows of resources, and fund balances 280,565 $
57,636 $
13,231 $
201,206 $
552,638 See Notes to Financial Statements 20
CITY OF RIVERSIDE RECONCILIATION OF THE BALANCE SHEET OF GOVERNMENTAL FUNDS TO THE STATEMENT OF NET POSITION JUNE 30, 2022 (amounts expressed in thousands)
Total fund balances - governmental funds Amounts reported for governmental activities in the Statement of Net Position are different because:
Capital assets, net of accumulated depreciation, used in governmental activities are not current financial resources and, therefore, are not reported as assets in the governmental funds Right to use asset, net of accumulated amortization, used in governmental activities and are not current financial resources and, therefore, are not reported as assets in the governmental funds Net pension asset Deferred outflows on refunding charges are not available resources and, therefore, are not reported on the funds Deferred outflows on pension related items Deferred outflows on OPEB related items Deferred inflows on pension related items Deferred inflows on OPEB related items Revenue not available to pay for current period expenditures are reported as unavailable revenue in the governmental funds Accrued interest payable for the current portion of interest due on various debt issues has not been reported in the governmental funds Long-term liabilities, as listed below, are not due and payable in the current period and, therefore, are not reported in the governmental funds General obligation bonds Pension obligation bonds Certificates of participation Lease revenue bonds Financed purchase Compensated absences OPEB liability Lease liability The City uses derivative instruments to hedge its exposure to changing interest rates through the uses of interest swaps. The following related items have been reflected in the Statement of Net Position:
Net fair value of interest rate swaps Deferred amount related to the hedgeable portion of derivative instrument Internal service funds are used by management to charge the costs of insurance, centralized purchasing and fleet management to individual funds. The assets and liabilities of the internal service funds are included in the governmental activities in the Statement of Net Position.
Net position of governmental activities See Notes to Financial Statements 21 345,893 1,322,679 1,029 92,895 2,094 53,478 6,293 (187,739)
(4,656) 53,434 (1,856)
(4,987)
(333,690)
(85,477)
(68,855)
(22,294)
(29,537)
(27,228)
(1,039)
(573,107)
(6,288) 4,574 (1,714)
(14,183) 1!094!540
CITY OF RIVERSIDE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Revenues:
Taxes Licenses and permits Intergovernmental Charges for services Fines and forfeitures Special assessments Rental and investment income Miscellaneous Total revenues Expenditures:
Current:
General government Public safety Highways and streets Culture and recreation Capital outlay Debt service:
Principal Interest and fiscal charges Total expenditures Excess/(deficiency) of revenues over/(under) expenditures Other Financing Sources/(Uses):
Transfers in Transfers out Issuance of long-term debt Proceeds from sale of capital assets Proceeds from financing related to leases Total other financing sources/(uses)
Net change in fund balances Fund Balances:
Beginning of year End of year See Notes to Financial Statements Capital Outlay General Debt General Fund Fund Service Fund 298,986 $
1,920 11,304 4,463 13,830 15,311 2,096 316 538 1,234 (4,391)
(1,437)
(25) 1,232 742 3292317 132673 32129 8,197 193,369 17,935 30,882 3,262 20,130 675 27,389 96 3
19,989 254,416 20,133 47,378 74 901
{6,460)
{44,249) 58,586 11,651 44,636 (67,682)
(3,045)
(11,292) 11,292 53 1,713
{7,330) 8,606 44,636 67,571 2,146 387 159,647 50,358 11,292 227,218 $
52,504 $
11!679 22 Non-Major Total Governmental Governmental Funds Funds 300,906 3,546 14,850 69,707 88,000 1,627 16,938 2,096 5,100 7,188 (680)
(6,533) 1,729 3,703 81 2029 427!148 16,132 24,329 12,599 205,968 870 18,805 2,183 33,065 48,142 71,534 62 28,126 44 20,132 80,032 401,959 997 25,189 2,018 116,891 (3,361)
(85,380) 11,292 6
59 1
1,714
{1,336) 44,576 (339) 69,765 54,831 276,128 54,492 $
345,893
CITY OF RIVERSIDE 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, 2022 (amounts expressed in thousands)
Net change in fund balances - total governmental funds Amounts reported for governmental activities in the Statement of Activities are different because:
Governmental funds report capital outlays as expenditures. However, in the Statement of Activities, the costs of those assets is allocated over their estimated useful lives as depreciation and amortization expense.
Capital outlay Depreciation expense Lease amortization expense Gain/(Loss) on sale of capital assets Repayment of long-term debt principal is an expenditure in the governmental funds, but the repayment reduces long-term liabilities in the Statement of Net Position.
Whereas, issuance of long-term debt is a current financial resource in the governmental funds, but the issuance increase long-term debt in the Statement of Net Position. Also, governmental funds report the effect of premiums, discounts, and deferral on loss of refunding when the debt is first issued, whereas these amounts are deferred and amortized in the Statement of Activities Issuance of long-term debt Principal repayments General obligation bonds Pension obligation bonds Certificates of participation Lease revenue bonds Loan payable Financed purchase Leases Amortization of bond premium/discount The City uses derivative instruments to hedge its exposure to changing interest rates through the uses of interest swaps. The changes in the fair value of the interest swaps are only reflected on the Statement of Activities Accrued interest for long-term liabilities. This is the net change in accrued interest for the current period Compensated absences expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds Governmental funds report all contributions in relation to the annual required contribution (ARC) for the City retirement plan as expenditures; however, in the Statement of Activities only the ARC is an expense Governmental funds report all contributions in relation to the annual required contribution (ARC) for OPEB as expenditures; however, in the Statement of Activities only the ARC is an expense Revenues reported as unavailable revenue in the governmental funds and recognized in the Statement of Activities. These are included in the intergovernmental revenues in the governmental fund activity Internal service funds are used by management to charge the costs of insurance, central purchasing and fleet management to individual funds. The net revenues (expenses) of the internal service funds is reported with governmental activities Change in net position of governmental activities See Notes to Financial Statements 23 45,413 (51,219)
(682)
(670)
(13,003) 1,475 14,370 4,675 3,248 457 3,920 672 356 69,765 (7,158) 16,170 296 122 842 46,943 (1,757) 1,547 (558) 126,212
CITY OF RIVERSIDE STATEMENT OF REVENUES, EXPENDITURES AND CHANGES, IN FUND BALANCE - BUDGET AND ACTUAL GENERAL FUND FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Variance to Final Budget Budgeted Amounts Actual Positive Original Final Amounts
{Negative}
Revenues:
Taxes 252,040 $
275,737 $
298,986 $
23,249 Licenses and permits 9,955 10,391 11,304 913 Intergovernmental 1,413 1,463 4,463 3,000 Charges for services 15,139
. 13,991 15,311 1,320 Fines and forfeitures 1,608 1,608 2,096 488 Special assessments 551 551 316 (235)
Rental and investment income 2,726 2,726 (4,391)
(7,117)
Miscellaneous 1,867 2,413 1,232 (1,181)
Total revenues 285,299 3081880 329,317 201437 Expenditures:
General government:
Mayor 1,021 1,037 1,036 1
Council 1,709 1,707 1,632 75 Manager 7,737 10,630 5,536 5,094 Attorney 6,338 6,354 5,921 433 Clerk 2,258 2,266 1,950 316 Community development 16,825 24,954 13,913 11,041 Human resources 4,502 4,724 3,868 856 General services 6,818 6,977 6,210 767 Finance 11,681 10,423 8,880 1,543 Innovation and technology 14,395 15,419 12,884 2,535 Subtotal 73,284 84,491 61,830 22,661 Allocated expenditures - General Government (53,615)
(53,624)
(53,633) 9 Total general government 19,669 30,867 8,197 22,670 Public safety:
Police 124,772 128,093 119,573 8,520 Fire 64,488 67,018 67,196 (178)
Animal regulation 3,307 3,818 3,315 503 Building and zoning inspection 3,682 3,698 3,285 413 Total public safety 196,249 202,627 193,369 9,258 Highways and streets 21,854 22,763 17,935 4,828 Culture and recreation:
Library 8,282 8,578 7,399 1,179 Museum and cultural affairs 2,211 2,438 1,812 626 Parks, recreation and community services 24,777 24,027 21,671 2,356 Total culture and recreation 35,270 35,043 30,882 4,161 Capital outlay 3,630 20,301 3,262 17,039 Debt service:
Principal 675 (675)
Interest and fiscal charges 96 (96)
Total expenditures 2761672 311,601 254,416 571185 Other Financing Sources/(Uses):
Transfers in 48,709 59,818 58,586 (1,232)
Transfers out (56,102)
(78,243)
(67,682) 10,561 Proceeds from sale of capital assets 53 53 Proceeds from financing related to leases 1,713 1,713 Total other financing sources/(uses)
!71393}
(181425!
!71330}
111095 Net change in fund balance 1,234 (21,146) 67,571 88,717 Fund Balance:
Beginning of year, as previously stated 159,647 159,647 159,647 Ending of year 160,881 $
138,501 $
227,218 $
88,717 See Notes to Financial Statements 24
CITY OF RIVERSIDE STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Assets:
Current assets:
Cash and investments Receivables, net of allowance for uncolleclible Interest Utility billed Utility unbilled Accounts Property taxes Intergovernmental Lease receivable Inventory Prepaid items Deposits Other current assets Restricted assets:
Cash and cash equivalents Rate stabilization cash and cash equivalents Other restricted cash and cash equivalents Benefit/Conservation Programs receivable Total current assets Noncurrent assets:
Restricted assets:
Cash and investments at fiscal agent Lease receivable Prepaid items noncurrent Other noncurrent assets Advances to other funds Regulatory assets Derivative instruments Advances to Successor Agency Trust Fund Net pension asset Capital assets, net of accumulated depreciation Right to use assets, net of amortization Total noncurrent assets Total assets Deferred Outflows of Resources:
Changes in derivative values Deferred charge on refunding Pension related items OPEB related items Total deferred outflows of resources See Notes to Financial Statements Electric 274,172 $
663 26,920 16,601 6,542 30 990 485 5,446 1,334 63,558 1,485 398,226 53,785 7,099 12,317 1,665 2,454 26,219 795,736 491 899z766 1,297,992 5,924 8,046 9,168 1,805 24,943 Business-Tree Activities - Entererise Funds Governmental Non-Major Total Activities -
Enterprise Enterprise Internal Service Water Sewer Funds Funds Funds 49,076 $
108,145 $
12,160 $
443,553 $
57,202 248 225 38 1,174 117 6,260 6,710 3,458 43,348 3,649 2,527 1,053 23,830 1,476 1,502 2,816 12,336 125 20 20 1,619 825 4,695 7,169 415 425 30 940 2,385 3,120 79 3,684 8,197 199 29 38 5,712 2
306 1,640 300 300 1,000 1,000 10,887 2,500 76,945 172 1,657 74 311 1241113 281103 624,753 661058 4,666 5
58,456 82,983 27 4,800 94,909 12,317 2,925 2,925 1,442 1,442 880 1,191 9,588 13,324 269 269 2,454 8,809 6,021 4,117 45,166 2,232 508,294 524,753 146,039 1,974,822 7,119 16 16 255 778 23 6081573 5331455 1651068 21206,862 9 374 682,884 657,568 1931171 2,831,615 75,432 812 1,983 8,719 5,028 646 13,720 3,080 2,105 1,440 15,793 780 727 466 418 3,416 211 9,647 2,571 4,487 41648 991 25
CITY OF RIVERSIDE STATEMENT OF NET POSITION PROPRIETARY FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Liabilities:
Current liabilities:
Accounts payable Accrued payroll Retainage payable Unearned revenue Deposits Accrued interest Due to other funds BenefiUConservation Programs payable Total current liabilities Noncurrent liabilities:
Due within one year:
Long-term obligations Compensated absences Claims and judgments Landfill capping Decommissioning liability Lease liability Due in more than one year:
Long-term obligations Compensated absences Claims and judgments Landfill capping Decommissioning liability Regulatory liability Derivative instruments OPEB liability Lease liability Total noncurrent liabilities Total liabilities Deferred Inflows of Resources:
Change in derivative values Deferred charges on refunding Pension related items OPEB related items Lease related items Total deferred inflows of resources Net position:
Net investment in capital assets Restricted net position:
Debt service Landfill capping Regulatory requirements Public Benefit Programs Water Conservation Program Unrestricted/( deficit)
Total net position See Notes to Financial Statements Electric 21,111 1,010 601 1,412 11,888 5,465 624 42111 21,356 4,774 8,813 134 615,834 2,426 44,497 4,220 8,905 10,460 363 721,782 7631893 44,089 1,426 7,964 53,479 246,698 18,967 19,598 25,857 194,443 5051563 $
Business-T:tee Activities - Entererise Funds Governmental Non-Major Total Activities -
Enterprise Enterprise Internal Service Water Sewer Funds Funds Funds 3,492 2,256 4,203 31,062 1,531 377 214 154 1,755 77 541 118 497 1,757 6
1,145 6,152 8,709 1,022 6
648 13,564 2,009 6,631 49 14,154 39 71 695 8,657 9,225 11 703 71,696 1,653 10,195 10,619 5,794 47,964 288 1,905 1,222 501 8,402 351 15,304 559 559 8,813 5
5 79 223 5
239,544 362,832 79,238 1,297,448 4,286 668 255 104 3,453 106 63,486 9,261 9,261 44,497 4,096 16,167 34 24,517 2,646 2,726 14,277 4,286 2,984 2,605 20,335 1,207 11 11 179 564 16 263,356 394,095 101,080 1,480,313 85,049 2721013 4031320 112,783 1,552,009 86,702 252 252 616 616 14,814 10,125 6,922 75,950 3,753 562 347 317 2,652 151 82,838 57 5,813 96,672 98,214 11,145 13,304 176,142 3,904 293,641 163,884 70,246 774,469 7,123 7,557 5,300 31,824 2,500 2,500 2,456 22,054 25,857 3,431 3,431 17,675 74,034 (1,175) 284,977 (21,306) 3221304 $
245,674 $
71,571 $
111451112 $
(14,183) 26
CITY OF RIVERSIDE STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Business-T:tee Activities - Entererise Funds Non-Major Enterprise Electric Water Sewer Funds Operating Revenues:
Charges for services 397,947 $
80,535 $
71,557 $
48,435 Total operating revenues 397,947 80,535 71,557 48,435 Operating Expenses:
Personnel services 32,356 10,856 8,928 6,305 Contractual services 6,466 2,527 1,017 15,559 Maintenance and operation 239,373 11,115 8,993 10,881 General 6,153 17,085 5,341 16,295 Materials and supplies 919 897 4,239 1,785 Claims/Insurance 1,848 1,162 1,121 650 Depreciation 36,718 16,179 14,931 5,382 Amortization 134 11 4
642 Total operating expenses 323,967 59,832 44,574 57,499 Operating income/(loss) 73,980 20,703 26,983 (9,064)
Nonoperating Revenues/(Expenses):
Grant subsidies 5,866 Interest revenue (10,330) 61 (2,782)
(273)
Interest expense and fiscal charges (25,037)
(9,471)
(14,486)
(3,022)
Capital improvement fees 647 Other 6,589 3,957 150 74 Gain/(loss) on disposal of capital assets 505 709 8
Total nonoperating revenues/(expenses)
(28,273)
(4,744)
(16,463) 2,645 lncome/(loss) before contributions and operating transfers 45,707 15,959 10,520 (6,419)
Capital contributions 7,667 5,693 128 7,039 Special item (694)
Extraordinary item (5,748)
Transfers in 13,273 Transfers out (39,436)
(7,708)
(14)
(336)
Change in net position 8,190 13,944 10,634 12,863 Net Position:
Beginning of year, as previously stated 497,373 308,360 234,397 58,708 Prior period adjustment 643 Beginning of year, as restated 497,373 308,360 235,040 58,708 End of year 505,563 $
322,304 $
245,674 $
71,571 See Notes to Financial Statements 27 Governmental Total Activities -
Enterprise Internal Service Funds Funds 598,474 $
28,410 598,474 28,410 58,445 3,706 25,569 1,576 270,362 2,990 44,874 6,476 7,840 143 4,781 14,887 73,210 741 791 5
485,872 30,524 112,602 (2,114) 5,866 (13,324)
(1,376)
(52,016)
(148) 647 10,770 173 1,222 105 146,835)
(1,246) 65,767 (3,360) 20,527 92 (694)
(5,748) 13,273 2,714 (47,494)
(4) 45,631 (558) 1,098,838 (13,625) 643 1,099,481 (13,625) 1,145,112 $
(14,183}
CITY OF RIVERSIDE STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Business-Time Activities - Entererise Funds Governmental Activities -
Non-Major Total Internal Enterprise Enterprise Service Electric Water Sewer Funds Funds Funds Cash Flows from Operating Activities:
Cash received from customers and users 394,707 $
80,337 $
70,033 $
50,835 $
595,912 $
Cash received from interfund services provided 28,302 Cash paid to suppliers for goods or services (252,247)
(32,039)
(21,156)
(44,571)
(350,013)
(24,490)
Cash paid to employees for services (47,823)
(15,499)
(11,516)
(7,916)
(82,754)
(4,789)
Net cash provided/(used) by operating activities 94,637 32,799 37,361 (1,652!
163,145 (977!
Cash Flows from Non-Capital Financing Activities:
Transfers in 13,273 13,273 2,714 Transfers out (39,436)
(7,708)
(14)
(1,030)
(48,188)
(4)
Payment made to other funds (3,002)
(3,002) 39 Payment receipt from advances to other funds 471 322 793 Payments on pension obligation bonds (3,310)
(1,075)
(671)
(452)
(5,508)
(227)
Grant subsidies 5,866 5,866 Other receipts/(payments) from non-operating revenue 6,463 1,496 150 146 8,255 172 Net cash provided/(used) by non-capital financing activities (35,812)
(7,287!
(213) 14,801 (28,511!
2,694 Cash Flows from Capital and Related Financing Activities:
Purchase of capital assets (32,361)
(22,738)
(4,350)
(7,930)
(67,379)
(1,626)
Proceeds from sales of capital assets 535 713 8
1,256 105 Principal paid on long-term obligations (16,581)
(6,867)
(9,295)
(1,727)
(34,470)
Interest paid on long-term obligations (25,645)
(9,004)
(16,577)
(6,494)
(57,720)
(149)
Capital improvement fees 583 583 Contributions 5,445 3,590 128 7,733 16,896 92 Lease payments (126)
(5)
(5)
(80)
(216)
(6)
Net cash provided/(used) by capital and related financing activities (68i133l (341311!
(29!508!
!82498!
(1411050!
(1!584!
Cash Flows from Investing Activities:
Proceeds from investment securities 6,164 6,164 Interest from investments (10,407)
(101)
(2,825)
(298)
(13,631)
(1,431)
Net cash provided/(used) by investing activities (41243!
(101!
!21825!
(298!
!71467!
!11431!
Net increase/(decrease) in cash and cash equivalents (14,151)
(8,900) 4,815 4,353 (13,883)
(1,298)
Cash and cash equivalents at beginning of year (excluding $59,949 in restricted investments for Electric) 351,881 73,529 104,335 10,307 540,052 58,500 Cash and cash equivalents at end of year (excluding $53,785 restricted investments for Electric) 337i730 $
64,629 $
109!150 $
141660 $
526!169 $
571202 See Notes to Financial Statements 28
CITY OF RIVERSIDE STATEMENT OF CASH FLOWS PROPRIETARY FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Business-Tiee Activities - Ente!J!rise Funds Governmental Activities -
Non-Major Total Internal Enterprise Enterprise Service Electric Water Sewer Funds Funds Funds Reconciliation of Operating Income to Net Cash Provided/(Used) by Operating Activities:
Operating income/(loss) 73,980 $
20,703 $
26,982 $
{9,064) $
112,601 $
{2,114)
Adjustments to Reconcile Operating lncome/(Loss) Net Cash Provided/(Used) by Operating Activities:
Depreciation 36,718 16,179 14,931 5,382 73,210 741 Amortization 134 11 4
642 791 5
(lncrease)/decrease in utility billed receivable (3,908)
(242)
(678)
(1,196)
(6,024)
(lncrease)/decrease in utility unbilled receivable (931) 39 (57)
(64)
(1,013)
(lncrease)/decrease in accounts receivable (1,487)
(227)
(793)
(1,615)
(4,122) 11 (lncrease)/decrease in property tax receivable 20 20 (lncrease)/decrease in intergovernmental receivable 18 1,846 5
892 2,761 (122)
(lncrease)/decrease in inventory 485 (168)
(38) 279 (779)
(lncrease)/decrease in prepaid items 1,482 39 6
2 1,529 (lncrease)/decrease in deposits (6)
(6)
(lncrease)/decrease in Benefit/Conservation Programs receivable (283)
(20)
(303) lncrease/(decrease) in accounts payable 4,044 26 (152) 764 4,682 192 lncrease/(decrease) in accrued payroll 407 180 94 67 748 31 lncrease/(decrease) in retainage payable 134 240 (129) 474 719 (15) lncrease/(decrease) in unearned revenue 1,345 (1,202) 4,236 4,379 lncrease/(decrease) in deposits payable 1,325 9
123 1.457 lncrease/(decrease) in Benefit/Conservation Programs payable 385 43 428 lncrease/(decrease) in compensated absences 18 (146) 26 (47)
(149)
(62) lncrease/(decrease) in claims and judgments 2,187 lncrease/(decrease) in landfill capping liability (599)
(599) lncrease/(decrease) in decommissioning liability (3,334)
(3,334)
Changes in net pension liability/(asset) and related deferred inflows/(outflows) of resources (16,425)
(4,890)
(2,836)
(1,740)
(25,891)
(1,105)
Changes in OPEB liability and related deferred inflows/(outflows) of resources 530 211 126 115 982 53 Total adjustments 20,657 12,096 10,379 7,412 50,544 1,137 Net cash provided/(used) by operating activities 94,637 $
32,799 $
37,361 $
{1,652} $
163,145 $
(977)
Non-Cash Investing, Capital, and Financing Activities:
Capital contributions - capital assets 2,222 $
2,103 $
4,325 $
Payment on note payable offset by rent credit 1,890 1,890 See Notes to Financial Statements 29
CITY OF RIVERSIDE STATEMENT OF NET POSITION FIDUCIARY FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Private-Purpose Trust Fund Successor Agency Trust Fund Custodial Fund Assets:
Cash and investments 27,851 $
537 Cash and investments with fiscal agent 4,033 13,251 Receivables, net of allowance for uncollectible Interest 56 Property taxes 46 Accounts 475 Intergovernmental 795 Notes 1,989 Direct financing lease receivable 7,570 Lease receivable 826 Deposits 2
Land and improvements held for resale 7,361 Capital assets:
Capital assets, not depreciated 185 Total assets 51,143 13,834 Liabilities:
Accounts payable 392 Accrued interest 2,419 Advances from City 2,454 Noncurrent liabilities:
Due within one year:
Long-term obligations 7,143 Due in more than one year:
Long-term obligations 171,467 Total liabilities 183,875 Deferred Inflows of Resources:
Deferred charges on refunding 693 Lease related items 820 Total deferred inflows of resources 1 513 Net Position:
Restricted for other governments (134,245) 13,834 Total net position
{134,245} $
13,834 See Notes to Financial Statements 30
CITY OF RIVERSIDE STATEMENT OF CHANGES IN NET POSITION FIDUCIARY FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Additions:
Property taxes Special assessments Rental and investment income Miscellaneous Issuance of long-term debt Total additions Deductions:
Professional services and other deductions Redevelopment projects Principal Interest and fiscal charges Total deductions Changes in Net Position Net Position:
Beginning of year, as previously stated Prior period adjustment Beginning of year, as restated End of year See Notes to Financial Statements 31 Private-Purpose Trust Fund Successor Agency Trust Fund Custodial Fund 16,012 $
4,399 (87) 7 37 4,805 15,962 9,211 2,133 143 123 2,175 6,173 2,103 8,429 4,421 7,533 4,790 (141,778)
(29,921) 38,965 (141,778) 9,044 (134,245) $
13,834
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022
{amounts expressed in thousands)
- 1.
Summary of Significant Accounting Policies The City of Riverside (City) was incorporated on October 11, 1883 as a Charter City and operates under a Council-Manager form of Government. The more significant accounting policies reflected in the financial statements are summarized as follows:
A. Reporting Entity The financial statements present the City and its component units, entities for which the City is financially accountable. Blended component units are legally separate entities, but in substance are part of the City's operations and their data is combined with that of the City's. The City has no component units that meet the criteria for discrete presentation. All of the City's component units have a June 30 year end.
Blended Component Units Riverside Housing Authority (Housing Authority) was established in 2006 by the City. The Housing Authority's primary purpose is to provide safe and sanitary housing accommodations for persons with low or moderate income. The Housing Authority's activity has been combined with that of the primary government because City Council members serve as the Housing Authority's commissioners and because the City is financially accountable and operationally responsible for all matters.
Riverside Public Financing Authority (Public Financing Authority) was organized in December 1987 by the City and the Redevelopment Agency. Pursuant to Assembly Bill 1X 26 (as modified by the California Supreme Court on December 29, 2011) all redevelopment agencies were dissolved effective February 1, 2012. Subsequently, the City became the Successor Agency to the Redevelopment Agency. The Parking Authority of the City of Riverside was added as an additional member of the Public Financing Authority on August 14, 2012. The Public Financing Authority's activity has been combined with that of the primary government because City Council members serve as the Public Financing Authority's board members and because the Public Financing Authority exclusively provides financing assistance to the primary government.
The City is also financially accountable and operationally responsible for all matters.
Riverside Municipal Improvements Corporation (Municipal Improvements Corporation) was created in 1978 and operates under provisions of the 32 Nonprofit Public Benefit Corporation Law of the State of California. The Municipal Improvements Corporation's primary purpose is to provide financing assistance by obtaining land, property and equipment on behalf of the City. The activity of the Municipal Improvements Corporation has been combined with that of the primary government because three members of the City Council serve as the Municipal Improvements Corporation's directors and because the Municipal Improvements Corporation exists to serve exclusively the primary government.
The City is financially accountable and operationally responsible for all matters.
Fiduciary Component Unit Successor Agency to the Redevelopment Agency of the City of Riverside (Successor Agency) is a separate legal entity, which was formed to hold the assets and liabilities of the former Redevelopment Agency pursuant to City Council actions taken on March 15, 2011 and January 10, 2012. The activity of the Successor Agency is overseen by an Oversight Board comprised of individuals appointed by various government agencies and the City of Riverside as Successor Agency of the former Redevelopment Agency. In 2018, the oversight was transferred to the Riverside Countywide Oversight Board, as a result of state legislation that consolidated all oversight boards to successor agencies. The Countywide Oversight Board was created to oversee the winddown activities of the various successor agencies in Riverside County. The nature and significance of the relationship between the City and the Successor Agency is such that it would be misleading to exclude the Successor Agency from the City's financial statements. The Successor Agency is presented herein in the City's fiduciary funds as a private-purpose trust fund.
Complete financial statements are prepared for the Riverside Public Financing Authority and the Successor Agency to the Redevelopment Agency of the City of Riverside, which can be obtained from the City's Finance Department, 3900 Main Street, Riverside, California, 92522 or online at www.riversideca.gov.
- 8. Government-wide and Fund Financial Statements The government-wide financial statements report information on all of the non-fiduciary activities of the City and its component units. lnterfund activity has been removed from these statements except for utility charges, as this would distort the presentation of function costs and program revenues. 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.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
The statement of net position presents financial information on all of the City's assets, liabilities, and deferred inflows/outflows of resources, with the difference reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the financial position of the City is improving or deteriorating.
The statement of activities demonstrates the degree to which the direct expenses of a given function or segment are offset by program revenues. Direct expenses are those that are clearly identifiable with a specific function or segment. Program revenues include 1) charges to customers or applicants who purchase, use, or directly benefit from goods, services, or privileges provided by a given function or segment, and 2) grants and contributions that are restricted to meeting the operational or capital requirements of a particular function or segment. Taxes and other items not properly included among program revenues are reported instead as general revenues. Indirect expenses are allocated to the various functions based on a proportionate utilization of the services rendered. Such allocations consist of charges for accounting, human resources, information technology and other similar support services.
Separate financial statements are provided for governmental funds, proprietary funds, and fiduciary funds, even though the latter are excluded from the government-wide financial statements. Major individual governmental funds and major individual enterprise funds are reported as separate columns in the fund financial statements.
C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The government-wide, proprietary and fiduciary funds financial statements are reported using the economic resources measurement focus and the accrual basis of accounting. Revenues are recorded when earned and expenses are recorded when a liability is incurred, regardless of the timing of related cash flows. Property taxes are recognized as revenues in the year for which they are levied on the property. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. An allowance for doubtful accounts is maintained for the utility and other miscellaneous receivables.
Governmental fund financial statements are reported using the current financial resources measurement focus and the modified accrual basis of accounting.
Revenues are recognized as soon as they are both measurable and available.
Revenues are considered to be available when they are collectible within the current period or soon enough thereafter to pay liabilities of the current period.
33 Revenues are considered to be available if they are generally collected within 60 days after year end, except for revenue associated with neglected property abatement which is eleven (11) months and except for grant revenue, including reimbursement received from Transportation Uniform Mitigation Fees, which is six (6) months. Grant revenue is recognized if received within six (6) months of year end to enable the matching of revenue with applicable expenditures.
Expenditures generally are recorded when a liability is incurred under accrual accounting. However, debt service expenditures, as well as expenditures related to compensated absences and claims and judgments, are recorded only when payment is due.
Property taxes, special assessments, sales taxes, franchise taxes, licenses, charges for services, amounts due from other governments and interest associated with the current fiscal period are all considered to be susceptible to accrual. Other revenue items such as fines and permits are considered to be measurable and available only when the government receives cash and are therefore not susceptible to accrual.
The government reports the following major governmental funds:
The General fund is the government's primary operating fund. It accounts for all financial resources of the general government, except those required to be accounted for in another fund.
The Capital Outlay fund accounts for the construction and installation of street and highway capital improvements for the City, including improvements funded by the 1/2% sales tax approved by Riverside County in 1988.
The General Debt Service fund accounts for the accumulation of resources and payment of long-term debt obligations of the City and related entities.
The government reports the following major proprietary funds:
The Electric fund accounts for the activities of the City's electric distribution operations.
The Water fund accounts for the activities of the City's water distribution operations.
The Sewer fund accounts for the activities of the City's sewer systems.
Additionally, the government reports the following fund types:
Special Revenue funds account for proceeds of specific revenue sources
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) that are legally restricted or otherwise committed or assigned for specific purposes.
Capital Projects funds account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
Internal Service funds account for self-insurance, central stores, and central garage on a cost reimbursement basis.
Fiduciary funds include private-purpose trust and custodial funds. The private-purpose trust fund accounts for assets and activities of the dissolved Redevelopment Agency, which is accounted for in the Successor Agency Trust. The custodial funds are used to account for special assessments that service no-commitment debt.
The Permanent fund is a governmental fund that is used to report reso*urces that are legally restricted to the extent that only earnings, and not principal, may be used for purposes that support the City's Library programs. Non-expendable net position on the Statement of Net Position includes $1.5 million of permanent fund principal which are considered nonexpendable.
Amounts reported as program revenues include 1) charges fo customers for goods, services, or privileges provided, 2) operating grants and contributions, and 3) capital grants and contributions, including special assessments.
Internally dedicated resources are reported as general revenues rather than as program revenues. Likewise, general revenues include all taxes.
Proprietary funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services and producing and delivering goods in connection with a proprietary fund's principal ongoing operations. The Sewer fund also recognizes, as operating revenue, the portion of connection fees intended to recover the cost of connecting new customers to the system. Operating expenses for enterprise funds and internal service funds include the cost of sales and services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses.
D. Cash and Investments The City values its cash and investments in accordance with the provisions of Governmental Accounting Standards Board Statement No. 72 (GASB 72), Fair 34 Value Measurement and Application, which requires governmental entities to use valuation techniques that are appropriate under the circumstances and for which sufficient data are available to measure fair value.
The techniques should be consistent with one or more of the following approaches: the market approach, the cost approach or the income approach.
Cash accounts of all funds are pooled for investment purposes to enhance safety and liquidity while maximizing interest earnings. Investments are stated at fair value except for investments in investment contracts which are recorded at contract value. All highly liquid investments (including restricted assets) with a maturity of 90 days or less when purchased are considered cash equivalents.
Cash and investments held on behalf of proprietary funds by the City Treasurer are considered highly liquid and are classified as cash equivalents for the purpose of presentation in the statement of cash flows.
E. Restricted Cash and Investments Certain proceeds of long-term indebtedness, as well as certain resources set aside for their repayment, are classified as restricted assets on the statement of net position because their use is limited by applicable bond covenants.
Restricted cash and investments also include cash set aside for nuclear decommissioning, public benefit programs, regulatory requirements and rate stabilization because their use is legally restricted to a specific purpose.
Unspent proceeds received from the City's landfill capping surcharge are also recorded as restricted assets.
F. Allowance for Doubtful Accounts Management determines the allowance for doubtful accounts by analyzing customer accounts for all balances over 60 days old. The allowance for doubtful accounts is then adjusted at fiscal year-end based on the amount equal to the annual uncollectible accounts. Utility customer closed accounts are written off when deemed uncollectible. Recoveries to utility customer receivables previously written off are recorded when received. For non-utility accounts receivables, delinquent notices after 60 days are sent to customers with outstanding balances. After 120 days, accounts still outstanding are referred to the City's collection agency. As of June 30, 2022, the City had an allowance for doubtful account balance of
$9,669 for all accounts receivables.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
G. Land and Improvements Held of Resale Land and improvements held for resale were generally acquired for future development projects. The properties are carried at the lower of cost or net realizable value.
H. Inventory Supplies are valued at cost using the average-cost method. Costs are charged to user departments when consumed rather than when purchased.
I. Prepaid Items Payments to vendors for services benefiting future periods are recorded as prepaid items and expenditures are recognized when items are consumed.
