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Home My WebLink About2019-01-17 Council Agenda PacketThursday, January 17, 2019 9:00 AM City of Fresno 2600 Fresno Street Fresno, CA 93721 www.fresno.gov Council Chambers City Council Meeting Agenda - Final-revised Regular Meeting January 17, 2019City Council Meeting Agenda - Final-revised The Fresno City Council welcomes you to City Council Chambers, located in City Hall, 2nd Floor, 2600 Fresno Street, Fresno, California 93721. The City of Fresno’s goal is to comply with the Americans with Disabilities Act (ADA) in all respects. The meeting room is physically accessible. If, as an attendee or participant at the meeting, you need additional accommodations such as interpreters, signers, assistive listening devices, or the services of a translator, please contact the Office of the City Clerk at (559) 621-7650 or clerk@fresno.gov. To ensure availability, you are advised to make your request at least 48 hours prior to the meeting. The agenda and related staff reports are available at www.fresno.gov, as well as in the Office of the City Clerk. The Council meeting can be viewed live on Comcast Channel 96 and AT&T Channel 99 from 9:00 a.m. and is re-played beginning at 8:00 p.m.. The meeting can also be viewed online at https://fresno.legistar.com. PROCESS: For each matter considered by the Council there will first be a staff presentation followed by a presentation from the involved individuals, if present. Testimony from those in attendance will then be taken. All testimony will be limited to three minutes per person. If you would like to speak fill out a Speaker Request Form available from the City Clerk’s Office and in the Council Chambers. The three lights on the podium next to the microphone will indicate the amount of time remaining for the speaker. The green light on the podium will be turned on when the speaker begins. The yellow light will come on with one minute remaining. The speaker should be completing the testimony by the time the red light comes on and tones sound, indicating that time has expired. A countdown of time remaining to speak is also displayed on the large screen behind the Council dais. No documents shall be accepted for Council review unless they are submitted to the City Clerk at least 24 hours prior to the Council Agenda item being heard. Following is a general schedule of items for Council consideration and action. The City Council may consider and act on an agenda item in any order it deems appropriate. Actual timed items may be heard later but not before the time set on agenda. Persons interested in an item listed on the agenda are advised to be present throughout the meeting to ensure their presence when the item is called. AGENDA ITEMS MARKED WITH AN ASTERISK (***) ARE SUBJECT TO MAYORAL VETO OR RECONSIDERATION Page 2 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised El Consejo de la Ciudad de Fresno da la bienvenida al City Council Chambers, ubicado en la Alcaldía (City Hall), do piso, 2600 Fresno Street, Fresno, California 93721. El objetivo de la Ciudad de Fresno es cumplir con la Ley de Americanos con Discapacidades (ADA) en todo aspecto. La sala para juntas es físicamente accesible. Si usted, como asistente o participante de la junta, necesita acomodaciones adicionales coma intérpretes, lenguaje de señas, aparatos auditivos, o los servicios de un traductor, por favor comuníquese con la Oficina del Secretario Municipal llamando al (559) 621-7650 o al clerk@fresno.gov. Para asegurarse de la disponibilidad, se le recomienda llamar y hacer su petición por lo menos 48 horas antes de la junta. La agenda y los reportes de personal correspondientes están disponibles en el www.fresno.gov, o en la Oficina del Secretario Municipal. Las juntas del Municipio se pueden ver en el Canal 96 de Comcast y el Canal 99 de AT&T a las 9:00 a.m. y otra vez empezando a las 8:00 p.m. La junta también se puede ver en el internet en el https://fresno.legistar.com PROCESO: Por cada asunto que escuche el Consejo Municipal, habrá una presentación del personal seguida por una presentación de los individuos involucrados, si están presentes. El testimonio de los presentes se escuchará entonces. Todo testimonio se limitará a tres minutos por persona. Si usted desea hablar, Ilene la hoja para pedir hablar disponibles en la oficina del Secretario Municipal y en la Sala Consistorial. Las tres luces en el atril junto al micrófono indicarán cuanto tiempo le queda al orador. La luz verde en el atril se prenderá cuando el orador comience. La luz amarilia se prenderá cuando quede un minuto. El orador debería estar concluyendo su testimonio cuando la luz roja prenda y ci sonido indique que se acabo su tiempo. La cantidad del tiempo que queda también aparecerá en la pantalla grande atrás del Consejo Municipal. No se aceptarán documentos para que repase el Consejo Municipal a menos que se sometan al Secretario Municipal por lo menos 24 horas antes de que se escuche la Agenda del Consejo Municipal. Este es el horario general de temas para la consideración y acción del Consejo Municipal. El consejo Municipal pudiera considerar y tomar acción en un artículo de la Agenda en el orden que considere adecuado. Artículos con una hora fijada se pueden escuchar después de la hora indicada pero no antes de la hora indicada en la agenda. Se les recomienda a las personas que estén interesadas en un artículo de la agenda, que estén presentes durante toda la junta para asegurar su presencia Page 3 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised cuando se presente ese artículo. LOS ARTICULOS MARCADOS CON TRES ASTERISCOS (***) ESTAN SUJETOS A UN VETO POR PARTE DEL ALCALDE O UNA RECONSIDERACION Tso Fresno City Council tos txais koj rau City Council Chambers, nyob rau hauv City Hall, 2nd Floor, 2600 Fresno Street, Fresno, California 93721. Lub hom phiaj ntawm nroog Fresno yuav ua kom tau txhua yam raw li txoj cai American with Disabilities Act (ADA) kom fwm txhua tus. Lub rooj sab laj txhua tus yuav tsum muaj feem koom kom tau, txawm yog cov tuaj koom, cov muaj feem rau lub rooj sab laj, yuav tsum kom muaj kev pab rau sawv daws xws li txhais lus, piav tes, tej twj mloog pob ntseg los yog ib tug txhais lus, thov hu rau Office of the City Clerk ntawm (559) 621-7650 los sis clerk@fresno.gov. Yuav kom paub tseeb tias npaj tau rau koj, koj yuav tsum tau hais ua ntej 48 xuab moos ntawm lub rooj sab laj. Daim ntawv kom tswj thiab tej ntaub ntawv cov ua dej num yuav coj los ceeb tshaj muaj nyob rau ntawm www.fresno.gov, los sis ntawm Office of the City Clerk. Council lub rooj sab laj saib pom rau hauv Comcast tshooj 96 thiab AT&T tshooj 99 thaum 9:00 teev sauv ntxoov thiab rov tso tawm thaum 8:00 teev tsaus ntuj. Lub rooj sab Iaj kuj saib tau online at https://fresno.legistar.com. TXUAS NTXIV: Txhua nqe laj txheej yuav tau pom zoo los ntawm cov council ua ntej thiab yuav tau muaj ib tug staff los cej luam dhau ntawd cov uas muaj feem cuam mam los cej luam ib tug zuj zus, yog tuaj nyob rau ntawd. Dhau ntawd yuav tso rau sawv daw los tawrn suab, ib leeg twg yuav los tawm suab tsuas pub peb(3) nas this xwb. Yog koj xav los tawm suab, mus sau rau daim ntawv (Speaker Request Form) muaj nyob rau hauv City Clerk's Office thiab nyob rau huav Council Chambers. muaj peb(3) lub teeb nyob rau ntawm lub podium uas puab rau ntawm lub (microphone) qhia tias tus neeg hais lus muaj sij haum ntev Ii cas xwb. Lub teeb ntsuab ntawm lub podium yuav cig thaum tus hais lus pib hais. Lub teeb daj yuav cig thaum tshuav ib(1) nas this. Tus hais lus yuav tsum hais kom tas rau thaum lub teeb liab cig thiab lub tswb nrov, qhia tias sij haum tas lawm. lb qhov ntxiv nyob rau saum daim (screen) loj loj dai rau tom cov council nrob qaurn yuav pom lub sij hawm dhia qis zuj zus los mus. Page 4 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised Cov council yuav tsis txais ib yam ntaub ntawv los saib ntxiv tshwj tsis yog twb muab xa rau City Clerk 24 teev thiab muab tso rau hauv daim kom tswj ua ntej council yuav los mloog tej xwm txheej. Dhau ntawd yuav muab sij hawm rau cov council los soj ntsuam thiab ua tes dej num, Coy tswv zos (City Council) yuav los ntsuam xyuas thiab leg raws tej nqe hauv daim kom tswj yog pom tias yam twg yuav tsim nyog. Mam muab lub sij hawm los xyuas raws tej txheej txheem tom qab tiam si yuav tsis yog ua ntej raws Ii daim kom tswj tau teev tseg. Cov uas txaus siab rau tei laj txheej uas tau teev tseg rau hauv daim kom tswj, xav kom nyob kom dhau lub rooj sab laj kom thaum hu txog nws thiaj nyob rau ntawd YOG QHOV MUAJ PEB LUB HNUB QUB (***) NYOB RAU HAUV DAIM KOM TSWJ YUAV RAUG MAYORAL VETO LOS SIS ROV SOJ NTSUAM DUA Page 5 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised 9:12 A.M. ROLL CALL Invocation by Pastor John Cox of the River Park Bible Church Pledge of Allegiance to the Flag APPROVE AGENDA APPROVE MINUTES ID19-0178 Approval of amended minutes for December 6, 2018. Sponsors:Office of the City Clerk ID19-0188 Approval of minutes for January 10, 2019. Sponsors:Office of the City Clerk CEREMONIAL PRESENTATIONS ID19-0175 Presentation of the SPCA Pet of the Month Sponsor: Councilmember Soria ID19-0184 Proclamation for “David McDonald” Sponsors:Mayor's Office and Council President Brandau ID19-0172 Proclamation of “National Slavery and Human Trafficking Awareness Month” Sponsors:Mayor's Office and Councilmember Chavez COUNCILMEMBER REPORTS AND COMMENTS 1. CONSENT CALENDAR All Consent Calendar items are considered to be routine and will be treated as one agenda item. The Consent Calendar will be enacted by one motion. Public comment on the Consent Calendar is limited to three (3) minutes per speaker. There will be no separate discussion of these items unless requested by a Councilmember, in which event the item will be removed from the Consent Calendar and will be considered as time allows. 1-A ID19-0193 Actions pertaining to the 2018 Edward Byrne Memorial Justice Page 6 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised Assistance Grant (JAG) Program: 1.Authorize the Chief of Police to apply for and accept $282,426 in total grant funding for the 2018 JAG Program from the U.S. Department of Justice, Bureau of Justice Assistance for the City and County of Fresno 2.Authorize the Chief of Police to execute all related documents for the application, acceptance, modification, and administration of 2018 JAG Program 3.Authorize the Chief of Police to execute an agreement between the City of Fresno and the County of Fresno regarding the 2018 JAG Program 4.***RESOLUTION - 24th amendment to the Annual Appropriation Resolution No. 2018-157 appropriating $71,700 from the 2018 JAG Program award from the U.S. Department of Justice, Bureau of Justice Assistance (Requires 5 affirmative votes) (Subject to Mayor’s Veto) Sponsors:Police Department 1-B ID19-0194 RESOLUTION - Of Intention to annex Final Tract Map No. 5913 as Annexation No. 99 to the City of Fresno Community Facilities District No. 11 and to Authorize the Levy of Special Taxes; and setting the public hearing for February 28, 2019 at 10:00 a.m. (northeast corner of South Armstrong Avenue and the California Alignment) (Council District 5) Sponsors:Public Works Department 1-C ID19-0187 RESOLUTION - To rescind approval of Development Permit D-16-109 and adoption of Environmental Assessment No . D-16-109. Sponsors:Planning and Development Department 1-D ID19-0015 Approve Service Provider Contract between City of Fresno through the PARCS Department and Fresno-Madera Area Agency on Aging (FMAAA) annual renewal for FY19 to operate the Senior Hot Meals (SHM) Program Site Management Contract at seven sites; and authorize the PARCS Director to execute the agreement on behalf of the City Sponsors:Parks, After School and Recreation and Community Services Department Page 7 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised 1-E ID19-0138 Approve the award of a purchase contract to Vincent Communications, Inc., a Clovis-based corporation, for the purchase of 70 Kenwood radio sets in the amount of $177,057.30 for Police Department fleet vehicles Sponsors:Department of Transportation 1-F ID19-0140 Actions pertaining to awarding a contract to remove underground diesel storage tanks in the Fresno Area Express bus yard: 1.Adopt findings of categorical exemptions pursuant to sections 15301 and 15330 of the California Environmental Quality Act Guidelines 2.Award a construction contract to Jimmy the Junker, Inc ., DBA Williams Excavation, of Fresno, California, in the amount of $481,600 for removal and disposal of underground diesel tanks, dispensers, and associated piping Sponsors:Department of Transportation 1-G ID19-0142 Approve a purchase contract to Swanson Fahrney Ford for the purchase of 15 new Ford F-150 XLT super crew cab pickups in the amount of $434,318.64 Sponsors:Department of Transportation 1-H ID19-0143 Approve an Agreement with Fresno County Superintendent of Schools’ Fresno Regional Occupational Program to provide a community classroom training opportunity for students within the Department of Transportation Municipal Fleet Division Sponsors:Department of Transportation 1-I ID19-0141 Approve the Mayor’s appointees for the Anti-Displacement Task Force. Sponsors:Mayor's Office 1-J ID19-0180 Approve the reappointment of Peter Vang to the Planning Commission and the reappointments of James Poptanich and Rodney Ashley to the Fresno Madera Area Agency on Aging Board (FMAAA) Sponsors:Mayor's Office Page 8 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised 1-K ID19-0151 Approve Consultant Services Agreement in the amount of $129,354 with Akel Engineering Group, Inc ., a California corporation, for Wastewater Collection System Hydraulic Modeling (Citywide) Sponsors:Department of Public Utilities CONTESTED CONSENT CALENDAR 2. SCHEDULED COUNCIL HEARINGS AND MATTERS 10:00 A.M.#1 ID19-0132 HEARING to adopt resolutions and ordinance to annex territory and levy a special tax regarding City of Fresno Community Facilities District No. 11, Annexation No. 90 (Final Tract Map No. 6165, Assessor’s Parcel Number 316-022-62, and Assessor’s Parcel Number 316-022-63) (north side of East Church Avenue between South Fowler and Sunnyside Avenues) (Council District 5) 1.RESOLUTION - Directing Preparation of a Modified District Report Analyzing Impact of the Proposed Change in Services and Increase in the Probable Special Tax for Proposed Modification of Resolution No. 2018-267 2.RESOLUTION - Receiving and Approving the Modified District Report and Modifying Council Resolution No. 2018- 267 for Annexation No. 90 to the City of Fresno Community Facilities District No. 11 3.***RESOLUTION - to Annex Territory to Community Facilities District No. 11 and Authorizing the Levy of a Special Tax for Annexation No. 90 (Subject to Mayor’s Veto) 4.***RESOLUTION - Calling Special Mailed -Ballot Election (Subject to Mayor’s Veto) 5.***RESOLUTION - Declaring Election Results (Subject to Mayor’s Veto) 6.***BILL - (For introduction and adoption) - Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No. 11, Annexation No. 90 (Subject to Mayor’s Veto) Sponsors:Public Works Department 10:00 A.M.#2 6258 HEARING to adopt resolutions and ordinance to annex Page 9 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised territory and levy a special tax regarding City of Fresno Community Facilities District No. 11, Annexation No. 98 (Final Tract Map No. 6162) (northeast corner of North Hayes Avenue and East Ashlan Avenue) (Council District 1) 1.***RESOLUTION - to Annex Territory to Community Facilities District No. 11 and Authorizing the Levy of a Special Tax for Annexation No. 98 (Subject to Mayor’s Veto) 2.***RESOLUTION - Calling Special Mailed-Ballot Election (Subject to Mayor’s Veto) 3.***RESOLUTION - Declaring Election Results (Subject to Mayor’s Veto) 4.***BILL - (For introduction and adoption) - Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No. 11, Annexation No. 38 (Subject to Mayor’s Veto) Sponsors:Public Works Department 10:05 A.M. REPORT TO THE CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO AND THE FRESNO REVITALIZATION CORPORATION ID19-0169 Successor Agency to the Redevelopment Agency of the City of Fresno and Fresno Revitalization Corporation (FRC) consider adopting: 1. RESOLUTION - Approving the Recognized Obligation Payment Schedule 19-20 Sponsors:Successor Agency to the Redevelopment Agency of the City of Fresno Page 10 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised 10:10 A.M. ID19-01102 Appearance by Joseph and Ziona Brophy to request Council assistance with a long standing issue of their neighbors repairing and storing vehicles on their front yard. (Speakers reside in District 1) 1:30 P.M. ID19-0191 Approve Agreement with the State of California to receive $3,105,519.90 in Homeless Emergency Aid Program (HEAP) funding awarded to the City of Fresno December 20, 2018. Sponsors:Mayor's Office ID19-0192 Approve a Fourth Amendment to the Agreement between the City of Fresno and WestCare California for Street Outreach Services through the HERO Team in the amount of $420,000. Sponsors:Mayor's Office 3. GENERAL ADMINISTRATION 3-A ID19-0159 Provide Anti-Slum Enforcement Team (ASET) Quarterly Report Sponsors:Office of Mayor & City Manager and City Attorney's Office 3-B ID19-0196 Submission and Acceptance of the City of Fresno Comprehensive Annual Financial Report and the Comprehensive Annual Debt Report for Fiscal Year 2018. Sponsors:Finance Department 3-C ID19-0120 Approve the amended City of Fresno Retiree Health Reimbursement Arrangement (HRA) Plan Document Sponsors:Personnel Services Department 3-D ID19-0121 BILL - (For introduction) - Amending Section 3-422 of the Fresno Municipal Code relating to the redeposit by members of the Fire and Police Retirement System of contributions withdrawn by former spouses Sponsors:Personnel Services Department 3-E ID19-0136 Award a Requirements Contract to Chemtrade Chemicals, US, LLC., of Parsippany, New Jersey in the amount of $1,204,500 for Bulk Aluminum Sulfate, for a term of one -year with the possibility of Page 11 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised two one-year extensions. Bid File 9478 (Citywide) Sponsors:Department of Public Utilities 3-F ID19-0150 Approve a Consultant Services Agreement with Carollo Engineers, Inc., for an amount not to exceed $906,350 for preparation of engineering design of a new Waste Gas Flare unit for the Fresno/Clovis Regional Wastewater Reclamation Facility (Citywide) Sponsors:Department of Public Utilities 3-G ID19-1597 Actions pertaining to the removal, processing, and beneficial reuse or other environmental friendly alternative disposal of Biosolids (Bid File No. 9460) (Citywide) 1.Approve a three year contract with two one -year optional terms with Synagro Technologies, Inc ., in the amount of $10,155,000; 2.Approve a three year contract with two one -year optional terms with Holloway Environmental, LLC ., in the amount of $6,372,000 Sponsors:Department of Public Utilities 3-H ID19-0149 Actions pertaining to accepting a Groundwater Sustainability Grant from the State of California for removal of Perchloroethylene from Groundwater at Pump Stations PS 117 and PS 284 (Citywide): 1.Adopt findings of Class 1, Class 3, and Class 32 Categorical Exemptions pursuant to Sections 15301, 15303, and 15332 of the California Environmental Quality Act Guidelines 2.***RESOLUTION - Authorizing entering into a Funding Agreement with the State Water Resources Control Board and Authorizing and Designating a Representative for the Groundwater Sustainability Grant Program for Funding Related to Perchloroethylene (PCE) groundwater cleanup project for water well Pump Stations PS 117 and PS 284 in the City of Fresno and authorizing the execution of documents (Subject to Mayor’s Veto) 3.Approve a Third Amendment to Agreement for supplemental engineering services with Provost & Pritchard Engineering Group, Inc., in the amount of $28,500 Sponsors:Department of Public Utilities Page 12 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised 3-I ID19-0139 Approve the award of a purchase contract to Stommel Inc., dba Lehr Automotive, a California-based company, in the amount of $899,509.13 for the purchase of 66 sets of police vehicle hardware Sponsors:Department of Transportation 3-J ID19-01101 WORKSHOP - Proposed PARCS Priority Projects Sponsors:Parks, After School and Recreation and Community Services Department 3-K ID19-0198 Approve the expenditures of $1,000,000 of General Fund appropriations identified in FY2019 budget deliberations for PARCS recommended priority projects Sponsors:Parks, After School and Recreation and Community Services Department 3-L ID19-0135 Actions pertaining to the Installation of Field Lighting at Cary Park located at 4750 N. Fresno Street south of Shaw Avenue - Project Bid File No. 3603 (Council District 4) 1.Adopt a finding of Categorical Exemption pursuant to Class 1 Section 15301(c) (existing facilities) of the California Environmental Quality Act (CEQA) Guidelines for the Installation of Field Lighting at Cary Park 2.Award a construction contract to Cable Links Construction of Fresno, California, in the amount of $764,487 for the Installation of Field Lighting at Cary Park Sponsors:Public Works Department 4. CITY COUNCIL 4-A ID19-0197 Actions related to repairs at Romain Neighborhood Center: 1. Adopt a finding of Categorical Exemption pursuant to Class 1/Section 15301(c) of the California Environmental Quality Act (CEQA) Guidelines for repair of damage to Romain Neighborhood Center. 2.***RESOLUTION - Directing the prompt repair of Romain Neighborhood Center. (Subject to Mayor’s veto) Sponsor: Councilmember Esparza 4-B ID19-0173 Council Boards and Commissions Communications, Reports, Assignments and/or Appointments, Reappointments, Removals to/from City and non-City Boards and Commissions: 1. Council of Governments - Mayor Brand-Ex-Officio Page 13 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised (Olivier-Alternate) 2. Finance and Audit Committee - Bredefeld, Esparza- Vice Chair, Brandau 3. Fresno Area Workforce Investment Corporation - Soria 4. Fresno County Transportation Authority (FCTA) - Mayor Brand-Ex-Officio, (Caprioglio) 5. Fresno Regional Workforce Development Board - Soria 6. Fresno County Zoo Authority - Mayor Brand-Ex-Officio, (Arias-Alternate) 7. Fresno Madera Area Agency on Aging Board - Olivier 8. Joint Powers Financing Authority - Mayor Brand, President Soria, Councilmember Caprioglio 9. San Joaquin River Conservancy Board - Mayor Brand-Ex-Officio, (Brandau-Alternate) 10. Association for the Beautification of Highway 99 - Baines 11. Upper Kings Basin Integrated Regional Water Management JPA - Brandau (Olivier, Michael Carbajal and Vacant - Alternates) 12. Economic Development Corporation Serving Fresno County - Caprioglio-Ex-Officio, City Manager Wilma Quan-Schecter and (Chavez - Alternate) 13. League of California Cities (Annual Meeting) - Council President Soria, (Vice President Brandau, Councilmember Caprioglio - Alternate) 14. Litigation Exposure Reduction Ad Hoc Committee - Brandau, Caprioglio 15.Sub- Committee on Transportation - Baines, Caprioglio, Soria 16.Code Enforcement Sub-Committee - Baines, Caprioglio, Soria 17.Enterprise and Construction Management Oversight Board - Councilmember Chavez, Bredefeld-Alternate 18.School Liaison Sub-Committee - Soria - Chair, Olivier, Baines 19. North Kings Groundwater Sustainability Agency (GSA) Joint Powers Authority - Mayor Brand (Michael Carbajal, Tim Orman - Alternates) Sponsors:Council President Brandau 5. CLOSED SESSION Page 14 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised PLEASE NOTE: UNSCHEDULED COMMUNICATION IS NOT SCHEDULED FOR A SPECIFIC TIME AND MAY BE HEARD ANY TIME DURING THE MEETING UNSCHEDULED COMMUNICATION Members of the public may address the Council regarding items that are not listed on the agenda and within the subject matter jurisdiction of the Council. Each person is limited to a three (3) minute presentation. Anyone wishing to be placed on an agenda for a specified topic should contact the City Clerk’s Office at least ten (10) days prior to the desired date. Council action on unscheduled items, if any, shall be limited to referring the item to staff for a report and possible scheduling on a future Council agenda. ADJOURNMENT UPCOMING SCHEDULED COUNCIL HEARINGS AND MATTERS JANUARY 31, 2019 BILL- (for introduction) – Approve the Money Back Guarantee/Business Streamlining Act - adding Article 22 to Chapter 12 of the Fresno Municipal Code - to make the development process more transparent, accountable and user friendly. (Councilmember Bredefeld and Council President Brandau) FEBRUARY 14, 2019 10:00 A.M. - HEARING regarding the proposed Substantial Amendment, 2018-01 to the 2018 - 2019 Action Plan . FEBRUARY 14, 2019 10:30 A.M. - Community Choice Energy Workshop FEBRUARY 28, 2019 10:00 AM - HEARING to adopt resolutions and ordinance to annex territory and levy a special tax regarding City of Fresno Community Facilities District No. 11, Annexation No. 99 (Final Tract Map No. 5913) (northeast corner of South Armstrong Avenue and the California Alignment) (Council District 5) MARCH 21, 2019 10:00 AM - HEARING to adopt resolutions and ordinance to annex territory and levy a special tax regarding City of Fresno Community Facilities District No. 9, Page 15 City of Fresno ***Subject to Mayoral Veto January 17, 2019City Council Meeting Agenda - Final-revised Annexation No. 23 (the development of Assessor’s Parcel Number 501-153-05S and 501-153-06S as United Health Center, Development Permit Application no. 2017-051) (northwest corner of West Herndon and North Brawley Avenues) (Council District 2) UPCOMING EMPLOYEE CEREMONIES January 31, 2019 – Employee of the Winter Quarter April 10, 2019 (Wednesday) – Employee Service Awards May 9, 2019 – Employee of the Spring Quarter July 25, 2019 - Employee of the Summer Quarter October 24, 2019 – Employee of the Fall Quarter November 13, 2019 (Wednesday) – Employee Service Awards 2019 CITY COUNCIL MEETING SCHEDULE JANUARY 24 - NO MEETING JANUARY 31 - 9:00 A.M. MEETING FEBRUARY 7 - NO MEETING FEBRUARY 14 - 9:00 A.M. MEETING FEBRUARY 21 - NO MEETING FEBRUARY 28 - 9:00 MEETING Page 16 City of Fresno ***Subject to Mayoral Veto City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0178 Agenda Date:1/17/2019 Agenda #: REPORT TO THE CITY COUNCIL January 17, 2019 SUBJECT Approval of amended minutes for December 6, 2018. City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ Thursday, December 6, 2018 9:00 AM City of Fresno 2600 Fresno Street Fresno, CA 93721 www.fresno.gov Council Chambers City Council President - Esmeralda Z. Soria Vice President - Steve Brandau Councilmembers: Oliver L. Baines, III, Paul Caprioglio, Luis Chavez, Garry Bredefeld, Clinton J. Olivier City Manager - Wilma Quan-Schecter City Attorney - Douglas T. Sloan City Clerk - Yvonne Spence, MMC Meeting Minutes - Final Regular Meeting December 6, 2018City Council Meeting Minutes - Final The City Council met in regular session in the Council Chamber, City Hall on the date and time above written. 9:10 A.M. ROLL CALL Councilmember Baines was absent during roll call and arrived at 9:45 A.M. President Esmeralda Z. Soria Vice President Steve Brandau Councilmember Oliver L. Baines III Councilmember Paul Caprioglio Councilmember Luis Chavez Councilmember Garry Bredefeld Councilmember Clinton Olivier Present:7 - Invocation by Joe White of the Neighborhood Church in Southeast Fresno Pledge of Allegiance to the Flag APPROVE AGENDA City Clerk Spence announced the following changes to the agenda: File ID18-1440 (Ceremonial) Proclamation for Valley Caregivers Month has been removed from the agenda per District 4. File ID18-1454 (1-A) Re: Results of the General Election held on November 6, 2018 has been continued to December 13, 2018. File ID18-0045 - Should read - Approval of minutes of November 29, 2018 not November 15, 2018. File ID18-1402 Closed Session (5-A), Re: Central Valley Community Sports Foundation has been removed from the agenda; File ID18-1517 Closed Session (5-B) Re: South Central Neighbors United v. City of Fresno has been continued to December 13, 2018. Add on item - Notice of Joint Special Meeting for Employee Performance Evaluation and Conference with Labor Negotiators for Executive Director, Fresno Revitalization Corporation. File ID18-1483, 11:00 A.M. item, the speaker Mr. J.D. McCubbin will speak next week on the December 13, 2018 agenda. File ID18-1405 (1-W) was pulled from the agenda by staff. File ID18-1516 (4-A) is being continued to the December 13, 2018 meeting. File ID18-1520, 10:05 A.M. #3 is being continued to the December 13, 2018 meeting. On motion of Councilmember Olivier, seconded by Councilmember Caprioglio, the above item was adopted as amended. The motion carried by the following vote: City of Fresno ***Subject to Mayoral Veto Page 2 December 6, 2018City Council Meeting Minutes - Final Aye:Soria, Brandau, Caprioglio, Chavez, Bredefeld and Olivier6 - Absent:Baines III1 - CEREMONIAL PRESENTATIONS ID18-1389 Special presentation to the Make a Difference Day Sponsors and Volunteers PRESENTED ID18-1357 Proclamation of “Cristian Robles Day” PRESENTED APPROVE MINUTES 18-0045 Approval of minutes from November 29, 2018 On motion of Councilmember Caprioglio, seconded by Vice President Brandau, the above item was approved. The motion carried by the following vote: Aye:Soria, Brandau, Caprioglio, Chavez, Bredefeld and Olivier6 - Absent:Baines III1 - COUNCILMEMBER REPORTS AND COMMENTS Councilmember Caprioglio congratulated the Fresno State football team on becoming the Mountain West Champions, and on December 15th they will play Arizona State in the Las Vegas Bowl. He also congratulated Coach Tedford for being named a finalist for the 2nd year in a row for the Eddie Robinson Coach of the Year award. Councilmember Caprioglio gave a shout out to several Public Works employees, and also thanked John DeLucia in the Copy Center. Council Vice President Brandau also talked about the Fresno State game. He announced that next Thursday is Santa’s Village in Pinedale and it’s their 4th year hosting this event. Santa Clause will be there and will be taking free pictures with the kids. There will also be free gifts, food for the kids, games and raffles. This event will be next Thursday around 4pm in the afternoon. City of Fresno ***Subject to Mayoral Veto Page 3 December 6, 2018City Council Meeting Minutes - Final Council President Soria announced that one of the favorite local spots in the Tower District, Livingston’s Restaurant which has been there for over 30 years is reopening. The restaurant has been closed for the last two years due to damage from an arson fire. December 12th will be the grand opening for the restaurant. Council President Soria also reminded everyone that she is still collecting toys for Steinbeck Elementary and thanked those who already donated. 