J. Capital Assets Capital assets, which include property, plant, equipment, and infrastructure assets (e.g., roads, bridges, sidewalks, right of way, and similar items), are reported in the applicable governmental activities and business-type activities of the government-wide financial statements and in the proprietary funds and the fiduciary private-purpose trust fund statements of net position. The government defines capital assets as assets with an initial, individual cost of more than five thousand dollars and an estimated useful life in excess of one year. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed. Costs include: labor; materials; interest during construction; allocated indirect charges such as engineering, construction and transportation equipment, retirement plan contributions and other fringe benefits. Donated capital assets or donated works of art and similar items are recorded at acquisition cost at the date of donation. Capital assets received in a service concession arrangement are recorded at acquisition value. Intangible assets that cost more than one hundred thousand dollars with useful lives of at least three years are capitalized and are recorded at cost. Interest incurred during the construction phase is expensed in the period incurred.
The costs of normal maintenance and repairs that do not add to the value of the asset or materially extend asset lives are not capitalized. Capital assets other than land are depreciated using the straight-line method. Estimated useful lives used to compute depreciation are as follows:
35 Buildings and improvements Improvements other than buildings Intangibles, depreciable Machinery and equipment Infrastructure K. Leases 30-50 years 20-99 years 3-15 years 3-15 years20-100 years Leases are defined by the general government as the right to use an underlying asset. As lessee, the City recognizes a lease liability and an intangible right-of-use lease asset at the beginning of a lease unless the lease is considered a short-term lease or transfers ownership of the underlying asset. Right-of-use lease assets are measured based on the net present value of the future lease payments at inception, using the weighted average cost of capital, which approximate the incremental borrowing rate. Re measurement of a lease liability occurs when there is a change in the lease term and/or other changes that are likely to have a significant impact on the lease liability. The City calculates the amortization of the discount on the lease liability and report that amount as outflows of resources. Payments are allocated first to accrued interest liability and then to the lease liability. Variable lease payments based on the usage of the underlying assets are not included in the lease liability calculations but are recognized as outflows of resources in the period in which the obligation was incurred. As lessor, the City recognizes a lease receivable.
The lease receivable is measured using the net present value of future lease payments to be received for the lease term and deferred inflow of receivables at the beginning of the lease term. Periodic amortization of the discount on the receivable are reported as interest revenue for that period. Deferred inflows of resources are recognized as inflows on a straight-line basis over the term of the lease. This recognition does not apply to short-term leases, contracts that transfer ownership, leases of assets that are investments, or certain regulated leases. Any initial direct costs are reported as an outflow of resources for that period.
Re-measurement of lease receivables occur when there are modifications, including but not limited to changes in the contract price, lease term, and adding or removing an underlying asset to the lease agreements. In the case of a partial or full lease termination, the carrying value of the lease receivable and the related deferred inflow of resources will be reduced and will include a gain or loss for the difference. For lease contracts that are short-term, the City recognizes short-term lease payments as inflows of resources (revenues) based on the payment provisions of the lease contract. Liabilities are only recognized if payments are received in advance, and receivables are only recognized if payments are received subsequent to the reporting period. Leases
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) between the Airport System and air carriers and other aeronautical users are subject to external laws and regulations. As permitted by GASBS No. 87, paragraph 43, the Airport System recognizes inflows of resources based on the payment provisions of the lease contract, and the accounting policies do not apply to regulated leases. Additional disclosures regarding regulated leases are in Note 9 L. Compensated Absences City employees receive 10 to 25 vacation days a year based upon length of service. A maximum of two years' vacation accrual may be accumulated, any excess vacation must be used in accordance to policy, and unused vacation is paid in cash upon separation.
City employees generally receive one day of sick leave for each month of employment with unlimited accumulation. Upon retirement or death, certain employees or their estates receive a percentage of unused sick leave paid in a lump sum based on longevity. The General, Electric and Water funds have been primarily used to liquidate such balances.
The liability associated with these benefits is reported in the government-wide statements. Vacation and sick leave of proprietary funds is recorded as an expense and as a liability of those funds as the benefits accrue to employees.
M. Derivative Instruments The City's derivative instruments are accounted for in accordance with Government Accounting Standards Board Statement No. 53 (GASB 53),
Accounting and Financial Reporting for Derivative Instruments, which requires the City to report its derivative instruments at fair value. Changes in fair value for effective hedges that are achieved with derivative instruments are reported as deferrals in the statements of net position.
The City uses derivative instruments to hedge its exposure to changing interest rates through the use of interest rate swaps. The City had debt that was layered with "synthetic fixed rate" swaps, which was refunded in 2008 and 2011. The balance of the deferral account for each swap is included as part of the deferred charge on refunding associated with the new bonds. The swaps were also employed as a hedge against the new debt. Hedge accounting was applied to that portion of the hedging relationship, which was determined to be effective.
The negative fair value of the interest rate swaps related to the new hedging relationship has been recorded and deferred on the statement of net position.
See Note 7 for further discussion related to the City's interest rate swaps.
36 Various transactions permitted in the Utility's Power Resources Risk Management Policies may be considered derivatives, including energy and/or gas transactions for swaps, options, forward arrangements and congestion revenue rights. The City has determined that all of its contracts including congestion revenue rights fall under the scope of "normal purchases and normal sales" and are exempt from GASB 53.
N. Long-Term Obligations Long-Term Debt Long-term debt and other long-term obligations are reported as liabilities in the applicable governmental and business-type activities columns in the government-wide financial statements and in the proprietary funds and fiduciary funds statements of net position. 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.
In the fund financial statements, government fund types recognize bond issuance costs as expenditures during the current period. The face amount of debt issued is reported as other financing sources. Premiums received on debt issuances are reported as other financing sources while discounts on debt issuance are reported as other financing uses.
Decommissioning The City has a 1. 79 percent undivided ownership interest in Units 2 and 3 of San Onofre Nuclear Generating Station (SONGS), located south of the City of San Clemente in northern San Diego County. Both Units 2 and 3 of SONGS were permanently retired on June 2013. Consequently, the units are no longer a source of supply for the Electric Utility, but remain associated with certain of its costs, including those associated with the units' shutdown and decommissioning (see Note 13 for nuclear decommissioning liability).
The other owners are SCE, with a 78.21 percent interest (including the 3.16 percent interest it acquired from the City of Anaheim in 2006), and San Diego Gas & Electric Company (SDG&E), with a 20.00 percent interest.
In 2005, the California Public Utilities Commission (CPUC) authorized a project to install four new steam generators in Units 2 and 3 at SONGS and remove and dispose of the predecessor generators. SCE completed the installation of these steam generators in 2010 and 2011 for Units 2 and 3, respectively. The Electric Utility's share of the cost to replace the steam generators was
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) approximately $13.4 million. Replacement of the steam generators was expected to enable plant operations to continue through at least 2022, and perhaps beyond, subject to the approval of the NRC.
In January 2012, a water leak occured in one of the heat transfer tubes of Unit 3's steam generators, causing it to be shut down. At that time, Unit 2 was off-line for a planned outage when unexpected wear in areas of tube-to-support structure was found. Units 2 and 3 remained offline for extensive inspections, testing and analysis of their system generators. On June 7, 2013, SCE unilaterally announced its plan to retire Units 2 and 3 permanently.
As a result of SCE's decision to permanently retire SONGS Units 2 and 3, the decommissioning phase of the plant began in June 2013. The process of decommissionining the nuclear power plant is expected to take many years and is governed by NRC regulations. According to SCE's decommissioning cost estimate document as of March 2018 in 2017 dollars, total decommissioning costs for Units 2 and 3 were estimated at $4.7 billion, of which the Electric Utility's share was $84 million.
In August 2021, SCE provided the updated decommissioning cost estimate document in 2020 dollars. According to the update, total decommissioning costs for Units 2 and 3 are estimated at $5.2 billion, of which the Electric Utility's share is $93.8 million.
As of June 30, 2022, the Electric Utility has set aside $42,082 in cash investments with the trustee and $16,107 in an designated decommissioning reserve for the Electric Utility's estimated share of the decommissioning costs.
Increases to the funds held for decommissioning liability are from investment earnings. The investment earnings are included in investment income in the Electric Utility's financial statements. An equivalent amount is reflected as decommissioning expense, which is considered part of production and purchased power. Decreases to the funds held for decommissioning liability are from actual funds drawn from the trust for decommissioning costs invoiced by SCE.
On February 23, 2016, the City Council adopted a resolution authorizing the commencement of SONGS decommissioning effective June 7, 2013. This resolution allows the Electric Utility to access the decommissioning trust funds to pay for its share of decommissioning costs. The Electric Utility began drawing decommissioning trust funds to pay for decommissioning costs in the fiscal year ended June 30, 2017. As of June 30, 2022, the Electric Utility has paid to date
$40,539 in decommissioning obligations which have been reimbursed by the 37 trust funds.
- 0. Claims arid Judgments Payable Claims and judgments payable are recognized when it is probable that a liability has been incurred and the amount of loss can be reasonably estimated. Such claims, including an estimate for claims incurred but not reported at year end, are recorded as liabilities in the self-insurance internal service fund. As of June 30, 2022, the City had an obligation related to claims and judgments which is reflected as a liability on the government-wide statements and is more fully described in Note 11.
P. Fund Equity In the fund financial statements, governmental fund balance is made up of the following components:
Nonspendable fund balance is the portion of fund balance that cannot be spent due to form. Examples include inventories, prepaid amounts, long-term loans, and notes receivable, unless the proceeds are restricted, committed or assigned. Also, amounts that must be maintained intact legally or contractually, such as the principal of a permanent fund are reported within the nonspendable category.
Restricted fund balance is the portion of fund balance that is subject to externally enforceable limitations by law, enabling legislation or limitations imposed by creditors or granters.
Committed fund balance is the portion of fund balance that can only be used for specific purposes due to formal action of the City Council through adoption of a resolution prior to the end of the fiscal year.
Once adopted, the limitation imposed by resolution remains in place until a similar action is taken (the adoption of another resolution) to remove or revise the limitation. On September 6, 2016, the City Council approved the General Fund Reserve Policy setting a 10%
minimum in the Emergency Reserve and 5% in the Contingency Reserve with an aspirational goal of 15% in the Emergency Reserve.
The Emergency Reserve was established for the purpose of addressing any extremely unusual and infrequent occurrences, such as a major natural disaster or a major unforeseen settlement.
Utilization of the Emergency Reserve requires declaration of an
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) emergency by a two-thirds majority of the City Council, and specification of the maximum dollar amount to be used. The Contingency Reserve was established for the purpose of providing a "bridge" to facilitate a measured and thoughtful reduction in expenditures during times of economic downturn, rather than making immediate and drastic budget reductions without the time for proper evaluation.
Utilization of the Contingency
- Reserve, including specification of the maximum dollar amount to be used, requires approval by a two-thirds majority of the City Council. The reserves committed at June 30, 2022 were calculated utilizing fiscal year 2022-2023 adopted General Fund expenditure budget of $305,670.
On April 2, 2019, the City Council approved the General Fund -
Measure Z Contingency Reserve Policy setting a required $5,000 in the Contingency Reserve. The Contingency Reserve was established to cover necessary expenses in order to provide time for a measured and thoughtful reduction in expenditures during times of economic downturn, rather than making immediate and drastic budget reductions without the time for proper evaluation. Utilization of the Contingency Reserve, including specification of the maximum dollar amount to be used, requires the affirmative votes of at least five members of the City Council.
Assigned fund balance reflects the City's intended use of resources.
Intent can be expressed by the City Council or by an official to which the City Council delegates the authority. On February 22, 2011, the City Council approved a policy whereby the authority to assign fund balance was delegated to the City's Chief Financial Officer, which authorized the assignment of fund balance for specific programs or purposes in accordance with City Council directives. The City also uses budget and finance policy to authorize the assignment of fund balance, which is done through the adoption of the budget and subsequent budget amendments throughout the year.
Unassigned fund balance is the residual classification that includes all spendable amounts in the General Fund not contained in other classifications.
When expenditures are incurred for purposes for which both restricted and unrestricted (committed, assigned or unassigned) fund balances are available, the City's policy is to use restricted amounts before unrestricted amounts.
38 Within unrestricted resources, committed resources are used first followed by assigned resources, and finally unassigned resources.
Q. Net Position Net position represents the difference between assets and deferred outflows less liabilities and deferred inflows. Net position invested in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the related acquisition, construction or improvement of those assets excluding unspent debt proceeds.
Restricted net position represents restricted assets less liabilities and deferred inflows related to those assets. Restricted assets are recorded when there are limitations imposed on their use either through legislation adopted by the City or through external restrictions imposed by creditors, granters or laws or regulations of other governments. Restricted resources are used first to fund appropriations.
R. lnterfund Transactions lnterfund transactions are accounted for as revenues and expenditures or expenses. Transactions, which constitute reimbursements, are eliminated in the reimbursed fund and accounted for as expenditures or expenses in the fund to which the transaction is applicable.
During the year, transactions occur between individual funds for goods provided or services rendered. Related receivables and payables are classified as "due from/to other funds" on the accompanying fund level statements. The noncurrent portion of long-term interfund loans receivable are reported as advances and, for governmental fund types, are equally offset by nonspendable fund balance to indicate that the receivable is not in spendable form.
Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as "internal balances."
S. Unearned Revenue Unearned revenues arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to meeting all eligibility requirements. In subsequent periods, when both revenue recognition criteria are met, or when the government has a legal claim to the resources, revenue is recognized.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
T. Unavailable Revenue Unavailable revenue arises only under a modified accrual basis of accounting.
Accordingly, unavailable revenue is reported only in the governmental funds balance sheet. These amounts are deferred and recognized as an inflow of resources (revenue) in the period that the amounts become available.
U. Deferred Outflows and Deferred Inflows of Resources When applicable, the statement of net position and the balance sheet will report a separate section for deferred outflows of resources. Deferred outflows of resources represent outflows of resources (consumption of net assets) that apply to future periods and that, therefore will not be recognized as an expense or expenditure until that time.
Conversely, deferred inflows of resources represent inflows of resources (acquisition of net assets) that apply to future periods and that, therefore, are not recognized as an inflow of resources (revenue) until that time.
V. Regulatory Assets and Deferred Regulatory Charges In accordance with GASB Statement No. 62, enterprise funds that are used to account for rate-regulated activities are permitted to defer certain expenses and revenues that would otherwise be recognized when incurred, provided that the City is recovering or expects to recover or refund such amounts in rates charged to its customers. Accordingly, regulatory assets and/or deferred regulatory charges have been recorded in the Electric, Water, Sewer and Refuse funds.
W. Property Tax Calendar Under California law, general property taxes are assessed for up to 1 % of the property's assessed value. General property taxes are collected by the counties along with other special district taxes and assessments and voter approved debt. General property tax revenues are collected and pooled by the county throughout the fiscal year and then allocated and paid to the county, cities and school districts based on complex formulas prescribed by State statutes.
Property taxes are calculated on assessed values as of January 1 for the ensuing fiscal year. On January 1 of the fiscal year the levy is placed and a lien is attached to the property. Property taxes are due in two installments. The first installment is due November 1 and is delinquent after December 10. The second installment is due February 1 and is delinquent after April 10. The City 39 generally accrues only those taxes, which are received within sixty days after the year-end. Under the Teeter plan, the County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy.
X. Use of Estimates The preparation of financial statements in conformity with accounting principles generally accepted in the United States of America requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities, disclosure of contingent assets and liabilities at the date of the financial statements, and the reported amounts of revenue and expenditures.
Specifically, the City has made certain estimates and assumptions relating to the revenues due and expenditures incurred through fiscal year end, collectability of its receivables, the valuation of property held for resale, the useful lives of capital assets, and the ultimate outcome of claims and judgments. Actual results may differ from those estimates and assumptions.
Y. Pensions For purposes of measuring the net pension asset/liability and deferred outflows/inflows of resources related to pensions, and pension expense, information about the fiduciary net position of the City of Riverside California Public Employees' Retirement System (CalPERS) plans (Plans) and additions to/deductions from the Plans' fiduciary net position have been determined on the same basis as they are reported by CalPERS. For this purpose, benefit payments (including refunds of employee contributions) are recognized when due and payable in accordance with the benefit terms. Investments are reported at fair value.
Z. Other Post-Employment Benefit (OPEB)
OPEB refers to the benefits, other than pensions, that the City provides as part of an employee's retirement benefits. The OPEB liability is defined as the liability of employers contributing to employees for benefits provided through a defined benefit OPEB plan that is administered through a trust.
AA.
New Accounting Pronouncements The following new Governmental Accounting Standards Board (GASB) pronouncements were effective and have been implemented for fiscal year 2021-2022 audit:
GASB Statement No. 87, Leases - This Statement defines a lease as a contract that conveys control of the right to use another entity's nonfinancial asset (the
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) underlying asset) as specified in the contract for a period of time in an exchange or exchange-like transaction. It requires recognition of certain lease assets and liabilities, for leases that were previously classified as operating leases, and establishes a single model for lease accounting. Under this Statement, a lessee is required to recognize a lease liability and an intangible right-to-use asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources.
GASB Statement No. 89, Accounting for Interest Cost Incurred before the End of a Construction Period. - This Statement requires that interest cost incurred before the end of a construction period be recognized as an expense in the period in which the cost is incurred for financial statements prepared using the economic resources measurement focus. As a result, interest cost incurred before the end of a construction period will not be included in the historical cost of a capital asset reported in a business-type activity or enterprise fund.
GASB Statement No. 97, Certain Component Unit Criteria, and Accounting and Financial Reporting for Internal Revenue Code Section 457 Deferred Compensation Plans - This Statement requires that for purposes of determining whether a primary government is financially accountable for a potential component unit, except for a potential component unit that is a defined contribution pension plan, a defined contribution OPEB plan, or another employee benefit plan (for example, certain Section 457 plans), the absence of a governing board should be treated the same as the appointment of a voting majority of a governing board if the primary government performs the duties that a governing board typically would perform.
The following GASB pronouncements are effective in the following fiscal years' audits and should be reviewed for proper implementation by management:
Fiscal year 2023 provide public services by conveying control of the right to operate or use a nonfinancial asset, such as infrastructure or other capital asset (the underlying PPP asset), for a period of time in an exchange or exchange-like transaction.
Some PPPs meet the definition of a service concession arrangement (SCA) in which (1) the operator collects and is compensated by fees from third parties; (2) the transferor determines or has the ability to modify or approve which services the operator is required to provide, to whom the operator is required to provide the services, and the prices or rates that can be charged for the services; and (3) the transferor is entitled to significant residual interest in the service utility of the underlying PPP asset at the end of the arrangement. This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). An APA is an arrangement in which a government compensates an operator for services that may include designing, constructing, financing, maintaining, or operating an underlying nonfinancial asset for a period of time *in an exchange or exchange-like transaction.
GASB Statement No.
96, Subscription-Based Information Technology Arrangements -
This Statement defines Subscription-Based Information Technology Arrangements (SBITA) as a contract that conveys control of the right to use another party's (a SBITA vendor's) information technology (IT) software, alone or in combination with tangible capital assets (the underlying IT assets), as specified in the contract for a period of time in an exchange or exchange-like transaction. This Statement establishes that a SBITA results in a right-to-use subscription asset-an intangible asset-and a corresponding subscription liability; (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. The standards for SBITAs are based on the standards established in Statement No. 87, Leases, as amended.
Fiscal year 2024 GASB Statement No. 91, Conduit Debt Obligations - This Statement clarifies the existing definition of a conduit debt obligation; establishes that a conduit GASB Statement No. 99, Omnibus 2022 - This Statement-provide clarification debt obligation is not a liability of the issuer; establishes standards for on previously issued Statement including classification and reporting of accounting and financial reporting of additional commitments and voluntary derivative instruments within the scope of Statement No. 53 Accounting and commitments extended by issuers and arrangements associated with conduit Financial Reporting for Derivative Instruments, that do not meet the definition of debt obligations; and improves required note disclosures.
either an investment derivative instrument or a hedging derivative instrument, clarification of provisions in Statement No. 87, Leases, as amended, related to GASB Statement No. 94, Public-Private and Public-Public Partnerships and the determination of the lease term, classification of a lease as a short-term Availability Payment Arrangement -
A Public-Private and Public-Public lease, recognition and measurement of a lease liability and a lease asset, and Partnerships (PPP) is an arrangement in which a government (the transferor) identification of lease incentives, clarification of provisions in Statement No.
contracts with an operator (a governmental or nongovernmental entity) to 94, Public-Private and Public-Public Partnerships and Availability Payment 40
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Arrangements, related to (a) the determination of the public-private and public-public partnership (PPP) term and (b) recognition and measurement of installment payments and the transfer of the underlying PPP asset, clarification of provisions in Statement No. 96, Subscription-Based Information Technology Arrangements, related to the subscription-based information technology arrangement (SBITA) term, classification of a SBITA as a short-term SBITA, and recognition and measurement of a subscription liability, extension of the period during which the London Interbank Offered Rate (LIBOR) is considered an appropriate benchmark interest rate for the qualitative evaluation of the effectiveness of an interest rate swap that hedges the interest rate risk of taxable debt, accounting for the distribution of benefits as part of the Supplemental Nutrition Assistance Program (SNAP), disclosures related to nonmonetary transactions, pledges of future revenues when resources are not received by the pledging government, clarification of provisions in Statement No. 34, Basic Financial Statements-and Management's Discussion and Analysis-for State and Local Governments, as amended, related to the focus of the government-wide financial statements, terminology updates related to certain provisions of Statement No. 63, Financial Reporting of Deferred Outflows of Resources, Deferred Inflows of Resources, and Net Position, and terminology used in Statement 53 to refer to resource flows statements.
GASB Statement No. 100, Accounting Changes and Error Corrections. - This Statement defines accounting changes as changes in accounting principles, changes in accounting estimates, and changes to or within the financial reporting entity and describes the transactions or other events that constitute those changes. It prescribes the accounting and financial reporting for (1) each type of accounting change and (2) error corrections, and requires that (a) changes in accounting principles and error corrections be reported retroactively by restating prior periods, (b) changes to or within the financial reporting entity be reported by adjusting beginning balances of the current period, and (c) changes in accounting estimates be reported prospectively by recognizing the change in the current period.
Fiscal year 2025 GASB Statement No. 101, Compensated Absences - This Statement requires that liabilities for compensated absences be recognized for (1) leave that has not been used and (2) leave that has been used but not yet paid in cash or settled through noncash means. It also requires that a liability for certain types of compensated absences-including parental leave, military leave, and jury duty leave-not be recognized until the leave commences. This Statement also requires that a liability for specific types of compensated absences not be 41 recognized until the leave is used. Further, this Statement establishes guidance for measuring a liability for leave that has not been used, generally using an employee's pay rate as of the date of the financial statements.
New Accounting Pronouncements In June 2017, the GASS issued Statement No. 87, "Leases". This statement increases the usefulness of governments' financial statements by requiring recognition of certain lease assets and liabilities for leases that previously were classified as operating leases and recognized as inflows of resources or outflows of resources based on the payment provisions of the contract. The requirements of this statement are effective for financial statements for periods beginning after December 15, 2019. The City has implemented GASB 87 in this annual report
- 2.
Legal Compliance - Budgets Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America. Annual appropriated budgets are adopted for all departments within the general, special revenue and capital project funds. Formal budgets are not employed for debt service funds because debt indenture provisions specify payments. The permanent fund is not budgeted.
Biennually, during the period December through February, department heads prepare estimates of required appropriations for the following two-year budget cycle. These estimates are compiled into a proposed operating budget that includes a summary of proposed expenditures and financial resources and historical data for the preceding budget cycle. At least thirty-five days prior to the beginning of the fiscal year, the City Manager provides the proposed budget in writing to the City Council for review. Following Council review, a public hearing is set to obtain citizen comments. The City Council generally conducts the public hearing and adopts the budget during one of its June meetings. The City Manager is legally authorized to transfer budgeted amounts between divisions and accounts within the same department. Transfer of appropriations between departments or funds and increased appropriations must be authorized by the City Council. Expenditures may not legally exceed budgeted appropriations within a fund. All appropriations shall lapse at the end of the fiscal year to the extent they have not been expended or lawfully encumbered, except for appropriations for capital projects which shall continue to their completion.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Per City Council direction, City intends to shift from an incremental budget methodology to a priority-based budgeting methodology in FY 2022/23.
Therefore, the City adopted a one-year budget for FY 2021/22 following a public hearing on June 22, 2021.
- 3.
Cash and Investments Cash and investments at fiscal year-end consist of the following:
Investments Investments with fiscal agent Cash on hand and deposits with financial institutions Total 846,451 101,800 948,251 160,091 1,108,342 The amounts are reflected in the statements of net position of the government-wide and fiduciary fund financial statements:
Cash and investments Restricted cash and cash equivalents Restricted cash and investments with fiscal agent Total per statement of net position Fiduciary fund cash and investments Fiduciary fund cash and investments with fiscal agent Total 886,186 77,945 98,539 1,062,670 28,388 17,284 1,108,342 The City follows the practice of pooling cash and investments of all funds except for funds required to be held by outside fiscal agents under the provisions of bond indentures, which are administered by outside agencies.
Interest income earned on pooled cash and investments is allocated monthly to funds based on the beginning and month-end balances. Interest income from cash and investments held at fiscal agents is credited directly to the related account. Bank deposits are covered by federal depository insurance for the first
$250 or by collateral held in the pledging bank's trust department in the name of the City.
Authorized Investments Under provisions of the City's investment policy, and in accordance with 42 California Government Code Section 53601, the City Treasurer may invest or deposit in the following types of investments:
Local Agency Investment Fund (State Pool)
Money Market Mutual Funds Mutual Funds Joint Powers Authority Pools Medium-Term Corporate Notes Municipal Bonds Negotiable Certificates of Deposit Mortgage Pass-Through and Asset-Backed Securities Certificates of Deposit Placement Services Collateralized Time Deposits Federally Insured Time Deposits Supranational Securities Federal Agency Obligations U.S. Treasury Obligations Repurchase Agreements Commercial Paper of "prime" quality Bankers' Acceptance Reverse Repurchase Agreements Max Maturity NIA NIA NIA NIA 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years 5 years 1 year 270 days 180 days 92 days Max %of Portfolio NIA 20 %
20 %
NIA 30 %
30 %
30 %
20 %
30 %
30 %
30 %
30 %
10 %
20 %
Investments in Medium-Term Corporate Notes may be invested in securities rated "A" or its equivalent or better by at least one nationally recognized statistical rating organization at the time of purchase. No more than 5% of the portfolio may be invested in any single issuer.
Investments in Negotiable Certificates of Deposit exceeding federal deposit insurance limits shall be issued by institutions which have long-term debt obligations rated in a rating category of "A" (or the equivalent) or better and short-term debt obligations, if any, rated "A-1" ( or the equivalent) or better by at least one nationally recognized statistical rating organization. No more than 5%
of the portfolio may be invested in any single issuer of non-negotiable or negotiable certificates of deposit.
Investments in Commercial Paper may be invested in securities rated "A-1" (or the equivalent) or higher by at least one nationally recognized statistical rating organization. In addition, debt other than Commercial Paper, if any, issued by corporations in this category must be rated at least in a rating category of "A" (or the equivalent) or better by at least one nationally recognized statistical rating organization. No more than 5% of the portfolio may be invested in any single issuer. For purposes of this issuer limitation, holdings of Commercial Paper shall be combined with holdings of Medium-Term Corporate Notes. No more
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) than 25% of the total portfolio may be invested in Commercial Paper. No more than 10% of the outstanding Commercial Paper of any single issuer may be purchased.
The City's investment policy provides the following three exceptions to the above: (1) investments authorized by debt agreements, (2) investments in the City of Riverside - 115 Trust for Pension and (3) funds reserved in the San Onofre Nuclear Generating Station Decommissioning Account for which the five-year maturity limitation may be extended to the term of the operating license.
Investments Authorized by Debt Agreements Provisions of debt agreements, rather than the general provIsIons of the California Government Code or the City's investment policy, govern investments of. debt proceeds held by bond fiscal agents. Permitted investments are specified in related trust agreements and include the following:
Securities of the U.S. Government and its sponsored agencies Bankers' Acceptances rated in the single highest classification Commerical Paper rated AA or higher at the time of purchase Investments in money market funds rated in the single highest classification, except for certain debt proceeds which have no minimum rating requirement Municipal obligations rated Aaa/AAA or general obligations of states with ratings of at least A2/A or higher by both Moody's and S&P Investment Agreements No maximum percentage of the related debt issue or maximum investment in one issuer is specified.
Investments in the City of Riverside - 115 Trust for Pension The City has established the City of Riverside - 115 Trust for Pension (the Plan) to accumulate resources for future contributions to CalPERS. As of June 30, 2022, the City had $19,423 of restricted cash and investments reported in the General Fund in a Section 115 Trust restricted for future pension contributions.
The City has retained US Bank as the trustee. US Bank has delegated investment authority to HighMark Capital Management, an SEC-registered investment adviser, with the full investment discretion over the managed assets in the account. The goal of the Plan's investment program is to provide a reasonable level of growth which, will result in sufficient assets to pay the 43 present and future obligations of the Plan.
Investment Time Horizon: Intermediate-Term 5 - 7 years Anticipated Cash Flows: Assets in the Plan will seek to mitigate the impact of future rate increases from CalPERS.
Investment Objective: Moderately Conservative Risk Tolerance: Moderately Conservative Portfolio Type: Index Plus (passive)
Strategic Asset Allocation:
Strategic Asset Cash Allocation Ranges 0%-20%
Policy 5%
65%
30%
Fixed income Equity 50% -80%
20% -40%
Investment Limitations: The following investment transactions are prohibited:
0 0
0 0
0 0
0 0
Direct investments in precious metals (precious metals mutual funds and exchange-traded funds are permissible).
Venture Capital Short sales*
Purchases of Letter Stock, Private Placements, or direct payments Leveraged Transactions*
Commodities Transactions Puts, calls, straddles, or other option strategies*
Purchases of real estate, with the exception of REITs Derivatives, with exception of Exchange Traded Funds (ETFs)*
- Permissible in diversified mutual funds and exchange-traded funds Disclosures Relating to Fair Value Measurement and Application Certain assets and liabilities are required to be reported at fair value. The fair value framework provides a hierarchy that prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to unadjusted quoted prices in active markets for identifcal assets or liabilities (Level 1 measurements) and the lowest priority to unobservable inputs (Level 3 measurements). The three levels of fair value hierarchy are described as
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) follows:
Level 1 - Inputs to the valuation methodology are unadjusted quoted prices for identical assets or liabilities in an active market Level 2 -
Inputs other than quoted prices included within Level 1 that are observable for the asset or liability, either directly or indirectly and fair value is determined through the use of models or other valuation methodologies including:
Quoted prices for similar assets or liabilities in active markets; Quoted prices for identical or similar assets or liabilities in markets that are inactive; Inputs other than quoted prices that are observable for the asset or liability; Inputs that are derived principally from or corroborated by observable market data by correlation or other means.
Level 3 - Inputs to the valuation methodology are unobservable and significant to the fair value measurement. These unobservable inputs reflect the City's own assumptions about the inputs market participants would use in pricing the asset or liability (including assumptions about risk). The unobservable inputs are developed based on the best information available in the circumstances and may include the City's own data.
The fair value of the City's investments in categorized within Level 2 of the fair value hierarchy using the institutional bond quotes with evaluations based on various market and industry inputs.
The City has the following recurring fair value measurements as of June 30, 2022:
44 Quoted Prices in Active Significant Markets for Other Significant Identical Observable Unobservable Assets Inputs Inputs Total jlevel 11 jlevel 21 jlevel 31 Joint Powers Authority Pools 131,756 $
131,756 $
Mortgage Pass-Through Securities 33,108 33,108 Asset-Backed Securities 66,956 66,956 U.S. Treasury Obligations 191,127 191,127 Federal Agency Obligations 113,001 113,001 Medium-Term Corporate Notes 148,472 148,472 Supranational Securities 34,458 34,458 Negotiable Certificates of Deposits 3,973 3,973 Held by Fiscal Agent:
Asset-Backed Securities 3,503 3,503 U.S. Treasury Obligations 18,274 18,274 Federal Agency Obligations 3,208 3,208 Medium-Term Corporate Notes 10,745 10,745 Supranational Securities 3,566 3,566 Total 762,147 $
131,756 $
630,391 $
Investments not subject to fair value hierarchy:
Local Agency Investment Fund 101,362 Mutual Funds 17,424 Money Market Mutual Funds 56,557 Investment Contracts 10,761 Total Investments 948,251 Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. The City's investment policy requires that the interest rate risk exposure be managed 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.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Information about the sensitivity of the fair values of the City's investments (including investments held by fiscal agent) to market interest rate fluctuations is provided by the following table that shows the distribution of the City's investments by maturity:
Remaining Maturi~ jin Months) 12 Months 13 to 36 37 to 60 More than Total or Less Months Months 60 Months Money Market Mutual Funds 23,482 $
23,482 $
Joint Powers Authority Pools 131,756 131,756 Local Agency Investment Fund 100,118 100,118 Mortgage Pass-Through Securities 33,108 9,231 19,278 4,599 Asset-Backed Securities 66,956 35,914 31,042 U.S. Treasury Obligations 191,127 22,987 92,833 75,307 Federal Agency Obligations 113,001 17,616 70,818 24,567 Medium-Term Corporate Notes 148,472 6,807 66,728 74,937 Supranational Securities 34,458 11,966 22,492 Negotiable Certificates of Deposit 3,973 3,973 Held by Fiscal Agent Money Market Mutual Funds 33,075 33,075 Mutual Funds 17,424 17,424 Local Agency Investment Fund 1,244 1,244 Asset-Backed Securities 3,503 1,401 2,102 Investment Contracts 10,761 10,761 U.S. Treasury Obligations 18,274 5,994 4,938 7,342 Federal Agency Obligations 3,208 2,622 586 Medium-Term Corporate Notes 10,745 6,665 4,080 Supranational Securities 3 566 1 687 1,879 Total 948,251 $
376,329 $
312,814 $
248,347 $
10,761 The City assumes that callable investments will not be called.