1. CONSENT CALENDAR APPROVAL OF THE CONSENT CALENDAR Upon call, there was no public comment. On motion of Councilmember Caprioglio, seconded by Councilmember Chavez, the CONSENT CALENDAR was hereby adopted by the following vote: Aye:Soria, Brandau, Caprioglio, Chavez, Bredefeld and Olivier6 - Absent:Baines III1 - 1-A ID18-1454 ***RESOLUTION - Declaration of Results of the Consolidated General Election held within the City of Fresno on November 6, 2018 THIS ITEM IS CONTINUED TO DECEMBER 13, 2018 This Action Item was approved on the Consent Calendar. 1-B ID18-1507 ***RESOLUTION - Amending Resolution No. 2008-243 to conform retention of police records to California law. (Subject to Mayor’s veto) RESOLUTION 2018-278 ADOPTED This Resolution was approved on the Consent Calendar. 1-C ID18-1387 Approval of City Council Meeting Schedule for Calendar Year 2019 THIS ITEM WAS PULLED BY COUNCIL VICE PRESIDENT BRANDAU AND WAS MOVED TO THE CONTESTED CONSENT CALENDAR FOR FURTHER DISCUSSION. 1-D ID18-1179 Actions pertaining to the Peace Officers Research Association of City of Fresno ***Subject to Mayoral Veto Page 4 December 6, 2018City Council Meeting Minutes - Final California (PORAC): 1.Approve the Chief of Police to enter into an agreement with PORAC to reimburse the City of Fresno $163,700 for the annual cost of one full time police officer elected to serve on the PORAC Board of Directors, effective January 1 through June 2019. 2.***RESOLUTION - 4th Amendment to the Position Authorization Resolution (PAR) No. 2018-158, adding one police officer position to the Fresno Police Department, effective January 1, 2019 (Subject to Mayor’s Veto) 3.***RESOLUTION - 14th Amendment to the Annual Appropriation Resolution (AAR) No. 2018-157 appropriating $72,900, to fund a full time police officer from January through June 2019. (Requires 5 affirmative votes) (Subject to Mayor’s Veto) RESOLUTION 2018-279 ADOPTED RESOLUTION 2018-280 ADOPTED This Action Item was approved on the Consent Calendar. 1-E ID18-1452 Actions pertaining to the 2018 National Sexual Assault Kit Initiative (SAKI) grant program, herein referred to as the SAKI grant 1.***RESOLUTION - 3rd Amendment to Position Authorization Resolution (PAR) No. 2018-158, adding two Police Officer positions to the Fresno Police Department, effective October 1, 2018. (Subject to Mayor’s Veto) RESOLUTION 2018-281 ADOPTED This action item was approved on the Consent Calendar 1-F ID18-1477 Actions pertaining to the 2017 Edward Byrne Memorial Justice Assistance Grant (JAG) Program 1.Authorize the Chief of Police to apply for and accept $264,557 in total grant funding for the 2017 JAG Program from the U.S. Department of Justice, Bureau of Justice Assistance for the City and County of Fresno 2.Authorize the Chief of Police to execute all related documents to the application, acceptance, and administration of 2017 JAG Program 3.Authorize the Chief of Police to execute a joint agreement City of Fresno ***Subject to Mayoral Veto Page 5 December 6, 2018City Council Meeting Minutes - Final between the City of Fresno and the County of Fresno regarding the 2017 JAG program 4.***RESOLUTION - 23rd amendment to the Annual Appropriation Resolution (AAR) No. 2018-157 appropriating $103,600 from the 2017 JAG program award from the U.S. Department of Justice, Bureau of Justice Assistance (Requires 5 affirmative votes) (Subject to Mayor’s Veto) RESOLUTION 2018-282 ADOPTED This Action Item was approved on the Consent Calendar. 1-G ID18-1309 RESOLUTION - Authorizing certain Finance Officers of the City of Fresno (City) to sign City checks as well as various investment and commercial banking documents, and to provide verbal instruction required for the prudent financial administration and safekeeping of City funds RESOLUTION 2018-283 ADOPTED This Action Item was approved on the Consent Calendar. 1-H ID18-1310 RESOLUTION - Designating and authorizing certain Finance Officers of the City of Fresno (City) to sign various investment and commercial banking documents, and to provide verbal instruction required for prudent financial administration and safekeeping of Fresno Joint Powers Finance Authority (JPFA) funds and property Motion by Member Soria, Seconded by Member Caprioglio, it was ordered that the above Resolution be adopted. Motion PASSED 2-0 Vote. Mayor Brand absent. JPFA-44 1-I ID18-1311 RESOLUTION - Consenting and authorizing the investment of monies in the Local Agency Investment Fund (LAIF) in the custody of the State Treasurer for purposes of investment and authorize certain Finance Officers in connection therewith RESOLUTION 2018-285 ADOPTED This Action Item was approved on the Consent Calendar. City of Fresno ***Subject to Mayoral Veto Page 6 December 6, 2018City Council Meeting Minutes - Final 1-J ID18-1312 RESOLUTION - Designating and authorizing the investment monies in the Local Agency Investment Fund in the custody of the State Treasurer for purposes of prudent financial administration and safekeeping of Fresno Joint Powers Financing Authority funds, and authorize certain Finance Officers of the City of Fresno in connection therewith Motion by Member Soria, Seconded by Member Caprioglio, it was ordered that the above Resolution be adopted. Motion PASSED 2-0 Vote. Mayor Brand absent. JPFA-45 1-K ID18-1467 RESOLUTION - Authorizing the execution and delivery of a Master Equipment Lease Purchase Agreement and certain separate lease schedules with respect to the acquisition, purchase, financing and leasing of equipment for the public benefit; and authorizing the execution and delivery of documents required in connection therewith. RESOLUTION 2018-287 ADOPTED This Action Item was approved on the Consent Calendar. 1-L ID18-1494 Approve the reappointment of Tony Canales to the Fresno Regional Workforce Development Board This Appointment was approved on the Consent Calendar. 1-M ID18-1498 BILL (for introduction) - Extending the exemption on development impact fees for certain projects in economically disadvantaged neighborhoods BILL NO. 60 INTRODUCED/LAID OVER This Action Item was approved on the Consent Calendar. 1-N ID18-1499 BILL (for introduction) - Extending the exemption on development impact fees for the replacement or reconstruction of existing commercial structures. BILL NO. 61 INTRODUCED/LAID OVER This Action Item was approved on the Consent Calendar. City of Fresno ***Subject to Mayoral Veto Page 7 December 6, 2018City Council Meeting Minutes - Final 1-O ID18-1492 Approve the award of a purchase contract to Braun Northwest Inc., a Washington-based corporation, for the purchase of a North Star 234-5 Type V SWAT command vehicle in the amount of $267,753.00 This Action Item was approved on the Consent Calendar. 1-P ID18-1323 Approve the acquisition of 5,115 square feet of permanent easement from property owned by Jenco Farms, L.P., (APN 504-091-32 and 504-091-33) in the amount of $51,200 to widen West Herndon Avenue (Council District 2). This Action Item was approved on the Consent Calendar. 1-Q ID18-1324 Approve the acquisition of 6,349 square feet of permanent easement from property owned by Jenco Farms, L.P., (APN 503-020-12) in the amount of $57,200 to widen West Herndon Avenue (Council District 2). This Action Item was approved on the Consent Calendar. 1-R ID18-1325 Approve First Amendment to Agreement with Blair Church & Flynn Consulting Engineers, Inc., for $29,330 for civil engineering design service and preparation of construction documents for the Polk Avenue Widening Project, Shaw Avenue to Gettysburg Avenue (Council Districts 1 and 2). This Action Item was approved on the Consent Calendar. 1-S ID18-1463 ***RESOLUTION - 20th Amendment to the Annual Appropriation Resolution (AAR) No. 2018-157 to appropriate $219,000 Supplemental Refunds and Reimbursements to approved Developers in the Urban Growth Management and Development Impact Fee Programs (Requires 5 affirmative votes) (Subject to Mayor’s veto) RESOLUTION 2018-288 ADOPTED This Action Item was approved on the Consent Calendar. 1-T ID18-1490 1.***BILL NO. B-59 - (Intro. 11/29/2018) (For adoption) - Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No. 11, Annexation No. 95 (Final Tract Map No. 5493) City of Fresno ***Subject to Mayoral Veto Page 8 December 6, 2018City Council Meeting Minutes - Final (east side of North Bryan Avenue between West Shaw and Gettysburg Avenues) (Council District 1) (Subject to Mayor’s veto) ORDINANCE 2018-60 ADOPTED This action was approved on the Consent Calendar. 1-U ID18-1217 Approve a vendor agreement with Sculpture Conservation Studio in the amount of $164,500 to provide non-professional maintenance services for 32 artworks located on Fulton Street between Inyo Street and Tuolumne Street (Council District 3) This Action Item was approved on the Consent Calendar. 1-V ID18-1462 Annual Review and Acceptance of the FY 2018 Impact Fee Annual Report As Required By California Government Code This Action Item was approved on the Consent Calendar. 1-W ID18-1405 Approve Sponsorship Agreement with Pepsi Beverages Company to be Exclusive Non-Alcoholic Beverage Provider for the Fresno Convention & Entertainment Center THIS ITEM IWAS PULLED FROM THE AGENDA BY STAFF This Action Item was approved on the Consent Calendar. 1-X ID18-1470 ***RESOLUTION - Authorizing the Director of Aviation or other authorized representative to: execute all implicated documentation for pre-application and application to the Federal Aviation Administration (FAA) for Airport Improvement Program (AIP) grants for federal fiscal years 2019 and 2020 for both Fresno Yosemite International Airport (FAT) and Fresno Chandler Executive Airport (FCH), accept FAA AIP grant(s) for FY 2019 and FY 2020 projects at both airports including all subsequent amendments thereto offered by the FAA; and apply for and accept grants and all subsequent amendments thereto offered by the California Department of Transportation Aeronautics Division for matching funds for FY 2019 and 2020 FAA grants for the Fresno Chandler Executive Airport (Subject to Mayor’s Veto) RESOLUTION 2018-289 ADOPTED City of Fresno ***Subject to Mayoral Veto Page 9 December 6, 2018City Council Meeting Minutes - Final This Action Item was approved on the Consent Calendar. 1-Y ID18-1480 Approve Contract Change Order No. 17 to the construction contract with W.M. Lyles Company for the City of Fresno’s Southeast Surface Water Treatment Facility Project, to reduce of the total construction contract amount by $1,015,444 (Citywide) This Action Item was approved on the Consent Calendar. 1-Z ID18-1481 Actions pertaining to cleaning and dewatering of Digester 7 at the Fresno/Clovis Regional Wastewater Reclamation Facility (Bid File 3623) (Council District 3): 1.Adopt a finding of Categorical Exemption of Class 1, pursuant to Section 15301 (Existing Facilities) of the California Environmental Quality Act Guidelines 2.Award a construction contract in the amount of $431,818 to Evoqua Water Technologies This Action Item was approved on the Consent Calendar. 1-AA ID18-1497 ***RESOLUTION - 9th Amendment to FY 2019 Salary Resolution No. 2018-159, amending Exhibit 13-2,Unit 13, Non-Exempt Supervisory and Professional (CFPEA) to add the classification of Senior Legal Secretary and providing a salary range for the respective class; amending Exhibit 14, Unit 14, Management Classes to add the classification of ADA Coordinator and providing a salary range for the respective class, and retitle the classifications of Public Works Manager to Public Works/Public Utilities Manager and Public Works Manager - Licensed Engineer to Public Works/Public Utilities Manager - Licensed Engineer (Subject to Mayor’s Veto) RESOLUTION 2018-290 ADOPTED This Action Item was approved on the Consent Calendar. 1-BB ID18-1515 Approve an Exclusive Negotiation Agreement with Tutelian & Company, Inc., for North Fulton Mall Development Opportunities This Action Item was approved on the Consent Calendar. CLOSED SESSION THE COUNCIL RECESSED TO GO INTO CLOSED SESSION FOR THE City of Fresno ***Subject to Mayoral Veto Page 10 December 6, 2018City Council Meeting Minutes - Final JOINT SPECIAL MEETING ITEM FROM 9:45 A.M. TO 9:55 A.M. CONTESTED CONSENT CALENDAR 1-C ID18-1387 Approval of City Council Meeting Schedule for Calendar Year 2019 The above item was presented to Council by Council Vice President Brandau. He added three additional meeting dates to the 2019 Council Calendar. The dates added are: March 14, April 25, and December 19. Council Vice President Brandau stated that he is adding more meetings to allow more time for Council to hear all of the important items without overloading the meeting agenda like it is today. Upon call, there was no public comment. On motion of Vice President Brandau, seconded by Councilmember Caprioglio, the above item was approved as amended. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - 2. SCHEDULED COUNCIL HEARINGS AND MATTERS 10:00 A.M. ID18-1444 TEFRA HEARING - To hear and to consider information concerning the proposed issuance of Health Facility Revenue Bonds by the Michigan Finance Authority in an amount not to exceed $1,500,000,000, of which no more than $35,000,000 will be used for the purpose of financing or refinancing the costs of acquisition, construction, furnishing, and equipping of certain health care facilities located in Fresno. 1.***RESOLUTION - Approving the issuance of the Michigan Finance Authority Revenue Bonds on behalf of Trinity Health Corporation, in one or more series, for the purpose among other things, of financing or refinancing the costs of acquisition, construction, improvement, and equipping of health care facilities owned and operated by Saint Agnes Medical Center and certain other matters relating thereto. (Subject to Mayor’s Veto) The above item was presented to Council by Director/Controller Lima, City of Fresno ***Subject to Mayoral Veto Page 11 December 6, 2018City Council Meeting Minutes - Final Finance Department. Upon call, there was no public comment. RESOLUTION 2018-291 ADOPTED On motion of Councilmember Bredefeld, seconded by Councilmember Chavez, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - 10:05 A.M.#1 ID18-1079 WORKSHOP - Restore Fresno This presentation was conducted by Director H. Spees of the Mayor's Office, Chief Dyer, Preston Prince, Fresno Housing Authority, Artie Padilla, Neighborhood Resource Team Director, Bob Nelson, Fresno Unified Superintendent, and Tim Rios, Wells Fargo. 10:10 A.M. ID18-1406 Hold a continued public hearing and approve items related to the granting of a Non-Exclusive Roll-Off Franchise for roll-off collection services (Citywide) 1.CONTINUED HEARING in accordance with Fresno City Charter Section 1301 related to ordinance and adoption of ordinance 2.***BILL NO. B-55 (Intro. 10/25/2018) (For adoption) of the City of Fresno, which grants to BinCo., a Non-Exclusive Franchise for Roll-Off Collection Services within the City of Fresno (Subject to Mayor’s veto) 3.Authorize the Director of Public Utilities or designee, to execute an Agreement of Non-Exclusive Franchise for Roll-Off Collection Services with the City of Fresno The above item was presented to Council by Assistant Director Schuber, Public Utilities Department. Upon call, there was no public comment City of Fresno ***Subject to Mayoral Veto Page 12 December 6, 2018City Council Meeting Minutes - Final ORDINANCE 2018-61 ADOPTED On motion of President Soria, seconded by Councilmember Chavez, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez and Bredefeld6 - Absent:Olivier1 - 10:05 A.M.#2 ID18-1482 RESOLUTION - Declaring a shelter crisis pursuant to Senate Bill 850 and authorizing application for $3,105,519 in Homeless Emergency Aid Program grant funds The above item was presented to Council by H. Spees, Director, Mayor's Office. Upon call, the following members of the public spoke: Preston Prince, Madison Allen, Dez Martinez, Yonaz, Shaun Jenkins, Brandi Nuez-Villegas, and Monroe Taliano RESOLUTION 2018-292 ADOPTED On motion of President Soria, seconded by Councilmember Chavez, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - CITY COUNCIL 4-C ID18-1513 BILL - (For introduction) Repealing Ordinance No. 2006-100 and adopting an ordinance setting forth the compensation of elective officers. The above item was presented to Council by Councilmember Baines. Upon call, the following members of the public spoke: Jim Cobb Councilmember Bredefeld supports this item but requested that the portion City of Fresno ***Subject to Mayoral Veto Page 13 December 6, 2018City Council Meeting Minutes - Final of the motion that pertains to the County Supervisors be removed. Councilmember Baines agreed to the request. BILL NO 62 INTRODUCED/LAID OVER On motion of Councilmember Baines III, seconded by Councilmember Bredefeld, the above item was approved as amended. The motion carried by the following vote: Aye:Soria, Baines III, Caprioglio, Chavez and Bredefeld5 - No:Brandau and Olivier2 - GENERAL ADMINISTRATION 3-C ID18-1139 Actions pertaining to the sale of APN 468-255-11 & 468-255-15 consisting of approximately a 53,040 SF Retail Building commonly referred to as the City-owned portion of the former Gottschalks building and a 214,292 SF parking structure commonly referred to as the Spiral Garage to Brixton Capital AC LLC for $1,700,000: 1.Adopt a finding of Categorical Exemption pursuant to Section 15332/Class 32 of the California Environmental Quality Act (CEQA) Guidelines. 2.Approve the Disposition and Development Agreement with Brixton Capital AC LLC for the sale of APN 468-255-11 & 468- 255-15 consisting of approximately a 53,040 SF Retail Building commonly referred to as the City-owned portion of the former Gottschalks building and a 214,292 SF parking structure commonly referred to as the Spiral Garage for $1,700,000 (District 3) Council President Soria recused herself due to a conflict of interest. The above item was presented to Council by Deputy City Manager Gloria, City Manager's Office. Kyle Kirkland, President of Club One Casino spoke on this item. Mr. Kirkland stated that the project will cost between $13M – $15M dollars, take 24 months to complete, and will add approximately 50 new jobs. Councilmember Baines wanted it on the record that Club One is a good neighbor, he asked Mr. Kirkland to speak about how Club One is a good neighbor. City of Fresno ***Subject to Mayoral Veto Page 14 December 6, 2018City Council Meeting Minutes - Final Councilmember Baines made a motion to approve staff recommendation. Council Vice President Brandau was asked to look into a parking authority downtown. He spoke with the City Manager about it and was told that in the 1980’s the City tried it and it did not work. Council Vice President Brandau gave direction to staff to take a fresh look at a downtown parking authority analysis. Councilmember Baines accepted the amendment. Council Vice President Brandau mentioned that we are acquiring the spiral parking lot at the appraised value. Upon call, there was no public comment. The Council recessed for lunch at 12:18 P.M. and will return at 1:43 P.M. On motion of Councilmember Baines III, seconded by Vice President Brandau, the above item was approved. The motion carried by the following vote: Aye:Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 6 - Recused:Soria1 - PLEASE NOTE: UNSCHEDULED COMMUNICATION IS NOT SCHEDULED FOR A SPECIFIC TIME AND MAY BE HEARD ANY TIME DURING THE MEETING UNSCHEDULED COMMUNICATION Upon call, the following members of the public spoke: Brandi Nuez-Villegas 10:05 A.M.#3 ID18-1520 Update on HERO Team ***RESOLUTION - 25th amendment to the Annual Appropriation Resolution (AAR) No. 2018-157 to appropriate $420,000 for homeless services provided by the Hero Team (WestCare) - Mayor’s Office 1. THIS ITEM IS BEING CONTINUED TO THE DECEMBER 13, 2018 MEETING City of Fresno ***Subject to Mayoral Veto Page 15 December 6, 2018City Council Meeting Minutes - Final 10:15 A.M. ID18-1407 CONTINUED HEARING to consider Pre-zone Application No. R-17-019 and related Environmental Assessment No. R-17-019. This application pertains to ±39.3 acres of property located on the north and south sides of West Clinton Avenue between North Hayes and North Polk Avenues (Council District 3-Baines). 1. ADOPT the Mitigated Negative Declaration prepared for Environmental Assessment No. R17-019 dated September 28, 2018. 2. BILL (for introduction and adoption) - Approving Pre-zone Application No. R-17-019 pertaining to property north of West Clinton Avenue which proposes to amend the Official Zone Map from the Fresno County RR (Rural Residential) zone district to the City of Fresno RS-5/UGM (Residential Single Family, Medium Density/Urban Growth Management-14.64 acres) and the RS-4/UGM (Residential Single Family, Medium Low Density -20 acres) zone districts and that portion south of Clinton Avenue from County R-R (Rural Residential) zone district to the RS-5/UGM/cz (Residential Single Family, Medium Density/Urban Growth Management, conditions of zoning- 4.66 acres) consistent with the Fresno General Plan planned land uses. The above item was introduced to Council by Planning Manager Emerson, Development and Resources Management Department. Jeff Roberts, spoke on behalf of the property owner. Upon call, there was no public comment. BILL NO 63 INTRODUCED/LAID OVER ORDINANCE 2018-62 ADOPTED On motion of Councilmember Baines III, seconded by Councilmember Olivier, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - City of Fresno ***Subject to Mayoral Veto Page 16 December 6, 2018City Council Meeting Minutes - Final 10:20 A.M. ID18-1496 HEARING to consider of Plan Amendment and Rezone Application No. P18-03514, Development Code Text Amendment Application No. P18-03517 , and related Environmental Finding filed by the Development and Resource Management Department Director pertaining to 207 acres within the City of Fresno: 1.ADOPT Environmental Assessment No. P18-03514, an Addendum to Final Master Environmental Impact Report SCH No. 2012111015 (MEIR) certified by the Fresno City Council on December 18, 2014 for the Fresno General Plan and Development Code, and to Program Environmental Impact Report SCH No. 2012041009 certified by the Fresno City Council on October 20, 2016 for the Downtown Plans and Code pursuant to California Environmental Quality Act Guidelines Sections 15162 and 15164. 2.RESOLUTION - Approving Plan Amendment Application No. P18-03514, pertaining to approximately 207 acres (sites 1-10 and 12-17 as described in Exhibit A), to amend the Fresno General Plan Land Use Map (Figure LU-1), the Bullard, Fresno High, McLane, Hoover, Woodward and Downtown Neighborhoods Community Plans, the Tower District Specific Plan, the Fresno Chandler Executive Airport Land Use Compatibility Plan, the Fresno-Chandler Downtown Airport Master and Environs Specific Plan and the Fresno Yosemite Airport Land Use Compatibility Plan, as described in Exhibit A. 3.BILL - (For introduction and adoption) - Approving Rezone Application No. P18-03514, pertaining to 207 acres sites 1-10 and 12-17 as described in Exhibit A. 4.BILL - (For introduction) - Approving Text Amendment Application No. P18-03517 for minor changes to the Development Code in order to improve functionality, clarity, internal consistency, and consistency with State law. Proposed amendments affect the following sections: 15-107, Overlay Districts; 15-310, Determining Residential Density; 15-902, Use Regulations for Residential Single-Family Districts; 15-903, Lot and Density Standards for Single Family Districts; 15-904, Driveway Paving; 15-1002, Use Regulations for Residential City of Fresno ***Subject to Mayoral Veto Page 17 December 6, 2018City Council Meeting Minutes - Final Multi-Family Districts; 15-1004, On-Site Open Space for Multi-Family Districts; 15-1102, Use Regulations for Mixed Use Districts; 15-1104, On-Site Open Space for Mixed-Use Districts; 15-1202, Use Regulations for Commercial Districts; 15-1302, Use Regulations for Employment Districts; 15-1502, Use Regulations for Downtown Districts; 15-2004, Accessory Buildings; 15-2006, Fences, Walls, and Hedges; 15-2008, Screening Between Land Uses; 15-2009, Security Fencing; 15- 2010, Electric Fences; 15-2015, Outdoor Lighting; 15-2016, Trash and Refuse Collection Areas; 15-2303 and 2305, Landscaping; 15-2402, Parking Applicability; 15-2409, Parking for Affordable Housing; 15-2412, Parking Exceptions; 15-2418, Parking Design; 15-2419, Parking Lot Surfaces; 15-2420, Parking Lighting; 15-2421, Parking Lot Landscaping; 15-2422, Parking Lot Trees; 15-2424, Carport Solar Panels; 15-2429, Bicycle Parking; 15-2430, On-Site Loading; 15-2609, Signs; 15- 2612, Master Sign Programs; 15-2614, Electronic Fuel Price Signs; 15-2702, Specific Uses and Activities; 15-2717, Commercial Modular Buildings; 15-2722, Corner Commercial; 15 -2737, Large-Format Retail; 15-2741, Mobile Vendors; 15-2754, Accessory Dwellings; 15-3105, 3303, 3304, 3305, 3307, Subdivisions; 15-3902, 3903, 3904, 3909, Condominiums; 15- 4105, 4108, Subdivisions; 15-5102, Zone Clearance Applicability; and 6704 and 6705, Definitions as described in Exhibit G. The above item was presented to Council by Assistant Director Zack, Development and Resource Management Department. Upon call, the following members of the public spoke: Jeff Roberts, Mike Prandini, Jack Swertfigure, Brady McGiness There was a typo in the resolution which was read into the record by Assistant Director Zack, " On page 5, item b. iii., it should read "13,712" not "3712". RESOLUTION 2018-293 ADOPTED BILL NO 64 INTRODUCED/LAID OVER ORDINANCE 2018-63 ADOPTED City of Fresno ***Subject to Mayoral Veto Page 18 December 6, 2018City Council Meeting Minutes - Final BILL NO 65 INTRODUCED/LAID OVER On motion of Vice President Brandau, seconded by Councilmember Caprioglio, the above item was approved as amended. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - 10:40 A.M. ID18-1459 HEARING to consider General Plan Text Amendment Application No. P18-3553 and related Environmental Finding initiated by the Fresno City Council on March 3, 2017 through Council Resolution No. 2017-61 pertaining to all prime farmland, unique farmland or farmland of statewide importance within the sphere of influence of the City of Fresno 1.ADOPT Environmental Assessment No. P18-03553, an Addendum to Final Master Environmental Impact Report SCH No. 2012111015 (MEIR) certified by the Fresno City Council on December 18, 2014 for the Fresno General Plan and Development Code, and to Program Environmental Impact Report SCH No. 2017031012 certified by the Fresno City Council on October 26, 2017 for the Southwest Fresno Specific Plan pursuant to California Environmental Quality Act Guidelines Sections 15162 and 15164. 2.RESOLUTION - Approving the General Plan Text Amendment No. P18-03553 amending Farmland Preservation Program Policy RC-9-c, as described in Exhibit A. THIS ITEM IS CONTINUED TO DECEMBER 13, 2018 AT 10:40 A.M. 11:00 A.M. ID18-1483 Appearance by Mr. J.D. McCubbin to request an explanation of the procedure of evacuating the City in case of an emergency THIS ITEM WAS CONTINUED TO DECEMBER 13, 2018 MEETING CITY COUNCIL 4-B ID18-1518 Actions pertaining to Commercial Cannabis Activity: 1. Adopt a finding of statutory exemption to the California City of Fresno ***Subject to Mayoral Veto Page 19 December 6, 2018City Council Meeting Minutes - Final Environmental Quality Act (CEQA) pursuant to Section 26055(h) of the California Business and Professions Code. 2. ***RESOLUTION - Setting cannabis business license tax rates. (Subject to Mayor’s veto) 3. BILL - (for introduction) Adding Article 33 to Chapter 9 of the Fresno Municipal Code relating to Medicinal Cannabis Retail Business and Commercial Cannabis Business. 