45 Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the actual rating as of year-end for each investment type:
Money Market Mutual Funds Joint Powers Authority Pools Local Agency Investment Fund Mortgage Pass-Through Securities Asset-Backed Securities U.S. Treasury Obligations Federal Agency Obligations Medium-Term Corporate Notes Supranational Securities Negotiable Certificates of Deposit Held by Fiscal Agent Money Market Mutual Funds Mutual Funds Local Agency Investment Fund Asset-Backed Securities Investment Contracts U.S. Treasury Obligations Federal Agency Obligations Medium-Term Corporate Notes Supranational Securities Total Ratings as of Year End
- Total AAA AA A
Unrated 23,482 $
18,309 $
5,173 131,756 100,118 33,108 66,956 191,127 113,001 148,472 34,458 3,973 33,075 17,424 1,244 33,108 53,315 191,127 113,001 17,811 10,722 3,503 2,869 10,761 18,274 18,274 3,208 3,208 52,690 131,756 100,118 13,641 81,019 14,763 3,973 16,647 22,353 17,424 1,244 634 10,761 10,745 2,754 6,656 1,335
---"3"',5.;;..66;;.. __
___..;.1..;;,8.;..79;;.. ----- -----
1,687 948,251 $
463,623 $
55,444 $
91,648 $
337,536
- Fitch rating used with "-" and "+" removed for simplicity Concentration on Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stated above. For fiscal year ended June 30, 2022, the City did not have any investments in any one issuer (other than U.S. Treasury securities, money market funds, and external investment pools) that represent 5% or more of total City investments.
Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The City's
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) investment policy requires that a third-party bank trust department hold all securities owned by the City. All trades are settled on a delivery vs. payment basis through the City's safekeeping agent. The City has no deposits with financial institutions; bank balances are swept daily into a money market account.
The pledge to secure deposits is administered by the California Commissioner of Business Oversight. Collateral is required for demand deposits at 110% of all deposits not covered by federal depository insurance (FDIC) if obligations of the United States and its agencies, or obligations of the State or its municipalities, school districts, and district corporations are pledged. Collateral of 150% is required if a deposit is secured by first mortgages or first trust deeds upon improved residential real property located in California. All such collateral is considered to be held by the pledging financial institutions' trust departments or agents in the name of the City. Obligations pledged to secure deposits must be delivered to an institution other than the institution in which the deposit is made; however, the trust department of the same institution may hold them.
Written custodial agreements are required to provide, among other things, that the collateral securities are held separate from the assets of the custodial institution.
Investment in State Investment Pool The City is a voluntary participant 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 fair value of the City's investment in this pool is reported in the accompanying financial statements at amounts based upon the City's pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio).
The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis.
- 4.
Direct Financing Lease Receivable The former Redevelopment Agency had a direct financing lease arrangement with the State of California (the State) for a twelve-story office building, which was transferred to the Successor Agency. The lease term is for thirty years and the State takes ownership of the facility at the conclusion of that term. The lease calls for semi-annual payments not less than the debt service owed on the related lease revenue bonds issued by the former Redevelopment Agency for the purchase and renovation of the building.
46 The future minimum lease payments to be received are as follows:
Fiscal Year 2023 2024 2025 Total due Less: amount applicable to interest Total direct financing lease receivable 2,759 2,786 2,823 8,368 (798) 7,570
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Beginning Additions/
Deletions/
Ending
- 5.
Capital Assets and Right to Use Assets Business-Type Activities:
Balance Transfers In Transfers Out Reclassifications Balance Capital assets, not depreciated:
The following is a summary of changes in the capital assets during the fiscal Land 100,111 $
100,111 Intangible assets 21,626 (131) 21,495 year ended June 30, 2022:
Construction in progress 126 187 58,404 125ol 15s1218l 128,123 Beginning Additions/
Deletions/
Ending Total capital assets, not Governmental Activities:
Balance Transfers In Transfers Out Reclassifications Balance depreciated 247,924 58,404 (3811 (56,2181 249,729 Capital assets, not depreciated:
Capital assets, being depreciated:
Land 376,616 $
413 $
(242) $
376,787 Buildings 671,789 99 6,681 678,569 Construction in progress 30,820 34,132
{748l (12,153) 52,051 Improvements other than buildings 1,966,396 11,099 (12,170) 41,692 2,007,017 Total capital assets, not Machinery and equipment 108,099 2,481 (941) 3,859 113,498 depreciated 407,436 34,545 (990}
11211s31 428,838 Intangibles, depreciable 26,277 3,986 30,263 Capital assets, being depreciated:
Total capital assets, being Buildings 190,232 190,232 depreciated 2,772,561 13,679 11311111 56,218 2,829,347 Improvements other than buildings 263,749 7,634 271,383 Less: accumulated depreciation Machinery and equipment 116,082 6,598 (2,607) 270 120,343 for:
Intangibles, depreciable 219 219 Buildings (198,313)
(14,517) 1 (212,829)
Infrastructure 1,161,554 4,674
{284) 4 249 1,170,193 Improvements other than buildings (753,306)
(49,832) 12,137 (791,001)
Total capital assets, being Machinery and equipment (75,387)
(6,055) 938 (80,504) depreciated 1,731,836 11,272
!2,891}
12,153 1,752,370 Intangibles, depreciable
{17,115)
{2,806) 1
{19,920)
Less: accumulated depreciation Total accumulated for:
depreciation 11,044,121}
!73,2101 13 077 f1z1041254}
Buildings (78,631)
(4,875)
(83,506)
Total capital assets being Improvements other than buildings (156,433)
(11,301)
(167,734) depreciated, net 1,728,440 (59,5311 f34l 56,218 1,725,093 Machinery and equipment (82,969)
(7,752) 2,438 (88,283)
Business-Type activities Intangibles, depreciable (219)
(219) capital assets, net
$ 1,976,364 $
11,127} $
(4151 $
$ 1,974,822 Infrastructure
{483,920)
{28,032) 284
{511,668)
Right to use assets, being Total accumulated amortized depreciation (802,172}
(51,9601 2,122
!851 14101 Land 312 312 Total capital assets being Buildings 348 348 depreciated, net 929,664
!40,688}
(169}
12,153 900,960 Machinery and equipment 345 345 Governmental Activities Total right to use assets 1,005 1,005 capital assets, net
$ 1,337,100 $
16,143} $
11,159} $
- $ 1,329,798 Less accumulated amortization Right to use assets, being Land (74)
(74) amortized Buildings (75)
(75)
Buildings 1,159 1,159 Machinery and equipment
{78l l78l Machinery and equipment 580 580 Total right to use lease Total right to use assets 1,739 1,739 accumulated Less accumulated amortization amortization 12211 (2271 Buildings (542)
(542)
Total right to use lease Machinery and equipment
{145)
(145l assets, net 778 778 Total rightto use lease Capital assets and right to accumulated use assets, net
$ 1,976,364 $
!3491 $
!4151 $
- $ 1,975,600 amortization (6871
{687l Total right to use lease assets, net 1,052 1,052 Capital assets and right to use assets, net
$ 1,337,100 $
15,091} $
11,159} $
- $ 1,330,860 47
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Depreciation expense was charged to various functions as follows:
Governmental Activities:
General government Public safety Highways and streets Culture and recreation Internal service funds Total depreciation expense - Governmental Activities Business-Type Activities:
Electric Water Sewer Airport Refuse Transportation Public Parking Civic Entertainment Total depreciation expense -
Business-Type Activities Amortization expense was charged to various functions as follows:
Governmental Activities:
General government Public safety Highways and streets Culture and recreation Internal service funds Total amortization expense - Governmental Activities Business-type Activities:
Electric Water Sewer Airport Refuse Transportation Public Parking Total amortization expense - Governmental Activities 3,953 7,210 28,686 11,370 741 51,960 36,718 16,179 14,931 717 837 448 855 2,525 73,210 51 328 10 293 5
687 134 11 4
1 1
2 74 227 48
- 6.
Leases Leases Receivable For the year ended June 30, 2022, the financial statements include the adoption of GASB Statement No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For additional information, refer to the disclosures below.
The City of Riverside entered into 111 leases as a Lessor for the use of various pieces of land, building and equipment. The terms range from 2 to 110 years beginning on the contract commencement date. An initial lease receivable was recorded in the amount of $108,894. As of June 30, 2022, the value of the lease receivable is $104,795. The lessee was required to make monthly payments in fiscal year 2021-2022 ranging from $0 to $87. The leases have interest rates ranging from 0.52% to 1.79%. The various buildings and equipment estimated useful lifes range from 3 to 50 years. The value of the deferred inflow of resources as of June 30, 2022 was $104,396, and the City recognized lease revenue of $4,497 during the fiscal year. The lessees have various extension options, ranging from 2 to 55 years.
Governmental Activities Fiscal Year Princieal Interest Total Pa~ments 2023 1,312 $
91 $
1,403 2024 1,261 76 1,337 2025 841 63 904 2026 768 53 821 2027 722 44 766 2028-2032 2,016 103 2,119 2033-2037 258 37 295 2038-2042 163 22 185 2043-2047 160 7
167 Total 7,501 $
496 $
7,997
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2032-2037 2038-2042 2042-2047 2048-2052 2053-2057 2058-2062 2063-2067 2068-2072 2073-2077 2078-2082 2083-2087 2088-2092 2093-2097 2098-2102 2103-2107 2108-2112 2113-2117 2118-2122 2123-2127 2128-2132 Total Lease Liability Business-Type Activities Principal Interest Payments Payments 2,385 $
1,670 1,923 1,650 1,687 1,624 1,512 1,602 1,492 1,581 4,546 7,662 3,547 7,329 3,052 7,037 3,223 6,766 3,826 6,454 4,495 6,077 4,948 5,655 5,639 5,183 3,391 4,763 3,007 4,488 3,272 4,207 3,578 3,900 3,911 3,567 4,279 3,198 4,681 2,796 5,118 2,358 5,596 1,880 6,121 1,354 6,694 780 5,031 198 340 2
Total Payments 4,055 3,573 3,311 3,114 3,073 12,208 10,876 10,089 9,989 10,280 10,572 10,603 10,822 8,154 7,495 7,479 7,478 7,478 7,477 7,477 7,476 7,476 7,475 7,474 5,229 342
=$===9=7=, 2=9=4 $
93,781 =$===19=1=,0=7=5 For the year ended June 30, 2022, the financial statements include the adoption of GASB Statement No. 87, Leases. The primary objective of this statement is to enhance the relevance and consistency of information about governments' leasing activities. This statement establishes a single model for lease accounting based on the principle that leases are financings of the right to use an underlying asset. Under this statement, a lessee is required to recognize a lease liability and an intangible right-to-use lease asset, and a lessor is required to recognize a lease receivable and a deferred inflow of resources. For 49 additional information, refer to the disclosures below.
The City of Riverside has entered into 163 leases as Lessee for the use of various pieces of land, building and equipment. The terms range from 4.5 to 14 years beginning on the contract commencement date. An initial lease liability was recorded in the amount of $2,744. As of June 30, 2022, the value of the lease liability is $1,847. The City of Riverside was required to make monthly payments in fiscal year 2021-2022 ranging from $0 to $24. The leases have an interest rate of 0.52%. The leases have various options to extend, ranging from 1 to 2 years. The value of the right-to-use asset as of June 30, 2022 of $2,744 with accumulated amortization of $914 and is included with Land, Building and Machinery and equipment on the Asset Class activities table found below.
Asset Class Land Buildings Machinery and equipment Fiscal Year 2023 2024 2025 2026 Total Amount of Lease Assets by Major Classes of Underlying Asset Lease Asset Accumulated Value Amortization 312 $
(74) 1,507 (617)
..;;.9;;;;.25;;;.. ____
...,(;;;;.22;;;..;3""'-)
2,744 =$====(9=1=4)
Governmental Activities Principal Interest Total Payments 443 $
4 $
447 380 2
382 177 1
178 60 60 1,060 =$=====7 =$=======1=,0=6=7
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Business-Type Activities Fiscal Year 2023 2024 2025 2026 Total
- 7.
Derivative Instruments Interest Rate Swaps Principal Interest Payments Payments 223 $
226 223 115 787 $
Total Payments 3 $
226 2
228 1
224 115 6 $=======
793 The City has six cash flow hedging derivative instruments, which are pay-fixed swaps. These swaps were employed as a hedge against debt that was refunded in 2008 and 2011 and against debt issued in 2012. The balance of the deferral account for each swap is included as part of the deferred charge on refunding associated with the new bonds. The swaps were also employed as a hedge against the new debt. Hedge accounting was applied to that portion of the hedging relationship, which was determined to be effective. Hedge accounting was also applied to the swap associated with the debt issued in 2012, which was also determined to be effective.
The following is a summary of the derivative activity for the year ended June 30, 2022:
Fair Value Notional as of Amount 06/30/22 Governmental Activities 2008 Renaissance Certificates of Participation*
59,133 $
(6,288) $
Business-Type Activities 2008 Renaissance Certificates of Participation*
26,567 (2,726) 2008 Electric Refunding/Revenue Bonds Series A 32,450 (1,885) 2008 Electric Refunding/Revenue Bonds Series C 32,150 (3,495) 2011 Electric Refunding/Revenue Bonds Series A 35,550 (3,525) 2011 Water Refunding/Revenue Bonds Series A 24,050 (2,646) 2012 Convention Center Financing 27,809 269
- The 2008 Riverside Renaissance Certificates of Participation were distributed between Governmental Activities and Business-Type Activities to properly reflect thier proportional share.
Change in Fair Value for Fiscal Year 6,830 2,961 2,847 4,025 4,191 3,037 2,158 Objective: In order to lower borrowing costs as compared to fixed-rate bonds, the City entered into interest rate swap agreements in connection with its 50
$141,840 2008 Electric Revenue Bonds (Series A and C), $56,450 2011A Electric Revenue Bonds, $59,000 2011A Water Revenue Bonds and $128,300 2008 Certificates of Participation ("COP"). Also, in 2012, the City entered into an additional interest rate swap agreement in connection with the $41,650 Convention Center financing with BBVA Compass Bank.
Terms: Per the existing swap agreements, the City pays a counterparty a fixed payment and receives a variable payment computed as 62.68% of the London Interbank Offering Rate ("LIBOR") one month index plus 12 basis points for the Electric and Water swaps. For the COP swap, the City pays a fixed payment and receives a variable payment computed as 63.00% of the LIBOR one-month index plus 7 basis points. The Convention Center financing consists of an initial 21-month variable rate interest only period during construction, which swaps to a fixed rate for the remaining 20-year amortization whereby the City will pay a fixed payment and will receive a variable payment computed at 65.01% of the LIBOR one month index plus 150 basis points. The notional value of the swaps and the principal amounts of the associated debt decline at a smaller rate until the debt is completely retired in fiscal year 2037.
The bonds and the related swap agreements for the 2008A Electric Revenue Bonds mature on October 1, 2029, 2008C Electric and 2011A Electric and 2011A Water Revenue/Refunding Bonds mature on October 1, 2035. The 2008 Certificates of Participation mature on March 1, 2037. The loan with BBVA Compass Bank will be paid in full on April 1, 2034.
As of June 30, 2022, rates were as follows:
2008 Electric 2008 Electric 2011 Electric Refunding/
Refunding/
Refunding/
Revenue Revenue Revenue Bonds Bonds Bonds Series A Series C Series A Rates Rates Rates Interest rate swap:
Fixed payment to counterparty 3.11100 %
3.20400 %
3.20100 %
Variable payment from counterparty (0.56374!%
(0.56412!%
(0.57863l%
Net interest rate swap payments 2.54726 %
2.63988 %
2.62237 %
Variable rate bond coupon payments 0.46162 %
0.46205 %
0.54311 %
Synthetic interest rate on bonds 3.00888 %
3.10193 %
3.16548 %
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) 2011 Water Refunding/
Revenue Bonds Series A Rates Interest rate swap:
Fixed payment to counterparty 3.20000 %
Variable payment from counterparty (0.55160l%
Net interest rate swap payments 2.64840 %
Variable rate bond coupon payments 0,53877 %
Synthetic interest rate on bonds 3.18717 %
2012 2008 Convention Renaissance Center COPs Financing Rates Rates 3.36200 %
3.24000 %
(0.52389J%
(2.05664!%
2.83811 %
1.18336 %
0.48346 %
2.05664 %
3.32157 %
3.24000 %
Fair Value: As of June 30, 2022, in connection with all swap arrangements, the transactions had a combined net negative fair value of $20,296. Because the coupons on the City's variable-rate bonds adjust to changing interest rates, the bonds do not have a corresponding fair value decrease. The fair value was developed by a pricing service using the zero-coupon method. This method calculates the future net settlement payments required by the swap, assuming that the current forward rates implied by the yield curve correctly anticipate future spot interest rates. These payments are then discounted using the spot rates implied by the current yield curve for hypothetical zero-coupon bonds due on the date of each future net settlement of the swap.
Credit risk: The City is not exposed to substantial credit risk because each swap, with the exception of the Convention Center Financing swap have a negative fair value. The swap counterparties, Bank of America, N.A., Merrill Lynch Capital Services, Inc., PNC Financial Services Group, Inc. and J.P.
Morgan Chase & Co. were rated A+, A-, A-and A-respectively by Standard &
Poor's. To mitigate the potential for credit risk for these swaps, the swap agreements require the fair value of the swap to be collateralized by the counterparty with U.S. Government securities if the counterparties' rating decreases to negotiated trigger points. Collateral would be posted with a third-party custodian. At June 30, 2022, there is no requirement for collateral posting for any of the outstanding swaps.
Basis risk: The City is exposed to basis risk on its pay-fixed interest rate swap and rate cap hedging derivative instruments because the variable-rate payments received by the City on these hedging derivative instruments are based on a rate or index other than interest rates the city pays on its hedged variable-rate debt. If a change occurs that results in the rates' moving to convergence, the expected cost savings may not be realized.
Termination risk: The derivative contract uses the International Swap Dealers such as failure to pay and bankruptcy. The Schedule to the Master Agreement includes an "additional termination event." That is, a swap may be terminated by the City if either counterparty's credit quality falls below "BBB-" as issued by Standard and Poor's. The City or the counterparty may terminate a swap if the other party fails to perform under the terms of the contract. If a swap is terminated, the variable-rate bond would no longer carry a synthetic interest rate. Also, if at the time of termination, a swap has a negative fair value, the City would be liable to the counterparty for a payment equal to the swap's fair value.
Swap payments and associated debt: As of June 30, 2022, the debt service requirements of the variable-rate debt and net swap payments assuming current interest rates remain the same, for their term are summarized in the following table. As rates vary, variable-rate bond interest payments and net swap payments will vary.
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 Total
- 8.
Letters of Credit Variable-Rate Bonds Interest Rate Princieal Interest Swaes, Net 8,468 $
1,677 $
6,296 7,504 1,603 6,110 7,677 1,530 5,927 14,671 1,432 5,607 15,351 1,321 5,228 95,712 4,678 19,343 92,212 1,113 5,599 241,595 $
13,354 $
54,110 Total 16,441 15,217 15,134 21,710 21,900 119,733 98,924 309,059 The City's 2008 Certificates of Participation, 2008 Electric Revenue Bonds (Series A and C}, and 2011 Electric Revenue Bonds (Series A) require an additional layer of security between the City and the purchaser of the bonds.
The City has entered into the following letters of credit ("LOC") in order to provide liquidity should all or a portion of the debt be optionally tendered to the remarketer without being successfully remarketed:
- .D.;;..;eb;;.;;t.;.;ls;;.;;s;..;;;u.;;.e ___________ LOG Provider 2008 Certificates of Participation Bank of America, N.A.
2008A Electric Revenue Bonds Barclays Bank, PLC 2008C Electric Revenue Bonds Barclays Bank, PLC 2011A Electric Revenue Bonds Bank of America, N.A.
LOG Expiration Date 2023 2024 2024 2023 Annual Commitment Fee 0.470%
0.395%
0.395%
0.295%
Association Master Agreement, which includes standard termination events, To the extent that remarketing proceeds are insufficient or not available, 51
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) tendered amounts will be paid from drawings made under an irrevocable direct-pay letter of credit.
Liquidity advances drawn against the LOC that are not repaid will be converted to an installment loan with principal to be paid quarterly not to exceed a 5-year period. The City would be required to pay annual interest equal to the highest of 8.0%, the Prime Rate plus 2.50%, the Federal Funds Rate plus 2.50% and 150% of the yield on the 30-year U.S. Treasury Bond. No amounts have ever been drawn against the four letters of credit due to a failed remarketing. The various indentures allow the City to convert the mode of the debt in the case of a failed remarketing.
On February 1, 2019, the City entered into a subordinate letter of credit agreement with U.S. Bank, National Association. The Subordinate Letter of Credit is a tool approved through the Electric and Water Utility Five-Year Rate Plan to manage rate increases by enabling the Electric Utility and Water Utility to reduce cash levels while maintaining compliance with the Riverside Public Utilities Cash Reserve Policy. Under the terms and conditions of the agreement, the City may borrow up to $35,000 for purposes of the capital or operating financial needs of the Electric System and $25,000 for purposes of the capital or operating financial needs of the Water System. There were no borrowings against the LOG as of June 30, 2022.
- 9.
Long-Term Obligations Changes in Long-Term Obligations:
Below is a summary of changes in long-term obligations during the fiscal year:
Governmental Activities:
General obligation bonds Pension obligation bonds Certificates of participation Lease revenue bonds Direct borrowings:
Loans payable Financed purchase Beginning Ending Due Within Balance Additions Reclass*
Reductions Balance One Year 6,478 $
(1,491) $
4,987 $
1,560 352,824 (14,560) 338,264 16,889 90,215 (4,738) 85,477 4,830 72,471
{3,616) 68,855 3,384 457 (457) 14,922 11,292 _
___._(6a.a9...
- 4)
(3,226) 22,294 3,495 537,367 $
11,292 $
(694) $
(28,088} $ 519,877 $
30,158
- Unexpended lease proceeds were approved to be transferred from governmental activities to business-type activities for the purchase of vehicles 52 Business-Type Activities:
Revenue bonds Pension obligation bonds Certificates of participation Lease revenue bonds Direct borrowings:
Notes payable Contracts payable Financed purchase Beginning Balance
$ 1,176,605 116,227 27,213 7,059 Ending Additions Reclass*
Reductions Balance (37,505) $1,139,100 (5,509) 110,718 (1,301) 25,912 (434) 6,625 Due Within One Year 33,445 7,010 1,330 457 64,678
{4,730) 59,948 4,873 1,067 (134) 933 150
__,;;2;:.;;,3"'-54.;.,. ---- -,---6,..,9_4 (872) 2,176 699
$ 1,395,203 =$===- =$==6=9=4 $
(50,485} $1,345,412 $
47,964 Governmental Activities:
General Obligation Bonds - Governmental Activities:
$20,000 Fire Facility Projects, Election of 2003 General Obligation Bond; 3.0% to 5.5%, due in annual installments Principal Outstanding from $410 to $1,740 through August 1, 2024.
4,940 Add: unamortized bond premium 47 Total general obligation bonds 4,987
==
Remaining general obligation bond debt service payments will be made from unrestricted revenues of the General Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 Premium Total Principal 1,560 $
1,640 1,740 47 4,987 $
Interest Total 229 $
1,789 141 1,781 48 1,788 47 418 $
5,405
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Principal Pension Obligation Bonds - Governmental Activities:
Outstanding In 2018, the 2017 Taxable Pension Obligation Bonds were distributed between Governmental Activities, Business-Type Activities and the Successor Agency to properly reflect their proportional share.
Pension Obligation bonds are not collateralized by assets, nor do they constitute an obligation of the City of Riverside whereby the City is obligated to levy or pledge any form of taxation.
In 2020, the 2017 Taxable Pension Obligation Bonds outstanding balances in the Successor Agency were distributed between Governmental Activities and Business-Type Activities.
$89,540 California Statewide Community Development Authority (Public Safety) 2004 Taxable Pension Obligation Bond; 2.65% to 5.896%, due in annual installments from $1,125 to $10,715 through June 1, 2023.
10,715
$31,960 2017 Taxable Pension Obligation Bonds Series A; 1.25% to 3.125%, due in annual installments from $2,910 to
$3,580 through June 1, 2027; $15,299 relates to Governmental Activities.
8,097
$432,165 2020 Taxable Pension Obligation Bonds Series A; 1.646% to 3.857% due in annual installments from $2,920 to
$28,310 through June 1,
2045.
$324,582 relates to Governmental Activities 319,644 Subtotal 338,456 Less: unamortized bond discount (192)
Total pension obligation bonds 338,264 Remaining pension obligation bond debt service payments will be made from unrestricted revenues of the General Fund. Annual debt service requirements to maturity are as follows:
53 Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 Discount Total Principal 16,889 $
7,623 9,840 9,884 10,966 62,782 103,829 94,720 21,923 (192) 338,264 $
Interest 12,284 11,523 11,353 11,123 10,868 49,523 35,018 14,511 1,383 157,586 Total 29,173 19,146 21,193 21,007 21,834 112,305 138,847 109,231 23,306 (192) 495,850 Principal
..;;.C..;ce.;..;rt;;;..;;if--'ic;..;.a-'-te.;..;s;...o.;..f_P;...a~rt-'-i_c_.ip_a_ti_o_n_-_G_ov_e_r_n_m_e_n_ta_l_A_c_t_iv_it_ie_s_: __ Outstanding In 2019, the 2008 Riverside Renaissance Certificates of Participation were distributed between Governmental Activities and Business-Type Activities to properly reflect their proportional share.
$19,945 2006 Galleria at Tyler Public Improvements Certificates of Participation are secured with collateral of the two level 912 space parking structure located near Tyler Street and Nordstrom store, the Tyler Mall North Plaza, the North Plaza parking, storm drains related to those improvements, and portions of two arterial streets; 4.0% to 5.0%, due in annual installments from
$435 to $1,270 through September 1, 2036.
$128,300 2008 Riverside Renaissance Certificates of Participation are secured with collateral of the Adulka Park, Fairmount Park and Golf Course, Arlington Heights Sports Park, Orange Terrace Park, Orange Terrace Community Center and Orange Terrace Library; issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.4%. For information on the swap agreement see Note 6. Due in annual installments from $2,900 to $7,200 through March 1, 2037; $71, 159 relates to Governmental Activities.
5 59,788
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
$35,235 2013 Pavement Rehab Certificates of Participation are secured by Measure A Sales Tax receipts; 4.0% to 5.0%, due in annual installments from $1,285 to $2,855 through June 1, 2033.
Subtotal Plus: unamortized bond premium Total certificates of.participation 24,985 84,778 699 85,477 Remaining Certificates of Participation debt service payments will be made from unrestricted revenues of the Debt Service Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Princieal Interest Total 2023 4,830 $
3,223 $
8,053 2024 5,054 3,031 8,085 2025 5,224 2,826 8,050 2026 5,463 2,612 8,075 2027 5,713 2,389 8,102 2028-2032 32,123 8,437 40,560 2033-2037 26,371 2,371 28,742 Premium 699 699 Total 85,477 $
24,889 $
110,366 Principal Lease Revenue Bonds - Governmental Activities:
Outstanding In 2019, the Series 2012A Lease Revenue Refunding Bonds were distributed between Governmental Activities, Business-Type Activities, and Successor Agency to properly reflect their proportional share.
54 On August 15, 2012, the City issued the Series 2012A Lease Revenue Refunding Bonds in the amount of $41,240.
The bonds are secured by lease payments on a portion of the City Hall Complex and the Lincoln Police Patrol Center. The bonds were issued to refinance the 2003 Certificates of Participation.
Interest on the bonds is payable semi-annually on May 1 and November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum depending on maturity date.
Principal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and ending November 1, 2033.
In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated.
$23,683 relates to Governmental Activities.
$15,980 2019A Lease Revenue Refunding Bonds (Galleria at Tyler Public Improvements) are secured by lease payments on the two level 912 space parking structure located near Tyler Street and Nordstrom store, the Tyler Mall North Plaza, the North Plaza
- parking, storm drains related to those improvements, and portions of two arterial streets. The bonds were issued to refinance all but $5 of the outstanding 2006 Lease Revenue Certificates of Participation (Galleria at Tyler Public Improvements);
2.75%
to 4.0%,
due in annual installments from $605 to $1,180 through November 1, 2036.
The refunding transaction resulted in a total net present value savings of $1,140. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated.
19,038 13,960
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
$33,505 2019B Lease Revenue Refunding Bonds (Main Library Project); 3.0% to 5.0%, due in annual installments from $1,245 to $2,645 through November 1, 2036. The bonds are secured by an amendment to the Ground Lease entered into by the City upon issuance of the 2012A Lease Revenue Bonds. It adds the remainder of the City Hall Complex, the Corporation Yard Administration Building and annex, Bobby Bonds Park, and the Main Library site. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated.
Subtotal Add: unamortized bond premium Total lease revenue bonds 28,810 61,808 7,047 68,855 Remaining lease revenue bond debt service payments will be made from unrestricted revenues of the Debt Service Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 Premium Total Principal 3,384 $
3,539 3,588 3,733 3,896 22,308 21,360 7,047 68,855 $
Interest Total 2,700 $
6,084 2,542 6,081 2,389 5,977 2,242 5,975 2,078 5,974 7,472 29,780 2,282 23,642 7,047 21,705 $
90,560 55 Business-Type Activities:
The following debt has been issued for the purpose of generating capital resources for use in acquiring or constructing municipal facilities or infrastructure projects.
Revenue Bonds - Business-Type Activities:
Electric All electric revenue bonds are covenanted per the Amended and Restated Resolution No. 17662 (Electric) Master Resolution that upon the occurrence and continuation of an event of default, the owners of 25% in aggregate amount of Bond Obligation may, by written notice to the City, declare the entire unpaid principal and accreted value of the bonds due and payable should the City fail to pay its debts as they become due or upon the entry of any decree or order of bankruptcy of the City.
$141,840 2008 Electric Refunding/Revenue Bonds; Series A &
C. The bonds were issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.1 % and 3.2% for the Series A & C bonds, respectively. See Note 6 for information on the swap agreements. Bonds are due in annual installments from $700 to $7,835 through October 1, 2035. In 2019, the Electric Fund refunded $40,425 of the outstanding balance.
$140,380 2010 Electric Revenue Bonds fixed rate bonds, 3% to 7.65%, due in annual installments from $95 to $33,725 through October 1, 2040.
Principal Outstanding 66,615 128,600
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
$56,450 2011 Electric Revenue Refunding Bonds; Series A.
The bonds were issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.2%.
For information on the swap agreements see Note 6. Bonds are due in annual installments from $725 to $5, 175 through October 1, 2035. Upon event of default, the bank may declare the outstanding amount of the obligations payable to be due immediately.
During fiscal year 2019-20, the bonds originally issued as private placement bonds were remarketed as public securities in order to obtain a lower rate. The structure is the same and the existing swap is the same.
$79,080 2013 Electric Revenue Refunding Bonds; Series A fixed rate bonds, 3% to 5.25%, due in annual installments from
$795 to $12,685 through October 1, 2043.
$283,325 2019 Electric Refunding/Revenue Bonds; Series A, fixed rate bonds, 5.0%, due in annual installments from $3,545 to $24,005 through October 1, 2048. The bonds refunded the 2008 Electric Revenue Bonds Series D and partially refunded the 2008 Electric Revenue Bonds Series A and C. The refunding transactions resulted in a total net present value savings of
$36,810.
Subtotal Add: Unamortized bond premium Subtotal - Electric Water All water revenue bonds are covenanted per the Amended and Restated Resolution No. 17664 (Water) Master Resolution that upon the occurrence and continuation of an event of default, the owners of 25% in aggregate amount of Bond Obligation may, by written notice to the City, declare the entire unpaid principal and accreted value of the bonds due and payable should the City fail to pay its debts as they become due or upon the entry of any decree or order of bankruptcy of the City.
$67,790 2009 Water Revenue Bonds; Series B fixed rate bonds, 5.1 % to 6.3%, due in annual installments from $2,475 to $4,985 through October 1, 2039.
35,550 36,355 257,010 524,130 45,055 569,185 65,315 56
$59,000 2011 Water Refunding/Revenue Bonds; Series A. The bonds were issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.2%.
For information on the swap agreements see Note 6. Bonds are due in annual installments from $600 to $3,950 through October 1, 2035.
$114,215 2019 Water Refunding/Revenue Bonds; Series A, fixed rate bonds, 5.0%, due in annual installments from $1,680 to $8,455 through October 1, 2048.
- The bonds refunded the 2008 Water Revenue Bonds Series B and partially refunded and partially unwound the swap on the 2011 Water Revenue Bonds Series A. The refunding transactions resulted in a total net present value savings of $10,759.
Subtotal Add: Unamortized bond premium Subtotal -Water Sewer All sewer revenue bonds are covenanted per Resolution No.
21860 Sewer Master Resolution that upon the occurrence and continuation of an event of default, the owners of 25% in aggregate amount of Bond Obligation may, by written notice to the City, declare the entire unpaid principal and accreted value of the bonds due and payable should the City fail to pay its debts as they become due or upon the entry of any decree or order of bankruptcy of the City.
$200,030 2015 Sewer Revenue Bonds; Series A fixed rate bonds, 4% to 5%, due in annual installments from $4,790 to
$14,175 through August 1, 2040.
$153,670 2018 Sewer Revenue Bonds; Series A fixed rate bonds, 4% to 5%, due in annual installments from $2,905 to
$11,775 through August 1, 2039.
The bonds advanced refunded the 2009 Direct Pay Build America Bonds Series B.
The refunding transaction resulted in a total net present value savings of $18,932.
Subtotal 24,050 102,825 192,190 17,472 209,662 179,430 143,425 322,855
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Add: unamortized bond premium Subtotal - Sewer Total revenue bonds 37,398 360,253 1,139,100 Remaining revenue bond debt service payments will be made from revenues of the Electric, Water and Sewer Enterprise funds. Annual debt service requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2052 Premium Principal 16,760 $
17,515 18,335 19,305 20,085 114,035 134,560 145,000 27,800 10,735 45,055 569,185 $
Total
$======::::=::==
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 2048-2052 Premium Principal 6,915 $
7,215 7,540 7,875 8,230 46,560 55,870 36,165 10,735 5,085 17,472 209,662 $
Total
=$========!::::
Electric Interest Total 24,174 $
40,934 23,362 40,877 22,488 40,823 21,580 40,885 20,742 40,827 89,670 203,705 61,860 196,420 26,022 171,022 5,888 33,688 543 11,278 45,055 296,329 $
865,514 Water Interest Total 8,491 $
15,406 8,167 15,382 7,823 15,363 7,463 15,338 7,086 15,316 29,339 75,899 18,635 74,505 6,658 42,823 2,665 13,400 257 5,342 17,472 96,584 $
306,246 57 Sewer Fiscal Year Principal Interest Total 2023 9,770 $
15,669 $
25,439 2024 11,460 15,139 26,599 2025 12,050 14,551 26,601 2026 12,670 13,933 26,603 2027 13,320 13,283 26,603 2028-2032 77,560 55,443 133,003 2033-2037 99,540 33,468 133,008 2038-2042 86,485 7,850 94,335 Premium
___;;.3.;..7,:..;;.3.;;..98;;.... ___________
..;.37-'-..;.39.;;..8;;....
Total 360,253 $
169,336 =$===52=9=,5=8=9 Pension Obligation Bonds - Business Type Activities:
Principal Outstanding In 2018, the 2017 Taxable Pension Obligation Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency to properly reflect their proportional share.
Pension Obligation Bonds are not collateralized by assets, nor do they constitute a debt of the City of Riverside whereby the City is obligated to levy or pledge any form of taxation.
In
- 2020, the 2017 Taxable Pension Obligation Bonds outstanding balances in the Successor Agency were distributed between Governmental Activities and Business-Type Activities.
$31,960 2017 Taxable Pension Obligation Bonds Series A; 1.25% to 3.125%, duei in annual installments from $2,910 to
$3,580 through June 1, 2027. $16,661 relates to Business Type Activities.
$432,165 2020 Taxable Pension Obligation Bonds Series A; 1.646% to 3.857% due in annual installments from $2,920 to
$28,310 through June 1, 2045. $107,583 relates to Business-Type Activities.
Total pension obligation bonds 8,818 101,900 110,718
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Remaining pension obligation bond debt service payments will be made from unrestricted revenues of the Business-Type Activities funds. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 7,010 8,457 9,365 9,636 9,244 23,498 25,786 17,035 687 Total
$=========
110,718 3,488 $
3,342 3,153 2,932 2,683 10,692 10,692 1,831 27 38,840 $
Certificates of Participation - Business Type Activities:
In 2019, the 2008 Riverside Renaissance Certificates of Participation were distributed between Governmental Activities and Business-Type Activities to properly reflect their proportional shares.
$128,300 2008 Riverside Renaissance Certificates of Participation are secured with collateral of the Andulka Park, Fairmount Park and Golf Course, Arlington Heights Sports Park, Orange Terrace Park, Orange Terrace Community Center, and Orange Terrace Library; issued at a variable rate; however, the City entered into an agreement to convert to a fixed rate of 3.4%. For information on the swap agreement see Note 6. Due in annual installments from $2,900 to $7,200 through March 1, 10,498 11,799 12,518 12,568 11,927 34,190 36,478 18,866 714 149,558 Principal Outstanding 2037; $30,841 relates to the Civic Entertainment Fund.
25__,,,_91_2_
Total certificates of participation
$===25=='=91=2
58 Remaining certificates of participation debt service payments will be made from unrestricted revenues of the Civic Entertainment Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Principal Interest Total 2023 2024 2025 2026 2027 2028-2032 2033-2037 1,330 1,391 1,421 1,482 1,542 8,557 10,189 Total
$==========
25,912 860 815 768 719 669 2,525 965 7,321 Lease Revenue Bonds - Business Type Activities:
In 2019, the Series 2012A Lease Revenue Refunding Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency to properly reflect their proportional share.
On August 15, 2012, the City issued the Series 2012A Lease Revenue Refunding Bonds in the amount of $41,240. The bonds are secured by lease payments on a portion of the City Hall Complex and the Lincoln Police Patrol Center. The bonds were issued to refinance the 2003 Certificates of Participation.
Interest on the bonds is payable semi-annually on May 1 and November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum depending on maturity date.
Principal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and ending November 1, 2033. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated.
$8,242 relates to 2,190 2,206 2,189 2,201 2,211 11,082 11,154 33,233 Principal Outstanding Governmental Activities.
6.;..,"""62_5_
Total lease revenue bonds 6,625
==
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Remaining lease revenue bond debt service payments will be made from unrestricted revenues of the Parking Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year Princieal Interest Total 2023 457 $
280 $
737 2024 480 256 736 2025 466 236 702 2026 481 220 701 2027 502 199 701 2028-2032 2,902 594 3,496 2033-2037 1,337 54 1,391 Total 6,625 $
1,839 $
8,464 The following are legally required debt service cash reserves. These amounts, at a minimum, are held by the City or fiscal agents at June 30, 2022:
Governmental Long-Term Obligations:
Certificates of participation Total Entererise Funds:
Electric Total 7,423 7,423 10,801 10,801 The City has a number of debt issuances outstanding that are collateralized by the pledging of certain revenues. The amount and term of the remainder of these commitments are indicated in the debt service to maturity tables presented in the accompanying notes. The purposes for which the proceeds of the related debt issuances were utilized are disclosed in the debt descriptions in the accompanying notes. For the current year, debt service payments as a percentage of the pledged gross revenue (or net of certain expenses where so required by the debt agreement) are indicated in the table below. The debt service coverage ratios also approximate the relationship of debt service to pledged revenue for the remainder of the term of the commitment.
59 Description of Pledge Revenue Electric revenues Water revenues Sewer revenues Annual Amount of Pledge Revenue (net of expenses, where required) 93,639
- 37,986
- 39,782
- Excludes non-cash pension expense Annual Debt Service Payments (all of debt secured by this revenue) 46,028 17,068 26,541 Coverage Ratio for FY 06/30/22 2.03 2.23 1.50 There are also a number of limitations and restrictions contained in Assessment Bond indentures. The City believes they are in compliance with all significant limitations and restrictions.
Direct Borrowings: Notes Payable - Business-Type Activities:
Notes payable consists of several agreements with Hillwood Enterprises, LP. and related entities (collectively Hillwood) for their development of logistic centers located in the City of San Bernardino. As part of these agreements, the Water Fund leases land to Hillwood and also purchased land from Hillwood with a subsequent lease-back to the entity. In addition, the agreements require Hillwood to relocate wells located on the properties as well as terminate an existing lease.
In consideration of the cost of the land purchase, well relocations and lease termination, the Water Fund will make payments to Hillwood in the form of a credit with Hillwood's rental payments to the Water Fund for the first 15 years of the leases.
Public Parking Fund and Civic Entertainment Fund loan for Fox Entertainment Plaza project secured with collateral of the Fox Theater, Fox Entertainment Plaza, and Parking Garage No. 7.
3.85%, payable in net annual installments of $1,747, beginning June 16, 2011 through December 16, 2031. In the event of default, the City would continue to remain liable for the payment of Rental Payments and damages for breach of the Lease.
Principal Outstanding 16,639 13,788
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
In July 19, 2012, the City secured financing in the amount of
$41,650 with BBVA Compass Bank for the renovation and expansion of the Riverside Convention Center (Civic Entertainment Fund) secured with collateral of the convention center facility. In March 2014, the financing arrangement with BBVA was increased to $44,650. The financing consists of an initial 21-month variable rate interest only period during construction that has a swap transaction layered over the remaining 20-year amortization resulting in a "synthetic fixed" rate of 3.24% for 20 of the 22 years. For information on the swap agreement see Note 6.
At the end of the construction period, principal and interest are due on the first of each month, with equal payments each year of approximately $2,850. In the event of default, the outstanding amount of the site lease payment drawn by the City and not repaid will bear interest at a default rate that will be charged until the default is cured.
29,521 Total notes payable
$===59='=94=8
Remaining notes payable debt service payments will be made from unrestricted revenues of the Water Fund, Public Parking Fund, and Civic Entertainment Fund. Annual debt service requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 Total Principal 1,535 $
1,624 1,719 1,818 1,923 7,507 513 16,639 $
Water Interest Total 436 $
1,971 392 2,016 346 2,065 296 2,114 242 2,165 411 7,918 4
517 2,127 $
18,766 60 Non-Major Enterprise Funds Fiscal Year Principal Interest Total 2023 3,338 $
1,439 $
4,777 2024 3,446 1,322 4,768 2025 3,568 1,200 4,768 2026 3,688 1,075 4,763 2027 3,811 945 4,756 2028-2032 20,209 2,623 22,832 2033-2037 5,249 149 5,398 Total 43,309 $
8,753 $
52,062 Principal Direct Borrowings: Contracts Pa~able Outstanding Water stock acquisition rights payable on demand to various water companies 933 Direct Borrowings: Financed Purchase The City purchased various equipment through financing arrangements in the governmental and proprietary fund types. These activities are reco~ded for b~th governmental and business-type activities in the government-wide financial statements. The assets and related obligations in governmental funds are not recorded in the fund statements. For proprietary funds, the assets and their related liabilities are reported directly in the fund. Amortization applicable to proprietary assets acquired through financing arrangements is included with depreciation for financial statement presentation.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
The assets acquired through financing arrangements are as follows:
Asset Buildings and improvements Machinery and equipment Subtotal Less: Accumulated depreciation Total Governmental Activites 1 $
Business-Type Activities 2....
3,'-35_6 ______ 8
....,_00_6_
23,357 8,006
__._(9..:..,5_2__._7) ___
__._(6..:..,0_66__._)
13,830 $
1,940
====
The future minimum obligations as of June 30, 2022 were as follows:
Due Beginning Ending Within Business-Type Activities:
Balance Additions Reductions Balance One Year Compensated absences 12,005 $
8,366 $
(8,516) $ 11,855 $
8,402
- 11. Risk Management The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; errors and omissions; injuries to employees; and natural disasters. Property insurance coverage has a limit of $1,000,000, with a deductible of $100. Earthquake and flood insurance coverage has a limit of
$25,000, with a deductible of 5% (subject to $100 minimum for earthquake and
$100 for flood). Workers' compensation insurance coverage has a limit of
$25,000, with a self-insured retention of $3,000. The City has four General Liability policies: a primary and and three excess General Liability policies. The Governmental Business-Type primary General Liability policy coverage has a limit of $4,000 and the Excess Activities Activities General Liability policies provide an additional $21,000 of coverage, with a self-Fiscal Year 2023 2024 2025 2026 2027 Thereafter Total minimum installments Less: Amount representing interest (rates ranging from 1.2% to 9%)
Total financed purchase
- 10. Compensated Absences 3,931 $
741 insured retention of $3,000. Both the primary and excess General liability 3,838 375 policies cover general and auto liability claims including but not limited to Law 3,838 375 Enforcement Liability and Public Officials Errors and Ommissions. There has 2,742 375 been one claim settled in the last three fiscal years that exceed insurance 2,742 375 coverage. Internal service funds have been established to account for and 6,943 57 finance the uninsured risks of loss.
24,034 2,298 All funds of the City participate in the Risk Management program and make payments to the Internal Service Funds based on actuarial estimates of the
-(1~,_7_4_0) ____ ___,(_1_22_,_)amounts needed to fund prior and current year claims and incidents that have 22,294 $
2,176 been incurred but not reported. lnterfund premiums are accounted for as quasi-external transactions and are therefore recorded as revenues of the Internal Service Funds in the fund financial statements.
A liability is recorded for unused vacation and similar compensatory leave balances since the employees' entitlement to these balances are attributable to services already rendered and it is probably that virtually all of these balances will be liquidated by either paid time-off or payments upon termination or retirement.
Changes in the self-insurance fund's claims and judgments amounts are:
Governmental Activities:
Claims and judgments Beginning Ending Balance Additions Reductions Balance 76,603 $
13,134 $
(10,947) $
78,790 Due Within One Year 15,304 Below is a summary of changes in compensated absences during the fiscal year:
Due Beginning Ending Within Governmental Activities:
Balance Additions Reductions Balance One Year Compensated absences 30,899 $ 16,205 $
(17,110) $ 29,994 $ 16,600 61
i I
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Unpaid claims, June 30,2020 Incurred claims (including IBNR's)
Claim payments and adjustments Unpaid claims, June 30,2021 Incurred claims (including IBNR's)
Claim payments and adjustments Unpaid claims, June 30,2022
- 12. Landfill Capping 53,828 35,818 (13,043) 76,603 13,134 (10,947) 78,790 State and Federal laws and regulations require the City to place a final cover on all active landfills when closed and to perform certain maintenance and monitoring functions at the landfill site for 30 years after closure. To comply with these laws and regulations, the City is funding the costs of closure and "final capping" of the Tequesquite landfill located in the City. This area, comprised of approximately 120 acres, operated as a "Class II Sanitary Landfill" until its closure in 1985. During its operation, the landfill did not accept hazardous waste and no clean up and abatement or cease and desist orders have been issued to the City. The capacity used at June 30, 2022 was 100%. The remaining post closure period is currently 20 years.
The estimated costs as determined and updated by the Public Works Department are associated with flood control upgrades, remediation of possible ground water contamination and control of methane gas. All potential costs have been recognized in the financial statements. However, there is the potential for these estimates to change due to inflation, deflation, technology, or change in laws or regulations. The City is recovering such costs in rates charged to its customers. The portion of costs to be recovered through future rates is classified as a regulatory asset and will be amortized over future periods.
Below is a summary of changes in landfill capping liability during the fiscal year:
Beginning Ending Business-Type Activities:
Balance Additions Reductions Balance Landfill capping 10,419 $
(599) $
9,820
- 13. Nuclear Decommissioning Liability Due Within One Year 559 As of June 30, 2022, decommissioning liability balance was $53,310 with a
$5.7 million in fiscal year 2021/22. The offset of this liability increase has been recorded as an extraordinary item in fiscal year 2021/22. See Note 1 and 26 for additional information. Due to adequate funding of the liability, the Electric Utility no longer provides additional funding to the trustee. However, since the decommissioning cost estimate is subject to a number of uncertainties including the cost of disposal of nuclear waste, site remediation costs, as well as a number of other assumptions and estimates, the Electric Utility will continue to set aside funds in the designated decommissioning reserve of $2,000 per year, as approved by the Board of Public Utilities and City Council.
Below is a summary of changes in decommissioning liability during the fiscal year:
Due Beginning Ending Within Business-Type Activities:
Balance Additions Reductions Balance One Year Decommissioning liability 50,896 $
6,555 $
(4,141) $
53,310 $
8,813
- 14. Commitments and Contingencies lntermountain Power Agency The Electric Utility has a power purchase contract with lntermountain Power Agency (IPA) for the delivery of electric power. The Electric Utility's share of IPA power is equal to 7.6 percent, or approximately 137.1 MW, of the net generation output of IPA's 1,800 MW central Utah coal-fueled generating station, known as lnt.ermountain Power Project (IPP). The contract expires in 2027 and the debt fully matures in 2024.
The contract constitutes an obligation of the Electric Utility to make payments solely from operating revenues. The power purchase contract requires the Electric Utility to pay certain minimum charges that are based on debt service requirements and other fixed costs. Such payments are considered a cost of production.
On September 29, 2006, Senate Bill 1368 (SB 1368) was enacted into law. The bill requires electric service providers to limit financial investments in power plants to those that adhere to greenhouse gas performance standards as determined by the Public Utilities Commission. Pursuant to this legislation, the Electric Utility is prohibited from renewing its participation in IPP if it remains a coal fueled generating resource.
portion reflected as current liabilities payable from restricted assets. As a result In order to facilitate the continued participation in the IPP, the IPA Board issued of the updated SCE decommissioning cost estimate and the increase in the the Second Amendatory Power Sales Contract, which amended the IPP Electric Utility's estimated share, the decommissioning liability was increased by Contract allowing the plant to replace the coal units with combined cycle natural 62
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) gas units by July 1, 2025. On June 16, 2015, the City Council approved the IPP renewal agreements, including the Second Amendatory Power Sales Contract and the Renewal Power Sales Contract, and authorized participation in the IPP Repower Project for up to 5 percent in generation capacity or 60MW. The Second Amendatory Power Sales Contract became effective March 16, 2016.
On January 5, 2017, the Electric Utility executed the Renewal Power Sales Contract and the Electric Utility accepted an offer of 4.167 percent entitlement or 50 MW generation capacity in the IPP Repower Project based on the 1,200 MW designed capacity, which is within the maximum participation level approved by the City Council. The Electric Utility's corresponding Southern Transmission System allocation is 5.278 percent or approximately 127 MW.
Further, under the Renewal Power Sales Contract, the Electric Utility had the right to exit from the Repower Project by no later than November 1, 2019, if it is determined that the Repower Project is not cost beneficial to its customers.
On September 11, 2018, the City Council approved "Alternative Repowering" of the IPP Repower Project, which reduced the design capacity of the future plant from 1,200 MW to 840 MW.
On May 7, 2019, the City Council authorized termination of the Renewal Power Sales Contract between the IPA and the Electric Utility effective November 1, 2019, and the Electric Utility's exit from the IPP Repower Project upon the expiration date of the current Power Sales Contract on June 15, 2027, due to numerous uncertainties surrounding the IPP Repower Project.
The Electric Utility is a member of the Southern California Public Power Authority (SCPPA), a joint powers agency. SCPPA provides for the financing and construction of electric generating and transmission projects for participation by some or all of its members. To the extent the Electric Utility participates in take-or-pay projects developed by SCPPA, it has entered into Power Purchase or Transmission Service Agreements, entitling the Electric Utility to the power output or transmission service, as applicable, and the Electric Utility will be obligated for its proportionate share of the project costs whether or not such generation output of transmission service is available.
The projects and the Electric Utility's proportionate share of SCPPA's obligations, including final maturities and contract expirations are as follows:
63 Percent Share Entitlement Project Palo Verde Nuclear Generating Station Southern Transmission System Mead-Phoenix Transmission Mead-Adelanto Transmission Terms of Take or Pay Commitments 5.40 %
12.3 MW 10.20 %
244.0 MW 4.00 %
18.0 MW 13.50 %
118.0 MW Final Maturity 2017 2027 2020 2020 Contract Expiration 2030 2027 2030 2030 As part of the take-or-pay commitments with IPA and SCPPA, the Electric Utility has agreed to pay its share of current and long-term obligations. Management intends to pay these obligations from operating revenues received during the year that payment is due. A long-term obligation has not been recorded on the accompanying financial statements for these commitments. Take-or-pay commitments terminate upon the later of contract expiration or final maturity of outstanding bonds for each project.
The outstanding debts associated with the take-or-pay obligations have fixed interest rates, which range from 4.00 percent to 5.00 percent. The schedule below details the amount of principal and interest that is due and payable by the Electric Utility as part of the take-or-pay contract for each project in the fiscal year indicated.
Debt Service Payment Year Ending June 30, 2023 2024 2025 2026 2027 Total IPA1 lntermountain Power Project 7,285 $
3,472 2,990 2,990 4,800 21,537 $
SCPPA Total Southern Transmission All System Projects 7,083 $
14,368 7,125 10,597 3,261 6,251 3,257 6,247 6,508 11,308 27,234 $
48 771 1
The Electric Utility's contract with IPA expires in 2027. The Electric Utility will not be responsible for the proportionate share of the 2022 Series A & B Revenue bonds after the contract expires.
In addition to debt service, the Electric Utility's entitlements require the payment of fuel costs, operating and maintenance, administrative and general and other miscellaneous costs associated with the generation and transmission facilities discussed above. These costs do not have a similar structured payment schedule as debt service and vary each year. The costs incurred for the years ended June 30, 2022 and 2021, are as follows:
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) lntennountain Fiscal Year Power Project*
2022 19,522 $
2021 20,648
- Excludes variable costs Southern Transmission Mead-Phoenix Mead-Adelanto Palo Verde Nuclear Generating Station*
2,930 $
2,951 System Transmission Transmission All Projects 4,400 $
57 $
415 $
27,324 5,126 44 424 29,193 These costs are included in production and purchased power or transmission expense on the Statements of Revenues, Expenses, and Changes in Net Position.
The Electric Utility has become a Participating Transmission Owner with the California Independent System Operator (CAISO) and has turned over the operational control of its transmission entitlements including the Southern Transmission System, Mead-Phoenix and Mead-Adelanto Transmission Projects. In return, users of California's high voltage transmission grid are charged for, and the Electric Utility receives reimbursement for, transmission revenue requirements, including the costs associated with these three transmission projects.
Hoover Uprating Project The Electric Utility's initial entitlement in the Hoover project through SCPPA terminated on September 30, 2017. On August 23, 2016, the City Council approved a 50-year Electric Service Contract (ESC) and an Amended and Restated Implementation Agreement (IA) with the Western Area Power Administration (Western), Bureau of Reclamation for 30 MW of hydroelectric power. The contract with Western is effective as of October 1, 2017. The ESC extended the Electric Utility's 30 MW entitlement in the Hoover project through 2067. The IA is a supplemental agreement to the ESC that establishes administrative, budgetary and project oversight by creating project committees and process for decision making plant operations.
Nuclear Insurance Under the industry wide retrospective assessment program provided for under the Act, assessments are limited to $137.6 million per reactor for each nuclear incident occurring at any nuclear reactor in the United States, with payments under the program limited to $20.5 million per reactor, per year, per event to be indexed for inflation every five years. Based on the Electric Utility's interest in Palo Verde, the Electric Utility would be responsible for a maximum assessment of $1.3 million, limited to payments of $0.2 million per incident, per year. If the public liability limit above is insufficient, federal regulations may impose further revenue-raising measures to pay claims, including a possible additional assessment on all licensed reactor operators.
Renewable Portfolio Standards (RPS)
On April 12, 2011, the California Renewable Energy Resources Act (SBX1-2) was signed into law by the Governor, which officially created the first set of tiered RPS targets of 20% by 2013, 25% by 2016 and 33% by 2020. SBX1-2 specified that publicly owned utilities must meet these defined targets via interim Compliance Period (CP) targets to achieve the end goal of 33% RPS by December 31, 2020 as follows: CP1 - an average of 20 percent of retail sales during the three year period from 2011-2013; CP2 - no less than 25 percent of retail sales by December 31, 2016; and CP3 - no less than 33 percent of retail sales by December 31, 2020. The Riverside Public Utilities Board and City Council approved the RPS Enforcement Program required by SBX1-2 on November 18, 2011 and December 13, 2011, respectively, and further approved the Electric Utility's RPS Procurement Plan (a.k.a. Procurement Policy) implementing the new RPS mandates on May 3, 2013 and May 14, 2013, respectively. The Electric Utility met the procurement requirements of SBX1-2 for CP1 (2011-2013) CP2 (2014-2016), and CP3 (2017-2020). The additional future mandates are expected to be met with resource procurement actions as outlined in the Electric Utility's RPS Procurement Plan. For calendar year 2021, renewable resources provided 43 percent of retail sales requirements.
On October 7, 2015, the Governor signed into law Senate Bill 350 (SB 350)
The Price-Anderson Act (the Act) requires that all utilities with nuclear increasing the RPS mandate from 33 percent by 2020 to 50 percent by generating facilities purchase the maximum private primary nuclear liability December 31, 2030. In addition, SB 350 required that an updated RPS insurance available ($450 million) and participate in the industry's secondary Procurement Policy be approved and adopted before January 1, 2019 and be financial protection plan. The secondary financial protection program is the incorporated into the Electric Utility's Integrated Resource Plan. An updated industry's retrospective assessment plan that uses deferred premium charges 2018 Renewable Energy Procurement Policy was adopted by the Board and from every licensed reactor owner if claims and/or costs resulting from a City Council on September 1 O, 2018 and October 9, 2018, respectively. The nuclear incident at any licensed reactor in the United States were to exceed the Electric Utility expects to be able to substantially meet the increased RPS primary nuclear insurance at that plant's site. Effective June 10, 2021, the Act mandates imposed by SB 350 with the actions described in the updated limits liability from third-party claims to approximately $13. 7 billion per incident.
procurement policy and the portfolio of renewable resources outlined below.
64
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
On September 10, 2018, the 100 Percent Clean Energy Act of 2018 (Senate Bill 100) was signed into law by the California Governor. This bill further increases the RPS goals of SBX1-2 and SB 350 while maintaining the 33 percent RPS target by December 31, 2020, but modifying the RPS percentages to be 44 percent by December 31, 2024, 52 percent by December 31, 2027, 60 percent by December 31, 2030, with an end goal of 100 percent of total retail sales of electricity in California generated from eligible renewable energy resources and zero-carbon resources by December 31, 2045. It is expected that the California Energy Commission will have further guidance and enforcement procedures for publicly owned utilities to meet these increased mandates. The Electric Utility will continue to monitor the outcome and impacts of any upcoming workshops and regulations in meeting the new requirements.
In an effort to increase the share of renewables in the Electric Utility's power portfolio, the Electric Utility entered into power purchase agreements (PPA) and power sales agreements (PSA) with various entities described below in general on a "take-and-pay basis. The contracts in the following tables were executed as part of compliance with RPS mandates.
Long-term renewable PPAs and PSAs in operation:
Supplier Wintec WKN Wagner Terraform Power - AP North Lake Onward Energy - Columbia II GlidePath Power Solutions - GPS Cabazon Wind LLC Capital Dynamics - Kingbird Solar B, LLC AES - Summer Solar AES - Antelope Big Sky Ranch AES -Antelope DSR 1 Solar Captial Dynamics - Tequesquite Landfill Solar American Renewable Power - Loyalton Roseburg Forest Products CalEnergy - Salton Sea Portfolio Atlantica - Cose Geothermal Total Type Wind Wind Photovoltaic Photovoltaic Wind Photovoltaic Photovoltaic Photovoltaic Photovoltaic Photovoltaic Biomass Biomass Geothermal Geothermal Maximum Contract1 1.3 MW 6.0 MW 20.0 MW 11.1 MW 39.0 MW 14.0 MW 10.0 MW 10.0 MW 25.0 MW 7.3 MW 0.8 MW 0.5 MW 86.0 MW 10.0 MW 241.0 MW Estimated Contract Annual Cost for Expiration ----'2=02=2'---
02/19/2024 $
12/22/2032 08/11/2040 12/22/2034 01/01/2025 12/31/2036 12/31/2041 12/31/2041 12/19/2036 12/31/2040 04/19/2023 02/16/2026 12/31/2039 12/31/2042 150 1,344 4,905 2,314 4,299 2,867 1,748 1,748 3,826 1,423 615 179 55,622 6,050 87,090 1
All contracts are contingent on energy delivered from specific related generating facilities. The Electric Utility has no commitment to pay any amounts except for energy delivered on a monthly basis from these facilities except for any economic curtailments directed by the Electric Utility.
Long-term renewable PPAs with expected delivery:
Supplier Type Atlantica - Caso Geothermal Geothermal Total Maximum Contract1 20.0 MW 20.0 MW Expected Delivery 01/01/2027 Energy Delivery No Later Than 01/01/2027 Contract Term In Years 15 1
All contracts are contingent on energy delivered from specific related generating facilities. The Electric Utility has no commitment to pay any amounts except for energy delivered on a monthly basis from these facilities except for any economic curtailments directed by the Electric Utility.
Cap-and-Trade Program Assembly Bill (AB) 32,. enacted in 2006, mandated that the California Air Resources Board (CARB) develop regulations for the reduction of greenhouse gas (GHG) emissions to the 1990 levels by the year 2020. Subsequently, Senate Bill (SB 32), enacted in 2016, extended the requirements of AB 32 and codified that it was the State's goal to reduce GHG emissions to 40% below 1990 levels by the year 2020. AB 398 was then enacted in 2017 clarifying that it was the State legislature's intent to continue the Cap-and-Trade Program and regulations until 2030. In January 2013, emission compliance obligations developed by CARB began under the Cap-and-Trade Program (Program). This Program requires electric utilities to have GHG allowances on an annual basis to offset GHG emissions associated with generating electricity. To ease the transition and mitigate the rate impacts to retail customers, CARB will allocate certain amounts of GHG allowances at no cost to electrical distribution utilities.
The Electric Utility's free allocation of GHG allowances is expected to be sufficient to meet the Electric Utility's direct GHG compliance obligations.
At times, the Electric Utility may have allocated allowances in excess of its compliance obligations that can be sold into the CARB quarterly auctions. In fiscal year ended June 30, 2022, the Electric Utility received $14,960 in proceeds related to the sale of the GHG allowances which are included on the Statements of Revenues, Expenses, and Changes in Net Position as other operating revenue. The Electric Utility has established a restricted Regulatory Requirement reserve to comply with regulatory restrictions and governing requirements related to the use of the GHG proceeds. The available funds are to be utilized for qualifying projects, consistent with the goals of AB 32 to benefit the retail ratepayers. The balance in the Regulatory Requirement reserve was
$16,366 as of June 30, 2022.
The Electric Utility also purchases GHG allowances which can be used in future periods for GHG compliance regulations. The balance of purchased GHG 65
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) allowances was $485 as of June 30, 2022 and is recorded as inventory in the Statement of Net Position.
Low Carbon Fuel Standard Program Assembly Bill (AB) 32, enacted in 2006, mandated that the California Air Resources Board (CARB) develop regulations for the reduction of greenhouse gas (GHG) emissions to the 1990 levels by the year 2020. Subsequently, Senate Bill (SB 32), enacted in 2016, extended the requirements of AB 32 and codified that it was the State's goal to reduce GHG emissions to 40% below 1990 levels by the year 2020. Similar to the Cap-and-Trade Program, the Low Carbon Fuel Standard (LCFS) Program is a key component of the market mechanisms authorized by these bills to achieve the State's GHG emissions reduction goals. The LCFS regulation was initially approved by CARB in 2009.
The program then underwent some litigation in the State of California and the regulation was re-adopted in 2015 with modifications and went into effect in 2016. LCFS seeks to reduce the carbon intensity (Cl) of fuels used for transportation by establishing an annual Cl target. Fuels that have a Cl greater than the target have a compliance obligation and are required to turn in LCFS credits; fuels with a Cl lower than the target may generate credits.
Electricity is considered a fuel subject to the program when it is used as a transpo~ation fuel in electric vehicles. However, because the Cl of electricity is substantially lower than the annual Cl targets under the program, electricity is a fuel that generates LCFS credits and participation in the Program is voluntary.
The City opted into the LCFS program in March 2018 and began generating LCFS credits for the first quarter of 2018. These credits are associated with two sources - unmetered electricity used to charge residents' electric vehicles at their homes (residential base credits) and from electric forklifts charging at private businesses (forklift credits). CARB calculates the credits that the Electric Utility receives, and the Electric Utility submits reports quarterly to receive the credits.
The LCFS regulation was amended in 2018 and required that electric utilities that have opted into the LCFS Program participate in and manage a statewide point-of-sale rebate program for new electric vehicles. This program is called the California Clean Fuel Reward Program (CFR) and the City joined the program in May 2020. To fund the program, electric utilities are required to contribute proceeds received from the sales of residential base credits beginning with the credits the Electric Utility received in Q4 2019 (generated from electricity used for transportation in Q2 2019). Residential base credits the Electric Utility received prior to that 'time are not subject to the contribution 66 requirements. Additionally, a "start-up" contribution from proceeds is required to be submitted by January 31, 2021. After the initial deposit of funds in November 2020, deposits to the CFR program are required by March 31 annually.
In fiscal year ended June 30, 2022, the Electric Utility's proceeds from the sale of LCFS credits were $1,047. These proceeds are included on the Statements of Revenues, Expenses and Changes in Net Position as other operating reven_ue.
The Electric Utility has established a restricted Regulatory Req~irement reserve to comply with regulatory restrictions and governing requirements related to the use of the LCFS proceeds. The available funds are to be utilized for qualifying programs that support the Electric Utility's customers who are existing and future electric vehicle owners. Total expenses for qualifying programs as of June 30, 2022 was $21 O. The balance in the Regulatory Requirement reserve as of June 30, 2022 was $3,233.
- 15. Other Post-Employment Benefits COPEB)
Plan description - The City's defined benefit OPES plan, Retiree Health Plan provides continuation of medical (including prescription drugs) and denta 1
I coverage benefits to retirees and surviving spouses in the form of an implied rate subsidy. The Retiree Health Benefits plan is a single employer defined benefit OPEB plan administered by the City. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement No. 75.
Benefits provided - Eligibility for continuation of coverage requires retirement from the City and CalPERS with at least 5 years of City service. The retiree is responsible for 100% of the premium cost for coverage, which is based on the blen~ed experience of both the active and retired employees. The City is not required by law or contractual agreement to provide funding other than the pay-as-you-go amount necessary to provide current benefit to eligible retirees and beneficiaries. Retiree and spousal coverage terminate when the retirees become covered under another employer health plan, or when the retiree reaches Medicare eligibility ago, which is currently age 65. However, retiree benefit continues to the surviving spouse if the retiree elects the CalPERS survivor annuity.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Employees covered by benefit terms -
At June 30, 2021, the following employees were covered by the benefit terms:
Inactive plan members or beneficiaries currently receiving benefits Inactive plan members entitled to but not yet receiving benefits Active plan members 206 2,014 Total 2,220 Significant Actuarial Assumptions Used in Calculating the Total OPEB Liability The total OPEB liability was determined by an actuarial valuation using the following actuarial assumptions:
Valuation Date:
Measurement Date:
Funding Policy:
Discount Rate:
Inflation Rate:
Salary Inflation:
Salary Increases:
Mortality:
June 30, 2021 June 30, 2021 Pay-as-you-go for implicit rate subsidy 2.16% per annum. This discount rate is the maximum of the range of 3-20 year municipal bond rate indices: S&P Municipal Bond 20 Year High Grade Rate Index, Bond Buyer 20-Bond GO Index, and Fidelity GO AA 20 Year Bond Index 2.5% per annum 2.75% per annum The benefits are not payroll related but the City's cost for each individual's projected City contribution is allocated over their lifetime as a level-percentage of pay.
Based on the CalPERS 2017 Experience Study Sensitivity analysis of total OPEB liability for healthcare cost trend rates.