4. BILL - (for introduction) Adding Article 34 to Chapter 9 of the Fresno Municipal Code relating to Adult Use and Medicinal Cannabis Retail Business and Commercial Cannabis Business. The above item was presented to Council by Councilmember Caprioglio. He made a motion to adopt Article 34 with the following changes: a) Section 9-3404 – add the cannabis innovation zone definition; i. “Cannabis Innovation Zone” is the area bounded by State Route 41, Golden State Blvd, Church Ave., East Avenue, and Parallel Avenue; 1) This does not have location restrictions, so all commercial cannabis business could go in here regardless of surrounding uses; b) Section 9-3406 maximum number; i) Allow a total of 16 cultivators, distributors or manufacturers; 1. Does not matter how many of each kind, just 16 total; c) Section 9-3408 Location; i. 8 cultivators, distributors, or manufactures must be located within the Cannabis Innovation Zone (Blue Zone); ii. 8 cultivators, distributors, or manufactures can be located in the Green Buffer Zone, subject to distance requirements; 1. Optional to be located within a Hub, but not required. When called, several members of the public spoke. Councilmember Bredefeld stated that allowing recreational marijuana will not eliminate the elicit market. He asked Chief Dyer for his comments, which he gave. Councilmember Bredefeld also stated that the Mayor gave his word that he would not support recreational marijuana. Council Vice President Brandau read from the minutes of the December 14, 2017 meeting which was the last time the council addressed this item. It was clear that only medicinal marijuana was the focus. Councilmember Olivier explained that within a few weeks, the State of California Bureau of Cannabis Control is going to ratify the State City of Fresno ***Subject to Mayoral Veto Page 20 December 6, 2018City Council Meeting Minutes - Final regulations, the State regulations are going to contain a provision which allows any licensee in the State of California to deliver cannabis to any address in the State of California, and it will be legal. The ideal behind moving toward Adult Use in the City of Fresno has everything to do with that regulation. Councilmember Olivier made the following amendment – 9-3418, number 1, he requested to remove the words “has been denied a cannabis license or permit”. Under Section 9-3316 with the consent of the maker and second of the motion he added “At the time of filing, each applicant shall include a social equity element as part of the application. The contents of the social equity element are at the discretion of the applicant. The weight of the social equity portion of the application will be considered in the overall scoring of the application.” Councilmember Baines addressed Council Vice President Brandau's concerns. Councilmember Chavez asked for a compromise requesting that a phased in approach be used. Phasing in medicinal marijuana the first year and phasing in the recreational marijuana in year 2. More discussion ensued. Councilmember Caprioglio explained the difference between Articles 33 and 34. City Attorney Sloan explained that no vote is required today since it is only being introduced. Councilmember Chavez wanted to be clear on what was agreed upon which was to phase in the medicinal marijuana year one, and phase in recreational marijuana in year 2. Councilmember Caprioglio changed his motion to approve Article 34, except in the first year from the date of adoption, retail can be medicinal only, with the changes Councilmember Caprioglio previously recited, to include the additional amendment by Councilmember Olivier. This would be in effect for one year from the date of adoption unless changed by the incoming council. At the end of one year, the council would look at implementing adult use of marijuana and include the police chief in those discussions. Council President Soria made the following comments: There City of Fresno ***Subject to Mayoral Veto Page 21 December 6, 2018City Council Meeting Minutes - Final are about 9 schools in her district that are in the one mile buffer and she recommended that the one mile buffer be reduced to one-half of a mile buffer in her district in order for her to support what is before the council. She would also like to make sure that the City Manager who is charged with authorization, notify the Councilmember when there is an applicant for a facility in their district prior to any decisions being made so that the Councilmembers are involved in the process. After more discussion it was determined that the process for obtaining a CUP has not been written yet. Council President Soria requested that the District Implementation Committees be part of the process before it goes to the Planning Commission. A couple of Councilmembers who are on the subcommittee cautioned that an elected official should not be part of the approval process. More discussion ensued regarding the one mile buffer and the request to change it to a half mile buffer. Council President Soria stated that she would not be supportive of this item if the buffer cannot be changed to a half mile. After additional discussion, the committee members agreed to change the buffer to a half mile citywide. Council President Soria also stated that she wants to be involved in the social equity policy and feels that a subcommittee should be created to work with the administration to finalize the social equity policy and she would like to be part of that subcommittee. Council President Soria also talked about the additional revenue that is anticipated from the sales tax, she thinks it is important for the council to be involved and would like to create a committee that would make recommendations to the administration on how to spend the money before the budget process. There was also discussion regarding the districts that will be impacted because of this industry coming into their district such as increased traffic and other issues. The council and administration should be mindful that these districts should get direct benefits from the revenues that come into the City. Council President Soria would like to create a standing cannabis committee. This committee would have input in creating the framework for both the social equity policy and be the body to make recommendations before budget and determine how the committees are made up and the framework would be adopted at a later meeting. City of Fresno ***Subject to Mayoral Veto Page 22 December 6, 2018City Council Meeting Minutes - Final This item is for introduction today and will be voted on at the next meeting. Item 4-B (2) is the resolution setting cannabis business license tax rates. Councilmember Caprioglio introduced item 4-B(2), the resolution setting cannabis business license tax rate. City Attorney Sloan stated that the voters approved up to 10% of gross receipts for retail, manufacturing, distribution, and testing laboratories, cultivation was approved at $12 per canopy square foot. The City Council has the authority to set up to those limits. Councilmember Baines made a motion to approve the following rates: retail at 4%, manufacturing at 4%, distribution at 1%, test laboratories at 0%, and cultivation at $6 per canopy square foot. The motion was seconded by Councilmember Caprioglio. RESOLUTION 2018-294 ADOPTED BILL NO 66 INTRODUCED/LAID OVER On motion of Councilmember Baines III, seconded by Councilmember Caprioglio, the above item was approved as amended. The motion carried by the following vote: Aye:Soria, Baines III, Caprioglio, Chavez and Olivier5 - No:Brandau1 - Absent:Bredefeld1 - 3. GENERAL ADMINISTRATION 3-A ID18-1434 Authorize the City of Fresno to enter in to a three year agreement with California State University, Fresno for $721,672.74 to provide police services at California State University, Fresno events. (Council District 4) The above item was introduced to Council by Deputy Chief Reid, Police Department. Upon call, there was no public comment. On motion of Councilmember Caprioglio, seconded by Councilmember Baines III, the above item was approved. The motion City of Fresno ***Subject to Mayoral Veto Page 23 December 6, 2018City Council Meeting Minutes - Final carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez and Olivier6 - Absent:Bredefeld1 - 3-B ID18-1472 Approve award of a requirements contract to Urban Solar, Inc., an Oregon-based corporation, to purchase bus stop solar powered lighting in the amount of $547,703.19 (Citywide) The above item was introduced to Council by Interim Director Barfield, Transportation Department. Upon call, there was no public comment. On motion of Councilmember Chavez, seconded by Councilmember Olivier, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez and Olivier6 - Absent:Bredefeld1 - 3-D ID18-1403 ***RESOLUTION - 546th Amendment to the Master Fee Schedule (MFS) Resolution No. 80-420 to Add, Adjust, Revise or Delete Various Fees (Subject to Mayor’s veto) The above item was introduced by Assistant City Manager, Sumpter, City Manager's Office. Council President Soria made a motion to approve the item but remove the room fees from the schedule. Upon call, there was no public comment. RESOLUTION 2018-295 ADOPTED On motion of President Soria, seconded by Councilmember Chavez, that the above Action Item be approved as amended. The motion carried by the following vote: Aye:Soria, Baines III, Chavez and Olivier4 - Absent:Brandau, Caprioglio and Bredefeld3 - City of Fresno ***Subject to Mayoral Veto Page 24 December 6, 2018City Council Meeting Minutes - Final 3-E ID18-1382 Actions pertaining to the sale of approximately ±3.39 acres of vacant land at the intersection of Ventura Avenue and South 7th Street (APN 470-052-01T, 470-052-02T, 470-052-03T) to MM Shirin Properties, LLC.: 1.Adopt a finding of Categorical Exemption pursuant to Section 15301/Class 1, Section 15312/Class 12, and Section 15332/Class 32 of the California Environmental Quality Act (CEQA) Guidelines. 2.Approve the Disposition and Development Agreement with MM Shirin Properties, LLC for the sale of approximately ±3.39 acres of vacant land at the intersection of Ventura Avenue and South 7th Street (APN 470-052-01T, 470-052-02T, 470-052- 03T) to MM Shirin Properties, LLC for $575,000 (District 5) The above item was introduced to Council by Deputy City Manager Gloria, City Manager's Office. Upon call, there was no public comment. On motion of Councilmember Chavez, seconded by Councilmember Caprioglio, the above item was approved. The motion carried by the following vote: Aye:Soria, Baines III, Caprioglio and Chavez4 - Absent:Brandau, Bredefeld and Olivier3 - 3-F ID18-1473 Actions pertaining to the Street Lighting Improvements on Blackstone and Abby Avenues from Divisadero to Shields Avenues - Project Bid File No. 3583 (Council Districts 1, 3, and 7) 1.Adopt finding of a Categorical Exemption pursuant to Class 1 Section 15301(c) (existing facilities) of the California Environmental Quality Act Guidelines for the Street Lighting Improvements on Blackstone and Abby Avenues from Divisadero to Shields Avenues. 2.Award a construction contract to Sebastian of Fresno, California, in the amount of $1,103,000 for the Street Lighting Improvements on Blackstone and Abby Avenues from Divisadero to Shields Avenues. The above item was introduced to Council by Manager Sehm, Public Works City of Fresno ***Subject to Mayoral Veto Page 25 December 6, 2018City Council Meeting Minutes - Final Department. Upon call, there was no public comment. On motion of President Soria, seconded by Councilmember Chavez, the above item was approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio and Chavez5 - Absent:Bredefeld and Olivier2 - 3-G ID18-1476 Actions pertaining to the McKinley and Blackstone Traffic Signal Modification and Railroad Improvement - Bid File 3619 (Council Districts 1 and 7) 1.Adopt a finding of Categorical Exemption per staff’s determination, pursuant to Section 15301(c) of the California Environmental Quality Act Guidelines (CEQA) 2.Award a Construction Contract to American Paving Co., of Fresno, CA in the amount of $956,015.50 The above item was introduced to Council by Deputy City Engineer Avittia, Public Works Department. Upon call, there was no public comment. On motion of President Soria, seconded by Councilmember Chavez, the above item was approved. The motion carried by the following vote: Aye:Soria, Brandau, Caprioglio and Chavez4 - Absent:Baines III, Bredefeld and Olivier3 - 3-H ID18-1315 WORKSHOP - Impact Fee Waiver THIS ITEM IS CONTINUED TO DECEMBER 13, 2018 3-I ID18-1457 Approve a $2,568,000 HOME Investment Partnerships, Community Housing Development Organization Program Agreement with Self-Help Enterprises for the construction of the proposed Annadale Commons Apartments, a 40-unit affordable senior rental housing project at Annadale Avenue and Elm Avenue in southwest Fresno City of Fresno ***Subject to Mayoral Veto Page 26 December 6, 2018City Council Meeting Minutes - Final The above item was introduced to Council by Assistant Director Furtado, Development and Resource Management Department. Upon call, there was no public comment. On motion of Councilmember Baines III, seconded by Councilmember Chavez, the above item was approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio and Chavez5 - Absent:Bredefeld and Olivier2 - 3-J ID18-1475 Actions related to entering into three Funding Agreements totaling $4,309,448 with the Fresno County Transportation Authority for 2018/19 Measure “C” New Technology Reserve Grant Program for Advance Transit and Transportation Projects: 1.Adopt a finding of Class 6 Categorical Exemption per staff determination, pursuant to Section 15306 of the CEQA Guidelines for a Microtransit Pilot Project. 2.Adopt a finding of a Class 1 Categorical Exemption per staff determination, pursuant to Section 15301(c) of the CEQA Guidelines for an Adaptive Signal Control Technology system in Downtown Fresno along Fresno Street, Van Ness and the Downtown Bus Rapid Transit (BRT) corridor. 3.Adopt a finding of Class 22 Categorical Exemption per staff determination, pursuant to Section 15322 of the CEQA Guidelines for an Advance Propulsion Systems Training Program. 4.Approve three Funding Agreements with the Fresno County Transportation Authority for 2018/19 Measure “C” New Technology Reserve Grant Program for Advance Transit and Transportation Projects, totaling $4,309,448 for the three projects named above. The above item was introduced to Council by Interim Director Barfield, Transportation Department. Upon call, there was no public comment. On motion of Councilmember Baines III, seconded by Councilmember Chavez, that the above Action Item be approved. The motion carried City of Fresno ***Subject to Mayoral Veto Page 27 December 6, 2018City Council Meeting Minutes - Final by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio and Chavez5 - Absent:Bredefeld and Olivier2 - 3-K ID18-1464 Actions pertaining to the Police Department Southeast (PDSE) Substation (Council District 5) 1.Adopt Finding of Conformity to Master Environmental Impact Report (MEIR) SCH No. 2012111015 2.***RESOLUTION - 22nd Amendment to the Annual Appropriations Resolution (AAR) appropriating $1,200,000 for the construction of the PDSE Substation (Requires 5 affirmative votes) (Subject to Mayor’s veto) 3.Award a construction contract to Klassen Corporation of Bakersfield, CA in the amount of $6,405,000, for the Base Bid amount of $6,515,000 less the two deductive alternates totaling ($110,000), for the PDSE Substation Bid File 3599 The above item was introduced to Council by Project Manager Bernard, Public Works Department. Upon call, there was no public comment. RESOLUTION 2018-296 ADOPTED On motion of Councilmember Chavez, seconded by Councilmember Caprioglio, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio and Chavez5 - Absent:Bredefeld and Olivier2 - 4. CITY COUNCIL 4-A ID18-1516 ***RESOLUTION - Directing an audit of homeless services funded by the City. (Subject to Mayor’s veto) THIS ITEM IS BEING CONTINUED TO THE DECEMBER 13, 2018 MEETING 5. CLOSED SESSION 5-A ID18-1402 CONFERENCE WITH REAL PROPERTY NEGOTIATOR - City of Fresno ***Subject to Mayoral Veto Page 28 December 6, 2018City Council Meeting Minutes - Final Government Code Section 54956.8 Property: APN 438-021-92T, 35T, 93T, and 60T, and 438-062-37T and 53T Negotiating Parties: City Manager Wilma Quan-Schecter, Central Valley Community Sports Foundation THIS ITEM WAS REMOVED FROM THE AGENDA 5-B ID18-1517 CONFERENCE WITH LEGAL COUNSEL-EXISTING LITIGATION - Government Code Section 54956.9, subdivision (d)(1) 1.South Central Neighbors United v. City of Fresno et al. - Fresno County Superior Court, Case No. 18CECG00690 THIS ITEM WAS CONTINUED TO DECEMBER 13, 2018 ADJOURNMENT The City Council meeting was adjourned at 4:00 p.m. City of Fresno ***Subject to Mayoral Veto Page 29 City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0188 Agenda Date:1/17/2019 Agenda #: Approval of City Council minutes January 17, 2019 Approval of minutes for January 10, 2019. City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ Thursday, January 10, 2019 10:00 AM City of Fresno 2600 Fresno Street Fresno, CA 93721 www.fresno.gov Council Chambers City Council President - Esmeralda Z. Soria Vice President - Steve Brandau Councilmembers: Oliver L. Baines, III, Paul Caprioglio, Luis Chavez, Garry Bredefeld, Clinton J. Olivier City Manager - Wilma Quan-Schecter City Attorney - Douglas T. Sloan City Clerk - Yvonne Spence, MMC Meeting Minutes - Draft Regular Meeting January 10, 2019City Council Meeting Minutes - Draft The City Council met in regular session in the Council Chamber, City Hall on the date and time written above. 10:13 A.M. ROLL CALL President Esmeralda Z. Soria Vice President Steve Brandau Councilmember Oliver L. Baines III Councilmember Paul Caprioglio Councilmember Luis Chavez Councilmember Garry Bredefeld Councilmember Clinton Olivier Present:7 - The meeting was called to order by President Soria. Following the election of the Council President and Vice President (File ID 19-0133), Councilmember Brandau presided over the meeting as Council President. Invocation by Pastor Scott Gossenberger of the New Covenant Community Church Pledge of Allegiance to the Flag Entertainment by: 1. Viv Ncaus Koom Siab 2. Roosevelt’s Mariachi Band APPROVE AGENDA City Clerk Spence announced the following changes to the agenda: File ID19-0130 (3) Luis Chavez -District 5 the oath of office will be administered by Fresno County Board of Supervisor Sal Quintero On motion of Councilmember Caprioglio, seconded by Councilmember Chavez, the above item was approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - PLEASE NOTE: UNSCHEDULED COMMUNICATION IS NOT SCHEDULED FOR A SPECIFIC TIME AND MAY BE HEARD ANY TIME DURING THE MEETING UNSCHEDULED COMMUNICATION Upon call, the following members of the public addressed Council: Garry Doesekle, Brandi Nuse-Villegas, Robert Mitchell, Sidhu Sukhdeep, Sam City of Fresno ***Subject to Mayoral Veto Page 2 January 10, 2019City Council Meeting Minutes - Draft Frank, Margarita Rocha, Pastor DJ Criner, Bill Daily and Marina Magdaleno. APPROVE MINUTES ID18-1595 Approval of December 13, 2018 Council minutes On motion of Councilmember Caprioglio, seconded by Councilmember Chavez, that the above Action Item be approved. The motion carried by the following vote: Aye:Soria, Brandau, Baines III, Caprioglio, Chavez, Bredefeld and Olivier 7 - CEREMONIAL PRESENTATIONS ID19-0128 Presentation of Gifts to Outgoing Councilmember Baines and Councilmember Olivier PRESENTED ID19-0129 Statements by Outgoing Councilmember Baines and Councilmember Olivier Councilmember Baines and Councilmember Olivier each addressed the crowd as outgoing Councilmembers. STATEMENTS MADE ID19-0130 Installation and Administration of Oaths of Office to Councilmembers-elect 1)Esmeralda Z. Soria - District 1 Oath Administered by Terance Frazier 2)Miguel Arias - District 3 Oath Administered by Anaii Zamora-Arias and Diego Angel Zamora-Arias 3)Luis Chavez - District 5 Oath Administered by Fresno County Board of Supervisor, Sal Quintero City of Fresno ***Subject to Mayoral Veto Page 3 January 10, 2019City Council Meeting Minutes - Draft 4)Nelson Esparza - District 7 Oath Administered by Sandra Garcia Terance Frazier administered the Oath of Office to Esmeralda Z. Soria for District 1. Anaii Zamora-Arias administered the Oath of Office to Miguel Angel Arias for District 3. Board of Supervisor Sal Quintero administered the Oath of Office to Luis Chavez for District 5. Sandra Garcia administered the Oath of Office to Nelson Esparza for District 7. Following the swearing in of Councilmembers elect, Couniclmember Baines of District 3 vacated the seat for Councilmember-elect Arias following the Oath of Office. Councilmember Olivier of District 7 vacated the seat for Councimember-elect Esparza following the Oath of Office. OATHS ADMINISTERED ID19-0131 Statements by the Newly Sworn In Councilmembers Councilmember Arias, Councilmember Esparza, Councilmember Chavez and Council President Soria addressed the crowd. ID19-0166 Presentation to Outgoing Council President Soria PRESENTED ID19-0133 Election of Council President and Vice President COUNCILMEMBER BRANDAU ELECTED COUNCIL PRESIDENT AND COUNCILMEMBER AIRAS ELECTED VICE PRESIDENT. On motion of Councilmember Soria, seconded by Councilmember Chavez, Councilmember Brandau was elected Council President and Councilmember Arias was elected Vice President. The motion carried by the following vote: Aye: 7- Arias, Bredefeld, Caprioglio, Chavez, Esparza, Soria and Brandau City of Fresno ***Subject to Mayoral Veto Page 4 January 10, 2019City Council Meeting Minutes - Draft ID19-0134 Election of Chair and Vice Chair to the Successor Agency to the Redevelopment Agency of the City of Fresno Council President Brandau made a motion to elect Councilmember Soria as Chair and Councilmember Caprioglio as Vice Chair. The motion was seconded by Councilmember Bredefeld. Councilmember Chavez requested the motion be amended to elect Councilmember Arias as Vice Chair. Council President Brandau and Councilmember Bredefeld accepted the amendment to the motion COUNCILMEMBER SORIA ELECTED CHAIR AND COUNCILMEMBER ARIAS ELECTED VICE CHAIR OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO The amended motion carried by the following vote: Aye: 7- Arias, Bredefeld, Caprioglio, Chavez, Esparza, Soria and Brandau ADJOURNMENT City Council adjourned the meeting at 12:38 P.M. RECEPTION TO FOLLOW IN THE FOYER City of Fresno ***Subject to Mayoral Veto Page 5 City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0175 Agenda Date:1/17/2019 Agenda #: CEREMONIAL PRESENTATION Presentation of the SPCA Pet of the Month Sponsor: Councilmember Soria City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0184 Agenda Date:1/17/2019 Agenda #: CEREMONIAL PRESENTATION Proclamation for “David McDonald” City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ CITY OF FRESNO Office s of Mayor Lee Brand and Council President Steve Brandau LEE BRAND, Mayor STEVE BRANDAU, Council President _____________________________________________ ESMERALDA SORIA, Councilmember District 1 MIGUEL ARIAS, Councilmember District 3 PAUL CAPRIOGLIO, Councilmember District 4 LUIS CHAVEZ, Councilmember District 5 _____________________________________________ __________________________________________ GARRY BREDEFELD, Councilmember District 6 NELSON ESPARZA, Councilmember, District 7 WHEREAS, David McDonald rose from humble beginnings to succeeded in growing a billion dollar business; and WHEREAS, David McDonald used his time, treasure and talent to make the world and lives of others better, making a big difference in the quality of life of the people of Fresno; and WHEREAS, in 1987, David McDonald bought Pelco, a small company that specialized in security cameras, and over the years turned it into a billion dollar enterprise; and WHEREAS, being deeply moved by the tragic loss of lives during the terrorist attack against the World Trade Center in New York, David McDonald built a California Memorial on the grounds of Pelco to pay tribute to the fallen public safety officers. He further opened his home to thousands of police officers and firefighters, flying them in chartered jets for dedication of the memorial and a weekend holiday; and WHEREAS, among Mr. McDonald’s many civic contributions included the Fresno Chaffee Zoo, both Measure Z campaigns, the 9/11 California Memorial, Toys for Tots, Special Education Days at Pelco, Miss Winkles Pet Adoption Center and many more; and WHEREAS, the City of Fresno and the entire Central Valley are better places because of the life of and legacy of David McDonald. NOW THEREFORE BE IT RESOLVED, that we Mayor Lee Brand, Council President Steve Brandau and members of the Fresno City Council do hereby proclaim Thursday, January 17, 2019, to be: “David McDonald Day” in the City of Fresno. IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of the City of Fresno, California, this 17thday of January, 2019. David McDonald City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0172 Agenda Date:1/17/2019 Agenda #: CEREMONIAL PRESENTATION Proclamation of “National Slavery and Human Trafficking Awareness Month” National Slavery and Human Trafficking Awareness Month is proclaimed by the federal government, state government and many local governmental agencies. Its aim is to raise awareness on human trafficking and celebrate survivors. Every year Fresno EOC Central Valley Against Human Trafficking host proclamations at the Fresno City Council. City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ CITY OF FRESNO Office of Mayor Lee Brand and Councilmember Luis Chavez LEE BRAND, Mayor STEVE BRANDAU, Council President _____________________________________________ ESMERALDA SORIA, Councilmember District 1 MIGUEL ARIAS, Councilmember District 3 PAUL CAPRIOGLIO, Councilmember District 4 LUIS CHAVEZ, Councilmember District 5 _____________________________________________ __________________________________________ GARRY BREDEFELD, Councilmember District 6 NELSON ESPARZA, Councilmember, District 7 Whereas, Fresno EOC Sanctuary and Youth Services Central Valley Against Human Trafficking project assisted and identified over 550 victims of human trafficking from our local communities; and Whereas, the Central Valley Against Human Trafficking project provides resources to empower self-sufficiency, restore dignity, and support recovery from trauma for survivors; and Whereas, the International Labor Organization recognizes there are an estimated 40.3 million people in modern slavery globally where one in four victims are children; and Whereas, National Center for Missing and Exploited Children estimates one out of six endangered runaways are likely child sex trafficking victims; and Whereas, the U.S. Department of Labor identified 139 goods from 75 countries made by forced and child labor; and Whereas, The City of Fresno recognizes the need for greater awareness and accountability in regard to modern-day slavery. NOW, THEREFORE BE IT RESOLVED that we, Mayor Lee Brand, Councilmember Luis Chavez and Members of the Fresno City Council, do hereby proclaim January, 2019, to be: “National Slavery and Human Trafficking Prevention Month.” in the City of Fresno. IN WITNESS WHEREOF, we have hereunto set our hands and affixed the seal of the City of Fresno, California, this 17thday of January, 2019. National Slavery and Human Trafficking Prevention Month City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0193 Agenda Date:1/17/2019 Agenda #:1-A REPORT TO THE CITY COUNCIL January 17, 2019 FROM:JERRY P. DYER, Chief of Police Police Department BY:LYDIA CARRASCO, Deputy Chief Administrative Division SUBJECT Actions pertaining to the 2018 Edward Byrne Memorial Justice Assistance Grant (JAG) Program: 1.Authorize the Chief of Police to apply for and accept $282,426 in total grant funding for the 2018 JAG Program from the U.S. Department of Justice, Bureau of Justice Assistance for the City and County of Fresno 2.Authorize the Chief of Police to execute all related documents for the application, acceptance, modification, and administration of 2018 JAG Program 3.Authorize the Chief of Police to execute an agreement between the City of Fresno and the County of Fresno regarding the 2018 JAG Program 4.