The following presents the total net OPEB liability, calculating using the healthcare cost trend rate of 4.0%, as well as what the total OPEB liability would be if it were calculated using a healthcare cost trend rate that is 1-percentage-point lower (3.0%) or 1-percentage-point higher (5.0%) than the current rate:
67 Total OPEB liability Current Healthcare 1% Decrease 3%
42,917 $
Cost Trend Rate 4%
48,770 $
Sensitivity analysis of total OPEB liability for discount rates 1% Increase 5%
55,716 The following presents the total OPEB liability, calculating using the discount rate of 2.16%, as well as what the total OPEB liability would be if it were calculated using a discount rate that is 1-percentage-point lower (1.16%) or 1-percentage-point higher (3.16%) than the current rate:
Total OPEB liability Change in total OPEB liability 1% Decrease (1.16%)
52,938 $
Current Discount Rate (2.16%)
48,770 $
1% Increase (3.16%)
44,908 For fiscal year 2022, the City recognized total OPEB expense of $2,790. The following table shows the change in the total OPEB liability for the year ended June 30, 2022:
Beginning total OPEB liability Service cost Interest Differences between expected and actual experience Changes of assumptions Benefit of implied subsidy payments Net changes Ending total OPEB liability 2022 52,276 2,646 1,394 (2,267)
(3,086)
(2,193)
(3,506) 48,770
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Deferred outflows/inflows of resources At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to OPES from the following sources:
Deferred Outflows Deferred Inflows of Contributions subsequent to the measurement date Differences between expected and actual experience Changes of assumptions Total of Resources Resources 1,628 $
195 3,860 8,097 ----~3,_59_9_
9,920 =$====7=,4=59=
Amounts reported as deferred outflows/(inflows) of resources related to OPES will be recognized in OPES expense as follows:
Year Ending June 30, 2023 2024 2025 2026 2027 Thereafter Total
- 16. City Employees Retirement Plan Deferred Outflows/(lnflows) of Resources 377 377 377 585 624 (1,507) 833 (A) Plan Description - The City of Riverside contributes to the California Public Employees Retirement System (CalPERS), an agent multiple employer public employee defined benefit pension plan. CalPERS provides retirement and disability benefits, annual cost-of-living adjustments, and death benefits to plan members and beneficiaries. CalPERS acts as a common investment and administrative agent for participating public entities within the State of California.
Benefit provisions and all other requirements are established by state statute and City ordinance. A copy of CalPERS' annual financial report may be obtained online at www.calpersca.gov.
68 (8) Funding Policy - The City has contributed at the actuarially determined rate provided by CalPERS' actuaries. Participants are required to contribute 8% for miscellaneous employees and 9% for safety employees of their annual covered salary. The City has a multiple tier retirement plan with benefits varying by plan.
The City pays the employees' contributions to CalPERS for both miscellaneous and safety employees hired on or before specific dates as follows:
Safety (Police):
1st Tier (RPOA, RPOA Supervisory & RPAA Management) - The retirement formula is 3% at age 50 for employees hired on or before February 16, 2012 (RPOA, RPAA Management) or June 8, 2012 (RPOA Supervisory).
Effective January 1, 2018, employees were required to pay 1.5% of their pensionable income, with the City contributing the other 7.5%. Only in the event that annual wages increase in excess of 2%, will the following apply: Effective January 1, 2019, employees were required to pay an additional portion of their pensionable income. This portion is a three-year increase of 1.5%
(2019), 1.5% (2020) and 1.5% (2021 ). However, the 2021 increase did not take affect; therefore in 2022, employees are contributing 4.5%
pensionable income.
2nd Tier (RPOA, RPOA Supervisory & RPAA Management) - The retirement formula is 3% at age 50 for RPOA and RPAA Management employees hired on or after February 17, 2012 and RPOA Supervisory employees hired on or after June 8, 2012 pay their share (9%) of contributions.
3rd Tier (RPOA, RPOA Supervisory & RPAA) - The retirement formula is 2. 7% at age 57 for new members hired on or after January 1, 2013 and the employee must pay the normal cost to CalPERS which is currently at 12.75%. Classic members (CalPERS members prior to 12/31/12) hired on or after January 1, 2013 may be placed in a different tier.
Safety (Fire):
1st Tier - The retirement formula is 3% at age 50 for employees hired before June 11, 2011.
Effective January 1, 2019, employees were required to pay a portion of their pensionable income. This portion is a
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) three-year increase of 2.5% (2019), 2.5% (2020) and 3% (2021 ).
However, the 2021 increase was only 2% with the remaining 1 %
increase in 2022; therefore, in 2022, employees are contributing 8% of their pensionable income.
2nd Tier - The retirement formula is 3% at age 55 and new employees hired on or after June 11, 2011 pay their share (9%) of contributions.
3rd Tier - The retirement formula is 2.7% at age 57 for new members hired on or after January 1, 2013. A new member, as defined by the Public Employees' Pension Reform Act (PEPRA), hired on or after January 1, 2013 pay 50% of the normal cost to CalPERS which is currently 12. 75% of compensation.
Miscellaneous:
1st Tier-0 The retirement formula is 2.7% at age 55 for employees hired on or before October 18, 2011.
Effective January 1, 2018 for unrepresented employees (Sr.
Management, Management, Professional, Para-professional, Supervisory, Confidential, and Executive units, excluding the Chief of Police and the Fire Chief),
the employees were required to pay 2% of their pensionable income, with the City contributing the other 6%. Effective January 1, 2019, employees were required to pay an additional portion of their pensionable income. This portion is a three-year increase of 2%
(2019), 2% (2020) and 2% (2021 ). As of 2021, employees were contributing the entire 8% of their pensionable income.
0 The retirement formula is 2.7% at age 55 for SEIU and SEIU Refuse employees hired before June 7, 2011. Currently, employees are required to pay 7% of their pensionable income with the City contributing the other 1 %. Effective January 1, 2019, employees were required to pay an additional portion of their pensionable income. This portion is a two-year increase of 1 % (2019) and 1 %
(2020). As of 2020, employees are contributing the entire 8% of their pensionable income.
0 The retirement formula is 2.7% at age 55 for IBEW and IBEW 69 Supervisory employees hired on or before October 18, 2011.
Effective November 1, 2017 employees were required to pay 2% of their total pensionable income with the City paying the remaining 6%. Effective each November 1st, employees will be required to pay an additional portion of their pensionable income. This portion is a three-year increase of 2% (2018), 2% (2019) and 2% (2020). As of November 2020, employees are contributing the entire 8% of their pensionable income.
2nd Tier-The retirement formula is 2.7% at age 55, and:
0 Miscellaneous employees, IBEW, and IBEW Supervisory hired on or after October 19, 2011 pay their share (8%) of contributions.
0 SEIU and SEIU Refuse employees hired on or after June 7, 2011 pay their share (8%) of contributions.
3rd Tier - The retirement formula is 2% at age 62 for new members hired on or after January 1, 2013 and the employee must pay the normal cost to CalPERS which is currently at 7.75%. Classic members (CalPERS members prior to 12/31/12) hired on or after January 1, 2013 may be placed in a different tier.
The contribution requirements of plan members and the City are established and may be amended by CalPERS.
(C) 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 five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1959 Survivor Benefit Level Ill, 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.
(D) Employees Covered - At June 30, 2021, the following employees were covered by the benefit terms of each Plan: Inactive employees or beneficiaries currently receiving benefits are 2,373 and 832 for the Miscellaneous and Safety Plans, respectively. Inactive employees entitled to but not yet receiving benefits
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) are 1,422 and 186 for Miscellaneous and Safety Plans, respectively. Active employees were 1,508 and 579 for Miscellaneous and Safety Plans, respectively.
(E) 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.
(F) Net Pension Liability - 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, 2021, using an annual actuarial valuation as of June 30, 2020 rolled forward to June 30, 2021 using standard update procedures. The liability for the governmental activities is primarily liquidated from the General Fund.
A summary of principal assumptions and methods used to determine the net pension liability is shown below. Actuarial Assumptions - The total pension liabilities in the June 30, 2021 actuarial valuations were determined using the following actuarial assumptions:
Valuation Date Measurement Date Actuarial Cost Method Actuarial Assumptions Discount Rate Inflation Salary Increase Mortality Rate Table1 Post Retirement Benefit Increase Miscellaneous Safety June 30, 2020 June 30, 2020 June 30, 2021 June 30, 2021 Entry-Age Normal Cost Method 7.15%
7.15%
2.50%
2.50%
Varies by Entry Age and Service Derived using CALPERS' membership data for all funds The lesser of contract COLA or 2.50% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.50%
thereafter 70 1 The mortality table used was developed based on CalPERS-specific data.
The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90%
of Scale MP-2016 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from December 2017 that can be found on the CalPERS website.
Long-term Expected Rate of Return - 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:
Current Target Real Return Real Return Asset Class1 Allocation Years 1 -102 Years 11+3 Public Equity 50.00%
4.80%
5.98%
Fixed income 28.00%
1.00%
2.62%
Inflation Assets 0.00%
0.77%
1.81%
Private Equity 8.00%
6.30%
7.23%
Real Assets 13.00%
3.75%
4.93%
Liquidity 1.00%
0.00%
(0.92)%
1 In the System's CAFR, Fixed Income is included in Global Debt Securities; Liquidity is included in Short-term Investments; Inflation Assets are included in both Global Equity Securities and Global Debt Securities.
2 An expected inflation of 2.00% used for this period
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) 3 An expected inflation of 2.92% used for this period Discount Rate - The discount rate used to measure the total pension liability was 7.15%. 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.
Changes in Assumptions - In 2021, there was no changes in assumptions.
(G) Changes in the Net Pension Liability The changes in the Net Pension Liability for each Plan follows:
Miscellaneous Increase (Decrease)
Plan Fiduciary Net Pension Balance at June 30, 2020 Total Pension Liability 1,492,113 Net Position Liability/(Asset)
$ 1,372,046 $
120,067 Changes recognized for the measurement period:
Service cost Interest on total pension liability Differences between expected and actual experience Net Plan to Plan Resource Movement Contributions - employer Contributions - employees Net investment income Benefit payments, including refunds of employee contributions Administrative expenses Net changes Balance at June 30,2021 26,168 105,017 873 (74,608) 57,450
$ 1,549,563 $
(1) 26,274 10,358 305,548 (74,608) 26,168 105,017 873 1
(26,274)
(10,358)
(305,548)
(1,371} ___
...;.1.,;:;,3.:...71.;_
266,200 __
_.(2_0_8.,_, 7_50_.)
1,638,246 =$==='8=8=,6=83=)
71 Safety Increase (Decrease)
Balance at June 30, 2020 Changes recognized for the measurement period:
Service cost Interest on total pension liability Differences between expected and actual experience Net Plan to Plan Resource Movement Contributions - employer Contributions - employees Net investment income Benefit payments, including refunds of employee contributions Administrative expenses Net changes Total Pension Liability 1,195,893 23,160 84,654 6,361 (59,739) 54,436 Plan Fiduciary Net Pension Net Position Liability/(Asset)
$ 1,086,394 $
109,499 1
22,931 10,492 242,945 (59,739) 23,160 84,654 6,361 (1)
(22,931)
(10,492)
(242,945)
(1,085} ___
...;.1.,;:;,0~85=-
Balance at June 30,2021
$ 1,250,329 $
215,545.,...-_....
(1.;;..;6;..;.1.<..,;;, 1..;;.09;;.<)
1,301,939 =$==='5=1=,6=10=)
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 one percentage point lower or one percentage point higher than the current rate:
Miscellaneous Plan's net pension liability/(asset)
Safety Plan's net pension liability/(asset)
Current Discount Rate
-1% (6.15%)
Discount Rate Discount Rate (7.15%)
+1% (8.15%)
118,863 $
(88,683) $
(259,597)
Current Discount Rate
-1% (6.15%)
Discount Rate Discount Rate (7.15%)
+1% (8.15%)
116,434 $
(51,610) $
(189,837)
Pension Plan Fiduciary Net Position - Detailed information about each pension plan's fiduciary net position is available in the separately issued CalPERS
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) financial reports.
(H) Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions.
For the year ended June 30, 2022, the City recognized pension expense of
$(47,456) to Miscellaneous and $(26,481) to Safety for a total of $(73,937). At June 30, 2022, the City reported deferred outflows of resources and deferred inflows of resources related to pensions from the following sources:
Miscellaneous Pension contributions subsequent to measurement date, net Differences between expected and actual experience Net differences between projected and actual earnings on plan investments Total Safety Pension contributions subsequent to measurement date, net Changes of assumptions Differences between expected and actual experience Net differences between projected and actual earnings on plan investments Total Deferred Deferred Outflows Inflows of Resources of Resources 27,330 $
3,680 (149,129) 31,010 =$=='1=4=9,==1 =29=)
Deferred Deferred Outflows Inflows of Resources of Resources 24,773 $
(221) 14,268 (118,092)
=$====3=9'=04::::::1::::: =$=='1=1=8'=3=13=)
$52,103 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 subsequent fiscal period rather than in the current fiscal period.
Amortization of Deferred Outflows and Deferred Inflows of Resources - Under GASB 68, gains and losses related to changes in total pension liability and 72 fiduciary net position are recognized in pension expense systematically over time.
The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense.
The amortization period differs depending on the source of the gain or loss:
Net difference between projected and actual earnings 5 year straight-line amortization All other amounts Straight-line amortization over the expected average remaining service lifetime (EARSL) of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period The remammg amounts reported as deferred outflows of resources and deferred (inflows) of resources related to pensions will be recognized as pension expense as follows:
Fiscal Year 2023 2024 2025 2026 Total Miscellaneous _ __;;S;..;;a;.;;..;fe;..;;ty,.___
(34,425) $
(22,577)
(33,631)
(22,494)
(35,597)
(26,164)
___._(4_1.._, 7_96..... ) __
___._(3_2 __
,a_1 o.... >
(145,449)==='1=0=4==,0=45=)
Subsequent Events - There were no subsequent events that would materially affect the results presented in this disclosure.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022
{amounts expressed in thousands)
- 17. Other Long-Term Obligations Changes in Long-Term Obligations Below is a summary of changes in long-term obligations during the fiscal year for the former Redevelopment Agency, which is accounted for in the Successor Agency Trust Fund (a fiduciary fund):
Beginning Ending Due Within Balance Additions Reductions Balance One Year Lease revenue bonds Tax allocation bonds Direct borrowings:
11,641 $
(2,291) $
9,350 $
2,399 171,416 (6,074) 165,342 4,710 Notes payable 3,918 -,----
3,918 34 186,975 $
(8,365) $ 178,610 $
7,143 Principal Lease Revenue Bonds - Successor Agency:
Outstanding
$26,255 State of California Department of General Services Project, 2003 Lease Revenue Refunding Bonds, Series A are secured by lease payments made by the State of Califronia Department of General Services for the California Tower office building; 2% to 5% due in annual installments from $545 to
$2,230 through October 1, 2024. The bonds are subject to acceleration under the Trust Agreement upon the occurrence of an event of default and with the consent of the Insurer. There is no remedy of acceleration of the total Base Rental over the term of the Lease.
6,265
$4,810 State of California Department of General Services Project, 2003 Lease Revenue Refunding Bonds, Series B are secured by lease payments made by the State of California Department of General Services for the California Tower office building; $310 serial bonds 1.20% to 1.42% through October 1, 2004; $620 term bonds at 3.090% due October 1, 2008; $1,110 term bonds at 4.340% due October 1, 2014 and $2,770 term bonds at 5.480% due October 1, 2024. The bonds are subject to acceleration under the Trust Agreement upon the occurrence of an event of default and with the consent of the Insurer. There is no remedy of acceleration of the total Base Rental over the term of the Lease.
995 73 In 2019, the 2012A Lease Revenue Refunding bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency to properly reflect their proportional share.
$41,240 Lease Revenue Refunding Bonds, Series 2012A The bonds are secured by lease payments on a portion of the City Hall Complex and the Lincoln Police Patrol Center. The bonds were issued to refinance the 2003 Certificates of Participation.
Interest on the bonds is payable semi-annually on May 1 and November 1 of each year, commencing May 1, 2013. The rate of interest varies from 2% to 5% per annum depending on maturity date. Principal is payable in annual installments ranging from $1,295 to $2,840 commencing November 1, 2013 and ending November 1, 2033. In the event of default, the Trustee may retain the Lease Agreement and hold the City liable for all Base Rental Payments on an annual basis. The rental payments may not be accelerated. $2,415 relates to the Successor Agency.
Subtotal Add: Unamortized bond premium Total lease revenue bonds 1,941 9,201 149 9,350 Remaining debt service will be paid by the Successor Agency Trust from future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 Premium Total Principal 2,399 $
2,556 2,716 141 147 850 392 149 9,350 $
Interest Total 392 $
2,791 267 2,823 135 2,851 64 205 58 205 174 1,024 16 408 149 11106 $
10,456
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Principal Tax Allocation Bonds - Successor Agency:
Outstanding On October 16, 2014, the Successor Agency to the Redevelopment Agency of the City of Riverside issued 2014 Subordinate Tax Allocation Refunding Bonds (Series A and 8) in the amount of $62,980. The bonds were issued to refund certain obligations of the former Redevelopment Agency of the City of Riverside. Interest is due semi-annually on March 1 and September 1, commencing March 1, 2015. Principal is due in annual installments from $160 to $4,745 through September 1, 2034. The rate of interest varies from 0.6% to 5% per annum. $
32,980
$114,815 2018 Tax Allocation Refunding Bonds (Series A and 8). The bonds were issued to refund the 2007 Riverside Public Financing Authority Redevelopment Agency Tax Allocation Bonds (Series A, B, C and D). Principal is payable in annual installments from $140 to $9,180 through September 1, 2037.
The rate of interest varies from 3.125% to 5% per annum. The refunding transaction resulted in a total net present value savings of $20,000.
114,815 Subtotal Add: Unamortized bond premium Total tax allocation bonds 147,795 17,547 165,342 The Successor Agency Tax Allocation Bonds are secured by tax revenues deposited in the Redevelopment Property Tax Trust Fund for the Agency established and held by the County of Riverside Auditor-Controller pursuant to Section 34813(a)(2) of the Dissolution Act. Upon event of default, the principal due on the Bonds is subject to acceleration.
74 Remaining debt service will be paid by the Successor Agency Trust Fund from future property tax revenues. Annual debt service requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 Principal 4,710 $
10,280 10,690 10,795 11,135 48,915 44,435 6,835 17,547 Interest 6,823 $
6,450 5,928 5,392 4,844 16,512 5,835 137 Total 11,533 16,730 16,618 16,187 15,979 65,427 50,270 6,972 17,547 Premium Total 165,342 $
51,921 $====2=1=7=,2=6=3 Notes Payable - Successor Agency:
These notes payable have been issued to promote development and expansion within the City's redevelopment areas.
Pepsi Cola Bottling Company of Los Angeles, 10.5%, payable in net annual installments of $341, subject to recording of completion. Interest accrues on the outstanding note balance upon issuance of the Certificate of Completion. Principal and interest on the note are payable solely from Project Property Tax Increment. Payments start upon the time sufficient increment is generated in one year to pay the annual principal and interest on the note. Upon 25 years from the first anniversary date of the certificate of completion, all unpaid principal together with any Principal Outstanding accrued interest will be forgiven.
2,987 Smith's Food & Drug Centers Inc., 6% payable in variable installments, subject to payment of annual Community Facilities District assessment. The note is secured under a developer agreement.
931 Total notes payable 3,918
=
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Remaining debt seNice will be paid by the Successor Agency Trust Fund from future property tax revenues. Annual debt seNice requirements to maturity are as follows:
Fiscal Year 2023 2024 2025 2026 2027 2028-2032 2033-2037 2038-2042 2043-2047 Principal 34 38 42 47 51 349 576 948 1,833 Total
$===========
3,918 Interest Total 307 $
341 303 341 300 342 295 342 291 342 1,360 1,709 1,134 1,710 761 1,709 807 2,640 5,558 $
9,476 Assessment Districts and Community Facilities Districts Bonds (Not obligations of the City):
As of June 30, 2022, the City has several series of Assessment District and Community Facility District Bonds outstanding in the amount of $41,595. Bonds were issued for improvements in certain districts and are long-term obligations of the property owners. The City Treasurer acts as an agent for the property owners in collecting the assessments, forwarding the collections to bondholders and initiating foreclosure proceedings, if applicable. Since the debt does not constitute an obligation of the City, it is not reflected as a long-term obligation of the City and is not reflected in the government-wide financial statements.
- 18. lnterfund Assets, Liabilities and Transfers Due From/To Other Funds: These balances resulted from expenditures being incurred prior to receipt of the related revenue source.
The following table shows amounts receivable/payable between funds within the City at June 30, 2022:
_R_e_ce_i_v_ab_l_e_F_u_n_d_s ___
P_ay,._a_b_l_e_F_u_n_d_s _____ _
General Fund Non-Major Governmental Funds Internal SeNice Funds Total Amount 831 39 870 75 Advances To/From Other Funds: These balances consist of advances used to fund capital projects in advance of related financing/assessments and for other long-term borrowing purposes.
The following table shows amounts advanced from funds within the City to other funds within the City at June 30, 2022:
_R_e..;..ce_i_v_ab_l_e_F_u_n_d_s __
- ...P.;.;.ay,._a=b.;..;l..;..e..;..F...;.u_n..;..d..;..s _____ _
Amount Sewer General Debt SeNice Fund 1,442 In addition, the following advances to the former Redevelopment Agency are accounted for in the Private-Purpose Trust Fund of the Successor Agency:
Receivable Funds Amount Electric 2,454 Transfers In/Out: Transfers are primarily used to (1) move revenues to the fund that statute or budget requires to expend them, and (2) move receipts restricted to debt seNice from the funds collecting the receipts to the debt seNice fund as debt seNice payments become due.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
The following table shows amounts transferred to/from funds within the City for the year ended June 30, 2022:
.;..Tr;;.;;a;.;.;n..;;..sf;;.;;e..;;..rs;;;..;.;.in;;..;F;..;u""'n""'d;.;;;s ____ Transfers Out Funds General Fund Capital Outlay Fund Capital Outlay Fund General Debt Service Fund Non-Major Governmental Funds Non-Major Enterprise Funds Internal Service Fund
- 19. Deficit Net Position General Debt Service Fund Non-Major Governmental Funds Electric Fund Water Fund General Fund Non-Major Enterprise Funds General Fund Capital Outlay Fund Non-Major Governmental Funds General Fund General Fund Non-Major Governmental Funds General Fund Non-Major Governmental Funds Sewer Non-Major Enterprise Funds Internal Service Funds Total Amount 48 11,292 102 39,436 7,708 58,586 11,325 326 11,651 39,681 2,997 1 958 44,636 2,018 11,973 1,300 13,273 2,685 1
14 10 4
2,714
$ 132,878 Deficit net position exists in the non-major governmental fund, Housing &
Community Development ($1,215). The deficit is primarily due to grant expenditures recognized in the current fiscal year while revenue cannot be recognized until completion of certain grant projects, which will occur beyond the revenue recognition period. Revenue will be recognized in subsequent fiscal 76 year and the fund should no longer be in a deficit.
Deficit net position exists in the non-major enterprise fund, Transportation
$(1, 146). The deficit is primarily due to the net pension and OPEB liabilities.
Deficit net position exists in the Self-Insurance Internal Service Fund $(34,578).
This City adopted a Self-Insurance Reserve Policy that addresses the on-going deficit in fund balance. In the past, the City began funding a portion of the deficit in the internal service fund via self-insurance rate increases phased in over several years. However, the increases continue to be offset by unusually large losses incurred during the year combined with an adjustment for the increase in the amount estimated for claims and judgments. Management believes that there are sufficient funds on hand to cover current payment obligations and plans to continue to control costs and increase rates, as needed.
Deficit net position exists in the Successor Agency Private-Purpose Trust Fund
$(134,245). The deficit in the Successor Agency Trust Fund will be reduced over the years as the related debt is paid-off with funds received from the Redevelopment Property Tax Trust Fund (RPTTF), which is administered by the County Auditor-Controller.
- 20. Contruction Commitments As of June 30, 2022, the Electric Utility had commitments (encumbrances) of approximately $19,409 with respect to ongoing capital projects, of which $8,380 is expected to be funded by bonds, $7,842 to be funded by unrestricted cash reserves, and $3, 187 to be funded by restricted cash reserves.
- 21. Forward Purchase/Sale Agreements In order to meet seasonal energy needs and summer peaking requirements, the Electric Utility contracts on a monthly and/or quarterly basis, for the purchase or sale of natural gas, electricity and/or capacity products on a one to four year forward horizon. As of June 30, 2022, the Electric Utility has net natural gas and electricity commitments for fiscal year 2023 and thereafter, of approximately
$70,840, with a market value of $77,296.
- 22. Economic Contingency A portion of fund balance has been committed within the General Fund and Measure Z fund for future economic contingencies. The amount that has been set aside for the General Fund is $61,000 which equals to approximately 20% of the 2022-2023 General Fund adopted expenditure budget. For the General Fund Measure Z Fund, $5,000 has been set aside.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
- 23. Litigation The City is a defendant in various lawsuits arising in the normal course of business. Present lawsuits and other claims against the City are incidental to the ordinary course of operations and are largely covered by the City's self-insurance program. In the opinion of management and the City Attorney, such claims and litigation will not have a materially adverse effect upon the financial position or results of operation of the City.
- 24. Tax Abatements In November 2012, the City entered into a tax sharing agreement with a local business to incentivize an expansion of their facility. Assistance is provided in the form of a rebate of sales and property taxes over fifteen years in an amount not to exceed $4,500. The agreement expires on the earlier of: 1) total cumulative tax rebate of $4,500; or 2) fifteen years in fiscal 2027-28.
Incremental Sales Tax Revenue can be generated from sales, over the fiscal 2011-12 base period, reported to the State Board of Equalization at the business site and from third party vendor transactions occurring using the business site as the point of sale.
Incremental Property Tax Revenue is generated from the increase in County assessed valuation over the 2012-13 base period values, for the parcels designated in the agreement. For parcels acquired after 2012-13 in the project area, the acquisition price will become its base year valuation. The initial 2012-13 base year assessed valuation is
$114,293 and has been adjusted to $125,043 for the parcels acquired in 2014-
- 15. The business is due 100% of the incremental Property tax revenue due to the City from the project area tax rate. It is calculated as 11 % of the value determined from taking 1 % of the difference of current net assessed valuation over the adjusted base valuation. The cumulative rebate payment as of June 30, 2022 is $1,331.
- 25. Subsequent Events Parada II Litigation On September 12, 2018, a petition for writ of mandate entitled Parada v. City of Riverside ("Parada If') was filed against the City seeking to invalidate, rescind and void, under Proposition 26, the Electric System's rates approved by City Council on May 22, 2018, which took effect on January 1, 2019, by challenging the portion of the electric rates that are attributable to the General Fund. The petition did not seek any monetary relief from the General Fund. The trial court divided the case into two stages for hearings: a liability phase and a damages 77 phase. On April 17, 2020, the Court in the liability phase of Parada II litigation entered a tentative ruling finding the City's electric rates attributable to the General Fund transfer violate Article XIII C of the California Constitution. The formal hearing on the matter took place on June 5, 2020, but the Court asked for further briefing on the issue of whether or not the plaintiffs failed to exhaust their administrative remedies. On October 9, 2020, the Court confirmed its tentative ruling and entered an order denying the City's request for interlocutory remand. The court had set a hearing for February 24, 2021, to set a briefing schedule for determining appropriate remedies /damages in the case. The City expected the second phase of the trial relating to plaintiffs' available remedies to occur in the second quarter of 2021.
The ruling by the Court in Parada II was anticipated to likely have a material adverse impact on the City's General Fund. The General Fund receives approximately $40 million annually (up to the maximum amount of 11.5% of Electric Fund revenues) from the Electric Fund. Based on the Court's order in the liability phase of the trial, approximately $19-32 million of the General Fund transfer is potentially attributable to rate payer revenue that was not approved by the voters. However, that amount will be determined during the damages phase of the trial. Additionally, the City might have been required to refund rate payers for the portions of the rates that were determined to violate Article XIII C of the California Constitution from the date the writ of mandate was filed.
However, the trial court did not issue any ruling as to what the amount of any damages would be.
Based on the Court's order in the liability phase of the trial, the City estimated that the amount of a refund would be $19 to $32 million per year, beginning January 1, 2019, until date of settlement or issuance of a final, non-appealable judgment by the trial court after anticipated appeals are resolved. This amount could vary depending upon whether or not the City decides to repeal and replace the challenged rates pending appeal.
On May 17, 2021, the City and the Paradas entered into a conditional settlement agreement. This settlement was conditioned on: (1) the Riverside City Council's placement of a ballot measure on City ballots in November 2021 to approve the City's General Fund Transfer practices as a general tax ("Ballot Measure"); and (2) voter approval of the Ballot Measure. The Riverside City Council placed the Ballot Measure on the ballot for the November 2, 2021 election. The Parties stayed the Parada lawsuit until certification of the results of the Ballot Measure. If voters approved the Ballot Measure, the City would refund to customers of its electric utility an amount equal to $24 million less the amount awarded to Plaintiffs' counsel in fees, paid over a five year period beginning no
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) later than February 1, 2022. If voters did not approve the Ballot Measure, this litigation would then resume.
On or about September 16, 2021, a petition for writ of mandate entitled Riversiders Against Increased Taxes v. City of Riverside, et al. ("RAIT lawsuit")
was filed against the City challenging the Ballot Measure on the grounds that the Ballot Measure cannot be adopted at the November 2021 election because that election is a "special" election and under Proposition 218, a ballot measure to impose a general tax can only be submitted to voters at a general election.
On November 9, 2021, the court *set a trial date for the RAIT lawsuit for January 7, 2022 and ordered a stay of the certification of the Ballot Measure Election results pending the January 7th hearing but did not otherwise delay or cancel the election for the Ballot Measure.
The election was held on November 2, 2021, and the Measure C was approved by voters, with 54.52 percent voting in favor.
On April 26, 2022 the RAIT lawsuit trial court determined that the November 2021 election was a "special election" rather than a "general election" and therefore did not comply with Proposition 218. The RAIT lawsuit trial court further ruled that it lacked power to enjoin the certification of election results or to otherwise invalidate the election. Both sides have since appealed that ruling.
On May 12, 2022, the City and the Paradas amended the May 17, 2021 Settlement Agreement, with the following additional terms: (a) City agreed to start making refunds to ratepayers by October 1, 2022; (b) if the City prevailed in the appeal of the trial court's decision in the RAIT lawsuit, no additional refund would be due to the ratepayers; (c) if the City did not prevail in the appeal of the trial court's decision in the RAIT lawsuit, an additional refund would be implemented in the amount of $705,882 per month, from November, 2021 up to when the City either (i) sets new electric rates; (ii) voters approve a valid ballot measure for the GFT or (iii) the City otherwise stops collecting the electric GFT.
The Parada lawsuit was dismissed on May 13, 2022.
The City Council adopted a resolution certifying the results of the Measure C election on July 19, 2022. The plaintiffs from the RAIT lawsuit sought to intervene in the Parada lawsuit and set aside this dismissal. On August 3, 2022, the Parada trial court refused to set aside the dismissal. The City has now begun to implement the settlement agreement.
78
- 26. Special and Extraordinary Items The Refuse Fund, a non-major enterprise fund, reported a special item of $694 related to a financed purchase liability transferred from governmental activities for the purchase of vehicles.
The Electric Fund reported an extraordinary item of $5,748 in the Statement of Revenues, Expenses and Changes in Net Position as of June 30, 2022. In fiscal year 21/22, SCE provided the 2020 Decommissioning Cost Estimate report, which projected a material increase in costs for the Electric Utility over the life of the SONGS decommissioning project. As a result, it was determined that the decommissioning liability be increased. For additional information related to SONGS, see Note 1 and 13.
- 27. Prior Period Adjustments Effective July 1, 2021, the City adopted GASB's No. 87 - Leases, using the facts and circumstances that existed at the beginning of the period of implementation.
The standard requires that it is applied retroactively unless it is impractical to do so. Due to the sheer number of leases, the City considered it impractical to do so. As a result, there was no impact to the City's beginning net position upon adoption of the new accounting standard.
A prior period adjustment of $643 was made to the Sewer Enterprise Fund for previously expensed items which should have been included on the balance sheet as inventory.
The restatement of beginning net position of the Sewer Fund is summarized as follows:
Sewer Fund Net position at July 1, 2021, as previously stated Inventory adjustment Net position at July 1, 2021 as restated 234,398 643 235,041 A prior period adjustment of $38,965 was made to the Custodial Fund for the removal of the long-term debt based upon additional guidance and clarification received subsequent to the first year implementation of GASB Statement No.
84, Fiduciary Activities.
CITY OF RIVERSIDE NOTES TO BASIC FINANCIAL STATEMENTS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
The restatement of beginning net position of the Custodial Fund is summarized as follows:
Custodial Fund Net position at July 1, 2021, as previously stated Long-term debt adjustment Net position at July 1, 2021 as restated (29,922) 38,965 9,043 79
Required Supplementary Information Consists of the following:
Schedule of Changes in Net Pension Liability and Related Ratios Schedule of Pension Plan Contributions Schedule of Changes in Total OPEB Liability and Related Ratios 80
CITY OF RIVERSIDE MISCELLANEOUS PLAN SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
{amounts expressed in thousands) 2014 2015 2016 Total Pension Liabili~
Service cost 23,320 $
22,228 $
22,189 $
Interest on total pension liability 84,965 87,436 90,913 Differences between expected and actual experience (21,782)
Changes in assumptions (23,548)
(8,417)
Benefit payments, including refunds of employee contributions (50,770)
(53,853)
(57,702)
Net change in total pension liability 57,515 10,481 46,983 Total pension liability - beginning 1,146!583 112041098 1,2141579 Total pension liability - ending (a) 1,204!098 $
1,214!579 $
1,261!562 $
Plan Fiducia!l'. Net Position Net Plan to Plan Resource Movement Contributions - employer 27,583 $
25,996 $
29,426 $
Contributions - employees 2,294 4,380 5,187 Net investment income 145,843 21,671 4,958 Benefit payments, including refunds of employee contributions (50,770)
(53,853)
(57,702)
Administrative and other income/(expenses)
(1,056)
(594)
Net change in fiduciary net position 124,950 (2,862)
(18,725)
Plan fiduciary net position - beginning 848!699 973!649 970z787 Plan fiduciary net position - ending (b) 973,649 $
970,787 $
952,062 $
Plan net pension liability/(assets) - ending (a) - (b) 230!449 $
243z792 $
309!500 $
Plan fiduciary net position as a percentage of the total pension liability 80.86 %
79.93 %
75.47 %
Covered payroll 109,990 $
110,891 $
118,512 $
Plan net pension liability/(asset) as a percentage of covered payroll 209.52 %
219.85 %
261.15 %
2017 2018 2019 2020 2021 24,766 $
25,117 $
25,017 $
25,919 $
26,168 92,725 92,595 96,836 101,080 105,017 79,037 (37,885) 6,927 6,220 873 (26,068)
(19,805)
(60,108)
(63,483)
(67,073)
(71,266)
(74,608) 110,352 (3,461) 61,707 61,953 57,450 11261 1562 1!371,914 1!368,453 114301160 11492 1113 1,371,914 $
1,368,453 $
114301160 $
114921113 $
1!549,563 (1) 30,477 $
29,920 $
34,627 $
239,156 $
26,274 6,115 9,749 10,286 10,957 10,358 104,771 86,307 71,046 56,837 305,548 (60,108)
(63,483)
(67,073)
(71,266)
(74,608)
(1,290)
(4,664)
(776)
(1,604)
(1,371) 79,965 57,829 48,110 234,080 266,200 952,062 110321027 110891856 111371966 1,3721046 11032,027 $
1,089,856 $
1,137,966 $
1,372,046 $
11638,246 339,887 $
278,597 $
292!194 $
120,067 $
(88,683}
75.23 %
79.64 %
79.57 %
91.95 %
105.72 %
117,637 $
121,957 $
128,881 $
131,492 $
131,216 288.93 %
228.44 %
226.72 %
91.31 %
(67.59)%
(1) Historical information is required only for measurement for which GASS 68 is applicable. Fiscal Year 2015 was the first year of implementation. Future years' information will be displayed up to 1 O years as information becomes available.
(2) Net of administrative expenses.
Notes to Schedule:
Benefit Changes: There was no changes in benefits.
Changes of Assumptions:
In fiscal year 2016-17, the discount rate was changed from 7.65 percent (net of administrative expense) to 7.15 percent.
In fiscal year 2017-18, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017.
There were no changes in the discount rate.
81
CITY OF RIVERSIDE SAFETY PLAN SCHEDULE OF CHANGES IN NET PENSION LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands) 2014 2015 2016 Total Pension Liabili!X Service cost 18,818 $
18,187 $
18,144 Interest on total pension liability 62,249 64,815 67,513 Differences between expected and actual experience (16,117)
Changes in assumptions (6,835)
(4,373)
Benefit payments, including refunds of employee contributions (38,981)
(42,076)
(44,609)
Net change in total pension liability 42,086 17,974 36,675 Total pension liability - beginning 840,067 882,153 900,127 Total pension liability - ending (a) 882,153 $
900,127 $
936,802 Plan Fiducia!l Net Position Net Plan to Plan Resource Movement Contributions - employer 23,156 $
23,384 $
26,483 Contributions - employees 365 924 1,837 Net investment income 107,032 15,632 3,478 Benefit payments, including refunds of employee contributions (38,981)
(42,076)
(44,609)
Administrative and other income/(expenses)
(816)
(428)
Net change in fiduciary net position 91,572 (2,952)
(13,239)
Plan fiduciary net position - beginning 620,069 711,641 708,689 Plan fiduciary net position - ending (b) 711,641 $
708,689 $
695,450 Plan net pension liability/(assets) - ending (a) - (b) 170,512 $
191,438 $
241,352 Plan fiduciary net position as a percentage of the total pension liability 80.67 %
78.73 %
74.24 %
Covered payroll 63,734 $
63,612 $
68,707 $
Plan net pension liability/(asset) as a percentage of covered payroll 267.54 %
300.95 %
351.28 %
2017 2018 2019 2020 2021 21,373 $
20,390 $
21,454 $
22,391 $
23,160 70,337 73,104 76,922 80,940 84,654 59,768 (4,644) 10,897 11,896 6,361 (18) 868 (47,009)
(50,477)
(52,564)
(56,537)
(59,739) 104,451 39,241 56,709 58,690 54,436 936,802 1,041,253 1,080,494 1,137,203 1,195,893 1,041,253 $
1,080,494 $
1,137,203 $
1,195,893 $
1,250,329 1
26,775 $
25,451 $
29,254 $
263,061 $
22,931 2,449 6,402 7,679 9,454 10,492 76,844 62,933 51,750 41,765 242,945 (47,009)
(50,478)
(52,564)
(56,537)
(59,739)
(1,145)
(3,403)
(567)
(1,170)
(1,085) 57,914 40,905 35,552 256,573 215,545 695,450 753,364 794,269 829,821 110861394 753,364 $
794,269 $
829,821 $
1,086,394 $
1,301,939 287,889 $
286,225 $
307,382 $
109,499 $
{51,610) 72.35 %
73.51 %
72.97 %
90.84 %
104.13 %
66,226 $
68,251 $
73,237 $
76,955 $
78,813 434.71 %
419.37 %
419.71 %
142.29 %
(65.48)%
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal year 2015 was the first year of implementation. Future years' information will be displayed up to 10 years as information becomes available.
(2) Net of administrative expenses.
Notes to Schedule:
Benefit Changes: There was no changes in benefits.
Changes of Assumptions:
In fiscal year 2016-17, the discount rate was changed from 7.65 percent (net of administrative expense) to 7.15 percent.
In fiscal year 2017-18, demographic assumptions and inflation rate were changed in accordance to the CalPERS Experience Study and Review of Actuarial Assumptions December 2017.
There were no changes in the discount rate.
82
CITY OF RIVERSIDE SCHEDULE OF PENSION PLAN CONTRIBUTIONS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands) 2014 Miscellaneous Plan Actuarially determined contribution 20,505 $
Contribution in relation to the actuarially determined contribution
{27,584)
Contribution deficiency/( excess)
{7,079) $
Covered payroll 109,990 $
Contributions as a percentage of covered payroll 25.08 %
Safetl Plan Actuarially determined contribution 17,341 $
Contribution in relation to the actuarially determined contribution
{23,156)
Contribution deficiency/(excess)
{5,815) $
Covered payroll 63,734 $
Contributions as a percentage of covered payroll 36.33 %
2015 21,063 $
{25,997)
{4,934) $
110,891 $
23.44 %
18,452 $
{23,384)
{4,932) $
63,612 $
36.76 %
2016 2017 2018 2019 24,885 $
26,955 $
29,948 $
34,486 $
{29,426)
{30,477)
{29,948)
{34,486)
{4,541) $
{3,522) $
118,512 $
117,637 $
121,957 $
128,881 $
24.83 %
25.91 %
24.56 %
26.76 %
21,886 $
23,076 $
25,289 $
29,047 $
{26,483)
(26,775)
{25,289)
{29,047)
{4,597) $
{3,699) $
68,707 $
66,226 $
68,251 $
73,237 $
38.54 %
40.43 %
37.05 %
39.66 %
(1) Historical information is required only for measurement for which GASB 68 is applicable. Fiscal Year 2015 was the first year of implementation.
Notes to Schedule:
Actuarial valuation date:
Actuarial cost method:
June 30, 2019 Entry Age Normal Source
{Gain)/Loss 2020 2021 38,889 $
26,274 $
{239,220)
{26,274)
{200,331) $
131,492 $
131,216 $
181.93%
20.02 %
32,785 $
22,925 $
{263,016)
{22,925)
{230,231) $
76,955 $
78,813 $
341.78 %
29.09 %
Non-Assumption/
Benefit 2022 27,330
{27,330) 130,060 21.01 %
24,773
{24,773) 77,338 32.03 %
Golden Driver Investment Investment Method Chanae Chanae Handshake Amortization of unfunded actuarial accrued liability:
Asset valuation method: Fair value of assets Discount rate: 7.0%
Overall payroll growth: 2.75%
Inflation: 2.5%
Amortization period Escalation rate
- Active plans
- Inactive plans Ramp up Ramp down Retirement age: 2019 CalPERS experience study 30 Years 2.75%
0%
5 5
30 Years 20 Years 2.75%
2.75%
0%
0%
5 5
5 5
Mortality: 2019 CalPERS Experience Study, with ongoing improvement using 90 percent of Scale MP-2016 83 20 Years 5 Years 2.75%
2.75%
0%
0%
0 0
0 0
CITY OF RIVERSIDE SCHEDULE OF CHANGES IN TOTAL OPEB LIABILITY AND RELATED RATIOS AS OF JUNE 30, FOR THE LAST TEN FISCAL YEARS (1)
(amounts expressed in thousands)
Reporting period June 30, 2018 2019 2020 2021 Measurement period June 30, 2017 2018 2019 2020 Total OPEB liability Service cost 2,554 $
2,403 $
2,435 $
2,569 $
Interest on the total OPEB liability 1,090 1,301 1,392 1,810 Differences between expected and actual experience 292 (2,300)
Changes in assumptions (1,668)
(306) 9,550 2,225 Benefit payments
{1,732}
{1,846}
{2,003}
{2,032}
Net change in total OPEB liability 244 1,552 11,666 2,272 Total OPEB liability - beginning 36,542 36,786 38,338 50,004 Total OPEB liability - ending 36,786 $
38,338 $
50,004 $
521276 $
Covered payroll 170,858 $
170,858 $
185,967 $
191,546 $
Total OPEB liability as a percentage of covered-employee payroll 21.53 %
22.44 %
26.89 %
27.29 %
(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:
2022 2021 2,646 1,394 (2,267)
(3,086)
{2,193}
(3,506) 52,276 481770 197,292 24.72 %
Changes in assumptions: For the measurement period ending June 30, 2021, the discount rate was changed from 2.66 percent to 2.16 percent.
There are no asset accumulated in a trust that meets the criteria of GASB codification P22.101 or P52.101 to pay related benefits for the OPEB plan.
84
Non-Major Governmental Funds Special Revenue Funds Special Revenue Funds are used to account for specific revenues that are legally restricted to expenditure for particular purposes.
Urban Areas Security Initiative (UASI) Fund - To account for UASI grants received from the U.S. Department of Homeland Security.
Grants and Restricted Programs Fund - To account for federal, state, and local grants along with other restricted program revenue.
Gas Tax Fund - To account for the construction and maintenance of the road network system of the City. Financing is provided by the City's share of state gasoline taxes which state law requires to be used to maintain streets.
Air Quality Improvements Fund - To account for qualified air pollution reduction programs funded by the South Coast Air Quality Management District.
Housing & Community Development Fund - To account for federal grants received from the Department of Housing and Urban Development (HUD). The grants are used for the development of a viable urban community by providing decent housing, a suitable living environment, and expanding economic opportunities, principally for persons with low and moderate incomes.
National Pollution Discharge Elimination System (NPDES) Storm Drain Fund - To account for storm drain maintenance and inspection required for California storm water permits. Activities are funded by a special assessment district of Riverside County, California.
Special Districts Fund - To account for Loving Homes, Village at Canyon Crest, Sycamore Highlands, Riverwalk, Riverwalk Parks Projects, and Street Lighting districts.
Housing Fund - To account for the housing activities for persons with low or moderate income.
Capital Projects Funds Capital Projects Funds are used to account for the acquisition and construction of major capital facilities other than those financed by proprietary funds.
Special Capital Improvement Fund - To account for the acquisition, construction and installation of capital improvements and a Community Facilities District within the City.
Storm Drain Fund - To account for the acquisition, construction and installation of storm drains in the City.
Transportation Fund - To account for the construction and installation of street and highway improvements in accordance with Articles 3 and 8 of the Transportation Development Act of 1971 of the State of California.
Permanent Fund Permanent Funds are used to report resources that are legally restricted to the extent that only earnings, not principal, may be used for purposes that support the reporting government's programs.
Library Special Fund - To account for the monies held in trust for the benefit of the Riverside City Public Library System.
85
CITY OF RIVERSIDE COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Seecial Revenue Funds Urban Areas Grants and Housing &
Security Restricted Air Quality Community NPDES Strom Special Initiative Programs Gas Tax lmerovements Develoement Drain Districts Housing Total Assets:
Cash and investments 78,996 $
29,695 $
1,681 $
4,948 $
41 $
676 $
10,113 $
126,150 Cash and investments with fiscal agent Receivables, net of allowance for uncollectible Interest 103 62 3
13 1
21 203 Property taxes 98 98 Accounts 91 17 13 121 Intergovernmental 2,129 5,063 1,327 104 5,777 566 14,966 Notes 14,119 31,457 45,576 Prepaid items 101 129 230 Land and improvements held for resale 443 2,392 2,835 Total assets 2,129 $
84,354 $
31,084 $
1,788 $
25,446 $
607 $
775 $
43,996 $
190,179 Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable 1,298 $
5,263 $
385 $
1,689 $
33 $
228 $
8,896 Accrued payroll 6
9 6
18 39 Retainage payable 10 939 70 1
1,020 Intergovernmental 1
Unearned revenue 75,583 8,331 83,914 Due to other funds 831 831 Total liabilities 22129 801862 1,324 101099 6
34 247 94,701 Deferred Inflows of Resources:
Unavailable revenue 1,813 16,562 31,457 49,832 Total deferred inflows of resources 1,813 161562 31,457 49,832 Fund Balances:
Nonspendable:
Permanent fund principal Restricted:
Housing and redevelopment 12,292 12,292 Transportation and public works 1,679 29,760 1,788 601 741 34,569 Other purposes Unassigned:
(1,215}
(1,215}
Total fund balances 1 679 292760 1 788
{1 12151 601 741 121292 451646 Total liabilities, deferred inflows of resources, and fund balances 2,129 $
84,354 $
31,084 $
1,788 $
25,446 $
607 $
775 $
43,996 $
190,179 86
CITY OF RIVERSIDE COMBINING BALANCE SHEET NON-MAJOR GOVERNMENTAL FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Caeital Projects Funds Permanent Fund Total Special Non-Major Capital Governmental lmerovement Storm Drain Transeortation Total Libra!}'. Seecial Funds Assets:
Cash and investments 6,319 $
2,528 $
8,847 $
1,495 $
136,492 Cash and investments with fiscal agent 665 665 665 Receivables, net of allowance for uncollectible Interest 13 7
20 223 Property taJCes 98 Accounts 121 Intergovernmental 14,966 Notes 45,576 Prepaid items 230 Land and improvements held for resale 2,835 Total assets 6,997 $
2,535 $
9,532 $
1,495 $
201,206 Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable 31 $
650 $
681 $
9,577 Accrued payroll 39 Retainage payable 5
5 1,025 Intergovernmental 1
Unearned revenue 1,495 1,495 85,409 Due to other funds 831 Total liabilities 36 2,145 2181 96,882 Deferred Inflows of Resources:
Unavailable revenue 49,832 Total deferred inflows of resources 49,832 Fund Balances:
Nonspendable:
Permanent fund principal 1,495 1,495 Restricted:
Housing and redevelopment 12,292 Transportation and public works 34,569 Other purposes 6,961 390 7,351 7,351 Unassigned:
(1,215l Total fund balances 6,961 390 7 351 1495 54,492 Total liabilities, deferred inflows of resources, and fund balances 6,997 $
2,535 $
9,532 $
1,495 $
201,206 87
CITY OF RIVERSIDE COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands) seecial Revenue Funds Urban Areas Grants and Housing &
Security Restricted Air Quality Community NPDES Strom Special Initiative Programs Gas Tax lmerovements Develoement Drain Districts Housing Total Revenues:
Licenses and permits Intergovernmental 2,572 16,490 14,120 419 27,678 61,279 Charges for services 1,580 47 1,627 Special assessments 980 4,120 5,100 Rental and investment income 442 (753)
(40)
(34)
(1) 1 (6)
(391)
Miscellaneous 789 10 232 539 1,570 Total revenues 2,572 19,301 13,367 436 27,876 979 4,121 533 69,185 Expenditures:
Current:
General government 9,871 93 2,487 3,631 16,082 Public safety 2,572 5,391 4,636 12,599 Highways and streets 280 590 870 Culture and recreation 1,993 39 2,032 Capital outlay 222 8,479 29,660 982 39,343 Debt service:
Principal 19 43 62 Interest and fiscal charges 14 30 44 Total expenditures 2,572 17 757 81479 93 32,180 982 5,265 3 704 71,032 Excess/(deficiency) of revenues over/(under) expenditures 1,544 4,888 343 (4,304}
(3)
(1,144)
(3,171}
(1,847)
Other Financing Sources/(Uses):
Transfers in 608 1,410 2,018 Transfers out (1,610)
(1)
(1,611)
Proceeds from sale of capital assets 6
6 Proceeds from financing related to leases 1
Total other financing sources/(uses)
(996) 1 410
!1l 414 Net change in fund balances 548 4,888 343 (4,304)
(2) 266 (3,172)
(1,433)
Fund Balances:
Beginning of year 1,131 24,872 1,445 3,089 603 475 15,464 47,079 End of year 1,679 $
29,760 $
1,788 $
!1,215) $
601 $
741 $
12,292 $
45,646 88
CITY OF RIVERSIDE COMBINING STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES NON-MAJOR GOVERNMENTAL FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Permanent Caeital Projects Funds Fund Total Special Non-Major Capital Governmental lmerovement Storm Drain Transeortation Total Libra!)'. Seecial Funds Revenues:
Licenses and permits 3,393 $
153 $
3,546 $
3,546 Intergovernmental 8,428 8,428 69,707 Charges for services 1,627 Special assessments 5,100 Rental and investment income (164)
(137)
(301) 12 (680)
Miscellaneous 2
2 157 1,729 Total revenues 3,229 8,446 11,675 169 81,029 Expenditures:
Current:
General government 50 50 16,132 Public safety 12,599 Highways and streets 870 Culture and recreation 151 2,183 Capital outlay 194 8,605 8,799 48,142 Debt service:
Principal 62 Interest and fiscal charges 44 Total expenditures 244 8,605 8,849 151 80,032 Excess/(deficiency) of revenues over/(under) expenditures 2,985 (159) 2,826 18 997 Other Financing Sources/(Uses):
Transfers in 2,018 Transfers out (1,750)
(1,750)
(3,361)
Proceeds from sale of capital assets 6
Proceeds from financing related to leases 1
Total other financing sources/(uses)
{1,750}
(1,750)
(1,336)
Net change in fund balances 1,235 (159) 1,076 18 (339)
Fund Balances:
Beginning of year 5,726 549 6,275 1,477 54,831 End of year 6,961 $
390 $
7,351 $
1,495 $
54,492 89
CITY OF RIVERSIDE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON-MAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Urban Areas Securih'. Initiative Grants and Restricted Programs Gas Tax Variance to Variance to Variance to Final Budget Final Budget Final Budget Final Actual Positive Final Actual Positive Final Actual Positive Budget Amounts (Negative)
Budget Amounts (Negative)
Budget Amounts (Negative)
Revenues:
Intergovernmental 11,089 $
2,572 $
(8,517) $
94,511 $
16,490 $
(78,021) $
14,567 $
14,120 $
(447)
Charges for services 1,598 1,580 (18)
Rental and investment income 442 442 150 (753)
(903)
Miscellaneous 897 789 (108)
Total revenues 11,089 21572 (8,517) 97,006 19,301 (77z705) 14 717 13,367 (1,350)
Expenditures:
Current:
General government 46,680 9,871 36,809 Public safety 11,089 2,572 8,517 11,887 5,391 6,496 Highways and streets 1,410 280 1,130 Culture and recreation 26,115 1,993 24,122 Capital outlay 8,027 222 7,805 36,861 8,479 28,382 Total expenditures 11,089 21572 81517 941119 17z757 761362 361861 81479 28,382 Excess/(deficiency) of revenues over/(under) expenditures 2,887 1,544
{1,343)
{22,144) 4,888 27,032 Other Financing Sources/(Uses):
Transfers in 1,036 608 (428)
Transfers out (2,569)
(1,610) 959 Proceeds from sale of capital assets 6
6 Total other financing sources/(uses)
(11533)
(996}
537 Net change in fund balance 1,354 548 (806)
(22,144) 4,888 27,032 Fund Balances:
Beginning of year 1 131 1,131 24,872 24,872 End of year 2,485 $
1,679 $
(806) $
2,728 $
29,760 $
27,032 90
CITY OF RIVERSIDE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON-MAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Air Quali~ lmerovements Housing & Communi~ Develoement NPDES Strom Drain Variance to Variance to Variance to Final Budget Final Budget Final Budget Final Actual Positive Final Actual Positive Final Actual Positive Budget Amounts (Negative)
Budget Amounts (Negative)
Budget Amounts (Negative)
Revenues:
Intergovernmental 420 $
419 $
(1) $
58,362 $
27,678 $
(30,684) $
Charges for services 130 47 (83)
Special assessments 1,716 980 (736)
Rental and investment income (40)
(40) 54 (34)
(88)
(1)
(1)
Miscellaneous 10 10 1,268 232 (1,036}
Total revenues:
550 436 (114) 59,684 27,876 (31 1808) 1,716 979 (737)
Expenditures:
Current:
General government 635 93 542 4,375 2,487 1,888 Capital outlay 242 242 71,777 29,660 42,117 1,925 982 943 Debt service:
Principal 19 19 Interest and fiscal charges 14 14 Total expenditures 877 93 784 76,185 321180 44,005 1,925 982 943 Excess/(deficiency) of revenues over/(under) expend_itures (327}
343 670 (161501 l (4,304}
12,197 (209}
(3}
206 Other Financing Sources/(Uses):
Transfers in Transfers out Proceeds from financing related to leases 1
Total other financing sources/(uses) 1 1
Net change in fund balances (327) 343 670 (16,501)
(4,304) 12,197 (209)
(2) 207 Fund Balances:
Beginning of year 1,445 1,445 3,089 3,089 603 603 End of year 1!118 $
1!788 $
670 $
{13,412) $
{1!215) $
12,197 $
394 $
601 $
207 91
CITY OF RIVERSIDE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL NON-MAJOR SPECIAL REVENUE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Seecial Districts Housing Variance to Variance to Final Budget Final Budget Final Actual Positive Final Actual Positive Budget Amounts (Negative)
Budget Amounts (Negative)
Revenues Special assessments 4,079 $
4,120 $
41 $
Rental and investment income 1
1 (6)
(6)
Miscellaneous 539 539 Total revenues 4,079 4121 42 533 533 Expenditures:
Current:
General government 4,887 3,631 1,256 Public safety 4,712 4,636 76 Highways and streets 764 590 174 Culture and recreation 314 39 275 Debt service:
Principal 43 43 Interest and fiscal charges 30 30 Total expenditures 5,790 5,265 525 4,960 3,704 1,256 Excess/(deficiency) of revenues over/(under) expenditures
{1,711}
{1,144) 567 (4,960)
{3,171}
1,789 Other Financing Sources/(Uses):
Transfers in 1,415 1,410 (5)
Transfers out
{1 l
{1 l Total other financing sources/(uses) 11415 1 410 (51 (1 l (1 l Net change in fund balances (296) 266 562 (4,961)
(3,172) 1,789 Fund Balances:
Beginning of year 475 475 15,464 15,464 End of year 179 $
741 $
562 $
10,503 $
12!292 $
1z789 92
CITY OF RIVERSIDE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL CAPITAL PROJECT FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Caeital Outlal Fund Seecial Caeital lmerovement Storm Drain Variance to Variance to Variance to Final Budget Final Budget Final Budget Final Actual Positive Final Actual Positive Final Actual Positive Budget Amounts
{Negative}
Budget Amounts
{Negative}
Budget Amounts
{Negative}
Revenues:
Licenses and permits 2,560 $
3,393 $
833 $
195 $
153 $
(42)
Intergovernmental 52,369 13,830 (38,539) 29,243 8,428 (20,815)
Special assessments 787 538 (249)
Rental and investment income 180 (1,437)
(1,617) 20 (164)
(184) 13 (137)
(150)
Miscellaneous 369 742 373 2
2 Total revenues 53,705 13,673
{40!032}
2!580 31229 649 291451 8!446
{21,005}
Expenditures:
Current:
General government 50 50 Capital outlay 105,622 20,130 85,492 1,365 194 1,171.
29,892 8,605 21,287 Debt service:
Interest and fiscal charges 2
4 (2l Total expenditures 1051624 201134 851490 11415 244 1171 291892 8!605 21,287 Excess/(deficiency) of revenues over/(under) expenditures (51,919}
(6,461}
45,458 1165 21985 1,820 (441}
(159}
282 Other Financing Sources/(Uses):
Transfers in 11,325 11,651 326 Transfers out (3,045}
(31045}
(1,750}
(1,750}
Total other financing sources/(uses) 8!280 81606 326
{1z750}
{1 !750}
Net change in fund balance (43,639) 2,145 45,784 (585) 1,235 1,820 (441)
(159) 282 Fund Balances:
Beginning of year 50,359 50,359 5,726 5,726 549 549 End of year 6!720 $
52,504 $
45z784 $
51141 $
6!961 $
11820 $
108 $
390 $
282 93
CITY OF RIVERSIDE SCHEDULE OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES - BUDGET AND ACTUAL CAPITAL PROJECT FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Revenues:
Intergovernmental Total revenues Expenditures:
Capital outlay Total expenditures Other Financing Sources/(Uses):
Transfers in Fund Balances:
Beginning of year End of year 94 Transportation Actual Final Budget Amounts Variance to Final Budget Positive (Negative) 2_68_..;.$ ____
(._26_8...,)
268 (268) 268 268 268 268
$====*=,$=====* =$===
Non-Major Enterprise Funds Enterprise Funds are used to account for the operations that are financed and operated in a manner similar to private business enterprises. The City's intent is to demonstrate that the cost of services provided to the general public on a continuing basis is financed or recovered through user charges; or the City has decided that the periodic determination of net income is appropriate for accountability purposes.
Airport - To account for the operations of the City's airport.
Refuse - To account for the operations of the City's solid waste and sanitation program which provides for the collection and disposal of solid waste on a user charge basis to residents and businesses.
Transportation - To account for the operations of the City's Senior Citizens' and Handicapped Transportation System in accordance with Article 4 of the Transportation Development Act of 1971 (SB325) of the State of California. Federal Transit Administration Funds are also accounted for in this fund.
Public Parking - To account for the operations and construction of the City's public parking facilities.
Civic Entertainment - To account for the operations of the Riverside Fox Theater, Riverside Municipal Auditorium, The Box and Showcase, the Riverside Convention Center, and the Cheech.
95
CITY OF RIVERSIDE COMBINING STATEMENT OF NET POSITION NON-MAJOR ENTERPRISE FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Assets:
Current assets:
Cash and investments Receivables, net of allowance for uncollectible Interest Utility billed Utility unbilled Accounts Property taxes Intergovernmental Lease receivable Inventory Prepaid items Deposits Restricted assets:
Cash and cash equivalents Total current assets Noncurrent assets:
Lease receivable Regulatory assets Derivative instruments Net pension asset Capital assets, net of accumulated depreciation Right to use assets, net of amortization Total noncurrent assets Total assets Deferred Outflows of Resources:
Changes in derivative values Deferred charge on refunding Pension related items OPEB related items Total deferred outflows of resources Aireort 1,610 $
7 171 20 1
371 21180 2,460 302 21,018 6
23,786 251966 105 26 131 96 Business-Tlee Activities - Entererise Funds Total Non-Major Civic Enterprise Refuse Transeortation Public Parking Entertainment Funds 3,097 $
3,279 $
1,994 $
2,180 $
12,160 13 7
5 6
38 3,458 3,458 1,053 1,053 292 466 1,886 2,816 20 1,533 26 3,135 4,695 569 940 79 79 3
35 38 306 306 2,500 2,500 10 416 4 820 31060 71627 281103 2,340 4,800 9,588 9,588 269 269 2,089 1,192 534 4,117 3,604 2,207 28,226 90,984 146,039 3
6 240 255 151284 31405 311340 911253 165,068 25i700 81225 341400 981880 1931171 1,983 1,983 646 646 731 417 187 1,440 218 145 29 418 949 562 216 2,629 4487 (Continued)
CITY OF RIVERSIDE COMBINING STATEMENT OF NET POSITION NON-MAJOR ENTERPRISE FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Liabilities:
Current liabilities:
Accounts payable Accrued payroll Retainage payable Unearned revenue Deposits Accrued interest Total current liabilities Noncurrent liabilities:
Due within one year:
Long-term obligations Compensated absences Landfill capping Lease liability Due in more than one year:
Long-term obligations Compensated absences Landfill capping Regulatory liability Derivative instruments OPEB liability Lease liability Total noncurrent liabilities Total liabilities Deferred Inflows of Resources:
Change in derivative values Pension related items OPEB related items Lease related items Total deferred inflows of resources Net Position:
Net investment in capital assets Landfill capping Unrestricted/(deficit)
Total net position Aireort 69 12 19 45 145 52 65 684 13 161 4
980 1,125 507 19 2,866 31392 21,018 562 211580 $
97 Business-T:tee Activities - Entererise Funds Total Non-Major Civic Enterprise Refuse Transeortation Public Parking Entertainment Funds 2,458 7
663 1,006 4,203 85 35 22 154 478 497 4,619 1,488 6,152 648 648 49 49 2 543 4 661 734 31620 11 703 394 148 1,180 4,020 5,794 294 117 25 501 559 559 1
2 75 79 4,630 2,144 13,858 57,922 79,238 61 25 5
104 9,261 9,261 34 34 2,726 2,726 1,414 728 302 2,605 3
5 167 179 16 617 3169 151612 54i702 1011080 19,160 7,830 16,346 68,322 1121783 252 252 3,514 2,004 897 6,922 167 99 32 317 2,947 5,813 3 681 2,103 3 876 252 13 304 3,011 2,207 14,322 29,688 70,246 2,500 2,500 (1,703)
(3,353) 72 3,247 (1,175) 3,808 $
(1,146)$
14,394 $
32,935 $
71,571
CITY OF RIVERSIDE COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN NET POSITION NON-MAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Business-Tiee Activities - Entererise Funds Total Non-Major Civic Enterprise Aireort Refuse Transeortation Public Parking Entertainment Funds Operating Revenues:
Charges for services 1,728 $
29,768 $
168 $
4,888 $
11,883 $
48,435 Total operating revenues 1 728 29?68 168 4 888 11 883 48 435 Operating Expenses:
Personnel services 529 3,897 1,816 63 6,305 Contractual services 175 6,842 51 1,845 6,646 15,559 Maintenance and operation 193 9,604 433 581 70 10,881 General 252 4,740 696 414 10,193 16,295 Materials and supplies 12 1,623 145 5
1,785 Claims/Insurance 41 182 93 95 239 650 Depreciation 717 837 448 855 2,525 5,382 Amortization 1
565 2
74 642 Total operating expenses 1,920 28,290 3,684 3,932 19,673 57,499 Operating income/(loss)
(192) 1,478 (3,516) 956 (7,790)
(9,064)
Nonoperating Revenues/(Expenses):
Grant subsidies 7
2,379 3,480 5,866 Interest revenue 4
(160)
(68)
(2)
(47)
(273)
Interest expense and fiscal charges (24)
(159)
(74)
(634)
(2,131)
(3,022)
Other 23 1
(77) 127 74 Total nonoperating revenues/(expenses):
10
{318) 21237 (713) 1 429 21645 lncome/(loss) before contributions and transfers (182) 1,160 (1,279) 243 (6,361)
(6,419)
Capital contributions 52 293 6,694 7,039 Special item (694)
(694)
Transfers in 694 1,300 11,279 13,273 Transfers out (1)
(331)
(3)
(1)
(336)
Change in net position (131) 829 (989) 1,542 11,612 12,863 Net Position Beginning of year, as previously stated 21,711 2,979 (157) 12,852 21,323 58,708 End of year 21,580 $
31808 $
(1,146) $
14,394 $
32,935 $
71,571 98
CITY*OF RIVERSIDE COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2022
{amounts expressed in thousands)
Cash Flows from Operating Activities:
Cash received from customers and users Cash paid to suppliers for goods or services Cash paid to employees for services Net cash provided/(used) by operating activities Cash Flows from Non-Capital Financing Activities:
Transfers in Transfers out Payment made to other funds Payment on pension obligation bonds Other receipts/(payments) from non-operating revenue Grant subsidies Net cash provided/(used) by non-capital financing activities Cash Flows from Capital and Related Financing Activities:
Purchase of capital assets Principal paid on long-term obligations Interest paid on long-term obligations Contributions Lease payments Net cash provided/(used) by capital and related financing activities Cash Flows from Investing Activities:
Interest from investments Net cash provided/(used) by investing activities Net increase/(decrease) in cash and cash equivalents Cash and cash equivalents at beginning of year Cash and cash equivalents at end of year Aireort 1,818 $
(716)
(668) 434 (1)
(43) 58 7
21 (229)
(24) 52 (1)
{202}
(2)
!2) 251 1,359 1,610 $
99 Business-T:t'.ee Activities - Entererise Funds Total Non-Major Civic Enterprise Refuse Transeortation Public Parking Entertainment Funds 28,568 $
3,293 $
5,083 $
12,073 $
50,835 (22,859)
(1,516)
(2,715)
(16,765)
(44,571)
(4,730)
(2,232)
(286)
(7,916) 979
{455) 2,082
{4,692)
(1,652) 694 1,300 11,279 13,273 (1,025)
(3)
(1)
(1,030)
(3,002)
(3,002)
(231)
(117)
(61)
(452) 1 (40) 127 146 2,379 3,480 5,866
{561}
2,259 1,198 11,884 14,801 (53)
(73)
(881)
(6,694)
(7,930)
(101)
(410)
(1,216)
(1,727)
(159)
(74)
(1,287)
(4,950)
(6,494) 694 293 6,694 7,733 (1)
(2)
(76)
(80) 380 144 (2,654}
(6,166)
{8,498)
{165)
{74)
{4)
{53)
(298)
{165)
{74)
!4)
{53)
{298) 633 1,874 622 973 4,353 4,964 1405 1,372 1,207 10,307 5,597 $
3,279 $
1,994 $
2,180 $
14,660
CITY OF RIVERSIDE COMBINING STATEMENT OF CASH FLOWS NON-MAJOR ENTERPRISE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Reconciliation of Operating Income to Net Cash Provided/(Used) by Operating Activities:
Operating income/(loss)
Adjustments to reconcile operating income (loss) net cash provided (used) by operating activities:
Depreciation Amortization (lncrease)/decrease in utility billed receivable (lncrease)/decrease in utility unbilled receivable (lncrease)/decrease in accounts receivable (lncrease)/decrease in property tax receivable (lncrease)/decrease in intergovernmental receivable (lncrease)/decrease in inventory (lncrease)/decrease in prepaid items (lncrease)/decrease in deposits lncrease/(decrease) in accounts payable lncrease/(decrease) in accrued payroll lncrease/(decrease) in retainage payable lncrease/(decrease) in unearned revenue lncrease/(decrease) in deposits payable lncrease/(decrease) in compensated absences lncrease/(decrease) in landfill capping liability Changes in net pension liability/(asset) and related deferred inflows/(outflows) of resources Changes in OPEB liability and related deferred inflows/(outflows) of resources Total adjustments Net cash provided/(used) by operating activities Aireort
{192) $
717 1
3 20 50 (39) 5 (4) 17 4
(155) 7 626 434 $
100 Business-Tl'.ee Activities - Entererise Funds Total Non-Major Civic Enterprise Refuse Transeortation Public Parking Entertainment Funds 1,478 $
(3,516) $
956 $
(7,790) $
(9,064) 837 448 855 2,525 5,382 565 2
74 642 (1,196)
(1,196)
(64)
(64) 59 2
199 (1,878)
(1,615) 20 19 (5) 828 892 (38)
(38) 8 (6) 2 (6)
(6) 722 (99) 225 (45) 764 37 12 13 67 478 474 3,102 1,117 4,236 123 123 (16)
(18)
(17)
(47)
(599)
(599)
(912)
(442)
(231)
(1,740) 60 35 13 115 (499) 3 061 1,126 3,098 7,412 979 $
(455) $
2,082 $
!4,692) $
(1,652i
Internal Service Funds Internal Service Funds are used to account for the financing of goods and services provided by one City department to other City departments on a cost-reimbursement basis.