***RESOLUTION - 24th amendment to the Annual Appropriation Resolution No. 2018-157 appropriating $71,700 from the 2018 JAG Program award from the U.S. Department of Justice, Bureau of Justice Assistance (Requires 5 affirmative votes) (Subject to Mayor’s Veto) RECOMMENDATION Staff recommends that Council authorize the Chief of Police to accept $282,426 in total grant funding for the 2018 JAG Program for the City and County of Fresno;authorize the Chief of Police to sign all applicable and related documents for the application,acceptance,modification,and administration of 2018 JAG Program;authorize the Chief of Police to enter into a related agreement between the City and County of Fresno;and adopt the 24th amendment to the Annual Appropriation Resolution No. 2018-158 appropriating $71,700 from the 2018 JAG program into the FY 2019 budget.The remaining funding will be realized in the FY 2020 budget. EXECUTIVE SUMMARY This agreement is the result of an award for the joint application of the City of Fresno and the County of Fresno,with City of Fresno acting as the fiscal agent,to administer the 2018 JAG Program funding.The City of Fresno’s allocation is $210,804,and the remaining allocation of $71,622 is for the County of Fresno,for a total grant allocation of $282,426.The agreement between the City and City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0193 Agenda Date:1/17/2019 Agenda #:1-A the County of Fresno,for a total grant allocation of $282,426.The agreement between the City and County of Fresno is required by the U.S. Department of Justice and is a condition for this funding. BACKGROUND The JAG award formula is a minimum base allocation with the remaining amount determined on population,Part 1 violent crime statistics,and a direct allocation to units of local government.The City of Fresno agrees to act as the fiscal agent for the JAG formula funding in the county.The joint application specified the award amount for distribution to each unit of local government. The 2018 JAG Program has allocated $282,426 for the Fresno County area.Based on the grant guidelines formula,the City of Fresno will receive $210,804,and the County of Fresno will receive $71,622.These funds will assist in the acquisition of equipment,operational needs and supplies, and essential support services for each agency in accordance with grant guidelines outlined by the U.S. Department of Justice, Bureau of Justice Assistance. The proposed spending plan required during the application process,is based on priority needs that are not included in the FY 2019 budget.The proposed items will allow the Fresno Police Department to maintain control and reduce crime through the acquisition of necessary tactical equipment,officer safety equipment,and special unit operational needs.JAG funds are requested to provide for priority needs such as Skywatch operations and maintenance,ammunition,safety equipment for special units,including but not limited to K-9,SWAT,and Traffic.These costs are essential to the department and will not be met through local general funds. ENVIRONMENTAL FINDINGS This is not a “project” for the purposes of the California Environmental Quality Act (CEQA), pursuant to CEQA Guidelines Section 15378. LOCAL PREFERENCE Local preference was not considered because this does not include a bid or award of a construction or service contract. FISCAL IMPACT There is no fiscal impact to the General Fund and there is no match requirement under this grant program,however if unfunded,these essential tools and necessary equipment would have to come from the general fund,creating a negative fiscal impact.All funds are received in advance and deposited into an interest bearing account.All interest earned is to be used to support the same objectives of the grant’s approved spending plan. Attachment:Grant Award Agreement 24th Amendment to Annual Appropriation No. 2018-157 City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ U.S. Department of Justice Office of Justice Programs Washington, D.C. 20531Office of the Assistant Attorney General November 16, 2018 Ms. Wilma Quan-Schecter City of Fresno 2600 Fresno Street Fresno, CA 93721-3620 Dear Ms. Quan-Schecter: On behalf of Attorney General Jefferson Sessions III, it is my pleasure to inform you that the Office of Justice Programs has approved your application for funding under the FY 18 Edward Byrne Memorial Justice Assistance Grant (JAG) Program - Local Solicitation in the amount of $282,426 for City of Fresno. Enclosed you will find the Grant Award and Special Conditions documents. This award is subject to all administrative and financial requirements, including the timely submission of all financial and programmatic reports, resolution of all interim audit findings, and the maintenance of a minimum level of cash-on-hand. Should you not adhere to these requirements, you will be in violation of the terms of this agreement and the award will be subject to termination for cause or other administrative action as appropriate. If you have questions regarding this award, please contact: - Program Questions, Linda Hill-Franklin, Program Manager at (202) 514-0712; and - Financial Questions, the Office of the Chief Financial Officer, Customer Service Center (CSC) at (800) 458-0786, or you may contact the CSC at ask.ocfo@usdoj.gov. Congratulations, and we look forward to working with you. Sincerely, Enclosures Matt Dummermuth Principal Deputy Assistant Attorney General U.S. Department of Justice Office of Justice Programs OFFICE FOR CIVIL RIGHTS 810 7th Street, NW Washington, DC 20531 Tel: (202) 307-0690 TTY: (202) 307-2027 E-mail: askOCR@usdoj.gov Website: www.ojp.usdoj.gov/ocr November 16, 2018 Ms. Wilma Quan-Schecter City of Fresno 2600 Fresno Street Fresno, CA 93721-3620 Congratulations on your recent award. In establishing financial assistance programs, Congress linked the receipt of federal funding to compliance with federal civil rights laws. The Office for Civil Rights (OCR), Office of Justice Programs (OJP), U.S. Department of Justice (DOJ) is responsible for ensuring that recipients of financial assistance from the OJP, the Office of Community Oriented Policing Services (COPS), and the Office on Violence Against Women (OVW) comply with the applicable federal civil rights laws. We at the OCR are available to help you and your organization meet the civil rights requirements that come with DOJ funding. Ensuring Access to Federally Assisted Programs Federal laws that apply to recipients of financial assistance from the DOJ prohibit discrimination on the basis of race, color, national origin, religion, sex, or disability in funded programs or activities, not only in employment but also in the delivery of services or benefits. A federal law also prohibits recipients from discriminating on the basis of age in the delivery of services or benefits. In March of 2013, President Obama signed the Violence Against Women Reauthorization Act of 2013. The statute amends the Violence Against Women Act of 1994 (VAWA) by including a nondiscrimination grant condition that prohibits discrimination based on actual or perceived race, color, national origin, religion, sex, disability, sexual orientation, or gender identity. The new nondiscrimination grant condition applies to certain programs funded after October 1, 2013. The OCR and the OVW have developed answers to some frequently asked questions about this provision to assist recipients of VAWA funds to understand their obligations. The Frequently Asked Questions are available at https://ojp.gov/about/ocr/vawafaqs.htm. Enforcing Civil Rights Laws All recipients of federal financial assistance, regardless of the particular funding source, the amount of the grant award, or the number of employees in the workforce, are subject to prohibitions against unlawful discrimination. Accordingly, the OCR investigates recipients that are the subject of discrimination complaints from both individuals and groups. In addition, based on regulatory criteria, the OCR selects a number of recipients each year for compliance reviews, audits that require recipients to submit data showing that they are providing services equitably to all segments of their service population and that their employment practices meet equal opportunity standards. Dear Ms. Quan-Schecter: OCR Letter to All Recipients Providing Services to Limited English Proficiency (LEP) Individuals In accordance with DOJ guidance pertaining to Title VI of the Civil Rights Act of 1964, 42 U.S.C. § 2000d, recipients of federal financial assistance must take reasonable steps to provide meaningful access to their programs and activities for persons with limited English proficiency (LEP). See U.S. Department of Justice, Guidance to Federal Financial Assistance Recipients Regarding Title VI Prohibition Against National Origin Discrimination Affecting Limited English Proficient Persons, 67 Fed. Reg. 41,455 (2002). For more information on the civil rights responsibilities that recipients have in providing language services to LEP individuals, please see the website https://www.lep.gov. Ensuring Equal Treatment of Faith-Based Organizations and Safeguarding Constitutional Protections Related to Religion The DOJ regulation, Partnerships with Faith-Based and Other Neighborhood Organizations, 28 C.F.R. pt. 38, updated in April 2016, prohibits all recipient organizations, whether they are law enforcement agencies, governmental agencies, educational institutions, houses of worship, or faith-based organizations, from using financial assistance from the DOJ to fund explicitly religious activities. Explicitly religious activities include worship, religious instruction, or proselytization. While funded organizations may engage in non-funded explicitly religious activities (e.g., prayer), they must hold them separately from the activities funded by the DOJ, and recipients cannot compel beneficiaries to participate in them. The regulation also makes clear that organizations participating in programs funded by the DOJ are not permitted to discriminate in the provision of services on the basis of a beneficiary's religion, religious belief, a refusal to hold a religious belief, or a refusal to attend or participate in a religious practice. Funded faith-based organizations must also provide written notice to beneficiaries, advising them that if they should object to the religious character of the funded faith based organization, the funded faith-based organization will take reasonable steps to refer the beneficiary to an alternative service provider. For more information on the regulation, please see the OCR's website at https://ojp.gov/about/ocr/partnerships.htm. SAAs and faith-based organizations should also note that the Omnibus Crime Control and Safe Streets Act (Safe Streets Act) of 1968, as amended, 34 U.S.C. § 10228(c); the Victims of Crime Act of 1984, as amended, 34 U.S.C. § 20110(e); the Juvenile Justice and Delinquency Prevention Act of 1974, as amended, 34 U.S.C. § 11182(b); and VAWA, as amended, 34 U.S.C. § 12291(b)(13), contain prohibitions against discrimination on the basis of religion in employment. Despite these nondiscrimination provisions, the DOJ has concluded that it may construe the Religious Freedom Restoration Act (RFRA) on a case-by- case basis to permit some faith-based organizations to receive DOJ funds while taking into account religion when hiring staff, even if the statute that authorizes the funding program generally forbids recipients from considering religion in employment decisions. Please consult with the OCR if you have any questions about the regulation or the application of RFRA to the statutes that prohibit discrimination in employment. Using Arrest and Conviction Records in Making Employment Decisions The OCR issued an advisory document for recipients on the proper use of arrest and conviction records in making hiring decisions. See Advisory for Recipients of Financial Assistance from the U.S. Department of Justice on the U.S. Equal Employment Opportunity Commission's Enforcement Guidance: Consideration of Arrest and Conviction Records in Employment Decisions Under Title VII of the Civil Rights Act of 1964 (June 2013), available at https://ojp.gov/about/ocr/pdfs/UseofConviction_Advisory.pdf. Recipients should be mindful that the misuse of arrest or conviction records to screen either applicants for employment or employees for retention or promotion may have a disparate impact based on race or national origin, resulting in unlawful employment discrimination. In light of the Advisory, recipients should consult local counsel in reviewing their employment practices. If warranted, recipients should also incorporate an analysis of the use of arrest and conviction records in their Equal Employment Opportunity Plans (EEOPs) (see below). Complying with the Safe Streets Act An organization that is a recipient of financial assistance subject to the nondiscrimination provisions of the Safe Streets Act, must meet two obligations: (1) complying with the federal regulation pertaining to the development of an EEOP (see 28 C.F.R. pt. 42, subpt. E) and (2) submitting to the OCR findings of discrimination (see 28 C.F.R. §§ 42.204(c), .205(c)(5)). Sincerely, Meeting the EEOP Requirement An EEOP is a comprehensive document that analyzes a recipient's relevant labor market data, as well as the recipient's employment practices, to identify possible barriers to the participation of women and minorities in all levels of a recipient's workforce. As a recipient of DOJ funding, you may be required to submit an EEOP Certification Report or an EEOP Utilization Report to the OCR. For more information on whether your organization is subject to the EEOP requirements, see https://ojp.gov/about/ocr/eeop.htm. Additionally, you may request technical assistance from an EEOP specialist at the OCR by telephone at (202) 616-1771 or by e-mail at EEOPforms@usdoj.gov. Meeting the Requirement to Submit Findings of Discrimination If in the three years prior to the date of the grant award, your organization has received an adverse finding of discrimination based on race, color, national origin, religion, or sex, after a due-process hearing, from a state or federal court or from a state or federal administrative agency, your organization must send a copy of the finding to the OCR. Ensuring the Compliance of Subrecipients SAAs must have standard assurances to notify subrecipients of their civil rights obligations, written procedures to address discrimination complaints filed against subrecipients, methods to monitor subrecipients' compliance with civil rights requirements, and a program to train subrecipients on applicable civil rights laws. In addition, SAAs must submit to the OCR every three years written Methods of Administration (MOA) that summarize the policies and procedures that they have implemented to ensure the civil rights compliance of subrecipients. For more information on the MOA requirement, see https://ojp.gov/funding/Explore/StateMethodsAdmin-FY2017update.htm. If the OCR can assist you in any way in fulfilling your organization's civil rights responsibilities as a recipient of federal financial assistance, please contact us. Michael L. Alston Director cc:Grant Manager Financial Analyst Grant PAGE 1 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance 1. RECIPIENT NAME AND ADDRESS (Including Zip Code) City of Fresno 2600 Fresno Street Fresno, CA 93721-3620 8. SUPPLEMENT NUMBER 00 9. PREVIOUS AWARD AMOUNT 10. AMOUNT OF THIS AWARD $ 0 $ 282,426 11. TOTAL AWARD $ 282,426 2a. GRANTEE IRS/VENDOR NO. 946000338 2b. GRANTEE DUNS NO. 071887855 3. PROJECT TITLE FY 18 Local JAG Program 12. SPECIAL CONDITIONS THE ABOVE GRANT PROJECT IS APPROVED SUBJECT TO SUCH CONDITIONS OR LIMITATIONS AS ARE SET FORTH ON THE ATTACHED PAGE(S). 13. STATUTORY AUTHORITY FOR GRANT This project is supported under FY18(BJA - JAG State & JAG Local) Title I of Pub. L. No. 90-351 (generally codified at 34 U.S.C. 10101 - 10726), including subpart I of part E (codified at 34 U.S.C. 10151 - 10158); see also 28 U.S.C. 530C(a) 14 . CATALOG OF DOMESTIC FEDERAL ASSISTANCE (CFDA Number) 16.738 - Edward Byrne Memorial Justice Assistance Grant Program 15. METHOD OF PAYMENT GPRS AGENCY APPROVAL 16. TYPED NAME AND TITLE OF APPROVING OFFICIAL GRANTEE ACCEPTANCE Matt Dummermuth Principal Deputy Assistant Attorney General AGENCY USE ONLY 20. ACCOUNTING CLASSIFICATION CODES 21. FISCAL YEAR FUND CODE BUD. ACT.OFC. DIV. REG.SUB.POMS AMOUNT DJBX 80 00 00 282426 TDJUGT0524 18. TYPED NAME AND TITLE OF AUTHORIZED GRANTEE OFFICIAL Wilma Quan-Schecter City Manager 4. AWARD NUMBER:2018-DJ-BX-0837 5. PROJECT PERIOD: FROM BUDGET PERIOD: FROM 6. AWARD DATE 7. ACTION Initial 11/16/2018 TO TO 10/01/2017 10/01/2017 09/30/2021 09/30/2021 OJP FORM 4000/2 (REV. 5-87) PREVIOUS EDITIONS ARE OBSOLETE. OJP FORM 4000/2 (REV. 4-88) 19. SIGNATURE OF AUTHORIZED RECIPIENT OFFICIAL 19A. DATE17. SIGNATURE OF APPROVING OFFICIAL 23 AWARD CONTINUATION SHEET Grant PAGE 2 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Requirements of the award; remedies for non-compliance or for materially false statements The conditions of this award are material requirements of the award. Compliance with any certifications or assurances submitted by or on behalf of the recipient that relate to conduct during the period of performance also is a material requirement of this award. Failure to comply with any one or more of these award requirements -- whether a condition set out in full below, a condition incorporated by reference below, or a certification or assurance related to conduct during the award period -- may result in the Office of Justice Programs ("OJP") taking appropriate action with respect to the recipient and the award. Among other things, the OJP may withhold award funds, disallow costs, or suspend or terminate the award. The Department of Justice ("DOJ"), including OJP, also may take other legal action as appropriate. Any materially false, fictitious, or fraudulent statement to the federal government related to this award (or concealment or omission of a material fact) may be the subject of criminal prosecution (including under 18 U.S.C. 1001 and/or 1621, and/or 34 U.S.C. 10271-10273), and also may lead to imposition of civil penalties and administrative remedies for false claims or otherwise (including under 31 U.S.C. 3729-3730 and 3801-3812). Should any provision of a requirement of this award be held to be invalid or unenforceable by its terms, that provision shall first be applied with a limited construction so as to give it the maximum effect permitted by law. Should it be held, instead, that the provision is utterly invalid or -unenforceable, such provision shall be deemed severable from this award. Applicability of Part 200 Uniform Requirements The Uniform Administrative Requirements, Cost Principles, and Audit Requirements in 2 C.F.R. Part 200, as adopted and supplemented by DOJ in 2 C.F.R. Part 2800 (together, the "Part 200 Uniform Requirements") apply to this FY 2018 award from OJP. The Part 200 Uniform Requirements were first adopted by DOJ on December 26, 2014. If this FY 2018 award supplements funds previously awarded by OJP under the same award number (e.g., funds awarded during or before December 2014), the Part 200 Uniform Requirements apply with respect to all funds under that award number (regardless of the award date, and regardless of whether derived from the initial award or a supplemental award) that are obligated on or after the acceptance date of this FY 2018 award. For more information and resources on the Part 200 Uniform Requirements as they relate to OJP awards and subawards ("subgrants"), see the OJP website at https://ojp.gov/funding/Part200UniformRequirements.htm. Record retention and access: Records pertinent to the award that the recipient (and any subrecipient ("subgrantee") at any tier) must retain -- typically for a period of 3 years from the date of submission of the final expenditure report (SF 425), unless a different retention period applies -- and to which the recipient (and any subrecipient ("subgrantee") at any tier) must provide access, include performance measurement information, in addition to the financial records, supporting documents, statistical records, and other pertinent records indicated at 2 C.F.R. 200.333. In the event that an award-related question arises from documents or other materials prepared or distributed by OJP that may appear to conflict with, or differ in some way from, the provisions of the Part 200 Uniform Requirements, the recipient is to contact OJP promptly for clarification. 1. 2. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 3 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Compliance with DOJ Grants Financial Guide References to the DOJ Grants Financial Guide are to the DOJ Grants Financial Guide as posted on the OJP website (currently, the "DOJ Grants Financial Guide" available at https://ojp.gov/financialguide/DOJ/index.htm), including any updated version that may be posted during the period of performance. The recipient agrees to comply with the DOJ Grants Financial Guide. Reclassification of various statutory provisions to a new Title 34 of the United States Code On September 1, 2017, various statutory provisions previously codified elsewhere in the U.S. Code were editorially reclassified to a new Title 34, entitled "Crime Control and Law Enforcement." The reclassification encompassed a number of statutory provisions pertinent to OJP awards (that is, OJP grants and cooperative agreements), including many provisions previously codified in Title 42 of the U.S. Code. Effective as of September 1, 2017, any reference in this award document to a statutory provision that has been reclassified to the new Title 34 of the U.S. Code is to be read as a reference to that statutory provision as reclassified to Title 34. This rule of construction specifically includes references set out in award conditions, references set out in material incorporated by reference through award conditions, and references set out in other award requirements. Required training for Point of Contact and all Financial Points of Contact Both the Point of Contact (POC) and all Financial Points of Contact (FPOCs) for this award must have successfully completed an "OJP financial management and grant administration training" by 120 days after the date of the recipient's acceptance of the award. Successful completion of such a training on or after January 1, 2016, will satisfy this condition. In the event that either the POC or an FPOC for this award changes during the period of performance, the new POC or FPOC must have successfully completed an "OJP financial management and grant administration training" by 120 calendar days after-- (1) the date of OJP's approval of the "Change Grantee Contact" GAN (in the case of a new POC), or (2) the date the POC enters information on the new FPOC in GMS (in the case of a new FPOC). Successful completion of such a training on or after January 1, 2016, will satisfy this condition. A list of OJP trainings that OJP will consider "OJP financial management and grant administration training" for purposes of this condition is available at https://www.ojp.gov/training/fmts.htm. All trainings that satisfy this condition include a session on grant fraud prevention and detection. The recipient should anticipate that OJP will immediately withhold ("freeze") award funds if the recipient fails to comply with this condition. The recipient's failure to comply also may lead OJP to impose additional appropriate conditions on this award. Requirements related to "de minimis" indirect cost rate A recipient that is eligible under the Part 200 Uniform Requirements and other applicable law to use the "de minimis" indirect cost rate described in 2 C.F.R. 200.414(f), and that elects to use the "de minimis" indirect cost rate, must advise OJP in writing of both its eligibility and its election, and must comply with all associated requirements in the Part 200 Uniform Requirements. The "de minimis" rate may be applied only to modified total direct costs (MTDC) as defined by the Part 200 Uniform Requirements. 3. 4. 5. 6. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 4 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Requirement to report potentially duplicative funding If the recipient currently has other active awards of federal funds, or if the recipient receives any other award of federal funds during the period of performance for this award, the recipient promptly must determine whether funds from any of those other federal awards have been, are being, or are to be used (in whole or in part) for one or more of the identical cost items for which funds are provided under this award. If so, the recipient must promptly notify the DOJ awarding agency (OJP or OVW, as appropriate) in writing of the potential duplication, and, if so requested by the DOJ awarding agency, must seek a budget-modification or change-of-project-scope grant adjustment notice (GAN) to eliminate any inappropriate duplication of funding. Requirements related to System for Award Management and Universal Identifier Requirements The recipient must comply with applicable requirements regarding the System for Award Management (SAM), currently accessible at https://www.sam.gov/. This includes applicable requirements regarding registration with SAM, as well as maintaining the currency of information in SAM. The recipient also must comply with applicable restrictions on subawards ("subgrants") to first-tier subrecipients (first-tier "subgrantees"), including restrictions on subawards to entities that do not acquire and provide (to the recipient) the unique entity identifier required for SAM registration. The details of the recipient's obligations related to SAM and to unique entity identifiers are posted on the OJP web site at https://ojp.gov/funding/Explore/SAM.htm (Award condition: System for Award Management (SAM) and Universal Identifier Requirements), and are incorporated by reference here. This condition does not apply to an award to an individual who received the award as a natural person (i.e., unrelated to any business or non-profit organization that he or she may own or operate in his or her name). Requirement to report actual or imminent breach of personally identifiable information (PII) The recipient (and any "subrecipient" at any tier) must have written procedures in place to respond in the event of an actual or imminent "breach" (OMB M-17-12) if it (or a subrecipient)-- 1) creates, collects, uses, processes, stores, maintains, disseminates, discloses, or disposes of "personally identifiable information (PII)" (2 CFR 200.79) within the scope of an OJP grant-funded program or activity, or 2) uses or operates a "Federal information system" (OMB Circular A-130). The recipient's breach procedures must include a requirement to report actual or imminent breach of PII to an OJP Program Manager no later than 24 hours after an occurrence of an actual breach, or the detection of an imminent breach. All subawards ("subgrants") must have specific federal authorization The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable requirements for authorization of any subaward. This condition applies to agreements that -- for purposes of federal grants administrative requirements -- OJP considers a "subaward" (and therefore does not consider a procurement "contract"). The details of the requirement for authorization of any subaward are posted on the OJP web site at https://ojp.gov/funding/Explore/SubawardAuthorization.htm (Award condition: All subawards ("subgrants") must have specific federal authorization), and are incorporated by reference here. 7. 8. 9. 10. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 5 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Specific post-award approval required to use a noncompetitive approach in any procurement contract that would exceed $150,000 The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable requirements to obtain specific advance approval to use a noncompetitive approach in any procurement contract that would exceed the Simplified Acquisition Threshold (currently, $150,000). This condition applies to agreements that -- for purposes of federal grants administrative requirements -- OJP considers a procurement "contract" (and therefore does not consider a subaward). The details of the requirement for advance approval to use a noncompetitive approach in a procurement contract under an OJP award are posted on the OJP web site at https://ojp.gov/funding/Explore/NoncompetitiveProcurement.htm (Award condition: Specific post-award approval required to use a noncompetitive approach in a procurement contract (if contract would exceed $150,000)), and are incorporated by reference here. Requirements pertaining to prohibited conduct related to trafficking in persons (including reporting requirements and OJP authority to terminate award) The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable requirements (including requirements to report allegations) pertaining to prohibited conduct related to the trafficking of persons, whether on the part of recipients, subrecipients ("subgrantees"), or individuals defined (for purposes of this condition) as "employees" of the recipient or of any subrecipient. The details of the recipient's obligations related to prohibited conduct related to trafficking in persons are posted on the OJP web site at https://ojp.gov/funding/Explore/ProhibitedConduct-Trafficking.htm (Award condition: Prohibited conduct by recipients and subrecipients related to trafficking in persons (including reporting requirements and OJP authority to terminate award)), and are incorporated by reference here. Compliance with applicable rules regarding approval, planning, and reporting of conferences, meetings, trainings, and other events The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable laws, regulations, policies, and official DOJ guidance (including specific cost limits, prior approval and reporting requirements, where applicable) governing the use of federal funds for expenses related to conferences (as that term is defined by DOJ), including the provision of food and/or beverages at such conferences, and costs of attendance at such conferences. Information on the pertinent DOJ definition of conferences and the rules applicable to this award appears in the DOJ Grants Financial Guide (currently, as section 3.10 of "Postaward Requirements" in the "DOJ Grants Financial Guide"). Requirement for data on performance and effectiveness under the award The recipient must collect and maintain data that measure the performance and effectiveness of work under this award. The data must be provided to OJP in the manner (including within the timeframes) specified by OJP in the program solicitation or other applicable written guidance. Data collection supports compliance with the Government Performance and Results Act (GPRA) and the GPRA Modernization Act of 2010, and other applicable laws. OJP Training Guiding Principles Any training or training materials that the recipient -- or any subrecipient ("subgrantee") at any tier -- develops or delivers with OJP award funds must adhere to the OJP Training Guiding Principles for Grantees and Subgrantees, available at https://ojp.gov/funding/Implement/TrainingPrinciplesForGrantees-Subgrantees.htm. 11. 12. 13. 14. 15. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 6 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Effect of failure to address audit issues The recipient understands and agrees that the DOJ awarding agency (OJP or OVW, as appropriate) may withhold award funds, or may impose other related requirements, if (as determined by the DOJ awarding agency) the recipient does not satisfactorily and promptly address outstanding issues from audits required by the Part 200 Uniform Requirements (or by the terms of this award), or other outstanding issues that arise in connection with audits, investigations, or reviews of DOJ awards. Potential imposition of additional requirements The recipient agrees to comply with any additional requirements that may be imposed by the DOJ awarding agency (OJP or OVW, as appropriate) during the period of performance for this award, if the recipient is designated as "high- risk" for purposes of the DOJ high-risk grantee list. Compliance with DOJ regulations pertaining to civil rights and nondiscrimination - 28 C.F.R. Part 42 The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable requirements of 28 C.F.R. Part 42, specifically including any applicable requirements in Subpart E of 28 C.F.R. Part 42 that relate to an equal employment opportunity program. Compliance with DOJ regulations pertaining to civil rights and nondiscrimination - 28 C.F.R. Part 54 The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable requirements of 28 C.F.R. Part 54, which relates to nondiscrimination on the basis of sex in certain "education programs." Compliance with DOJ regulations pertaining to civil rights and nondiscrimination - 28 C.F.R. Part 38 The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable requirements of 28 C.F.R. Part 38, specifically including any applicable requirements regarding written notice to program beneficiaries and prospective program beneficiaries. Among other things, 28 C.F.R. Part 38 includes rules that prohibit specific forms of discrimination on the basis of religion, a religious belief, a refusal to hold a religious belief, or refusal to attend or participate in a religious practice. Part 38 also sets out rules and requirements that pertain to recipient and subrecipient ("subgrantee") organizations that engage in or conduct explicitly religious activities, as well as rules and requirements that pertain to recipients and subrecipients that are faith-based or religious organizations. The text of the regulation, now entitled "Partnerships with Faith-Based and Other Neighborhood Organizations," is available via the Electronic Code of Federal Regulations (currently accessible at https://www.ecfr.gov/cgi- bin/ECFR?page=browse), by browsing to Title 28-Judicial Administration, Chapter 1, Part 38, under e-CFR "current" data. 16. 17. 18. 19. 20. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 7 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Restrictions on "lobbying" In general, as a matter of federal law, federal funds awarded by OJP may not be used by the recipient, or any subrecipient ("subgrantee") at any tier, either directly or indirectly, to support or oppose the enactment, repeal, modification, or adoption of any law, regulation, or policy, at any level of government. See 18 U.S.C. 1913. (There may be exceptions if an applicable federal statute specifically authorizes certain activities that otherwise would be barred by law.) Another federal law generally prohibits federal funds awarded by OJP from being used by the recipient, or any subrecipient at any tier, to pay any person to influence (or attempt to influence) a federal agency, a Member of Congress, or Congress (or an official or employee of any of them) with respect to the awarding of a federal grant or cooperative agreement, subgrant, contract, subcontract, or loan, or with respect to actions such as renewing, extending, or modifying any such award. See 31 U.S.C. 1352. Certain exceptions to this law apply, including an exception that applies to Indian tribes and tribal organizations. Should any question arise as to whether a particular use of federal funds by a recipient (or subrecipient) would or might fall within the scope of these prohibitions, the recipient is to contact OJP for guidance, and may not proceed without the express prior written approval of OJP. Compliance with general appropriations-law restrictions on the use of federal funds (FY 2018) The recipient, and any subrecipient ("subgrantee") at any tier, must comply with all applicable restrictions on the use of federal funds set out in federal appropriations statutes. Pertinent restrictions, including from various "general provisions" in the Consolidated Appropriations Act, 2018, are set out at https://ojp.gov/funding/Explore/FY18AppropriationsRestrictions.htm, and are incorporated by reference here. Should a question arise as to whether a particular use of federal funds by a recipient (or a subrecipient) would or might fall within the scope of an appropriations-law restriction, the recipient is to contact OJP for guidance, and may not proceed without the express prior written approval of OJP. Reporting Potential Fraud, Waste, and Abuse, and Similar Misconduct The recipient and any subrecipients ("subgrantees") must promptly refer to the DOJ Office of the Inspector General (OIG) any credible evidence that a principal, employee, agent, subrecipient, contractor, subcontractor, or other person has, in connection with funds under this award -- (1) submitted a claim that violates the False Claims Act; or (2) committed a criminal or civil violation of laws pertaining to fraud, conflict of interest, bribery, gratuity, or similar misconduct. Potential fraud, waste, abuse, or misconduct involving or relating to funds under this award should be reported to the OIG by-- (1) mail directed to: Office of the Inspector General, U.S. Department of Justice, Investigations Division, 1425 New York Avenue, N.W. Suite 7100, Washington, DC 20530; and/or (2) the DOJ OIG hotline: (contact information in English and Spanish) at (800) 869-4499 (phone) or (202) 616-9881 (fax). Additional information is available from the DOJ OIG website at https://oig.justice.gov/hotline. 21. 22. 23. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 8 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Restrictions and certifications regarding non-disclosure agreements and related matters No recipient or subrecipient ("subgrantee") under this award, or entity that receives a procurement contract or subcontract with any funds under this award, may require any employee or contractor to sign an internal confidentiality agreement or statement that prohibits or otherwise restricts, or purports to prohibit or restrict, the reporting (in accordance with law) of waste, fraud, or abuse to an investigative or law enforcement representative of a federal department or agency authorized to receive such information. The foregoing is not intended, and shall not be understood by the agency making this award, to contravene requirements applicable to Standard Form 312 (which relates to classified information), Form 4414 (which relates to sensitive compartmented information), or any other form issued by a federal department or agency governing the nondisclosure of classified information. 1. In accepting this award, the recipient-- a. represents that it neither requires nor has required internal confidentiality agreements or statements from employees or contractors that currently prohibit or otherwise currently restrict (or purport to prohibit or restrict) employees or contractors from reporting waste, fraud, or abuse as described above; and b. certifies that, if it learns or is notified that it is or has been requiring its employees or contractors to execute agreements or statements that prohibit or otherwise restrict (or purport to prohibit or restrict), reporting of waste, fraud, or abuse as described above, it will immediately stop any further obligations of award funds, will provide prompt written notification to the federal agency making this award, and will resume (or permit resumption of) such obligations only if expressly authorized to do so by that agency. 2. If the recipient does or is authorized under this award to make subawards ("subgrants"), procurement contracts, or both-- a. it represents that-- (1) it has determined that no other entity that the recipient's application proposes may or will receive award funds (whether through a subaward ("subgrant"), procurement contract, or subcontract under a procurement contract) either requires or has required internal confidentiality agreements or statements from employees or contractors that currently prohibit or otherwise currently restrict (or purport to prohibit or restrict) employees or contractors from reporting waste, fraud, or abuse as described above; and (2) it has made appropriate inquiry, or otherwise has an adequate factual basis, to support this representation; and b. it certifies that, if it learns or is notified that any subrecipient, contractor, or subcontractor entity that receives funds under this award is or has been requiring its employees or contractors to execute agreements or statements that prohibit or otherwise restrict (or purport to prohibit or restrict), reporting of waste, fraud, or abuse as described above, it will immediately stop any further obligations of award funds to or by that entity, will provide prompt written notification to the federal agency making this award, and will resume (or permit resumption of) such obligations only if expressly authorized to do so by that agency. 24. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 9 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Compliance with 41 U.S.C. 4712 (including prohibitions on reprisal; notice to employees) The recipient (and any subrecipient at any tier) must comply with, and is subject to, all applicable provisions of 41 U.S.C. 4712, including all applicable provisions that prohibit, under specified circumstances, discrimination against an employee as reprisal for the employee's disclosure of information related to gross mismanagement of a federal grant, a gross waste of federal funds, an abuse of authority relating to a federal grant, a substantial and specific danger to public health or safety, or a violation of law, rule, or regulation related to a federal grant. The recipient also must inform its employees, in writing (and in the predominant native language of the workforce), of employee rights and remedies under 41 U.S.C. 4712. Should a question arise as to the applicability of the provisions of 41 U.S.C. 4712 to this award, the recipient is to contact the DOJ awarding agency (OJP or OVW, as appropriate) for guidance. Encouragement of policies to ban text messaging while driving Pursuant to Executive Order 13513, "Federal Leadership on Reducing Text Messaging While Driving," 74 Fed. Reg. 51225 (October 1, 2009), DOJ encourages recipients and subrecipients ("subgrantees") to adopt and enforce policies banning employees from text messaging while driving any vehicle during the course of performing work funded by this award, and to establish workplace safety policies and conduct education, awareness, and other outreach to decrease crashes caused by distracted drivers. Requirement to disclose whether recipient is designated "high risk" by a federal grant-making agency outside of DOJ If the recipient is designated "high risk" by a federal grant-making agency outside of DOJ, currently or at any time during the course of the period of performance under this award, the recipient must disclose that fact and certain related information to OJP by email at OJP.ComplianceReporting@ojp.usdoj.gov. For purposes of this disclosure, high risk includes any status under which a federal awarding agency provides additional oversight due to the recipient's past performance, or other programmatic or financial concerns with the recipient. The recipient's disclosure must include the following: 1. The federal awarding agency that currently designates the recipient high risk, 2. The date the recipient was designated high risk, 3. The high-risk point of contact at that federal awarding agency (name, phone number, and email address), and 4. The reasons for the high-risk status, as set out by the federal awarding agency. Cooperating with OJP Monitoring The recipient agrees to cooperate with OJP monitoring of this award pursuant to OJP's guidelines, protocols, and procedures, and to cooperate with OJP (including the grant manager for this award and the Office of Chief Financial Officer (OCFO)) requests related to such monitoring, including requests related to desk reviews and/or site visits. The recipient agrees to provide to OJP all documentation necessary for OJP to complete its monitoring tasks, including documentation related to any subawards made under this award. Further, the recipient agrees to abide by reasonable deadlines set by OJP for providing the requested documents. Failure to cooperate with OJP's monitoring activities may result in actions that affect the recipient's DOJ awards, including, but not limited to: withholdings and/or other restrictions on the recipient's access to award funds; referral to the DOJ OIG for audit review; designation of the recipient as a DOJ High Risk grantee; or termination of an award(s). 25. 26. 27. 28. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 10 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS FFATA reporting: Subawards and executive compensation The recipient must comply with applicable requirements to report first-tier subawards ("subgrants") of $25,000 or more and, in certain circumstances, to report the names and total compensation of the five most highly compensated executives of the recipient and first-tier subrecipients (first-tier "subgrantees") of award funds. The details of recipient obligations, which derive from the Federal Funding Accountability and Transparency Act of 2006 (FFATA), are posted on the OJP web site at https://ojp.gov/funding/Explore/FFATA.htm (Award condition: Reporting Subawards and Executive Compensation), and are incorporated by reference here. This condition, including its reporting requirement, does not apply to-- (1) an award of less than $25,000, or (2) an award made to an individual who received the award as a natural person (i.e., unrelated to any business or non-profit organization that he or she may own or operate in his or her name). Required monitoring of subawards The recipient must monitor subawards under this award in accordance with all applicable statutes, regulations, award conditions, and the DOJ Grants Financial Guide, and must include the applicable conditions of this award in any subaward. Among other things, the recipient is responsible for oversight of subrecipient spending and monitoring of specific outcomes and benefits attributable to use of award funds by subrecipients. The recipient agrees to submit, upon request, documentation of its policies and procedures for monitoring of subawards under this award. Use of program income Program income (as defined in the Part 200 Uniform Requirements) must be used in accordance with the provisions of the Part 200 Uniform Requirements. Program income earnings and expenditures both must be reported on the quarterly Federal Financial Report, SF 425. Justice Information Sharing Information sharing projects funded under this award must comply with DOJ's Global Justice Information Sharing Initiative (Global) guidelines. The recipient (and any subrecipient at any tier) must conform to the Global Standards Package (GSP) and all constituent elements, where applicable, as described at: https:/ / it.ojp.gov/ gsp_grantcondition. The recipient (and any subrecipient at any tier) must document planned approaches to information sharing and describe compliance with the GSP and appropriate privacy policy that protects shared information, or provide detailed justification for why an alternative approach is recommended. Avoidance of duplication of networks To avoid duplicating existing networks or IT systems in any initiatives funded by BJA for law enforcement information sharing systems which involve interstate connectivity between jurisdictions, such systems shall employ, to the extent possible, existing networks as the communication backbone to achieve interstate connectivity, unless the recipient can demonstrate to the satisfaction of BJA that this requirement would not be cost effective or would impair the functionality of an existing or proposed IT system. Compliance with 28 C.F.R. Part 23 With respect to any information technology system funded or supported by funds under this award, the recipient (and any subrecipient at any tier) must comply with 28 C.F.R. Part 23, Criminal Intelligence Systems Operating Policies, if OJP determines this regulation to be applicable. Should OJP determine 28 C.F.R. Part 23 to be applicable, OJP may, at its discretion, perform audits of the system, as per the regulation. Should any violation of 28 C.F.R. Part 23 occur, the recipient may be fined as per 34 U.S.C. 10231(c)-(d). The recipient may not satisfy such a fine with federal funds. 29. 30. 31. 32. 33. 34. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 11 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Protection of human research subjects The recipient (and any subrecipient at any tier) must comply with the requirements of 28 C.F.R. Part 46 and all OJP policies and procedures regarding the protection of human research subjects, including obtainment of Institutional Review Board approval, if appropriate, and subject informed consent. Confidentiality of data The recipient (and any subrecipient at any tier) must comply with all confidentiality requirements of 34 U.S.C. 10231 and 28 C.F.R. Part 22 that are applicable to collection, use, and revelation of data or information. The recipient further agrees, as a condition of award approval, to submit a Privacy Certificate that is in accord with requirements of 28 C.F.R. Part 22 and, in particular, 28 C.F.R. 22.23. Verification and updating of recipient contact information The recipient must verify its Point of Contact(POC), Financial Point of Contact (FPOC), and Authorized Representative contact information in GMS, including telephone number and e-mail address. If any information is incorrect or has changed, a Grant Adjustment Notice (GAN) must be submitted via the Grants Management System (GMS) to document changes. Law enforcement task forces - required training Within 120 days of award acceptance, each current member of a law enforcement task force funded with award funds who is a task force commander, agency executive, task force officer, or other task force member of equivalent rank, must complete required online (internet-based) task force training. Additionally, all future task force members must complete this training once during the period of performance for this award, or once every four years if multiple OJP awards include this requirement. The required training is available free of charge online through the BJA-funded Center for Task Force Integrity and Leadership (www.ctfli.org). The training addresses task force effectiveness, as well as other key issues including privacy and civil liberties/rights, task force performance measurement, personnel selection, and task force oversight and accountability. If award funds are used to support a task force, the recipient must compile and maintain a task force personnel roster, along with course completion certificates. Additional information regarding the training is available through BJA's web site and the Center for Task Force Integrity and Leadership (www.ctfli.org). Justification of consultant rate Approval of this award does not indicate approval of any consultant rate in excess of $650 per day. A detailed justification must be submitted to and approved by the OJP program office prior to obligation or expenditure of such funds. 35. 36. 37. 38. 39. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 12 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Submission of eligible records relevant to the National Instant Background Check System Consonant with federal statutes that pertain to firearms and background checks -- including 18 U.S.C. 922 and 34 U.S.C. ch. 409 -- if the recipient (or any subrecipient at any tier) uses this award to fund (in whole or in part) a specific project or program (such as a law enforcement, prosecution, or court program) that results in any court dispositions, information, or other records that are "eligible records" (under federal or State law) relevant to the National Instant Background Check System (NICS), or that has as one of its purposes the establishment or improvement of records systems that contain any court dispositions, information, or other records that are "eligible records" (under federal or State law) relevant to the NICS, the recipient (or subrecipient, if applicable) must ensure that all such court dispositions, information, or other records that are "eligible records" (under federal or State law) relevant to the NICS are promptly made available to the NICS or to the "State" repository/database that is electronically available to (and accessed by) the NICS, and -- when appropriate -- promptly must update, correct, modify, or remove such NICS- relevant "eligible records". In the event of minor and transitory non-compliance, the recipient may submit evidence to demonstrate diligent monitoring of compliance with this condition (including subrecipient compliance). DOJ will give great weight to any such evidence in any express written determination regarding this condition. Certification of Compliance with 8 U.S.C. 1373 and 1644 (within the funded "program or activity") required for valid award acceptance by a local government In order validly to accept this award, the applicant local government must submit the required "State or Local Government: FY 2018 Certification of Compliance with 8 U.S.C. 1373 and 1644" (executed by the chief legal officer of the local government). Unless that executed certification either-- (1) is submitted to OJP together with the fully- executed award document, or (2) is uploaded in OJP's GMS no later than the day the signed award document is submitted to OJP, any submission by a local government that purports to accept the award is invalid. If an initial award-acceptance submission by the recipient is invalid, once the local government does submit the necessary certification regarding 8 U.S.C. 1373 and 1644, it may submit a fully-executed award document executed by the local government on or after the date of that certification. For purposes of this condition, "local government" does not include any Indian tribe. 40. 41. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 13 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Noninterference (within the funded "program or activity") with federal law enforcement: 8 U.S.C. 1373 and 1644; ongoing compliance 1. With respect to the "program or activity" funded in whole or part under this award (including any such program or activity of any subrecipient at any tier), throughout the period of performance, no State or local government entity, - agency, or -official may prohibit or in any way restrict-- (1) any government entity or -official from sending or receiving information regarding citizenship or immigration status as described in 8 U.S.C. 1373(a); or (2) a government entity or -agency from sending, requesting or receiving, maintaining, or exchanging information regarding immigration status as described in either 8 U.S.C. 1373(b) or 1644. Any prohibition (or restriction) that violates this condition is an "information-communication restriction" under this award. 2. Certifications from subrecipients. The recipient may not make a subaward to a State, a local government, or a "public" institution of higher education, unless it first obtains a certification of compliance with 8 U.S.C. 1373 and 1644, properly executed by the chief legal officer of the government or educational institution that would receive the subaward, using the appropriate form available at https://ojp.gov/funding/Explore/SampleCertifications-8USC1373.htm. Also, the recipient must require that no subrecipient (at any tier) may make a further subaward to a State, a local government, or a public institution of higher education, unless it first obtains a certification of compliance with 8 U.S.C. 1373 and 1644, properly executed by the chief legal officer of the government or institution that would receive the further subaward, using the appropriate OJP form. 3. The recipient's monitoring responsibilities include monitoring of subrecipient compliance with the requirements of this condition. 4. Allowable costs. Compliance with these requirements is an authorized and priority purpose of this award. To the extent that such costs are not reimbursed under any other federal program, award funds may be obligated for the reasonable, necessary, and allocable costs (if any) that the recipient, or any subrecipient at any tier that is a State, a local government, or a public institution of higher education, incurs to implement this condition. 5. Rules of Construction A. For purposes of this condition: (1) "State" and "local government" include any agency or other entity thereof, but not any institution of higher education or any Indian tribe. (2) A "public" institution of higher education is defined as one that is owned, controlled, or directly funded (in whole or in substantial part) by a State or local government. (Such a public institution is considered to be a "government entity," and its officials to be "government officials.") (3) "Program or activity" means what it means under title VI of the Civil Rights Act of 1964 (see 42 U.S.C. 2000d-4a). (4) "Immigration status" means what it means under 8 U.S.C. 1373 and 8 U.S.C. 1644; and terms that are defined in 8 U.S.C. 1101 mean what they mean under that section 1101, except that "State" also includes American Samoa. (5) Pursuant to the provisions set out at (or referenced in) 8 U.S.C. 1551 note ("Abolition ... and Transfer of Functions"), references to the "Immigration and Naturalization Service" in 8 U.S.C. 1373 and 1644 are to be read as references to particular components of the Department of Homeland Security (DHS). B. Nothing in this condition shall be understood to authorize or require any recipient, any subrecipient at any tier, any State or local government, any public institution of higher education, or any other entity (or individual) to violate any federal law, including any applicable civil rights or nondiscrimination law. IMPORTANT NOTE: Any questions about the meaning or scope of this condition should be directed to OJP, before 42. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 14 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS award acceptance. Authority to obligate award funds contingent on noninterference (within the funded "program or activity") with federal law enforcement (8 U.S.C. 1373 and 1644); unallowable costs; notification 1. If the recipient is a "State," a local government, or a "public" institution of higher education: A. The recipient may not obligate award funds if, at the time of the obligation, the "program or activity" of the recipient (or of any subrecipient at any tier that is a State, a local government, or a public institution of higher education) that is funded in whole or in part with award funds is subject to any "information-communication restriction." B. In addition, with respect to any project costs it incurs "at risk," the recipient may not obligate award funds to reimburse itself if -- at the time it incurs such costs -- the program or activity of the recipient (or of any subrecipient at any tier that is a State, a local government, or a public institution of higher education) that would be reimbursed in whole or in part with award funds was subject to any information-communication restriction. C. Any drawdown of award funds by the recipient shall be considered, for all purposes, to be a material representation by the recipient to OJP that, as of the date the recipient requests the drawdown, the recipient and each subrecipient (regardless of tier) that is a State, local government, or public institution of higher education, is in compliance with the award condition entitled "Noninterference (within the funded 'program or activity') with federal law enforcement: 8 U.S.C. 1373 and 1644 and ongoing compliance." D. The recipient must promptly notify OJP (in writing) if the recipient, from its requisite monitoring of compliance with award conditions or otherwise, has credible evidence that indicates that the funded program or activity of the recipient, or of any subrecipient at any tier that is either a State or a local government or a public institution of higher education, may be subject to any information-communication restriction. In addition, any subaward (at any tier) to a subrecipient that is a State, a local government, or a public institution of higher education must require prompt notification to the entity that made the subaward, should the subrecipient have such credible evidence regarding an information-communication restriction. 2. Any subaward (at any tier) to a subrecipient that is a State, a local government, or a public institution of higher education must provide that the subrecipient may not obligate award funds if, at the time of the obligation, the program or activity of the subrecipient (or of any further such subrecipient at any tier) that is funded in whole or in part with award funds is subject to any information-communication restriction. 3. Absent an express written determination by DOJ to the contrary, based upon a finding by DOJ of compelling circumstances (e.g., a small amount of award funds obligated by the recipient at the time of a subrecipient's minor and transitory non-compliance, which was unknown to the recipient despite diligent monitoring), any obligations of award funds that, under this condition, may not be made shall be unallowable costs for purposes of this award. In making any such determination, DOJ will give great weight to evidence submitted by the recipient that demonstrates diligent monitoring of subrecipient compliance with the requirements set out in the "Noninterference ... 8 U.S.C. 1373 and 1644 and ongoing compliance" award condition. 4. Rules of Construction A. For purposes of this condition "information-communication restriction" has the meaning set out in the "Noninterference ... 8 U.S.C. 1373 and 1644 and ongoing compliance" condition. B. Both the "Rules of Construction" and the "Important Note" set out in the "Noninterference ... 8 U.S.C. 1373 and 1644 and ongoing compliance" condition are incorporated by reference as though set forth here in full. 43. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 15 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Noninterference (within the funded "program or activity") with federal law enforcement: No public disclosure of certain law enforcement sensitive information SCOPE. This condition applies with respect to the "program or activity" that is funded (in whole or in part) by the award, as of the date the recipient accepts this award, and throughout the remainder of the period of performance. Its provisions must be among those included in any subaward (at any tier). 1. Noninterference: No public disclosure of federal law enforcement information in order to conceal, harbor, or shield Consistent with the purposes and objectives of federal law enforcement statutes and federal criminal law (including 8 U.S.C. 1324 and 18 U.S.C. chs. 1, 49, 227), no public disclosure may be made of any federal law enforcement information in a direct or indirect attempt to conceal, harbor, or shield from detection any fugitive from justice under 18 U.S.C. ch. 49, or any alien who has come to, entered, or remains in the United States in violation of 8 U.S.C. ch. 12 -- without regard to whether such disclosure would constitute (or could form a predicate for) a violation of 18 U.S.C. 1071 or 1072 or of 8 U.S.C. 1324(a). 2. Monitoring The recipient's monitoring responsibilities include monitoring of subrecipient compliance with this condition. 3. Allowable costs To the extent that such costs are not reimbursed under any other federal program, award funds may be obligated for the reasonable, necessary, and allocable costs (if any) of actions (e.g., training) designed to ensure compliance with this condition. 4. Rules of construction A. For purposes of this condition-- (1) the term "alien" means what it means under section 101 of the Immigration and Nationality Act (see 8 U.S.C. 1101(a)(3)); (2) the term "federal law enforcement information" means law enforcement sensitive information communicated or made available, by the federal government, to a State or local government entity, -agency, or -official, through any means, including, without limitation-- (1) through any database, (2) in connection with any law enforcement partnership or -task-force, (3) in connection with any request for law enforcement assistance or -cooperation, or (4) through any deconfliction (or courtesy) notice of planned, imminent, commencing, continuing, or impending federal law enforcement activity; (3) the term "law enforcement sensitive information" means records or information compiled for any law enforcement purpose; and (4) the term "public disclosure" means any communication or release other than one-- (a) within the recipient, or (b) to any subrecipient (at any tier) that is a government entity. B. Both the "Rules of Construction" and the "Important Note" set out in the "Noninterference (within the funded 'program or activity') with federal law enforcement: 8 U.S.C. 1373 and 1644 and ongoing compliance" award condition are incorporated by reference as though set forth here in full. 44. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 16 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Noninterference (within the funded "program or activity") with federal law enforcement: Interrogation of certain aliens SCOPE. This condition applies with respect to the "program or activity" that is funded (in whole or in part) by this award, as of the date the recipient accepts this award, and throughout the remainder of the period of performance for the award. Its provisions must be among those included in any subaward (at any tier). 1. Noninterference with statutory law enforcement access to correctional facilities Consonant with federal law enforcement statutes and regulations -- including 8 U.S.C. 1357(a), under which certain federal officers and employees "have power without warrant ... to interrogate any alien or person believed to be an alien as to his right to be or to remain in the United States," and 8 C.F.R. 287.5(a), under which that power may be exercised "anywhere in or outside the United States" -- within the funded program or activity, no State or local government entity, -agency, or -official may interfere with the exercise of that power to interrogate "without warrant" (by agents of the United States acting under color of federal law) by impeding access to any State or local government (or government-contracted) correctional facility by such agents for the purpose "interrogat[ing] any alien or person believed to be an alien as to his [or her] right to be or to remain in the United States." 2. Monitoring The recipient's monitoring responsibilities include monitoring of subrecipient compliance with this condition. 3. Allowable costs To the extent that such costs are not reimbursed under any other federal program, award funds may be obligated for the reasonable, necessary, and allocable costs (if any) of actions (e.g., training) designed to ensure compliance with this condition. 4. Rules of construction A. For purposes of this condition: (1) The term "alien" means what it means under section 101 of the Immigration and Nationality Act (INA) (see 8 U.S.C. 1101(a)(3)). (2) The term "correctional facility" means what it means under the title I of the Omnibus Crime Control and Safe Streets Act of 1968 (see 34 U.S.C. 10251(a)(7)). (3) The term "impede" includes taking or continuing any action, or implementing or maintaining any law, policy, rule, or practice, that-- (a) is designed to prevent or to significantly delay or complicate, or (b) has the effect of preventing or of significantly delaying or complicating. B. Both the "Rules of Construction" and the "Important Note" set out in the "Noninterference (within the funded 'program or activity') with federal law enforcement: 8 U.S.C. 1373 and 1644 and ongoing compliance" award condition are incorporated by reference as though set forth here in full. 45. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 17 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Noninterference (within the funded "program or activity") with federal law enforcement: Notice of scheduled release SCOPE. This condition applies with respect to the "program or activity" that is funded (in whole or in part) by the award, as of the date the recipient accepts the award, and throughout the remainder of the period of performance. Its provisions must be among those included in any subaward at any tier. 1. Noninterference with "removal" process: Notice of scheduled release date and time Consonant with federal law enforcement statutes -- including 8 U.S.C. 1231 (for an alien incarcerated by a State or local government, a 90-day "removal period" during which the federal government "shall" detain and then "shall" remove an alien from the U.S. "begins" no later than "the date the alien is released from ... confinement"; also, the federal government is expressly authorized to make payments to a "State or a political subdivision of the State ... with respect to the incarceration of [an] undocumented criminal alien"); 8 U.S.C. 1226 (the federal government "shall take into custody" certain criminal aliens "when the alien is released"); and 8 U.S.C. 1366 (requiring an annual DOJ report to Congress on "the number of illegal alien[ felons] in Federal and State prisons" and programs underway "to ensure the prompt removal" from the U.S. of removable "criminal aliens") -- within the funded program or activity, no State or local government entity, -agency, or -official (including a government-contracted correctional facility) may interfere with the "removal" process by failing to provide -- as early as practicable (see para. 4.C. below) -- advance notice to DHS of the scheduled release date and time for a particular alien, if a State or local government (or government- contracted) correctional facility receives from DHS a formal written request pursuant to the INA that seeks such advance notice. 2. Monitoring The recipient's monitoring responsibilities include monitoring of subrecipient compliance with this condition. 3. Allowable costs To the extent that such costs are not reimbursed under any other federal program, award funds may be obligated for the reasonable, necessary, and allocable costs (if any) of actions (e.g., training) designed to ensure compliance with this condition. 4. Rules of construction A. For purposes of this condition: (1) The term "alien" means what it means under section 101 of the INA (see 8 U.S.C. 1101(a)(3)). (2) The term "correctional facility" means what it means under the title I of the Omnibus Crime Control and Safe Streets Act of 1968 (see 34 U.S.C. 10251(a)(7)). B. Nothing in this condition shall be understood to authorize or require any recipient, any subrecipient at any tier, any State or local government, or any other entity or individual to maintain (or detain) any individual in custody beyond the date and time the individual otherwise would have been released. C. Applicability (1) Current DHS practice is ordinarily to request advance notice of scheduled release "as early as practicable (at least 48 hours, if possible)." (See DHS Form I-247A (3/17)). If (e.g., in light of the date DHS made such request) the scheduled release date and time for an alien are such as not to allow for the advance notice that DHS has requested, it shall NOT be a violation of this condition to provide only as much advance notice as practicable. (2) Current DHS practice is to use the same form for a second, distinct purpose -- to request that an individual be 46. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 18 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS detained for up to 48 hours AFTER the scheduled release. This condition does NOT encompass such DHS requests for detention. D. Both the "Rules of Construction" and the "Important Note" set out in the "Noninterference (within the funded 'program or activity') with federal law enforcement: 8 U.S.C. 1373 and 1644 and ongoing compliance" award condition are incorporated by reference as though set forth here in full. Requirement to collect certain information from subrecipients The recipient may not make a subaward to a State, a local government, or a "public" institution of higher education, unless it first obtains from the proposed subrecipient responses to the questions identified in the program solicitation as "Information regarding Communication with the Department of Homeland Security (DHS) and/or Immigration and Customs Enforcement (ICE)." All subrecipient responses must be collected and maintained by the recipient, consistent with regular document retention requirements, and must be made available to DOJ upon request. Responses to these questions are not required from subrecipients that are either a tribal government/organization, a nonprofit organization, or a private institution of higher education. 47. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 19 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Compliance with National Environmental Policy Act and related statutes Upon request, the recipient (and any subrecipient at any tier) must assist BJA in complying with the National Environmental Policy Act (NEPA), the National Historic Preservation Act, and other related federal environmental impact analyses requirements in the use of these award funds, either directly by the recipient or by a subrecipient. Accordingly, the recipient agrees to first determine if any of the following activities will be funded by the grant, prior to obligating funds for any of these purposes. If it is determined that any of the following activities will be funded by the award, the recipient agrees to contact BJA. The recipient understands that this condition applies to new activities as set out below, whether or not they are being specifically funded with these award funds. That is, as long as the activity is being conducted by the recipient, a subrecipient, or any third party, and the activity needs to be undertaken in order to use these award funds, this condition must first be met. The activities covered by this condition are: a. New construction; b. Minor renovation or remodeling of a property located in an environmentally or historically sensitive area, including properties located within a 100-year flood plain, a wetland, or habitat for endangered species, or a property listed on or eligible for listing on the National Register of Historic Places; c. A renovation, lease, or any proposed use of a building or facility that will either (a) result in a change in its basic prior use or (b) significantly change its size; d. Implementation of a new program involving the use of chemicals other than chemicals that are (a) purchased as an incidental component of a funded activity and (b) traditionally used, for example, in office, household, recreational, or education environments; and e. Implementation of a program relating to clandestine methamphetamine laboratory operations, including the identification, seizure, or closure of clandestine methamphetamine laboratories. The recipient understands and agrees that complying with NEPA may require the preparation of an Environmental Assessment and/or an Environmental Impact Statement, as directed by BJA. The recipient further understands and agrees to the requirements for implementation of a Mitigation Plan, as detailed at https://bja.gov/Funding/nepa.html, for programs relating to methamphetamine laboratory operations. Application of This Condition to Recipient's Existing Programs or Activities: For any of the recipient's or its subrecipients' existing programs or activities that will be funded by these award funds, the recipient, upon specific request from BJA, agrees to cooperate with BJA in any preparation by BJA of a national or program environmental assessment of that funded program or activity. Establishment of trust fund If award funds are being drawn down in advance, the recipient (or a subrecipient, with respect to a subaward) is required to establish a trust fund account. Recipients (and subrecipients) must maintain advance payments of federal awards in interest-bearing accounts, unless regulatory exclusions apply (2 C.F.R. 200.305(b)(8)). The trust fund, including any interest, may not be used to pay debts or expenses incurred by other activities beyond the scope of the Edward Byrne Memorial Justice Assistance Grant Program (JAG). The recipient also agrees to obligate the award funds in the trust fund (including any interest earned) during the period of performance for the award and expend within 90 days thereafter. Any unobligated or unexpended funds, including interest earned, must be returned to OJP at the time of closeout. 48. 49. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 20 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Prohibition on use of award funds for match under BVP program JAG funds may not be used as the 50% match for purposes of the DOJ Bulletproof Vest Partnership (BVP) program. Certification of body armor "mandatory wear" policies The recipient agrees to submit a signed certification that all law enforcement agencies receiving body armor purchased with funds from this award have a written "mandatory wear" policy in effect. The recipient must keep signed certifications on file for any subrecipients planning to utilize funds from this award for ballistic-resistant and stab- resistant body armor purchases. This policy must be in place for at least all uniformed officers before any funds from this award may be used by an agency for body armor. There are no requirements regarding the nature of the policy other than it be a mandatory wear policy for all uniformed officers while on duty. Body armor - compliance with NIJ standards and other requirements Ballistic-resistant and stab-resistant body armor purchased with JAG award funds may be purchased at any threat level, make or model, from any distributor or manufacturer, as long as the body armor has been tested and found to comply with applicable National Institute of Justice ballistic or stab standards and is listed on the NIJ Compliant Body Armor Model List (https://nij.gov/topics/technology/body-armor/Pages/compliant-ballistic-armor.aspx). In addition, ballistic-resistant and stab-resistant body armor purchased must be made in the United States and must be uniquely fitted, as set forth in 34 U.S.C. 10202(c)(1)(A). The latest NIJ standard information can be found here: https:/ / nij.gov/ topics/ technology/ body-armor/ pages/ safety-initiative.aspx. Body armor - impact on eligibility for other program funds The recipient understands that the use of funds under this award for purchase of body armor may impact eligibility for funding under the Bulletproof Vest Partnership (BVP) program, a separate program operated by BJA, pursuant to the BVP statute at 34 USC 10531(c)(5). Reporting requirements The recipient must submit quarterly Federal Financial Reports (SF-425) and semi-annual performance reports through OJP's GMS (https://grants.ojp.usdoj.gov). Consistent with the Department's responsibilities under the Government Performance and Results Act (GPRA) and the GPRA Modernization Act of 2010, the recipient must provide data that measure the results of its work. The recipient must submit quarterly performance metrics reports through BJA's Performance Measurement Tool (PMT) website (www.bjaperformancetools.org). For more detailed information on reporting and other JAG requirements, refer to the JAG reporting requirements webpage. Failure to submit required JAG reports by established deadlines may result in the freezing of grant funds and future High Risk designation. Required data on law enforcement agency training Any law enforcement agency receiving direct or sub-awarded funding from this JAG award must submit quarterly accountability metrics data related to training that officers have received on the use of force, racial and ethnic bias, de- escalation of conflict, and constructive engagement with the public. Expenditures prohibited without waiver No funds under this award may be expended on the purchase of items prohibited by the JAG program statute, unless, as set forth at 34 U.S.C. 10152, the BJA Director certifies that extraordinary and exigent circumstances exist, making such expenditures essential to the maintenance of public safety and good order. 50. 51. 52. 53. 54. 55. 56. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 21 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Authorization to obligate (federal) award funds to reimburse certain project costs incurred on or after October 1, 2017 The recipient may obligate (federal) award funds only after the recipient makes a valid acceptance of the award. As of the first day of the period of performance for the award (October 1, 2017), however, the recipient may choose to incur project costs using non-federal funds, but any such project costs are incurred at the recipient's risk until, at a minimum-- (1) the recipient makes a valid acceptance of the award, and (2) all applicable withholding conditions are removed by OJP (via a Grant Adjustment Notice). (A withholding condition is a condition in the award document that precludes the recipient from obligating, expending, or drawing down all or a portion of the award funds until the condition is removed.) Except to the extent (if any) that an award condition expressly precludes reimbursement of project costs incurred "at- risk," if and when the recipient makes a valid acceptance of this award and OJP removes each applicable withholding condition through a Grant Adjustment Notice, the recipient is authorized to obligate (federal) award funds to reimburse itself for project costs incurred "at-risk" earlier during the period of performance (such as project costs incurred prior to award acceptance or prior to removal of an applicable withholding condition), provided that those project costs otherwise are allowable costs under the award. Nothing in this condition shall be understood to authorize the recipient (or any subrecipient at any tier) to use award funds to "supplant" State or local funds in violation of the recipient's certification (executed by the chief executive of the State or local government) that federal funds will be used to increase the amounts of such funds that would, in the absence of federal funds, be made available for law enforcement activities. Use of funds for DNA testing; upload of DNA profiles If award funds are used for DNA testing of evidentiary materials, any resulting eligible DNA profiles must be uploaded to the Combined DNA Index System ("CODIS," the DNA database operated by the FBI) by a government DNA laboratory with access to CODIS. No profiles generated under this award may be entered or uploaded into any non-governmental DNA database without prior express written approval from BJA. Award funds may not be used for the purchase of DNA equipment and supplies unless the resulting DNA profiles may be accepted for entry into CODIS. Three percent set-aside for NIBRS compliance The recipient must ensure that at least 3 percent of the total amount of this award is dedicated to achieving full compliance with the FBI's National Incident-Based Reporting System (NIBRS), unless the FBI or appropriate State official has certified that the recipient locality is already NIBRS compliant, and evidence of this has been submitted to and approved by BJA. The recipient will be required by BJA to make revisions to budgets that do not clearly indicate what projects will be supported by this 3 percent set-aside, unless evidence of NIBRS compliance has been submitted to and approved by BJA. Recipients serving as fiscal agents for "disparate jurisdictions," (as defined at 34 USC 10156(d)(4)) have to pass this requirement through to in subawards to other localities in the disparate jurisdiction, so that each locality in a disparate jurisdiction group dedicates at least 3 percent of award funds to NIBRS compliance, unless, with respect to each locality in the disparate jurisdiction group, evidence of NIBRS compliance has been submitted to and approved by BJA. 57. 58. 59. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 22 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS Encouragement of submission of "success stories" BJA strongly encourages the recipient to submit annual (or more frequent) JAG success stories. To submit a success story, sign in to a My BJA account at https:/ / www.bja.gov/ Login.aspx to access the Success Story Submission form. If the recipient does not yet have a My BJA account, please register at https:/ / www.bja.gov/ profile.aspx. Once registered, one of the available areas on the My BJA page will be "My Success Stories." Within this box, there is an option to add a Success Story. Once reviewed and approved by BJA, all success stories will appear on the BJA Success Story web page at https:/ / www.bja.gov/ SuccessStoryList.aspx. Withholding of funds: Required certification from the chief executive of the applicant government The recipient may not obligate, expend, or draw down any award funds until the recipient submits the required "Certifications and Assurances by the Chief Executive of the Applicant Government," properly-executed (as determined by OJP), and a Grant Adjustment Notice (GAN) has been issued to remove this condition. Withholding of funds: Expenditures that are prohibited absent a DOJ certification of extraordinary and exigent circumstances The recipient may not obligate, expend, or draw down any award funds until-- (1) OJP has reviewed and approved the recipient's request to utilize award funds to purchase or acquire an item (or items) that only may be purchased/ acquired if and when DOJ makes a particular certification, and (2) a Grant Adjustment Notice (GAN) has been issued to remove this condition. Pursuant to statute, award funds may not be used for certain items ("matters") unless and until DOJ makes a certification that "extraordinary and exigent circumstances exist that make the use of [award funds for such items/ matters] essential to the maintenance of public safety and good order." The items/ matters that are prohibited expenditures absent such a DOJ certification are set out at 34 U.S.C. 10152. Withholding of funds: Required certification regarding body armor The recipient may not obligate, expend or draw down any award funds until the recipient submits, and OJP has reviewed, the required certification regarding body armor, and a Grant Adjustment Notice (GAN) has been issued to remove this condition. Withholding of funds: Memorandum of Understanding The recipient may not obligate, expend, or draw down any award funds until OJP has reviewed and approved the Memorandum of Understanding (MOU), and a Grant Adjustment Notice (GAN) has been issued to remove this condition. The recipient agrees promptly to provide, upon request, financial or programmatic-related documentation related to this award, including documentation of expenditures and achievements. The recipient understands that it will be subject to additional financial and programmatic on-site monitoring, which may be on short notice, and agrees that it will cooperate with any such monitoring. 60. 61. 62. 63. 64. 65. 