Self-Insurance Trust - To account for the operations of the City's self-insured workers' compensation, unemployment, and liability programs.
Central Stores - To account for the operations of the City's centralized supplies inventory, including receiving and delivery services provided to City departments.
Central Garage - To account for the maintenance and repair of all city-owned vehicles and motorized equipment, except for Police vehicles.
101
CITY OF RIVERSIDE COMBINING STATEMENT OF NET POSITION INTERNAL SERVICE FUNDS JUNE 30, 2022 (amounts expressed in thousands)
Governmental Activities - Internal Service Funds Self Insurance Total Internal Trust Central Stores Central Garage Service Funds Assets:
Current assets:
Cash and investments 45,191 $
12,011 $
57,202 Receivables, net of allowance for uncollectible Interest 92 25 117 Accounts 29 96 125 Intergovernmental 185 230 415 Inventory 7,707 490 8,197 Prepaid items 2
2 Total current assets 45,497 7,707 12,854 66,058 Noncurrent assets:
Net pension asset 452 301 1,479 2,232 Capital assets, net of accumulated depreciation 92 7,027 7,119 Right to use assets, net of amortization 17 6
23 Total noncurrent assets 469 393 8,512 9,374 Total assets 451966 81100 21,366 75,432 Deferred Outflows of Resources:
Pension related items 158 105 517 780 OPEB related items 51 32 128 211 Total deferred outflows of resources 209 137 645 991 Liabilities:
Current liabilities:
Accounts payable 292 779 460 1,531 Accrued payroll 12 15 50 77 Retainage payable 6
6 Due to other funds 39 39 Total current liabilities 304 833 516 1,653 Noncurrent liabilities:
Due within one year:
Long-term obligations 38 40 210 288 Compensated absences 37 106 208 351 Claims and judgments
- 15,304 15,304 Lease liability 4
5 Due in more than one year:
Long-term obligations 572 577 3,137 4,286 Compensated absences 12 32 62 106 Claims and judgments 63,486 63,486 OPEB liability 188 191 828 1,207 Lease liability 12 4
16 Total noncurrent liabilities 791653 946 4 1450 85,049 Total liabilities 791957 1 779 4966 s6i702 Deferred Inflows of Resources:
Pension related items 760 506 2,487 3,753 OPEB related items 36 28 87 151 Total deferred inflows of resources 796 534 22574 31904 Net Position:
Net investment in capital assets 3
92 7,028 7,123 Un restricted/( deficit)
(34,581}
5 832 7,443 (21,306}
Total.net position
{34,578} $
5,924 $
14,471 $
{14,183}
102
CITY OF RIVERSIDE COMBINING STATEMENT OF REVENUES, EXPENSES, AND CHANGES IN FUND NET POSITION INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Governmental Activities - Internal Service Funds Self Insurance Total Internal Trust Central Stores Central Garage Service Funds Operating Revenues:
Charges for services 18,151 $
1,285 $
8 974 $
28,410 Total operating revenues 18,151 1!285 8,974 28,410 Operating Expenses:
Personnel services 732 737 2,237 3,706 Contractual services 1,394 5
177 1,576 Maintenance and operation 4
30 2,956 2,990 General 5,205 237 1,034 6,476 Materials and supplies 1
14 128 143 Claims/Insurance 14,792 95 14,887 Depreciation 11 730 741 Amortization 4
1 5
Total operating expenses 221132 11034 71358 301524 Operating income (loss)
(3,981) 251 1,616 (2,114)
Nonoperating Revenues/(Expenses):
Interest revenue
{1,031)
(345)
(1,376)
Interest expense and fiscal charges (19)
(20)
(109)
(148)
Other 134 39 173 Gain/(loss) on disposal of capital assets 2
103 105 Total nonoperating revenues/(expenses)
{916)
{18)
{312)
(1,246) lncome/(loss) before contributions and operating transfers
{4,897) 233 1,304 (3,360)
Capital contributions 92 92 Transfers in 2,714 2,714 Transfers out (1 l (3)
(4)
Change in net position (2,183) 232 1,393 (558)
Beginning of year (32,395) 5,692 13,078 (13,625)
End of year
{34,578) $
5,924 $
14,471 $
{14!183) 103
CITY OF RIVERSIDE COMBINING STATEMENT OF CASH FLOWS INTERNAL SERVICE FUNDS FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Governmental Activities - Internal Service Funds Self Insurance Total Internal Trust Central Stores Central Garage Service Funds Cash Flows from Operating Activities:
Cash received from interfund services provided 18,124 $
1,285 $
8,893 $
28,302 Cash paid to suppliers for goods and services (19,217)
(591)
(4,682)
(24,490)
Cash paid to employees for services (1,017)
(808)
(2,964)
(4,789)
Net cash provided/(used) by operating activities
!21110)
(114) 1 247 (977)
Cash Flows from Non-Capital Financing Activities:
Transfers in 2,714 2,714 Transfers out (1)
(3)
(4)
Payments from other funds 39 39 Payments on pension obligation bonds (30)
(32)
(165)
(227)
Other receipts/(payments) from non-operating revenue 133 39 172 Net cash provided/(used) by non-capital financing activities 2 817 6
(129) 2!694 Cash Flows from Capital and Related Financing Activities:
Purchase of capital assets (3)
(1,623)
(1,626)
Proceeds from sales of capital assets 2
103 105 Interest paid on long-term obligations (20)
(20)
(109)
(149)
Contributions 92 92 Lease payments (4)
(2)
(6)
Net cash provided/(used) by capital and related financing activities (24)
(21)
(11539)
!11584)
Cash Flows from Investing Activities:
Interest from investments (1,083)
(348)
(1,431)
Net cash provided/(used) by capital and related financing activities (1,083)
(348)
!11431)
Net increase/(decrease) in cash and cash equivalents (400)
(129)
(769)
(1,298)
Cash and cash equivalents at beginning of year 45,591 129 12,780 58,500 Cash and cash equivalents at end of year 451191 $
121011 $
571202 Reconciliation of Operating Income to Net Cash Provided/(Used) by Operating Activities:
Operating income/(loss)
(3,981) $
251 $
1,616 $
(2,114)
Adjustments to Reconcile Operating lncome/(Loss) Net Cash Provided/(Used) by Operating Activities:
Depreciation 11 730 741 Amortization 4
1 5
(lncrease)/decrease in accounts receivable 11 11 (lncrease)/decrease in intergovernmental receivable (30)
(92)
(122)
(lncrease)/decrease in inventory (671)
(108)
(779) lncrease/(decrease) in accounts payable (2) 366 (172) 192 lncrease/(decrease) in accrued payroll 2
9 20 31 lncrease/(decrease) in retainage payable (15)
(15) lncrease/(decrease) in compensated absences (71) 33 (24)
(62) lncrease/(decrease) in claims and judgments 2,187 2,187 Changes in net pension liability/(asset) and related deferred inflows/(outflows) of resources (232)
(124)
(749)
(1,105)
Changes in OPEB liability and related deferred inflows/(outflows) of resources 13 11 29 53 Total adjustments 1,871 (365)
(369) 1,137 Net cash provided/(used) by operating activities
!21110) $
(114) $
11247 $
!977) 104
Combining General Fund and Capital Outlay Fund Schedules with Measure Z Fund Activity 105
CITY OF RIVERSIDE BALANCE SHEET COMBINING GENERAL FUND SCHEDULE JUNE 30, 2022 (amounts expressed in thousands)
Total General General Fund Measure Z Fund Fund Assets:
Cash and investments 127,536 $
64,659 $
192,195 Cash and investments with fiscal agent 19,423 11,292 30,715 Receivables, net of allowance for uncollectible Interest 273 128 401 Property taxes 1,544 1,544 Sales taxes 15,476 14,919 30,395 Utility billed 3,350 3,350 Accounts 7,062 1
7,063 Intergovernmental 4,444 4,444 Lease receivable 7,501 7,501 Prepaid items 1,726 186 1,912 Due from other funds 870 870 Land and improvements held for resale 175 175 Total assets 189!380 $
91,185 $
280,565 Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable 8,114 $
1,380 $
9,494 Accrued payroll 21,075 358 21,433 Retainage payable 2
2 Intergovernmental 153 153 Deposits 11,459 11,459 Total liabilities 40,801 1,740 42,541 Deferred Inflows of Resources:
Unavailable revenue 3,082 3,082 Lease related items 7,724 7,724 Total deferred inflows of resources 101806 101806 Fund Balances:
Nonspendable:
Inventories, prepaids, and deposits 1,726 186 1,912 Land and improvements held for resale 175 175 Restricted:
Debt service 11,292 11,292 Unfunded accrued liability 19,423 19,423 Committed:
Economic contingency 61,000 5,000 66,000 Other purposes 16,801 16,801 Assigned:
General government 3,329 1,831 5,160 Public safety 773 11,546 12,319 Highways and streets 1,049 2,017 3,066 Culture and recreation 1,344 165 1,509 Continuing projects 3,333 16,320 19,653 Unassigned 28,820 41,088 69,908 Total fund balances 1371773 891445 227,218 Total liabilities, deferred inflows of resources, and fund balances 1891380 $
911185 $
2801565 106
CITY OF RIVERSIDE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES COMBINING GENERAL FUND SCHEDULE FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Total General General Fund Measure Z Fund Fund Revenues:
Taxes 215,829 $
83,157 $
298,986 Licenses and permits 11,304 11,304 Intergovernmental 4,463 4,463
. Charges for services 15,311 15,311 Fines and forfeitures 2,096 2,096 Special assessments 316 316 Rental and investment income (4,942) 551 (4,391)
Miscellaneous 1,231 1
1,232 Total revenues 245,608 83,709 329,317 Expenditures:
Current:
General government 6,274 1,923 8,197 Public safety 170,341 23,028 193,369 Highways and streets 16,952 983 17,935 Culture and recreation 29,896 986 30,882 Capital outlay 1,950 1,312 3,262 Debt service:
Principal 675 675 Interest and fiscal charges 96 96 Total expenditures 226,184 281232 254,416 Excess/(deficiency) of revenues over/(under) expenditures 19,424 55,477 74,901 Other Financing Sources/(Uses):
Transfers in 47,294 11,292 58,586 Transfers out (49,252)
(18,430)
(67,682)
Transfers in/(out) to General Fund
- 18,266 (18,266)
Proceeds from sale of capital assets 53 53 Proceeds from financing related to leases 1,713 1,713 Total other financing sources/(uses) 18,074
{251404}
{7,330}
Net change in fund balance 37,498 30,073 67,571 Fund Balances:
Beginning of year 100,275 59,372 159,647 End of year 137,773 $
89z445 $
227,218
- Per accounting standards, transfers within the same fund are not reflected in the Statement of Revenues, Expenditures, and Changes in Fund Balances; however, they are reflected in this schedule for transparency purposes.
107
CITY OF RIVERSIDE BALANCE SHEET COMBINING CAPITAL OUTLAY FUND SCHEDULE JUNE 30, 2022 (amounts expressed in thousands)
MeasureZ Capital Outlay Capital Outlay Total Capital Fund Fund Cutia~ Fund Assets:
Cash and investments 34,576 $
17,779 $
52,355 Receivables, net of allowance for uncollectible Interest 72 39 111 Accounts 451 451 Intergovernmental 4,700 4,700 Prepaid items 19 19 Total assets 39,818 $
17,818 $
57,636 Liabilities, Deferred Inflows of Resources, and Fund Balances:
Liabilities:
Accounts payable 1,314 $
1,448 $
2,762 Retainage payable 29 319 348 Unearned revenue 1,502 1,502 Total liabilities 2,845 1,767 4,612 Deferred Inflows of Resources:
Unavailable revenue 520 520 Total deferred inflows of resources 520 520 Fund Balances:
Restricted:
Transportation and public works 36,453 16,051 52,504 Total fund balances 36,453 16,051 52,504 Total liabilities, deferred inflows of resources, and fund balances 39,818 $
17,818 $
57,636 108
CITY OF RIVERSIDE STATEMENT OF REVENUES, EXPENDITURES, AND CHANGES IN FUND BALANCES COMBINING CAPITAL OUTLAY FUND SCHEDULE FOR THE YEAR ENDED JUNE 30, 2022 (amounts expressed in thousands)
Measure Z Capital Outlay Capital Outlay Fund Fund Revenues:
Total Capital Outla:l Fund Intergovernmental 13,830 $
13,830 Special assessments 538 538 Rental and investment income (873)
(564)
(1,437)
Miscellaneous 742 742 Total revenues 14,237
{564}
13,673 Expenditures:
Capital outlay 5,248 14,881 20,129 Debt service:
Interest and fiscal charges 4
4 Total expenditures 5,252 14,881 20,133 Excess/(deficiency) of revenues over/(under) expenditures 8,985 (15,445}
(6,460}
Other Financing Sources/(Uses):
Transfers in 826 10,825 11,651 Transfers out
{3,045}
(3,045}
Total other financing sources/(uses)
{2,219}
10,825 8,606 Net change in fund balances 6,766 (4,620) 2,146 Fund Balances:
Beginning of year 29,687 20,671 50,358 End of year 36,453 $
16,051 $
52,504 109
Statistical Section (Unaudited)
This part of the City's annual comprehensive financial report presents detailed information as a context for understanding what the information in the financial statements, note disclosures, and required supplementary information says about the City's overall financial health.
Contents Financial Trends These schedules contain trend information to help the reader understand how the City's financial performance and well-being have changed over time.
Revenue Capacity These schedules contain trend information to help the reader assess the factors affecting the City's ability to generate its property and sales taxes.
Debt Capacity These schedules present information to help the reader assess the affordability of the City's current levels of outstanding debt and the City's ability to issue additional debt in the future.
Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place and to help make comparisons over time and with other governments.
Operating Information These schedules contain information about the City's operati_ons and resources to help the reader understand how the City's financial information relates to the services the City provides and the activities it performs.
Source: Unless otherwise noted, the information in these schedules is derived from the annual comprehensive financial reports for the relevant year.
110 111 116 126 132 135
CITY OF RIVERSIDE TABLE 1 NET POSITION BY COMPONENT LAST TEN FISCAL YEAR (accrual basis of accounting)
Governmental Activities Net investment in capital assets Restricted Unrestricted Total governmental activities net position Business-Type Activities Net investment in capital assets Restricted Unrestricted Total business-type activities net position Primary Government Net investment in capital assets Restricted Unrestricted Total primary government net position 2013 2014 2015 2016 2017 2018 2019
$ 1,083,485 $ 1,106,384 $ 1,126,220 $ 1,123,910 $ 1,102,409 $ 1,093,896 $ 1,102,837 $
80,712 96,587 105,847 106,488 104,853 112,183 126,551 17,989 (2,049)
(406,388)
(389,278)
(362,146)
(364,500)
(356,340)
$ 1,182,186 $ 1,200,922 $
825,679 $
841,120 $
845,116 $
841,579 $
873,048 $
609,691 $
616,844 $
626,166 $
654,870 $
702,844 $
800,227 $
867,206 $
69,068 68,507 75,660 85,526 93,570 80,717 67,057 330,833 359,698 209,469 235,144 245,116 199,143 155,468
$ 1,009,592 $ 1,045,049 $
911,295 $
975,540 $ 1,041,530 $ 1,oao,oa1 $ 1,089,731 $
$ 1,693,176 $ 1,723,228 $ 1,752,386 $ 1,778,780 $ 1,805,253 $ 1,894,123 $ 1,970,043 $
149,780 165,094 181,507 192,014 198,423 192,900 193,608 348,822 357,649 (196,919)
(154,134)
(117,030)
(165,357)
(200,872)
$ 2,191,778 $ 2,245,971 $ 1,736,974 $ 1,816,660 $ 1,886,646 $ 1,921,666 $ 1,962,779 $
111 (in thousands) 2020 2021 2022 1,081,991 $ 1,170,232 $ 1,176,215 153,806 164,809 203,038 (369,222)
(366,713)
(284,713) 866,575 $
968,328 $ 1,094,540 751,865 $
756,116 $
774,469 75,170 78,885 85,666 272,776 263,837 284,977 1,099,811 $ 1,098,838 $ 1,145,112 1,833,856 $ 1,926,348 $ 1,950,684 228,976 243,694 288,704 (96,446)
(102,876) 264 1,966,386 $ 2,067,166 $ 2,239,652
CITY OF RIVERSIDE TABLE 2 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting)
(in thousands) Page 1 of 2 Fiscal Year 20131 2014 2015 2016 2017 2018 2019 2020 2021 2022 Expenses Governmental Activities:
General government 54,808 $
39,331 $
26,587 $
24,483 $
44,510 $
45,360 $
51,139 $
63,651 $
97,927 $
66,937 Public safety 147,652 149,555 154,123 161,284 160,665 216,772 201,942 222,061 219,136 169,742 Highways and streets 35,072 36,564 36,563 38,836 38,585 42,544 43,770 46,983 42,034 41,125 Cultural and recreation 40,077 42,252 45,594 47,762 49,406 38,362 31,200 37,400 37,693 38,885 Interest on long-term debt and fiscal charges 16,627 17,741 17 025 16,387 16,028 12,414 10,045 13,181 19,083 19,806 Total governmental activities 294,236 285,443 2791892 288,752 309,194 355,452 338,096 383,276 415,873 336,495 Business-Type Activities:
Electric 292,175 304,416 309,874 307,925 317,335 333,061 347,804 350,667 366,165 349,004 Water 58,768 60,030 62,792 57,769 62,189 68,281 70,912 73,742 71,738 69,303 Sewer 43,945 40,385 35,593 39,978 38,305 54,136 70,137 62,961 61,029 59,060 Airport 2,029 1,662 1,809 1,799 1,998 2,179 1,972 2,304 2,326 1,944 Refuse 20,581 20,831 20,007 21,652 21,953 22,082 24,205 26,549 28,428 28,449 Transportation 3,745 4,067 4,385 4,113 4,221 4,782 4,493 4,607 4,623 3,758 Public Parking 5,051 4,610 5,604 5,141 5,448 6,186 5,151 4,628 4,684 4,566 Civic Entertainment 19,995 24,151 21,584 11,885 21,804 Total business-type activities 4261294 4361001 4401064 4381377 4511449 51oi702 5481825 5471042 5501878 5371888 Total primary government expenses 720,530 $
721,444 $
719,956 $
727,129 $
760,643 $
866,154 $
886,921 $
930,318 $
966,751 $
874,383 Program Revenues Governmental Activities:
Charges for services:
General government 13,338 $
13,775 $
17,600 $
24,944 $
27,441 $
24,605 $
29,281 $
25,698 $
11,485 $
13,721 Public safety 7,793 7,444 7,256 3,243 1,167 1,880 2,443 2,138 7,649 14,491 Highways and streets 15,825 17,487 13,868 5,709 5,930 5,554 6,036 5,174 11,278 6,090 Cultural and recreation 5,237 7,406 16,319 12,458 22,802 6,078 7,465 5,050 3,694 6,770 Operating grants and contributions 21,485 14,341 12,869 16,321 19,374 22,548 23,966 21,779 64,405 50,378 Capital grants and contributions 32,202 48,433 43,904 31,216 7,617 18,039 27,450 19,945 28,284 38,508 Total governmental activities 951880 1081886 1111816 931891 841331 78,704 961641 79,784 1261795 1291958 Business-Type Activities:
Charges for services:
Electric 347,933 344,037 347,621 354,530 366,066 364,516 363,570 368,969 376,101 397,947 Water 68,489 68,691 66,051 57,250 62,627 66,828 65,177 70,167 80,252 80,535 Sewer 43,772 46,162 50,336 52,664 59,735 65,081 64,282 64,114 66,323 71,557 Airport 1,396 1,100 1,260 1,549 1,578 1,562 1,618 1,743 1,709 1,728 Refuse 20,829 20,677 21,360 21,806 22,567 23,085 23,004 25,109 26,468 29,768 Transportation 344 413 385 377 359 441 444 309 65 168 Public Parking 4,777 4,382 4,609 4,918 5,009 6,258 4,604 4,301 2,968 4,888 Civic Entertainment 16,393 16,977 12,233 1,381 11,883 Operating grants and contributions 2,718 2,524 3,869 2,322 3,751 3,374 3,093 3,473 3,976 5,866 Capital grants and contributions 11,734 11,486 8,027 18,868 24,151 26,957 10,607 13,979 12,273 20,527 Total business-type activities 5011992 4991472 5031518 5141284 5451843 574,495 5531376 5641397 5711516 6241867 Total primary government program revenues 5971872 $
6081358 $
615,334 $
6081175 $
630,174 $
653,199 $
650,017 $
6441181 $
6981311 $
754,825 112
CITY OF RIVERSIDE TABLE2 CHANGES IN NET POSITION LAST TEN FISCAL YEARS (accrual basis of accounting)
(in thousands) Page 2 of 2 Fiscal Year 20131 2014 2015 2016 2017 2018 2019 2020 2021 2022 Net Revenues/(Expenses)
Governmental Activities (198,356) $
(176,557) $
(168,076) $
(194,861) $
(224,863) $
(276,748) $
(241,455) $
(303,492) $
(289,078) $
(206,537)
Business-Type Activities 75,698 63,471 63,454 75,907 94,394 63,793 4,551 17,355 20,638 86,979 Total primary government net revenues/(expenses)
(122,658) $
(113,086) $
(104,622} $
(118,954) $
(130,469) $
(212,955) $
(236,904) $
(286,137) $
(268,440) $
(119,558)
General Revenues and Other Changes in Net Position Governmental Activities:
Taxes:
Sales taxes 50,222 $
55,096 $
59,437 $
60,976 $
75,883 $
120,338 $
130,645 $
128,653 $
150,321 $
173,933 Property taxes 52,904 51,323 54,864 55,545 59,526 63,515 69,478 72,609 71,986 79,790 Utility users' taxes 28,206 28,092 28,076 27,828 27,958 27,498 28,009 29,044 30,577 32,464 Franchise taxes 4,959 5,046 5,543 5,730 4,814 4,972 5,256 5,443 5,527 5,955 Transient occupancy taxes 3,703 4,189 5,280 6,093 6,622 6,793 7,163 5,959 5,801 8,764 Intergovernmental, unrestricted 337 263 3,153 477 145 172 156 656 499 661 Investment Income 2,786 2,759 3,233 729 6,145 5,187 7,500 10,185 4,969 (7,613)
Miscellaneous 9,208 5,425 12,395 11,708 2,050 4,278 9,146 5,988 3,880 Transfers 42,262 43,100 42,681 41,216 45,716 41,459 37,115 35,324 34,879 34,915 Total governmental activities 194,587 195,293 214,662 210,302 228,859 274,212 285,322 297,019 310,547 332,749 Business-Type Activities:
Investment income 4,744 8,005 5,319 6,888 2,650 3,939 19,488 19,838 681 (13,324)
Miscellaneous 5,767 7,081 7,652 22,666 14,662 12,901 10,322 8,211 11,986 12,639 Extraordinary items (41,259)
(5,748)
Transfers (42,262)
(43,100)
(42,681)
(41,216)
(45,716)
(41,459)
(37,115)
(35,324)
(34,278)
(34,915)
Total business-type activities (73,010)
(28,014)
(29,710}
(11,662!
(28,404!
(24,619!
(7,305!
(7,275!
(21,611!
(41,348!
Total primary government 121,577 167,279 184,952 198,640 200,455 249,593 278,017 289,744 288,936 291,401 Change in Net Position Governmental Activities (3,769) $
18,736 $
46,586 $
15,441 $
3,996 $
(2,536) $
43,867 $
(6,473) $
21,469 $
126,212 Business-Type Activities 2,688 35,457 33,744 64,245 65,990 39,174 (2,754) 10,080 (973) 45,631 Total primary government (1,081) $
54,193 $
80,330 $
79,686 $
69,986 $
36,638 $
41,113 $
3,607 $
20,496 $
171,843 1 The decrease in total business-type activities net position is primarily due to the power plant closure.
113
CITY OF RIVERSIDE TABLE3 FUND BALANCES - GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting) 2013 General Fund Nonspendable 26,421 $
Restricted 2,196 Committed Assigned 10,711 Unassigned 37,763 Total general fund 77,091 $
All Other Governmental Funds Nonspendable 1,441 $
Restricted for:
Housing and redevelopment 26,410 Debt service 25,884 Transportation and public works 16,487 Other purposes 2,003 Unassigned Total all other governmental funds 72,225 $
Notes:
2014 2015 2016 2017 24,419 $
23,642 $
23,094 $
26,168 $
2,204 2,985 3,067 2,651 14,505 13,965 9,922 14,968 37,732 39,059 29,495 39,283 78,860 $
79,651 $
65,578 $
83,070 $
1,460 $
1,625 $
1,619 $
1,601 $
26,223 25,523 24,746 24,098 26,177 26,203 26,221 6,455 54,876 36,347 36,876 34,178 321 2,326 3,628 4,145 (24) 109,057 $
92,024 $
93,090 $
70,453 $
Certain reclassifications have been made to prior year balances to conform with current year's presentation.
114 (in thousands) 2018 2019 2020 2021 2022 1,947 $
949 $
1,446 $
1,870 $
2,087 2,991 3,411 10,699 10,697 30,715 53,800 65,916 59,280 62,400 82,801 23,242 26,984 21,260 24,890 41,707 7 644 23,907 41,184 59,790 69,908 89,624. $
121,167 $
133,869 $
159,647 $
227,218 4,855 $
1,560 $
1,510 $
1,477 $
1,495 18,827 16,668 16,611 18,553 12,292 11,509 6,825 11,210 11,292 11,679 43,499 91,379 84,413 78,884 87,073 3,451 5,505 5,984 6,275 7,351 (27)
(1,215) 82,141 $
121,937 $
119,701 $
.116,481 $
118,675
CITY OF RIVERSIDE TABLE4 CHANGES IN FUND BALANCES -GOVERNMENTAL FUNDS LAST TEN FISCAL YEARS (modified accrual basis of accounting)
(in thousands) 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Revenues:
Taxes 139,994 $
143,748 $
153,200 $
156,172 $
174,803 $
223,116 $
240,416 $
241,708 $
267,714 $
300,906 Licenses and permits 10,173 9,244 11,168 11,611 14,455 12,442 14,317 13,023 12,778 14,850 Intergovernmental 50,734 59,348 49,892 51,896 31,440 42,454 44,950 42,296 87,226 88,000 Charges for services 12,062 15,734 24,737 26,443 31,384 17,438 16,927 15,968 14,578 16,938 Fines and forfeitures 6,234 7,283 3,957 1,941 1,976 3,717 2,078 1,887 2,100 2,096 Special assessments 6,669 6,272 6,757 7,039 7,578 7,113 7,973 6,950 7,674 7,188 Rental and investment income 3,878 4,315 5,112 4,370 4,718 3,446 6,548 8,441 4,437 (6,533)
Miscellaneous 14,933 6,957 6 939 12,578 7,252 8,716 5,370.
7,845 5,962 3,703 Total revenues 244,677 $
252,901 $
261z762 $
272,050 $
2731606 $
318,442 $
338,579 $
338,118 $
402,469 $
4271148 Expenditures:
General government 15,713 $
13,558 $
17,799 $
19,900 $
20,650 $
21,135 $
18,880 $
107,779 $
30,887 $
24,329 Public safety 150,290 151,721 157,660 164,800 163,712 190,916 198,363 434,208 200,733 205,968 Highways and streets 16,294 16,944 16,594 17,416 17,504 19,207 20,927 22,254 16,897 18,805 Culture and recreation 45,356 34,275 37,527 39,583 40,643 29,382 30,528 28,825 28,391 33,065 Capital outlay 73,581 72,365 60,060 53,208 31,000 33,504 41,585 55,178 69,248 71,534 Debt service:
Principal 45,006 45,500 49,101 51,987 72,700 21,904 37,867 23,761 24,475 28,126 Interest and fiscal charges 15,116 16,787 17,048 16,451 16,115 12,746 10,493 10,773 20,372 20,134 Bond issuance cost 581 843 172 180 29 24 854 1,185 Payment for advance refunding 3,521 Total expenditures 365,458 $
351,993 $
355!961 $
363,525 $
362,353 $
328,818 $
359,497 $
683,963 $
391,003 $
401,961 Excess/(deficiency) of revenue over/(under) expenditures (120,1a1i $
(99,092l $
(94,199l $
(91.475l $
(88,747l $
po,376l $
(20,918l $
(345,845l $
11,466 $
25,187 Other Financing Sources/(Uses):
Transfers in 56,572 $
58,469 $
61,510 $
61,384 $
94,521 $
102,774 $
94,771 $
95,932 $
112,907 $
116,891 Transfers out (14,178)
(15,369)
(18,829)
(20,168)
(48,805)
(66,021)
(58,688)
(60,608)
(102,028)
(85,380)
Issuance of long-term debt 99,753 87,037 30,940 31,145 31,578 14,500 49,485 320,131 11,292 Proceeds from sale of capital assets 82 931 (114) 261 4,199 461 149 856 213 59 Proceeds from financing related to leases 1,714 Capital lease financing 7,203 6,625 4,450 5,846 2,109 Bond premium/{discounts)
(43,591l 6,540 Total other financing sources/(uses) 105!841 1371693 77!957 78,468 831602 51z714 92!257 356!311 11!092 441576 Net changes in fund balances (14,940) $
38,601 $
(16,242) $
(13,007) $
(5,145) $
41,338 $
71,339 $
10,466 $
22,558 $
69,763 Debt services as a percentage of non-capital expenditures 21.039 %
21.803 %
22.360 %
21.714 %
26.625 %
11.999 %
15.143 %
5.428 %
13.383 %
13.535 %
(1)
(1) Includes one-lime payment of $318,944 to CalPERS to paydown the Unfunded Pension Liability for Miscellaneous and Safety personnel.
115
CITY OF RIVERSIDE TABLE 5 BUSINESS-TYPE ACTIVITIES - ELECTRICITY REVENUES BY SOURCE LAST TEN FISCAL YEARS (accrual basis of accounting)
(in thousands)
Other Fiscal Residential Commercial Industrial Wholesale Other Transmission Operating Total Year Sales Sales 1 Sales 1 Sales Sales Revenue Revenue Revenues 2013 118,173 $
66,632 $
110,680 $
638 $
5,712 $
32,688 $
13,410 $
347,933 2014 111,880 67,063 111,260 115 5,600 32,630 15,489 344,037 2015 114,112 68,572 112,283 60 5,654 30,587 16,353 347,621 2016 116,997 69,759 113,756 3
4,737 32,924 16,354 354,530 2017 117,662 71,456 115,432 9
4,782 35,497 21,779 366,617 2018 115,630 73,971 112,264 2
4,792 37,484 8,860 353,003 2019 116,303 72,511 111,445 344 4,824 35,730 22,413 363,570 2020 121,162 71,570 113,132 4,849 34,817 23,438 368,968 2021 133,460 71,510 112,572 27 4,864 32,316 21,351 376,100 2022 134,403 75,899 122,684 89 4,891 32,245 27,736 397,947 1 Changes in fiscal years 2018, 2019, 2020 and 2021 reflect reclassification of certain Industrial and Commercial accounts related to contract accounts. Prior to fiscal year 2018, accounts were reflected under Industrial Sales.
116
CITY OF RIVERSIDE TABLE 6 GOVERNMENTAL ACTIVITIES - TAX REVENUE BY SOURCE LAST TEN FISCAL YEARS (accural basis of accounting)
(in thousands)
Utility Transient Sales Property Users' Franchise Occupancy Total Fiscal Year Tax1 Tax2 Tax Tax Tax Taxes 2013 50,222 52,904 28,206 4,959 3,703 139,994 2014 55,096 51,323 28,092 5,046 4,189 143,746 2015 59,437 54,864 28,076 5,543 5,280 153,200 2016 60,976 55,545 27,828 5,730 6,093 156,172 2017 75,883 59,526 27,958 4,814 6,622 174,803 2018 120,338 63,515 27,498 4,972 6,793 223,116 2019 130,645 69,343 28,009 5,256 7,163 240,416 2020 128,653 72,609 29,044 5,443 5,959 241,708 2021 150,321 71,986 30,577 5,527 5,801 264,212 2022 173,933 79,790 32,464 5,955 8,764 300,906 1 Increase in sales tax in fiscal year 2017 is due to Measure Z which was passed by the voters November 2016 and became effective April 1, 2017.
Measure Z is a one percent transaction and use tax.
2 Decrease in property taxes in fiscal year 2013 relates to the dissolution of the Redevelopment Agency. Upon the dissolution of the Redevelopment Agency on February 1, 2012, property taxes received by the Successor Agency are reported in a private-purpose trust fund and therefore are excluded from the activities of the primary government.