66. OJP FORM 4000/2 (REV. 4-88) 23 AWARD CONTINUATION SHEET Grant PAGE 23 OF U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance AWARD DATE 11/16/2018PROJECT NUMBER 2018-DJ-BX-0837 SPECIAL CONDITIONS High risk: Withholding - Completion of "OJP financial management and grant administration training" required The recipient may not obligate, expend, or draw down funds under this award until-- (1) OJP determines that the recipient's Point of Contact (POC) and all Financial Points of Contact (FPOCs) for this award have successfully completed an "OJP financial management and grant administration training" on or after January 1, 2016, and (2) OJP issues a Grant Adjustment Notice (GAN) to modify or remove this special condition. Once both the POC and all FPOCs have successfully completed the training required by this condition, the recipient may contact the designated grant manager for the award to request initiation of a GAN to remove this condition. A list of the OJP trainings that OJP will consider an "OJP financial management and grant administration training" for purposes of this condition is available at https://ojp.gov/training/fmts.htm. All trainings that satisfy this condition include a session on grant fraud prevention and detection. Withholding of funds: NIBRS set-aside The recipient may not obligate, expend, or draw down any award funds until the recipient submits, and BJA reviews and accepts, a budget that clearly dedicates at least 3 percent of the total amount of the award to NIBRS compliance activities or documentation showing that the recipient has been certified as NIBRS compliant, and a Grant Adjustment Notice (GAN) has been issued to remove this condition. Withholding of funds: Budget narrative or information The recipient may not obligate, expend, or draw down any award funds until the recipient submits, and OJP reviews and accepts, the required budget information or narrative for the award, and a Grant Adjustment Notice (GAN) has been issued to remove this condition. Recipient may not obligate, expend or drawdown funds until the Bureau of Justice Assistance, Office of Justice Programs has received and approved the required application attachment(s) and has issued a Grant Adjustment Notice (GAN) releasing this special condition. 67. 68. 69. 70. OJP FORM 4000/2 (REV. 4-88) 23 Memorandum To: From: Subject: Washington, D.C. 20531 Orbin Terry, NEPA Coordinator Incorporates NEPA Compliance in Further Developmental Stages for City of Fresno The Edward Byrne Memorial Justice Assistance Grant Program (JAG) allows states and local governments to support a broad range of activities to prevent and control crime and to improve the criminal justice system, some of which could have environmental impacts. All recipients of JAG funding must assist BJA in complying with NEPA and other related federal environmental impact analyses requirements in the use of grant funds, whether the funds are used directly by the grantee or by a subgrantee or third party. Accordingly, prior to obligating funds for any of the specified activities, the grantee must first determine if any of the specified activities will be funded by the grant. The specified activities requiring environmental analysis are: a. New construction; b. Any renovation or remodeling of a property located in an environmentally or historically sensitive area, including properties located within a 100-year flood plain, a wetland, or habitat for endangered species, or a property listed on or eligible for listing on the National Register of Historic Places; c. A renovation, lease, or any proposed use of a building or facility that will either (a) result in a change in its basic prior use or (b) significantly change its size; d. Implementation of a new program involving the use of chemicals other than chemicals that are (a) purchased as an incidental component of a funded activity and (b) traditionally used, for example, in office, household, recreational, or education environments; and e. Implementation of a program relating to clandestine methamphetamine laboratory operations, including the identification, seizure, or closure of clandestine methamphetamine laboratories. Complying with NEPA may require the preparation of an Environmental Assessment and/or an Environmental Impact Statement, as directed by BJA. Further, for programs relating to methamphetamine laboratory operations, the preparation of a detailed Mitigation Plan will be required. For more information about Mitigation Plan requirements, please see https://www.bja.gov/Funding/nepa.html. Please be sure to carefully review the grant conditions on your award document, as it may contain more specific information about environmental compliance. U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance Official Grant File GRANT MANAGER'S MEMORANDUM, PT. I: PROJECT SUMMARY 1. STAFF CONTACT (Name & telephone number) PROJECT NUMBER 6. NAME & ADRESS OF SUBGRANTEE 7. PROGRAM PERIOD 8. BUDGET PERIOD 9. AMOUNT OF AWARD 10. DATE OF AWARD 11. SECOND YEAR'S BUDGET 2018-DJ-BX-0837 2. PROJECT DIRECTOR (Name, address & telephone number) 4. TITLE OF PROJECT 12. SECOND YEAR'S BUDGET AMOUNT 13. THIRD YEAR'S BUDGET PERIOD 14. THIRD YEAR'S BUDGET AMOUNT 15. SUMMARY DESCRIPTION OF PROJECT (See instruction on reverse) 5. NAME & ADDRESS OF GRANTEE Grant This project is supported under FY18(BJA - JAG State & JAG Local) Title I of Pub. L. No. 90-351 (generally codified at 34 U.S.C. 10101 - 10726), including subpart I of part E (codified at 34 U.S.C. 10151 - 10158); see also 28 U.S.C. 530C(a) Courtney Espinoza Business Manager PO Box 1271 Fresno, CA 93715-1271 (559) 621-2305 PAGE 11OF The Edward Byrne Memorial Justice Assistance Grant Program (JAG) allows states and units of local government, including tribes, to support a broad range of criminal justice related activities based on their own state and local needs and conditions. Grant funds can be used for state and local initiatives, technical assistance, training, personnel, equipment, supplies, contractual support, and information systems for criminal justice, including for any one or more of the following purpose areas: 1) law enforcement programs; 2) prosecution and court programs; 3) prevention and education programs; 4) corrections and community corrections programs; 5) drug treatment and enforcement programs; 6) planning, evaluation, and technology improvement programs; 7) crime victim and witness programs (other than compensation); and 8) mental health programs and related law enforcement and corrections programs, including behavioral programs and crisis intervention teams. This Local JAG award will be shared by the County and one or more jurisdictions identified as disparate within the current Fiscal Year eligibility list (www.bja.gov/Jag). JAG funding will be used to support criminal justice initiatives that fall under one or more of the allowable program areas above. Any Linda Hill-Franklin (202) 514-0712 OJP FORM 4000/2 (REV. 4-88) FY 18 Local JAG Program City of Fresno 2600 Fresno Street Fresno, CA 93721-3620 TO:10/01/2017 09/30/2021FROM:TO:10/01/2017 09/30/2021FROM: 11/16/2018 $ 282,426 3b. POMS CODE (SEE INSTRUCTIONS ON REVERSE) 3a. TITLE OF THE PROGRAM BJA FY 18 Edward Byrne Memorial Justice Assistance Grant (JAG) Program - Local Solicitation U.S. Department of Justice Office of Justice Programs Bureau of Justice Assistance equipment purchases or funded initiatives such as overtime, task forces, drug programs, information sharing, etc. will be aimed at reducing crime and/or enhancing public/officer safety. NCA/NCF Date Adopted: 1 of 2 Date Approved: Effective Date: Resolution No. RESOLUTION NO. ___________ A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO ADOPTING THE 24th AMENDMENT TO THE ANNUAL APPROPRIATION RESOLUTION NO. 2018-157 APPROPRIATING $71,700 FROM THE 2018 JUSTICE ASSISTANCE GRANT (JAG) PROGRAM AWARD FROM THE U.S. DEPARTMENT OF JUSTICE, BUREAU OF JUSTICE ASSISTANCE BE IT RESOLVED BY THE COUNCIL OF THE CITY OF FRESNO: THAT PART III of the Annual Appropriation Resolution No. 2018-157 be and is hereby amended as follows: Increase/(Decrease) TO: POLICE DEPARTMENT Justice Assistant Grant $ 71,700 THAT account titles and numbers requiring adjustment by this Resolution are as follows: Justice Assistant Grant Revenues: Account: 33104 Fed-Grant $ 71,700 Fund: 22041 Org Unit: 156516 Total Revenues $ 71,700 Appropriations: Account: 55801 Training $ 71,700 Fund: 22041 Org Unit: 156516 Total Appropriations $ 71,700 THAT the purpose is to appropriate $71,700 from the 2018 JAG program award from the U.S. Department of Justice, Bureau of Justice Assistance. 2 of 2 CLERK’S CERTIFICATION STATE OF CALIFORNIA} COUNTY OF FRESNO } ss. CITY OF FRESNO } I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing Resolution was adopted by the Council of the City of Fresno, California, at a regular meeting thereof, held on the Day of , 2018 AYES: NOES: ABSENT: ABSTAIN: Mayor Approval: , 2018 Mayor Approval/No Return: , 2018 Mayor Veto: , 2018 Council Override Veto: , 2018 YVONNE SPENCE, MMC City Clerk BY: ______________________ Deputy City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0194 Agenda Date:1/17/2019 Agenda #:1-B REPORT TO THE CITY COUNCIL January 17, 2019 FROM:SCOTT L. MOZIER, PE, Director Public Works Department BY:ANDREW J. BENELLI, PE, City Engineer/Assistant Director Public Works Department, Traffic Operations and Planning Division ANN LILLIE, Senior Engineering Technician Public Works Department, Traffic Operations and Planning Division SUBJECT RESOLUTION -Of Intention to annex Final Tract Map No.5913 as Annexation No.99 to the City of Fresno Community Facilities District No.11 and to Authorize the Levy of Special Taxes;and setting the public hearing for February 28,2019 at 10:00 a.m.(northeast corner of South Armstrong Avenue and the California Alignment) (Council District 5) RECOMMENDATION Adopt Resolution of Intention to annex Final Tract Map No.5913 to City of Fresno Community Facilities District No. 11 (“CFD No. 11”). EXECUTIVE SUMMARY The landowner has petitioned the City of Fresno to have Final Tract Map No.5913 annexed to CFD No.11 to provide funding for the operation and reserves for maintenance (“Services”)pertaining to the landscaping,trees and irrigation systems within the street rights-of-way,landscape easements and Outlot A;including the concrete curbs and gutters,valley gutters,entrance median curbing, sidewalks and curb ramps,Outlot A asphalt concrete trail,street name signage,block wall,street lighting,and local street paving associated with this subdivision.The cost for the Services for these improvements is $446.36 per lot annually for Fiscal Year 2018-2019.Final Tract Map No.5913 is located entirely in the Fresno City Limits.The Resolution of Intention begins the process,sets the required public hearing for Thursday,February 28,2019,at 10:00 a.m.,and defines the steps required to complete the annexation. (See attached location and feature maps.) BACKGROUND On November 15,2005,the Council of the City of Fresno adopted Council Resolution No.2005-490 City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0194 Agenda Date:1/17/2019 Agenda #:1-B On November 15,2005,the Council of the City of Fresno adopted Council Resolution No.2005-490 forming CFD No.11 to fund public maintenance of landscaping,open spaces,local streets,local street lights and street furniture,curbs,gutters,sidewalks,street trees and other public facilities and services as defined by the City of Fresno Special Tax Financing Law,Chapter 8,Division 1,Article 3 of the Fresno Municipal Code (“City Law”). The landowner has made a request to the City of Fresno to have Final Tract Map No.5913 annexed to CFD No.11 to provide funding for the Services pertaining to the landscaping,trees and irrigation systems within the street rights-of-way,landscape easements and Outlot A;including the concrete curbs and gutters,valley gutters,entrance median curbing,sidewalks and curb ramps,Outlot A asphalt concrete trail,street name signage,block wall,street lighting,and local street paving associated with this subdivision. (See attached location and feature maps.) Final Tract Map No. 5913 is not a phased map and is located entirely in the Fresno City Limits. The attached Resolution initiates the annexation process,sets the public hearing on this matter for Thursday,February 28,2019,at 10:00 a.m.,sets the Maximum Special Tax at $446.36 annually per residential lot for Fiscal Year 2018-2019 and sets the annual adjustment of the Special Tax at +3% plus the increase, if any, in the construction cost index for the San Francisco Region. Annexations to existing community facilities districts are permitted under City Law.The legislative body must follow certain prescribed procedures as outlined below: §Adoption of a Resolution of Intention to Annex to CFD No. 11 §Required 7-day minimum Notice of Public Hearing §Public hearing on Annexation and Levy of Special Tax §Call a Special Mailed-Ballot Election on the proposed Special Tax §Declare the Results of the Election §Formal Adoption of Special Tax Levy (if election passes) The attached Resolution has been approved as to form by the City Attorney’s Office. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this item does not qualify as a “project”and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference was not considered since this item does not include a bid or award of a construction or services contract. FISCAL IMPACT No City funds will be involved.All costs for services will be borne by the property owners within the subject tract. City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0194 Agenda Date:1/17/2019 Agenda #:1-B Attachments: Location Map Feature Map Resolution of Intention City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0187 Agenda Date:1/17/2019 Agenda #:1-C REPORT TO THE CITY COUNCIL January 17, 2019 FROM:JENNIFER K. CLARK, AICP, Director Development and Resource Management THROUGH:MIKE SANCHEZ, Assistant Director Development and Resource Management BY:PHILLIP SIEGRIST, Planner III Development and Resource Management SUBJECT RESOLUTION -To rescind approval of Development Permit D-16-109 and adoption of Environmental Assessment No. D-16-109. RECOMMENDATION It is recommended that the Council approve the attached Resolution. EXECUTIVE SUMMARY The applicant has submitted a written request to rescind approval of D-16-109 and its related Environmental Assessment. BACKGROUND On January 8,2018 the Fresno City Council adopted the Mitigated Negative Declaration and approved the associated Development Permit No.D-16-109.On January 8,2019,the applicant submitted a written request to rescind approval of D-16-109 and its related Environmental Assessment.The Council,as the legislative body that issued approval of D-16-109 and its related Environmental Assessment has the authority to rescind approval upon request of the applicant. ENVIRONMENTAL FINDINGS This action is not a project for the purposes of California Environmental Quality Act (CEQA) Guidelines Section 15378. City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0187 Agenda Date:1/17/2019 Agenda #:1-C LOCAL PREFERENCE Local preference is not implicated because this item does not involve public contracting or bidding with the City of Fresno. FISCAL IMPACT No additional General Fund appropriations are required for this action. Attachment:Resolution Exhibit A City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0015 Agenda Date:1/17/2019 Agenda #:1-D REPORT TO THE CITY COUNCIL January 17, 2019 FROM:PARVIN J. NELOMS, JR, Director, PARCS Parks, After School, Recreation and Community Services Department BY:Kristina Chamberlin, Assistant Director, PARCS Parks, After School, Recreation and Community Services Department SUBJECT Approve Service Provider Contract between City of Fresno through the PARCS Department and Fresno-Madera Area Agency on Aging (FMAAA) annual renewal for FY19 to operate the Senior Hot Meals (SHM) Program Site Management Contract at seven sites; and authorize the PARCS Director to execute the agreement on behalf of the City RECOMMENDATION Staff recommends that the City Council approve the one-year agreement with Fresno-Madera Area Agency on Aging (FMAAA) to operate the Senior Hot Meals (SHM) Program at seven sites and authorize the PARCS Department Director to execute the agreement on behalf of the City. EXECUTIVE SUMMARY The SHM Service Provider Contract is an annual contract with FMAAA to provide hot meals to Senior Citizens living in Fresno.The City will receive $80,000 from FMAAA for site management and the provision of congregate meals at seven senior sites including:Inspiration Park,Lafayette Neighborhood Center,Mary Ella Brown Community Center,Mosqueda Community Center,Pinedale Community Center,Senior Citizens Village and Ted C.Wills Community Center.The FMAAA funding is supplemented with participant meal contributions,General Fund,and Community Development Block Grant (CDBG)funds.Financial support provides healthy meals for seniors as well as recreation activities including ceramics,sewing,gardening,watercolor painting,exercise programs,and field trip excursions. BACKGROUND City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0015 Agenda Date:1/17/2019 Agenda #:1-D In 1994,the City of Fresno PARCS Department began a long-standing partnership with FMAAA as a congregate meal provider and in 2017 served over 36,579 meals at six sites.In May-June 2018, FMAAA and the Council approved adding Inspiration Park as a senior hot meal site with a Grand Opening held on August 3,2018.SHM program attendance at Inspiration Park started slowly but has accelerated;the site now serves 12 participants daily while attendance continues to grow.In addition, program staff actively engages regularly with the residents of the California Veterans Home encouraging their participation at meals and at social events. Today,the SHM program operates a comprehensive program for older adults serving lunch at seven sites throughout Fresno,Monday through Friday (excluding holidays).Trained senior coordinators, (CPR/First Aid and ServSafe best practices)serve nutritious meals prepared by Fresno County EOC Food Services.Along with their meal,seniors enjoy a socially interactive environment designed to encourage physical and emotional health through socialization and physical activity.For example, seniors are highly encouraged to enter their art and crafts projects in the Big Fresno Fair.This year the SHM participants received 4 Best of Shows,10 First Place Ribbons,7 Second Place Ribbons and 5 Third Place Ribbons. In FY18,the SHM program served 40,177 meals to seniors at seven sites and collected just over $21,000 in voluntary donations from participants. Current site participation is as follows: 1. Pinedale Community Center (District 2); average daily attendance: 25 participants 2. Mary Ella Brown Community Center (District 3); average daily attendance: 10 participants 3. Ted C. Wills Community Center (District 3); average daily attendance: 56 participants 4. Mosqueda Community Center (District 5); average daily attendance: 33 participants 5. Senior Citizens Village (District 5) average daily attendance: 45 participants 6. Lafayette Neighborhood Center (District 7); average daily attendance: 11 participants 7. Inspiration Neighborhood Center (District 1); average daily attendance: 12 participants PARCS SHM staff is proud of its knowledge of and compliance with federal regulations related to serving congregate meals.They regularly participate in required training sponsored by FMAAA and provide on-site monitoring to ensure all guidelines and requirements are followed.Staff provides activities and opportunities that enable seniors to participate in leisure programs,such as special events,field trips,dance instruction and cooking classes.Regular SHM program participants eagerly look forward to monthly dance socials such as the Valentine’s Day Dance or the Fall Harvest Dance. By creating a welcoming and professional-caring program culture,the Senior Hot Meals Program has provided a stimulating environment where seniors are on the move and involved.A variety of engaging activities and programs are offered on a regular basis which include volunteerism and work experience programs,educational opportunities such as learning new technology,art and crafts, sewing,gardening;participating in discussion groups and general socialization.These and other activities provide a stimulus for seniors,enabling them to be healthy and active while enjoying positive fellowship and improving their quality of life. This Agreement was reviewed and approved by the City Attorney and Risk Management Office(s). ENVIRONMENTAL FINDINGS By definition provided in the California Environmental Quality Act (CEQA)Guidelines Section 15378 City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0015 Agenda Date:1/17/2019 Agenda #:1-D the contract does not qualify as a “project” for the purposes of CEQA. LOCAL PREFERENCE Local preference is not applicable,since this item does not include a bid or award of a construction or services contract. FISCAL IMPACT The FMAAA will provide the City with $80,000 in funding to offset the cost associated with direct service site management of the meal program. The FMAAA funding is supplemented with approximately $20,000 from participant meal contributions, $106,500 from General Fund, and $185,000 through a Community Development Block Grant (CDBG). The supplemented contributions support direct service staff, general operating supplies, and costs associated with the social and recreational components of the program. Attachments: Site Management Contract Senior Hot Meal Program Contract No. 19-0310 FMAAA Approval Letter Contract No.19-0310 City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0138 Agenda Date:1/17/2019 Agenda #:1-E REPORT TO THE CITY COUNCIL January 17, 2019 FROM:GREGORY A. BARFIELD, Interim Director Department of Transportation BY:BRIAN BARR, Assistant Director Department of Transportation TIM OLDAY, Fleet Manager Department of Transportation/Public Safety Fleet Division SUBJECT Approve the award of a purchase contract to Vincent Communications, Inc., a Clovis-based corporation, for the purchase of 70 Kenwood radio sets in the amount of $177,057.30 for Police Department fleet vehicles RECOMMENDATION Staff recommends Council approve the award of a purchase contract to Vincent Communications, Inc.,a Clovis-based corporation,for the purchase of 70 Kenwood radio sets in the amount of $177,057.30 for Police Department fleet vehicles. EXECUTIVE SUMMARY The Department of Transportation,Public Safety Fleet Division requests approval to enter into a requirements contract for the purchase of Kenwood radio sets.The radio sets will go in service to provide frontline radio communications for daily law enforcement operations in the Police Department.This contract will stabilize supply and pricing for police radios used by the Police Department. BACKGROUND The Public Safety Fleet Division is responsible for purchasing,maintaining,and repairing the Police and Fire Departments fleet vehicles,which are comprised of approximately 1,000 vehicles.In order to maintain a modern fleet,the Public Safety Fleet Division purchases and manages the up-fitting of vehicles to be operated by the Police Department on an annual basis.Radio communications used by the Police Department are mission-critical in day-to-day practices.These communications allow City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0138 Agenda Date:1/17/2019 Agenda #:1-E by the Police Department are mission-critical in day-to-day practices.These communications allow immediate access to a dispatcher and other officers in order to quickly coordinate any situation that officers will encounter while on duty.The Kenwood NX-5000 radios are compatible with the Fresno police communications network.The radios will be installed on new vehicles purchased as approved in the FY19 budget. A competitive bid file was prepared and advertised on October 19,2018.Five specification documents were provided to prospective bidders.Two responses were received in a public opening on October 30,2018.The proposal from Vincent Communications,Inc.,was deemed the lowest responsive and responsible bidder.If the proposal is rejected by Council,the project will be re-bid, resulting in a delay of approximately 60 days. ENVIRONMENTAL FINDING By the definition provided in the California Environmental Quality Act (CEQA)Guidelines Section 15378, the award of this contract does not qualify as a “project,” as defined by CEQA. LOCAL PREFERENCE Both bidders are local companies; therefore, local preference does not apply. FISCAL IMPACT The City of Fresno has completed a Master Equipment Lease Purchase Agreement (MELPA)that will be used to finance these radio sets for the police patrol vehicles.The MELPA allows the City to expedite financing of certain equipment that is approved for purchase and financing where competitive procurement,budgeting,and appropriation requirements are completed.The appropriations for FY19 lease payments on this equipment have been approved in the FY19 budget. Attachment: Bid Evaluation City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0140 Agenda Date:1/17/2019 Agenda #:1-F REPORT TO THE CITY COUNCIL January 17, 2019 FROM:GREGORY A. BARFIELD, Interim Director Department of Transportation BY:BRIAN BARR, Assistant Director Department of Transportation KRISTOPHER GREY, Projects Administrator Department of Transportation/Capital Projects SUBJECT Actions pertaining to awarding a contract to remove underground diesel storage tanks in the Fresno Area Express bus yard: 1.Adopt findings of categorical exemptions pursuant to sections 15301 and 15330 of the California Environmental Quality Act Guidelines 2.Award a construction contract to Jimmy the Junker,Inc.,DBA Williams Excavation,of Fresno,California,in the amount of $481,600 for removal and disposal of underground diesel tanks, dispensers, and associated piping RECOMMENDATION Staff recommends Council adopt findings of categorical exemptions pursuant to Sections 15301 and 15330 of the California Environmental Quality Act (CEQA)Guidelines,and award a construction contract for the base bid amount of $481,600 to Jimmy the Junker,Inc.,DBA Williams Excavation of Fresno,California,as the lowest responsive and responsible bidder for the removal and disposal of underground diesel tanks,dispensers,and associated piping at the Fresno Area Express (FAX)bus yard. EXECUTIVE SUMMARY FAX no longer uses diesel powered buses;therefore,it no longer has a need for diesel fuel storage. FAX seeks Council approval of a construction contract for the removal and disposal of underground diesel fuel tanks,dispensers,and associated piping located at the FAX bus yard.Removing the diesel tanks will improve the environmental health of the FAX facility and improve the safety of the staff and nearby buildings in the facility. City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0140 Agenda Date:1/17/2019 Agenda #:1-F BACKGROUND Previously,FAX operated transit service using diesel-powered buses.To support a large bus fleet, FAX stored diesel fuel in underground storage tanks.As the bus fleet is now 100 percent powered by compressed natural gas fuels,there is no longer a need to purchase and store diesel fuel for transit use.FAX seeks to remove four 20,000 gallon underground diesel storage tanks,dispensers,and associated piping located in the parking lot of the FAX bus facility.Furthermore,removal and disposal will eliminate any potential environmental liabilities with continuing to store diesel fuel. This work is the first phase of the FAX Facility Improvement Project,which also includes a new fare counting building,parking lot efficiency upgrades,bus entrance/exit reconfigurations,solar generation, fire alarm upgrades, and electric bus charging infrastructure. This work will not affect fuel storage capacity for the City’s municipal fleet as fuel storage is not shared. A Notice Inviting Bids was published in the Fresno Business Journal on November 12,2018,posted on the City’s website,and faxed to eleven building exchanges.The specifications were distributed to fifteen prospective bidders.Four sealed bid proposals were received and opened in a public bid opening on December 4,2018.Bids ranged from $481,600.00 to $491,750.00.Jimmy the Junker, Inc.,DBA Williams Excavation,of Fresno was determined to be the lowest responsive and responsible bidder.The bids will expire on February 6,2019.The engineer’s estimate for the project was $543,387.00; the total contract price is 11.37 percent below the estimate. ENVIRONMENTAL FINDING Staff has performed a preliminary environmental assessment of this project and has determined this project is exempt under Sections 15301 and 15330 of the CEQA guidelines.Section 15301 is applicable because the project will rehabilitate existing facilities with no expansion of capacity. Furthermore,Section 15330 is applicable because the project is a minor cleanup action taken to prevent,minimize,stabilize,mitigate,or eliminate the release or threat of release of a hazardous waste costing $1 million or