117
CITY OF RIVERSIDE TABLE 7 TAXABLE SALES BY CATEGORY LAST TEN CALENDAR YEARS 2012 Apparel stores 175,320 General merchandise 450,988 Food stores 181,719 Eating and drinking places 422,153 Building materials 376,011 Auto dealers and supplies 1,118,907 Service stations 430,322 Other retail stores 535,945 All other outlets 1,0081206 Total
$ 4,699,571 Notes:
2013 2014 2015 178,349 $
188,670 $
203,001 463,355 475,147 477,903 193,368 209,022 217,902 447,841 483,901 533,317 454,468 514,993 567,790 1,280,633 1,461,217 1,548,385 418,110 413,128 370,257 550,157 595,305 633,089 1,154,492 1,312,607 1,461,982
$ 5,140,773 $ 51653,990 $ 6,013,626 (in thousands) 2016 2017 2018 2019 2020 2021 214,852 $
210,158 $
212,036 $
210,439 $
147,176 $
249,034 478,538 465,490 470,386 465,234 426,500 617,257 168,854 169,922 184,278 185,859 202,647 208,060 582,262 609,705 639,995 677,763 587,403 788,765 636,415 666,907 738,178 761,881 813,584 1,010,364 1,608,231 1,588,854 1,621,311 1,672,475 1,728,498 2,084,828 338,762 360,830 432,991 434,162 327,119 527,973 692,375 677,850 666,659 636,043 609,428 764,854 1,474,160 1,481,019 1,700,733 1,701,236 11995,760 2,099,827
$ 6,194,449 $ 6,230,735 $ 6,666,567 $ 6,745,092 $ 6,838,115 $ 8,350,962 Due to confidentiality issues, the names of the ten largest revenue payers are not available. The categories presented are intended to provide alternative information regarding the sources of the City's revenue.
Source: State of California Board of Equalization, California Department of Taxes and Fees Administration, State Controller's Office, and Hdl Companies.
118
CITY OF RIVERSIDE TABLE 8 ASSESSED VALUE AND ESTIMATED ACTUAL VALUE OF TAXABLE PROPERTY LAST TEN FISCAL YEARS Fiscal Year Ended June 30 Secured Unsecured 2013 22,313,665 $
1,244,448 $
2014 23,045,134 1,201,634 2015 24,482,621 1,329,391 2016 25,710,122 1,225,375 2017 26,927,989 1,311,356 2018 28,373,517 1,354,934 2019 30,196,815 1,420,597 20202 31,856,912 1,466,408 2021 33,717,485 1,482,535 2022 35,353,418 1,736,131 Notes:
(in thousands)
Taxable Total Less:
Assessed Direct
- Exemetions Value Rate1 (7,142,401) $
16,415,712 0.348 (7,394,982) 16,851,786 0.125 (7,945,000) 17,867,012 0.124 (8,432,984) 18,502,513 0.124 (9,029,817) 19,209,528 0.124 (9,791,810) 19,936,641 0.124 (10,818,883) 20,798,529 0.124 (10,946,897) 22,376,423 0.124 (11,915,468) 23,284,552 0.123 (12,881,213) 24,208,336 0.123 In 1978, the voters of the State of California passed Proposition 13 which limited property taxes to a total maximum rate of 1 % based upon the assessed value of the property being taxed. Each year, the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only re-assessed at the time that it is sold to a new owner. At that point, the new assessed value is reassessed at the purchase price of the property sold. The assessed valuation data shown above represents the only data currently available with respect to the actual market value of taxable property and is subject to the limitations described above. Assessed valuations are based on 100 percent of estimated actual value.
1 Total Direct Rate is the weighted average of all individual direct rates. Beginning in 2013/14, the Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas.
2 Total Taxable Assessed Value for FY2020 was recorded as an estimate and has been restated to the actual amount per information from the Riverside County Auditor-Controller.
Source: Riverside County Auditor-Controller 119
CITY OF RIVERSIDE TABLE 9 DIRECT AND OVERLAPPING PROPERTY TAX RATES (RATE PER $100 OF ASSESSED VALUATION)
LAST TEN FISCAL YEARS 2012/13 2013/14 2014/15 2015/16 2016/17 2017/18 2018/19 2019/20 2020/21 2021/22 Basic Levy1 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 1.000 Unified School Districts Debt Service2 0.325 0.390 0.377 0.487 0.495 0.517 0.521 0.535 0.529 0.535 City of Riverside Debt Service 0.006 0.007 0.006 0.006 0.006 0.006 0.006 0.005 0.005 0.005 Metropolitan Water District Original Area 0.004 0.004 0.004 0.004 0.004 0.004 0.004 0.004 0.004 0.004 Riverside City Community College Debt Service 0.017 0.018 0.018 0.017 0.016 0.016 0.015 0.015 0.015 0.015 Total direct & overlapping3 tax rates 1.352 1.419 1.405 1.514 1.521 1.543 1.546 1.559 1.553 1.559 City's share of 1% levy per prop 134 0.113 0.113 0.113 0.113 0.113 0.113 0.113 0.113 0.113 0.113 General obligation debt rate 0.006 0.007 0.006 0.006 0.006 0.006 0.006 0.005 0.005 0.005 Total direct rate5 0.348 0.125 0.124 0.124 0.124 0.124 0.124 0.124 0.123 0.123 Notes:
Amounts presented in this table have been restated for prior years to reflect the most current information available.
1 In 1978, California voters passed Proposition 13 which set the property tax rate at a 1.00% fixed amount. This 1.00% is shared by all taxing agencies for which the subject property resides within. In addition to the 1.00% fixed amount, property owners are charged taxes as a percentage of assessed property values for the payment of any voter approved bonds.
2 Includes: Alvord Unified School District, Corona Norco Unified School District, Jurupa Unified School District, Moreno Valley Unified School District, and Riverside Unified School District.
3 Overlapping rates are those of local and county governments that apply to property owners within the City. Not all overlapping rates apply to all property owners.
4 City's share of 1 % levy is based on the City's share of the general fund tax rate area with the largest net taxable value within the City. The ERAF portion of the City's levy has been subtracted where known.
5 Total Direct Rate is the weighted average of all individual direct rates applied by the City/Agency preparing the statistical information and excludes revenues derived from aircraft. Beginning in 2013/14, the Total Direct Rate no longer includes revenue generated from the former redevelopment tax rate areas. Challenges to recognize enforceable obligations assumed to have been resolved during 2012/13. For the purposes of this report, residual revenue is assumed to be distributed to the City/Agency in the same proportions as general fund revenue.
Source: Riverside County Assessor 2012/13 - 2021/22 Tax Rate Table.
120
CITY OF RIVERSIDE TABLE10 PRINCIPAL PROPERTY TAXPAYERS CURRENT YEAR AND NINE YEARS AGO Proeertv Owner Tyler Mall LP Nordstrom Inc CPT Riverside Plaza LLC Rohr Inc La Sierra University TA Lance Drive LLC 490 Columbia Corona Pointe Resort LLC Riverside Healthcare System Smiths Food and Drug Centers Inc Cole ID Riverside California State Street Bank and Trust Co of CA JSP Corona Pointe LLC Vestar Riverside Plaza LLC BRE Properties Inc Canyon Springs Marketplace Corporation Totals Notes:
2022 Taxable Assessed Valuation Rank 230,416 1
196,794 2
167,317 3
155,703 4
142,538 5
133,054 6
128,033 7
127,164 8
111,349 9
106,267 10 1,498,635 The amounts shown above include assessed value data for both the City and the Successor Agency.
Percentage of Total Taxable Taxable Assessed Assessed Value Valuation 0.65 % $
190,480 0.56 %
0.47 %
0.44 %
112,325 0.40%
104,729 0.38 %
0.36 %
0.36 %
0.32 %
117,031 0.30 %
91,500 89,839 76,159 69,554 69,277 69,000 4.25 % $
989,894
=
Source: Riverside County Assessor 2021/2022 and 2012/13 Combined Tax Rolls and the SBE Non Unitary Tax Roll.
121 (in thousands) 2013 Percentage of Total Taxable Assessed Rank Value 1
0.85 %
3 0.50 %
4 0.47 %
2 0.52 %
5 0.41 %
6 0.40 %
7 0.34 %
8 0.31 %
9 0.31 %
10 0.31 %
4.41 %
CITY OF RIVERSIDE TABLE 11 PROPERTY TAXES LEVIES AND COLLECTIONS LAST TEN FISCAL YEARS Taxes Fiscal Year Ended Levied for Collected Within the Fiscal Year of the Levy June 30 Fiscal Year Amount Percentage of Levy 2013 43,333 $
42,447 97.96%
2014 45,138 44,684 98.99%
2015 48,846 48,427 99.14%
2016 50,023 49,585 99.12%
2017 53,655 53,252 99.25%
2018 57,567 57,173 99.32%
2019 63,003 62,557 99.29%
2020 66,295 65,729 99.15%
2021 68,363 67,968 99.42%
2022 71,892 71,573 99.56%
Notes:
Collections in Subsequent Years 886 $
454 419 (in thousands)
Total Collections to Date Amount 43,333 45,138 48,846 50,023 53,655 57,567 63,003 66,295 68,363 71,573 Percentage of Levy 100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
100.00%
99.56%
The table reflects amounts related to the City. In addition, ii includes amounts related to the Redevelopment Agency through dissolution (01/31/12). The amounts collected by the Redevelopment Agency include monies that were passed-though to other agencies. Current tax levies are the original charge as provided by the County of Riverside. Current tax collections do not include supplemental taxes, aircraft taxes or other property taxes.
The City adopted the Teeter plan available with the County of Riverside effective Fiscal year 2014. Under the Teeter plan, the County of Riverside has responsibility for the collection of delinquent taxes and the City receives 100% of the levy.
Source: Riverside County Auditor-Controller and City Finance Department 122
CITY OF RIVERSIDE TABLE12 ELECTRICITY SOLD BY TYPE OF CUSTOMER LAST TEN FISCAL YEARS 2013 2014 2015 Type of Customer:
Residential 726 700 711 Commercial1 419 421 428 lndustrial1 1,003 997 995 Wholesale sales2 14 4
2 Other 31 30 31 Total 2,193 2,152 2,167 Total direct rate Monthly base rate
- 18.06 18.06 18.06
- Includes a Reliability Charge 2016 726 438 982 23 2,169 18.06 (in millions of kilowatt-hours) 2017 2018 2019
- 2020 2021 2022 730 727 722 722 783 759 448 476 460 442 430 443 996 970 947 931 890 923 2
23 22 21 18 18 19 2,198 2,195 2,150 2,114 2,121 2,146 18.06 18.06 19.41 20.63 21.84 23.20 1
Changes in fiscal years 2018, 2019, 2020 and 2021 reflect reclassification of certain Industrial and Commercial accounts related to contract accounts. Prior to fiscal year 2018, accounts were reflected in the Industrial customer class.
2 For fiscal years 2016, 2018, 2019, and 2021 wholesale MWH was less than 1 MWH.
Source: Riverside Public Utilities, Finance Services 123
CITY OF RIVERSIDE TABLE13 ELECTRICITY RA TES LAST TEN FISCAL YEARS Fiscal Year Ended June 30 Residential Commercial1 lndustrial1 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 0.16274 0.15995 0.16050 0.16119
- 0.16116
- 0.15910
- 0.16111*
0.16774
- 0.17032
- 0.17707
- 0.15913 0.15936 0.16022 0.15915
- 0.15958
- 0.15547
- 0.15768
- 0.16202
- 0.16636
- 0.17126
- 1 Changes in fiscal years 2018, 2019, 2020 and 2021 reflect reclassification of certain Industrial and Commercial accounts related to contract accounts. Prior to fiscal year 2018, accounts were reflected in the industrial customer class.
- Rate calculations were taken from the Sales Stats not the financial statements.
Does not include Public Benefits charge.
Source: Riverside Public Utilities, Finance Services 124 0.11030 0.11156 0.11282 0.11577
- 0.11586
- 0.11570
- 0.11761
- 0.12149
- 0.12643
- 0.13295 *
(average rate in dollars per kilowatt-hour)
Other 0.18375 0.18513 0.18291 0.20908
- 0.21287
- 0.21288
- 0.23448
- 0.26480
- 0.26659
- 0.26454
- CITY OF RIVERSIDE TABLE14 TOP 10 ELECTRICITY CUSTOMERS CURRENT YEAR AND NINE YEARS AGO 2022 2013 Percent of Percent of Electricity Total Electric Electricity Total Electric Electricity Customer Charges Rank Revenues Charges Rank Revenues Local University 12,258,825 1
3.63 % $
10,828,940 1
3.60 %
Local Government 8,259,542 2
2.44 %
7,920,390 2
2.63 %
Local Government 7,243,247 3
2.14 %
0.00 %
Local School District 4,813,893 4
1.42 %
4,199,138 4
1.39 %
Corporation 4,190,792 5
1.24 %
0.00 %
Corporation 3,844,085 6
1.14 %
3,337,147 6
1.11 %
Corporation 3,365,138 7
1.00 %
0.00 %
Hospital 3,201,349 8
0.95 %
2,457,850 7
0.82 %
Corporation 3,103,067 9
0.92 %
0.00 %
Local University 3,016,527 10 0.89 %
0.00 %
Local Government 0.00 7,447,872 3
2.47 Corporation 0.00 %
3,386,525 5
1.12 %
Corporation 0.00 %
2,428,008 8
0.81 %
Local School District 0.00 2,091,371 9
0.69 Corporation 0.00 %
2,087,427 10 0.69 %
Total 53,296,464 15.77 % $
46,184,669 15.33 %
Retail sales per financial statements
- 337,876,146 301,196,912 Source: Riverside Public Utilities, Finance Services
- Financial Report - Riverside Public Utilities 125
CITY OF RIVERSIDE TABLE15 RATIOS OF OUTSTANDING DEBT BY TYPE LAST TEN FISCAL YEARS General Lease Obligation Revenue Fiscal Year Bonds Bonds 2013 15,314 $
43,762 2014 14,460 42,344 2015 13,546 40,891 2016 12,567 39,398 2017 11,513 37,854 2018 10,388 36,246 2019 9,179 80,416 2020 7,874 75,964 2021 6,478 72,471 2022 4,987 68,855 Governmental Activities Pension Certificates Obligation of Bonds2 Particieation 122,005 $
158,697 $
115,775 191,446 108,725 187,212 101,000 181,429 92,592 156,516 60,883 150,800 50,486 99,178 364,633 94,802 352,824 90,215 338,264 85,477 Business-T~ee Activities Revenue Notes/Loans Fiscal Year Bonds Pa~able 2013 1,031,839 $
70,798 2014 1,094,290 36,030 2015 1,239,634 37,225 2016 1,208,851 37,793 2017 1,180,345 35,255 2018 1,139,864 78,583 2019 1,241,743 73,673 2020 1,212,914 69,519 2021 1,176,605 64,678 2022 1,139,100 59,948 Financed Purchase 2,558 $
2,266 1,720 4,694 6,209 6,821 5,192 3,633 2,354 2,176 Pension Obligation Bonds2 18,324 14,775 119,625 116,227 110,718 Certificates of Participation3 29,692 28,483 27,213 25,912 1 These ratios are calculated using personal income and population data for the prior calendar year.
Financed Purchase 8,424 13,168 14,966 12,006 17,193 25,647 21,422 18,207 14,922 22,294 Lease Revenue Bonds4 7,867 7,473 7,059 6,625 (in thousands)
Notes/Loans Pa~able 28,652 47,611 45,574 43,482 41,325 1,746 1,329 899 457 Total Percentage Debt Primary of Personal Per Government lncome1 Capita1 1,482,049 21.41%
4.75 1,557,390 22.54%
4.96 1,689,493 24.64%
5.38 1,641,220 23.60%
5.05 1,578,802 22.11%
4.83 1,529,302 20.81%
4.69 1,634,952 21.30%
4.98 2,004,026 24.73%
6.11 1,931,503 22.73%
5.96 1,864,356 20.97%
5.87 2 In 2018, the 2005 and 2017 Taxable Pension Obligation Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency.
3 In 2019, the 2008 Certificates of Participation were distributed between Governmental Activities and Business-Type Activities.
4 In 2019, the 2012 Lease Revenue Refunding Bonds were distributed between Governmental Activities, Business-Type Activities, and the Successor Agency.
Source: City of Riverside Notes to Financial Statements and Statistical Table 20.
126
CITY OF RIVERSIDE TABLE16 RATIOS OF GENERAL BONDED DEBT OUTSTANDING LAST TEN FISCAL YEARS General Certificates Obligation Pension of Fiscal Year Bonds Bonds Particieation 2013 15,314 $
122,005 $
158,697 2014 14,460 115,775 191,446 2015 13,546 108,725 187,212 2016 12,567 101,000 181,429 2017 11,513 92,592 156,516 2018 10,388 60,883 150,800 2019 9,179 50,486 99,178 2020 7,874 364,633 94,802 2021 6,478 352,824 90,215 2022 4,987 338,264 85,477 Notes:
Total Obligated Debt Outstanding 296,016 321,681 309,483 294,996 260,621 222,071 158,843 467,309 449,517 428,728 General bonded debt is debt payable with governmental fund and enterprise fund resources.
(in thousands, except per capita amount)
Less: Amounts Percent of Available in Debt Net Obligated Assessed Per Service Fund Debt Outstanding __ V_a_l_u_e_
1 ___
C_a~e_it_a_
2 _
(27,676) $
268,340 1.63 %
860 (27,996) 293,685 1.74 %
935 (9,295) 300,188 1.68 %
955 (27,997) 266,999 1.44 %
822 (8,339) 252,282 1.31 %
772 (13,546) 208,525 1.05 %
640 (9,051) 149,792 0.72 %
457 (11,210) 456,099 2.04 %
1,390 (11,292) 438,225 1.88 %
1,351 (11,679) 417,049 1.72 %
1,312 1 Assessed value has been used because the actual value of taxable property is not readily available in the State of California.
2 These ratios are calculated using population data for the prior calendar year.
Source: City of Riverside Notes to Financial Statements, Statistical Table 8, Statistical Table 15, and Reserve Cash Reconciliation maintained by City Finance Department.
127
CITY OF RIVERSIDE TABLE17 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT JUNE 30, 2022 2021-22 Assessed Valuation:
Less Dissolved Redevelopment Agency Incremental Valuation:
Adjusted Assessed Valuation:
Overlapping debt repaid with property taxes2 Metropolitan Water District Riverside County Flood Control, Zone 4 Riverside City Community College District Alvord Unified School District Riverside Unified School District Corona-Norco Unified School District Jurupa Unified School District Moreno Valley Unified School District Alvord Unified School District Community Facilities District No.2006-1 Riverside Unified School District Community Facilities Districts City of Riverside Community Facilities Districts City of Riverside 1915 Act Bonds Total overlapping debt repaid with property taxes 128 35,176,762,701 10,968,426,072 24,208,336,629 Total Debt 20,175,000 7,880,000 300,457, 165 197,211,602 321,490,000 498,729,283 151,897,972 215,367,791 6,235,000 63,130,000 25,280,000 16,315,000
% Applicable 1.045 %
1.833 27.860 72.108 84.218 0.001 0.002 10.231 80.759 88.076-100 100.000 100.000 Page 1 of 2 City's Share of Debt1 210,829 144,440 83,707,366 142,205,342 270,752,448 4,987 3,038 22,034,279 5,035,324 63,025,665 25,280,000 16,315,000 G2ai71ai71a (Continued)
CITY OF RIVERSIDE TABLE17 DIRECT AND OVERLAPPING GOVERNMENTAL ACTIVITIES DEBT AS OF JUNE 30 2022 Other overlapping debt2 Riverside County General Fund Obligations Riverside County Pension Obligations Corona-Norco Unified School District General Fund Obligations Jurupa Unified School District Certificates of Participation Moreno Valley Unified School District Certificates of Participation Riverside Unified School District General Fund Obligations Western Municipal Water District General Fund Obligations Total other overlapping debt Overlapping tax increment debt Total overlapping debt City direct debt Combined total direct and overlapping debt (1) Debt balances are as of June 30, 2022.
(2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, non-bonded capital lease obligations.
(3) Excludes debt related to Business-Type Activities.
Ratios to 2021-22 Assessed Valuation:
Total debt repaid with property taxes....................................
City direct debt $519,877,000..............................................
Combined total direct and overlapping debt............................
Ratios to dissolved redevelopment incremental valuation $(10,968,426,072):
Total overlapping tax increment debt...................................
1.79 %
1.48 %
4.28 %
1.64 %
720,218,351 10.712 %
820,060,000 10.712 21,677,172 0.001 50,480,800 0.002 5,985,000 10.231 12,284,000 84.218 5,461,361 32.509 Page 2 of 2 77,149,790 87,844,827 217 1,010 612,325 10,345,339 1,775,434 177,728,942 179,597,480 986,045,140 519,877,000 (3) 1,505,922,140 Overlapping governments are those that coincide, at least in part, with the geographic boundaries of the City. This schedule estimates the portion of the outstanding debt of those overlapping governments that is borne by the residents and businesses of the City. This process recognizes that, when considering the City's ability to issue and repay long-term debt, the entire debt burden borne by the residents and businesses should be taken into account. However, this does not imply that every taxpayer is a resident, and therefore responsible for repaying the debt of each overlapping government.
Source: California Municipal Statistics, Inc., Riverside County Auditor-Controller, City Finance Department, and Statistical Table 8.
129
CITY OF RIVERSIDE TABLE 18 LEGAL DEBT MARGIN INFORMATION LAST TEN FISCAL YEARS 2013 Assessed valuation
$ 16,415,712 Conversion percentage 25 %
Adjusted assessed valuation 4,103,928 Debt limit percentage 15 %
Debt limit 615,589 Total net debt applicable to limit 15,314 Legal debt margin 600,275 Total net debt applicable to the limit as a percentage of debt limit 2.5%
2014
$ 16,851,786 25 %
4,212,947 15 %
631,942 14,460 617,482 2.3 %
2015
. 2016 2017
$ 17,867,012 $ 18,502,513 $ 19,209,528 25%
25 %
25 %
4,466,753 4,625,628 4,802,382 15 %
15 %
15 %
670,013 693,844 720,357 13,546 12,567 11,513 656,467 $
681,277 $
708,844 2.0%
1.8 %
1.6 %
(in thousands) 2018 2019 2020 2021 2022
$ 19,936,641 $ 20,798,529 $ 22,376,423 $ 23,284,552 $ 24,208,336 25 %
25 %
25 %
25 %
25 %
4,984,160 5,199,632 5,594,106 5,821,138 6,052,084 15 %
15 %
15 %
15 %
15 %
747,624 779,945 839,116 873,171 907,813 10,388 9,179 7,874 6,478 4,987 737,236 $
770,766 $
831,242 $
866,693 $
902,826 1.4%
1.2 %
0.9%
0.7%
0.5%
The Government Code of the State of California provides for a legal debt limit of 15% of gross assessed valuation. However, this provision was enacted when assessed valuation was based upon 25% of market value. Effective with the 1981-82 fiscal year, each parcel is now assessed at 100% of market value (as of the most recent change in ownership for that parcel). The computations shown above reflect a conversion of assessed valuation data for each fiscal year from the current full valuation perspective to the 25% level that was in effect at the time that the legal debt margin was enacted by the State of California for local governments located within the State.
Source: City of Riverside, Statistical Table 8, Statistical Table 15, and Notes to Financial Statements.
130
CITY OF RIVERSIDE TABLE19 PLEDGED-REVENUE COVERAGE BUSINESS-TYPE ACTIVITY DEBT LAST TEN FISCAL YEARS Electric Revenue Bonds Less:
Net Fiscal Pledged Operating Available Debt Service Year Revenue1 Exeenses1 Revenue Princiele Interest 2013 348,187 $
226,997 121,190 $
18,486 $
25,941 2014 347,541 241,136 106,405 21,632 27,575 2015 348,244 250,578
- 97,666 15,485 26,532 2016 371,029 249,607
- 121,422 16,460 25,780 2017 368,956 251,998
- 116,958 14,032 25,553 2018 368,116 257,785
- 110,331 15,675 25,045 2019 374,510 279,394
- 95,116 16,449 26,017 2020 378,391 277,064
- 101,327 11,641 26,992 2021 373,663 284,293
- 89,370 17,364 27,559 2022 391,860 298,221
- 93,639 19,339 26,689 Sewer Revenue Bonds Less:
Net Fiscal Pledged Operating Available Debt Service Covera9e 2.73 2.16 2.32 2.87 2.95 2.71 2.24 2.62 1.99 2.03 Year Revenue1 Exeenses1 Revenue Princieal Interest Covera9e 2013 52,944 29,999 22,945 7,465 10,891 1.25 2014 52,098 28,930 23,168 7,753 10,781 1.25 2015 51,288 27,598 23,690 8,056 10,958 1.25 2016 68,412 31,864 36,548 8,405 20,786 1.25 2017 78,337 29,921 48,416 9,010 19,621 1.69 2018 68,735 31,513 37,222 9,184 19,136 1.31 2019 71,787 34,084 37,703 14,766 14,455 1.29 2020 70,365 33,704 36,661 8,634 18,434 1.35 2021 66,421 31,431 34,990 9,599 17,032 1.31 2022 69,422 29,640 39,782 9,966 16,575 1.50 Notes:
Details regarding the City's outstanding debt can be found in the notes to the financial statements The City of Riverside does not have any pledged revenue related to Govermental Activities.
(in thousands)
Water Revenue Bonds Less:
Net Pledged Operating Available Debt Service Revenue1 Exeenses1 Revenue Princieal Interest Covera9e 72,700 $
35,940 36,760 $
5,395 $
8,700 2.61 71,317 37,698 33,619 4,574 8,536 2.56 66,010 36,725
- 29,285 5,258 8,342 2.15 60,047 35,608
- 24,439 5,533 8,063 1.80 65,689 37,956
- 27,733 5,486 8,124 2.04 71,054 40,737
- 30,317 6,098 8,049 2.14 69,965 44,547
- 25,418 6,362 8,780 1.68 74,343 45,825
- 28,518 6,139 9,671 1.80 83,510 45,896
- 37,614 7,007 9,685 2.25 85,163 47,177
- 37,986 7,715 9,353 2.23 1 Amounts have been calculated in accordance with the provisions set forth in the debt covenants. Total operating expenses exclusive of depreciation. Pledged revenue includes applicable cash set aside in a rate stabilization account in accordance with applicable bond covenants.
- Excludes non-cash pension expense.
131
CITY OF RIVERSIDE TABLE 20 DEMOGRAPHIC AND ECONOMIC STATISTICS LAST TEN CALENDAR YEARS Calendar Year 2012 2013 2014 2015 2016 2017 2018 2019 2020 2021 Sources:
Population1 311,955 314,034 314,221 324,696 326,792 325,860 328,101 328,155 324,302 317,847 Personal lncome2 (in thousands) 6,923,217 6,909,376 6,857,559 6,953,323 7,139,080 7,349,024 7,674,374 8,102,150 8,496,064 8,891,501 1 California State Department of Finance.
Per Capita Personal lncome2 22,193 22,002 21,824 21,415 21,846 22,553 23,390 24,690 26,198 27,974 Unemployment Rate3 9.7 8.4 7.9 6.4 5.8 5.1 3.8 3.6 9.0 6.7 2 Demographic Estimates are based on the last available Census. Projections are developed by incorporating all of the prior census data released to date. Demographic Data is totaled from Census Block Groups that overlap the City's boundaries. Demographic Estimates for 2010 and later are per the U.S. Cenus Bureau most recent American Community Survey.
3 State of California Employment Development Department.
132
CITY OF RIVERSIDE TABLE 21 PRINCIPAL EMPLOYERS CURRENT YEAR AND NINE YEARS AGO 2022 2013 Percentage Percentage of Total City of Total City Employer Emelo)'.ees Rank Emelo)'.ment Emeloyees Rank Emelo)'.ment County of Riverside 24,290 1
20.1%
11,187 1
7.6%
University of California, Riverside 8,593 2
7.1%
5,497 3
3.7%
March Air Force Reserve 9,600 3
8.0%
Kaiser Permanente 5,846 4
4.8%
4,500 4
3.1%
Riverside Unified School District 5,003 5
4.1%
5,580 2
3.8%
City of Riverside 2,336 6
1.9%
2,687 5
1.8%
Riverside Community Hospital 2,200 7
1.8%
1,880 7
1.3%
Riverside Community College District 2,100 8
1.7%
2,087 6
1.4%
Alvord Unified School District 1,898 9
1.6%
1,445 9
1.0%
California Baptist University 1,442 10 1.2%
Riverside County Office of Eduation 1,765 8
1.2%
Parkview Community-Hospital 1,350 10 0.9%
Total 63,308 52.3%
37,978 25.8%
Source: City of Riverside, Economic Development Department 133
CITY OF RIVERSIDE TABLE22 FULL-TIME EQUIVALENT CITY GOVERNMENT EMPLOYEES BY FUNCTION LAST TEN FISCAL YEARS 2013 20141 2015 Function General government 413.90 356.25 361.25 Public safety (sworn and non-sworn personnel)
Police 596.75 551.75 553.75 Fire 255.46 255.00 255.00 Highways and streets 362.11 333.48 308.00 Sanitation 57.00 59.00 57.00 Culture and recreation 351.48 269.98 274.45 Airport 9.50 6.00 6.00 Water 181.15 182.15 181.15 Electric 459.50 462.50 464.50 2016 394.24 554.75 251.00 308.00 59.00 286.75 6.00 181.15 466.50 Total 2,686.85 2,476.11 2,461.10 2,507.39 1 In fiscal year 2013/14, the City Council deleted a number of long-term unfunded positions.
Source: City of Riverside, Finance Department, FY 2021/22 Budget Master Personnel Detail 134 2017 2018 2019 2020 2021 2022 417.55 430.05 453.80 458.30 460.30 462.05 512.00 543.00 557.00 571.00 585.00 604.00 239.00 242.00 245.00 248.00 251.00 250.00 272.00 273.00 271.00 271.00 270.00 271.00 59.00 59.00 59.00 59.00 62.00 62.00 276.23 276.98 276.07 284.07 283.60 287.86 7.00 7.00 7.00 7.00 7.00 7.00 174.15 158.65 158.65 158.65 164.50 164.50 471.75 489.25 475.25 475.25 466.25 468.50 2,428.68 2,478.93 2,502.77 2,532.27 2,549.65 2,576.91
CITY OF RIVERSIDE TABLE 23 OPERATING INDICATORS BY FUNCTION LAST TEN FISCAL YEARS Function/Program 2013 Police:
Arrests 8,362 Fire:
Number of calls answered 29,988 Inspections 10,151 Public Works:
Street resurfacing (miles) 16.50 Parks and Recreation:
Number of recreation classes 41,364 Number of facility rentals 43,358 Water:
Number of accounts 64,591 2014 9,321 30,668 12,476 35.38 45,707 46,432 64,829 Annual consumption (ccf) 28,186,178 28,887,304 Electric:
Number of accounts 107,525 108,358 Annual consumption (millions of kwh) 2,193 2,152 Sewer:
New connections 17,607 17,274 Average daily sewage treatment (millions of gallons) 29.57 28.49 1 Reduction is due to the affects of the COVID-19 pandemic.
Source: City of Riverside, various departments 2015 2016 2017 10,310 9,242 8,358 32,943 35,905 36,150 8,770 6,636 6,482 38.75 39.01 27.09 43,007 53,907 53,308 44,363 47,772 48,097 65,102 65,094 65,428 26,007,490 22,529,463 25,340,729 108,388 108,776 109,274 2,167 2,170 2,197 17,553 17,669 17,654 27.15 26.35 27.19 135 2018 2019 2020 2021.
2022 8,423 8,295 7,738 8,089 7,667 38,501 37,739 37,999 31,918 38,801 6,519 5,584 7,987 7,175 9,244 17.37 16.50 18.80 7.30 17.35 54,025 54,069 34,366 5251 8561 46,904 66,846 45,741 3241 3741 65,640 65,803 66,031 66,198 66,372 27,514,374 25,827,721 25,526,021 28,625,382 26,845,583 109,619 110,480 111,161 111,711 112,328 2,195 2,150 2,115 2,122 2,145 17,551 17,540 17,593 17,602 17,588 26.16 26.86 25.22 25.30 26.01
CITY OF RIVERSIDE TABLE 24 CAPITAL ASSET STATISTICS BY FUNCTION LAST TEN FISCAL YEARS Fiscal Year 2013 2014 2015 2016 2017 2018 2019 2020 2021 2022 Function:
Public Safety:
Police:
Stations 3
3 3
3 3
3 3
3 4
4 Substations 4
4 4
4 5
4 5
4 1
1 Helicopters 4
3 3
3 3
2 2
2 2
2 Airplane 0
0 0
0 0
1 1
1 1
1 Fire:
Stations 14 14 14 14 14 14 14 14 14 14 Active apparatus 28 28 31 33 32 33 55 32 32 32 Reserve apparatus 11 11 8
9 9
9 13 9
10 10 Training facilities 1
1 1
1 1
1 1
1 1
1 Highways and streets:
Streets (miles) 868.89 871.19 872.16 872.22 872.01 872.24 872.10 872.35 891.28 891.17 Streetlights 29,949 29,968 299,986 30,427 30,467 30,479 30,445 30,489 30,489 30,489 Signalized intersections 365 367 386 381 382 384 392 397 408 408 Culture and Recreation:
Parks acreage 2,891.0 2,911.8 2,926.8 2,983.0 2,983.0 2,988.0 2,988.0 2,988.0 2,988.0 2,988.0 Community centers 11 11 11 11 11 11 11 11 12
- 12 Playgrounds 43 44 44 46 46 46 46 46 46 43 Swimming pools 7
7 7
7 7
7 7
7 7
7 Softball and baseball diamonds 44 44 44 44 44 44 44 44 44 44 Library branches 8
8 8
8 8
8 8
8 8
8 Museum exhibit-fixed 3
3 4
5 5
1 1 0
1 1
Museum exhibit-special 4
4 5
6 6
1 1 4
1 3 1 1 1 5
Water:
Fire hydrants 7,726 7,754 7,758 7,908 7,952 8,173 8,192 9,304 8,012 8,019 Sewer:
Sanitary sewers (miles) 829 829 820 829 827 820 820 820 820 853 Electric:
Miles of overhead distribution system 513.0 513.0 513.0 513.0 513.0 514.0 514.0 513.0 513.0 513.0 Miles of underground system 810.0 814.0 815.0 817.0 826.0 831.0 834.0 838.0 838.0 838.0 1 The decrease in total numbers of Museum's exhibits is due to the closure of the Riverside Metropolitan Museum for expansion and renovation.
Source: City of Riverside, various departments 136