less.Furthermore,none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, section 15300.2 apply to this project. LOCAL PREFERENCE Local preference was not applicable as federal funding is used for this construction project. However, the lowest bidder is a local business. FISCAL IMPACT This project has no fiscal impact to the General Fund.This project will be funded from State of California Proposition 1B California Transit Security Grant Program funds and FTA grants. Attachment: Bid Evaluation City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0142 Agenda Date:1/17/2019 Agenda #:1-G REPORT TO THE CITY COUNCIL January 17, 2019 FROM:GREGORY A. BARFIELD, Interim Director Department of Transportation BY:BRIAN BARR, Assistant Director Department of Transportation TIM OLDAY, Fleet Manager Department of Transportation/Public Safety Fleet Division SUBJECT Approve a purchase contract to Swanson Fahrney Ford for the purchase of 15 new Ford F-150 XLT super crew cab pickups in the amount of $434,318.64 RECOMMENDATION Staff recommends Council approve the award of a purchase contract to Swanson Fahrney Ford for the purchase of 15 new Ford F-150 XLT super crew cab pickups in the amount of $434,318.64. EXECUTIVE SUMMARY The Department of Transportation,Public Safety Fleet Division would like to purchase 15 new Ford F -150 pickups to provide to the Police Department for daily law enforcement operations.The pickups will be new additions to the Police Department fleet. BACKGROUND With an emphasis on community partnerships,the Police Department is responsible for daily policing operations within the city of Fresno.The overall goal of the Police Department is to maintain the highest level of service while keeping communities safe.Maintaining vehicles in a good state of repair is critical to this mission,as vehicles are used to transport officers and others throughout the city. The growth of the Police Department necessitates the mobilization of additional officers.The Public Safety Fleet Division is responsible for the procurement,maintenance,and disposal of vehicles operated by the Police Department.The 15 pickups will be used for police operations throughout the City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0142 Agenda Date:1/17/2019 Agenda #:1-G operated by the Police Department.The 15 pickups will be used for police operations throughout the city of Fresno.The selected F-150 XLT super crew cab pickups will provide the assigned officers with sufficient workspace and storage for sensitive police equipment. Competitive bids were solicited for the 15 F-150 pickups on October 10,2018.Nine specifications were distributed to prospective bidders.The public bid opening took place on October 30,2018, resulting in one bid received by Swanson Fahrney Ford and was determined to be the lowest responsive and responsible bidder. ENVIRONMENTAL FINDING By the definition provided in the California Environmental Quality Act (CEQA)Guidelines Section 15378, the award of this contract does not qualify as a “project,” as defined by CEQA. LOCAL PREFERENCE Local preference was not implemented;the lowest responsive and responsible bidder is a local business. FISCAL IMPACT The City of Fresno has completed a Master Equipment Lease Purchase Agreement (MELPA)that will be used to finance these 15 F-150 pickups.The MELPA allows the City to expedite financing of certain equipment that is approved for purchase and financing where competitive procurement, budgeting,and appropriation requirements are completed.The appropriations for FY19 lease payments on this equipment have been approved in the FY19 budget. Attachment: Bid Evaluation City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0143 Agenda Date:1/17/2019 Agenda #:1-H REPORT TO THE CITY COUNCIL January 17, 2019 FROM:GREGORY A. BARFIELD, Interim Director Public Works Department] BY:BRIAN BARR, Assistant Director Department of Transportation DUANE MYERS, Fleet Manager Department of Transportation/ Municipal Fleet Division SUBJECT Approve an Agreement with Fresno County Superintendent of Schools’ Fresno Regional Occupational Program to provide a community classroom training opportunity for students within the Department of Transportation Municipal Fleet Division RECOMMENDATION Staff recommends Council approve entering in to an agreement with the Fresno County Superintendent of Schools (FCSS)Fresno Regional Occupational Program (ROP)to enable the Municipal Fleet Division to be a community classroom training station for students,and authorize the Director of Transportation (DOT) or designee to execute the agreement. EXECUTIVE SUMMARY The DOT Municipal Fleet Division is interested in partnering with the FCSS ROP.This is an internship program that allows eligible students the opportunity to gain real-world experience in their field of study.This partnership will afford student interns the opportunity to work alongside DOT’s mechanics and technicians,on a limited basis,servicing the City’s fleet vehicles and equipment at the Municipal Service Center through May 31, 2019. BACKGROUND The Municipal Fleet Division is responsible for purchasing and maintaining approximately 1,350 vehicles owned and operated by City departments.These include light,heavy,and construction equipment.The Municipal Fleet Division is interested in partnering with educational programs to City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0143 Agenda Date:1/17/2019 Agenda #:1-H share fleet maintenance practices with interested students. The non-paid internship program benefits students by providing hands-on experience in field of vehicle and equipment maintenance.The majority of students have not held a job prior to this training;therefore,they will experience actually clocking-in and working in a community classroom to learn vocational career fields and industry expectations.By partnering with FCSS,these students learn vocational skills that are sought by the City and many companies in the community and generally in short supply.Students are genuinely excited and motivated to learn the content as they experience first-hand the importance of learning these skills.By providing these opportunities,the City will help students become better prepared for higher education,vocational schools,trade schools, or the workforce. This program will allow the City to train the future workforce to its specific needs and expectations.In essence,this community classroom allows the City the opportunity for a 3-4 month long hands-on interview with potential future employees.Aside from the benefits to the students,the City receives positive feedback from the surrounding community. The agreement is valid through May 31,2019,and has been approved by the City Attorney’s Office as to form. ENVIRONMENTAL FINDING By the definition provided in the California Environmental Quality Act Guidelines Section 15378,the award of this contract does not qualify as a “project.” LOCAL PREFERENCE Local preference is not applicable as this is not a purchase agreement. FISCAL IMPACT No general funds will be used. Attachment: Agreement with Fresno County Superintendent of Schools City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0141 Agenda Date:1/17/2019 Agenda #:1-I REPORT TO THE CITY COUNCIL January 17, 2019 FROM:JENNIFER K CLARK, Director Development and Resource Management Department BY:SOPHIA PAGOULATOS, Planning Manager Development and Resource Management Department SUBJECT Approve the Mayor’s appointees for the Anti-Displacement Task Force. RECOMMENDATION Staff recommends approval of the Mayor’s appointees for the Anti-Displacement Task Force. EXECUTIVE SUMMARY On November 29, 2018, the City Council created the Anti-Displacement Task Force by Resolution No. 2018-277 and included a requirement for Council ratification of the Mayor’s appointees. BACKGROUND Council Resolution No. 2018-277 called out the following criteria for composition of the task force: 3 Residential Tenants, residing in each of (see attached map in Exhibit A for reference): ·1 residing in the Fulton Corridor Specific Plan Area ·1 residing in the Downtown Neighborhoods Community Plan Area ·1 residing in the Southwest Fresno Specific Plan Area 2 Commercial Tenants: ·1 in Downtown ·1 in Chinatown or Southwest Fresno 3 Developers: ·1 affordable housing developer City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0141 Agenda Date:1/17/2019 Agenda #:1-I ·1 market rate developer ·1 Community Development Corporation (CDC) Developer 3 Advocates: ·1 non-profit organization ·1 neighborhood organization ·1 individual/non-affiliate The Mayor’s appointees are attached in Exhibit B. ENVIRONMENTAL FINDINGS The approval of task force appointments is not a project pursuant to CEQA Guidelines section 15378. LOCAL PREFERENCE N/A; no procurement is being considered. FISCAL IMPACT The Task Force would be staffed by City of Fresno employees; no special funding or appropriation is requested. Attachments: Exhibit A:Map Exhibit B:Anti-Displacement Task Force Appointees City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ !!!!!!!!!!!!!!!!·|}þ ·|}þ ·|}þ ·|}þ·|}þ ·|}þ CHURCH AVEFRESNO STBELMONT AVE VANNESSAVEHUGHES AVEG ST H ST FIRST STJENSEN AVE MCKINLEY AVE CHESTNUT AVELOSANGELESS TBLACKSTONE AVEDIVISADERO STWEST AVEBUTLER AVE TUL ARE ST CALIFORN IA AVEHUGHES AVEHUNTINGTO N BLVD KEAR NEY BLVD R ST W EBE R AVE MAPLE AVEOLIVE AVE VENTURA STKING S CANYON RD JENSEN AV E NORTH AVE TUOLUMNE STSTANISLAUS STINYO STCALIFORNIA AVE HAZELW O O D B LV D BELMONT AVE G OLD E N STATE BLV D FIG AVECEDAR AVEMCKINLEY AVE G O LD E N STATE BLV D WALNUT AVEVALENTINE AVETHORNE AVEELDORADOSTCHERRY AVER O E DIN G D R WHITES BRIDGE AVE MADISON AVE B ST M ST FRUIT AVEO ST B ST BR O A D W AY EAST AVEANNADALE AVE NIELSEN AVE K E AR NE Y BLVDMARKS AVECEDAR AVEPALM AVEWEST AVETHORNE AVEMARKS AVEMARTIN LUTHER KING JR BLVDFRUIT AVEORANGE AVEBROADWAYP STWISHON AVEEAST AVEELM AVETEILMANAVE41 41 99 16899 180 Displacement Program Area Map Development and Resource Management Department ® Created by the City of Fresno November 6th, 2018.This map is believed to be an accurate representationof the City of Fresno GIS data, however we make no warranties either expressed or implied for correctness of this data. Legend Downtown Neighborhoods Community Plan Fulton Corridor Specific Plan Downtown !!!Chinatown Southw est Fresno Specific Plan Displacement Program Area City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0180 Agenda Date:1/17/2019 Agenda #:1-J NOTIFICATION OF APPOINTMENT Approve the reappointment of Peter Vang to the Planning Commission and the reappointments of James Poptanich and Rodney Ashley to the Fresno Madera Area Agency on Aging Board (FMAAA) City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0151 Agenda Date:1/17/2019 Agenda #:1-K REPORT TO THE CITY COUNCIL January 17, 2019 FROM:MICHAEL CARBAJAL, Director Department of Public Utilities THROUGH:DEJAN PAVIC, Supervising Professional Engineer Department of Public Utilities - Utilities Planning & Engineering BY:MATTHEW L. BULLIS, Professional Engineer Department of Public Utilities - Utilities Planning & Engineering SUBJECT Approve Consultant Services Agreement in the amount of $129,354 with Akel Engineering Group, Inc., a California corporation, for Wastewater Collection System Hydraulic Modeling (Citywide) RECOMMENDATIONS Staff recommends the City Council approve a Consultant Services Agreement in the amount of $129,354,including a contingency of $10,000,with Akel Engineering Group,Inc.,a California corporation (Akel),for Wastewater Collection System Hydraulic Modeling and authorize the Director of Public Utilities, or designee, to sign all documents on behalf of the City of Fresno (City). EXECUTIVE SUMMARY Under the proposed consultant services agreement,Akel will help manage the City’s sewer collection model,including purchasing and installing new sewer system hydraulic modeling software,converting existing data to the new software model,verifying the accuracy of the data,and providing on-call services in support of the hydraulic model.Following a competitive process,Akel was selected as the most qualified consultant offering the best value to the City needs for this project. BACKGROUND The City has a sewer collection service area that covers nearly 114 square miles and serves approximately 526,000 residential customers as well as commercial and industrial accounts through a network of approximately 1,600 miles of pipeline and 15 sewers lift stations.The Fresno/Clovis Regional Wastewater Reclamation Facility (RWRF)treats over 57-million gallons of wastewater daily. City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0151 Agenda Date:1/17/2019 Agenda #:1-K Regional Wastewater Reclamation Facility (RWRF)treats over 57-million gallons of wastewater daily. The City currently utilizes the H2OMAP software from Innovyze to help manage the City’s sewer collection system.The software is used to improve service levels by allowing staff to predict wet weather flow conditions,recognize and control unwanted sewer overflow events,and meet environmental regulations. Innovyze has notified the Department of Public Utilities (DPU),Wastewater Management Division that on January 1,2019,the H2OMAP software,which is 20 years old,will no longer be supported by the company.Any questions or issues with the software past the January 2019 date will not be addressed.The Wastewater Management Division needs to implement a new hydraulic modeling software program to replace the H2OMAP software.Staff recommends purchase of InfoSewer,the newest sewer modeling software available.In order to make a smooth transition between new and old software platforms several action items must be met:new software must be purchased,existing data in H2OMAP system must be converted to the InfoSewer software,accuracy of the data must be verified and test runs of the InfoSewer model must be conducted to verify system operation.Akel will complete these tasks and will provide on-call services to operate and maintain the InfoSewer model. In accordance with Fresno Municipal Code Chapter 4,Article 1,and Administrative Order 6-19,DPU conducted a competitive process to invite consultants to provide services to perform Wastewater Collection System Hydraulic Modeling.Announcements were published in the Fresno Business Journal on September 14,2018,and in Planet Bids on September 20,2018.The Wastewater Management Division received two Statement of Qualifications (SOQs)by October 16,2018.The SOQs were evaluated by a selection committee,consisting of representatives from the Utilities Planning and Engineering and Wastewater Management Division.Upon completion of the evaluation,scope of work and fee negotiation process,Akel was selected as being the most qualified consultant able to meet the City’s needs for this project and providing the best value for the City. The services required by this agreement will be completed in approximately 365 consecutive calendar days from the authorization to proceed.The contract is for a not to exceed amount of $119,354,paid on a time and materials basis,with a contingency of $10,000,for a total contract amount of $129,354. A standard Consultant Services Agreement has been used in accordance with Administrative Order 4-4,and the consultant’s Certificates of Insurance have been approved by the City’s Risk Management Division.Upon approval by the City Council,the agreement will be executed by the Director of Public Utilities, or designee, who has been delegated this authority by the City Manager. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act (CEQA)Guidelines Section 15378 the award of this contract does not qualify as a “project” for the purpose of CEQA. LOCAL PREFERENCE Local preference was implemented;Akel Engineering Group,Inc.,is a local business as defined by Fresno Municipal Code 4-109(b). FISCAL IMPACT City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0151 Agenda Date:1/17/2019 Agenda #:1-K There is no impact to the General Fund.This project is identified in the five-year Capital Improvement Plan.Funds for this project are budgeted in the Fiscal Year 2019 Wastewater Enterprise Fund No. 53302. Attachment: Consultant Services Agreement City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0132 Agenda Date:1/17/2019 Agenda #: REPORT TO THE CITY COUNCIL January 17, 2019 FROM:SCOTT L. MOZIER, PE, Director Public Works Department BY:ANDREW J. BENELLI, PE, City Engineer/Assistant Director Public Works Department, Traffic Operations and Planning Division ANN LILLIE, Senior Engineering Technician Public Works Department, Traffic Operations and Planning Division SUBJECT HEARING to adopt resolutions and ordinance to annex territory and levy a special tax regarding City of Fresno Community Facilities District No.11,Annexation No.90 (Final Tract Map No.6165, Assessor’s Parcel Number 316-022-62,and Assessor’s Parcel Number 316-022-63)(north side of East Church Avenue between South Fowler and Sunnyside Avenues) (Council District 5) 1.RESOLUTION -Directing Preparation of a Modified District Report Analyzing Impact of the Proposed Change in Services and Increase in the Probable Special Tax for Proposed Modification of Resolution No. 2018-267 2.RESOLUTION -Receiving and Approving the Modified District Report and Modifying Council Resolution No.2018-267 for Annexation No.90 to the City of Fresno Community Facilities District No. 11 3.***RESOLUTION -to Annex Territory to Community Facilities District No.11 and Authorizing the Levy of a Special Tax for Annexation No. 90 (Subject to Mayor’s Veto) 4.***RESOLUTION - Calling Special Mailed-Ballot Election (Subject to Mayor’s Veto) 5.***RESOLUTION -Declaring Election Results (Subject to Mayor’s Veto) 6.***BILL -(For introduction and adoption)-Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No.11, Annexation No. 90 (Subject to Mayor’s Veto) RECOMMENDATIONS 1.Adopt Resolution Directing Preparation of a Modified District Report 2.Adopt Resolution Receiving and Approving the Modified District Report and Modifying Council Resolution No. 2018-267 3.Adopt Resolution Annexing Territory to Community Facilities District No.11 and Authorizing the Levy of a Special Tax 4.Adopt Resolution Calling Special Mailed-Ballot Election City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0132 Agenda Date:1/17/2019 Agenda #: 5.Adopt Resolution Declaring Election Results 6.Adopt Ordinance Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No. 11, Annexation No. 90 EXECUTIVE SUMMARY On November 29,2018,the Council of the City of Fresno (“Council”)adopted Council Resolution No.2018-267 with the intent to annex territory to Community Facilities District No.11 (CFD No.11) at the request of the landowners of Final Tract Map No.6165,Assessor’s Parcel Number 316-022- 62,and Assessor’s Parcel Number 316-022-63.The quantities and types of Services have increased costs for Services and modification is required to reflect the increase of the annual Maximum Special Tax from $185,660.00 to $193,619.00 for fiscal year 2018-2019.This is the noticed public hearing to consider these modifications and to annex Final Tract Map No.6165 and the territory known as Assessor’s Parcel Number 316-022-62,and Assessor’s Parcel Number 316- 022-63 as Annexation No.90 to CFD No.11 to provide funding for the maintenance Services associated with this development.If approved,the recommended resolutions and ordinance will modify Council Resolution No.2018-267 and levy a Special Tax on the properties within Annexation No. 90 for identified Services. (See attached location and features map). BACKGROUND The landowner of Final Tract Map No.6165 has petitioned the City of Fresno to annex to CFD No. 11 to provide funding for the Services pertaining to certain required public improvements within the public easements and Outlot A as associated with Final Tract Map No.6165.These improvements include landscaping,trees,irrigation systems,concrete curb &gutter,sidewalks,curb ramps,and median curb with hardscaping,street name signage,street lights,and local street paving. Facilities within Outlot A will also include,without limitations,a StormTech drainage system,check valve,park amenities,basketball court,exercise equipment,hardscaping,and trail lighting and a trail connection to the south.The landowners of Assessor’s Parcel Number 316-022-62,and 316- 022-63 have also made a request to annex to CFD No.11 to share with the costs for all Services for Outlot A and the trail connection upon development their properties.The City of Fresno has agreed to allow these two parcels to share in the costs upon development as defined in the Rate and Method of Apportionment of Special Tax, attached to the Annexation Resolution as Exhibit B. Pursuant to this petition,the Council adopted Council Resolution No.2018-267 on November 29, 2018,declared its intention to annex territory to CFD No.11,and set the public hearing for formal consideration.Council Resolution No.2018-267 also directed the preparation of a written report describing the Services and the costs of those Services and to file a report with the City Clerk. Additional types of Services and increased quantities of facilities were requested by the landowners to be added to Annexation No.90 for maintenance.This modification increases the total Maximum Special Tax from $185,660.00 to $193,619.00 for fiscal year 2018-2019.A Modified District Report has been prepared and analyzed reflective of these modifications and is on file with the City Clerk and apart of this hearing. As adopted by Council,Council Resolution No.2018-267 proposed a total Maximum Special Tax of $185,660.00 and now is proposed to be modified to show an increase to $193,619.00.This requires Council Resolution No.2018-267 to be modified to adjust the Special Tax and is City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0132 Agenda Date:1/17/2019 Agenda #: accomplished with the following two additional resolutions: 1.The first is Council direction to analyze the proposed change to Council Resolution No.2018- 267 in a Modified District Report. 2.The second is for Council to approve the Modified District Report and to Modify Council Resolution No. 2018-267. The annexation to CFD No. 11 requires three additional resolutions and ordinance. 3.The third resolution annexes territory to CFD No.11 and authorizes the levy of the special tax if the tax is approved by a special election of the property owners. 4.Resolutions 4 and 5 conduct the special election approving the special tax. 5.The ordinance approves the levy of the special tax. Today’s public hearing has been duly noticed and the attached ordinance and resolutions have been approved as to form by the City Attorney’s Office. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this hearing does not qualify as a “project”and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference was not considered because this hearing does not include a bid or award of a construction or services contract. FISCAL IMPACT No City funds will be involved.All costs for services will be borne by the property owners within the subject tract. Attachments: Location Map Feature Map Resolution Directing Preparation Resolution Receiving and Approving Resolution Annex-Levy Resolution Calling Election Resolution Declaring Results Ordinance City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:6258 Agenda Date:1/17/2019 Agenda #: REPORT TO THE CITY COUNCIL January 17, 2019 FROM:SCOTT L. MOZIER, PE, Director Public Works Department BY:ANDREW J. BENELLI, PE, City Engineer/Assistant Director Public Works Department, Traffic Operations and Planning Division ANN LILLIE, Senior Engineering Technician Public Works Department, Traffic Operations and Planning Division SUBJECT HEARING to adopt resolutions and ordinance to annex territory and levy a special tax regarding City of Fresno Community Facilities District No.11,Annexation No.98 (Final Tract Map No.6162)(northeast corner of North Hayes Avenue and East Ashlan Avenue) (Council District 1) 1.***RESOLUTION -to Annex Territory to Community Facilities District No.11 and Authorizing the Levy of a Special Tax for Annexation No.98 (Subject to Mayor’s Veto) 2.***RESOLUTION - Calling Special Mailed-Ballot Election (Subject to Mayor’s Veto) 3.***RESOLUTION -Declaring Election Results (Subject to Mayor’s Veto) 4.***BILL -(For introduction and adoption)-Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No. 11, Annexation No. 38 (Subject to Mayor’s Veto) RECOMMENDATIONS 1.Adopt Resolution Annexing Territory to Community Facilities District No.11 and Authorizing the Levy of a Special Tax 2.Adopt Resolution Calling Special Mailed-Ballot Election 3.Adopt Resolution Declaring Election Results 4.Adopt Ordinance Levying a Special Tax for the Property Tax Year 2018-2019 and Future Tax Years Within and Relating to Community Facilities District No. 11, Annexation No. 98 EXECUTIVE SUMMARY On December 13,2018,the Council of the City of Fresno (“Council”)adopted Council Resolution No.2018-297 with the intent to annex territory to Community Facilities District No.11 (“CFD No. City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:6258 Agenda Date:1/17/2019 Agenda #: No.2018-297 with the intent to annex territory to Community Facilities District No.11 (“CFD No. 11”)at the request of the landowner of Final Tract Map No.6162.This is the noticed public hearing to consider annexing Final Tract Map No.6162 as Annexation No.98 to CFD No.11 to provide funding for the operation and reserves for maintenance (“Services”)pertaining to the landscaping,trees and irrigation systems within the street rights-of-way and landscape easements; the concrete curbs and gutters,valley gutters,sidewalks,curb ramps,street name signage,street lighting,and local street paving associated with this subdivision.The cost for Services is $546.73 per lot annually.If approved,the recommended resolutions and ordinance will levy a Special Tax on the properties in Final Tract Map No.6162 for identified Services.(See attached location and features map. BACKGROUND On November 15,2005,the Council adopted Council Resolution No.2005-490 forming CFD No. 11 to fund the maintenance of landscaping,open spaces,local streets,local street lights and street furniture,curbs,gutters,sidewalks,street trees and other public facilities and services as defined by the City of Fresno Special Tax Financing Law,Chapter 8,Division 1,Article 3 of the Fresno Municipal Code (“City Law”). The landowner of Final Tract Map No.6162 has petitioned the City of Fresno to be annexed into CFD No.11 to provide funding for the operation and reserves for maintenance (“Services”) pertaining to the landscaping,trees and irrigation systems within the street rights-of-way and landscape easements;the concrete curbs and gutters,valley gutters,sidewalks,curb ramps, street name signage,street lighting,and local street paving associated with this subdivision. Pursuant to this petition,the Council adopted Council Resolution No.2018-297,declared its intention to annex the Final Tract Map No.6162 to CFD No.11,and set the public hearing for formal consideration. (See attached location and features map.) Resolution No.2018-297 also directed the preparation of an Engineer’s Report describing the Services and the costs of those services and this report is on file with the City Clerk. If adopted by the Council,the attached ordinance would levy the proposed Maximum Special Tax of $546.73 per residential lot to provide Services for FY18-19.The Maximum Special Tax will be adjusted upward annually by 3%plus the rise,if any,in the Construction Cost Index for the San Francisco Region. The levy of the special tax is subject to approval by the qualified electors through a special election.Two additional resolutions are attached for Council consideration pertaining to this special election. Today’s public hearing has been duly noticed and the attached ordinance and resolutions have been approved as to form by the City Attorney’s Office. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this hearing does not qualify as a “project”and is therefore exempt from the California Environmental Quality Act requirements. City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:6258 Agenda Date:1/17/2019 Agenda #: LOCAL PREFERENCE Local preference was not considered because this hearing does not include a bid or award of a construction or services contract. FISCAL IMPACT No City funds will be involved.All costs for services will be borne by the property owners within the subject tract. Attachments: Location Map Feature Map Resolution Annex-Levy Resolution Calling Election Resolution Declaring Results Ordinance City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0169 Agenda Date:1/17/2019 Agenda #: REPORT TO THE CITY COUNCIL, SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO AND THE FRESNO REVITALIZATION CORPORATION DATE:January 17, 2019 FROM: MARLENE MURPHEY, Executive Director SUBJECT Successor Agency to the Redevelopment Agency of the City of Fresno and Fresno Revitalization Corporation (FRC) consider adopting: 1. RESOLUTION - Approving the Recognized Obligation Payment Schedule 19-20 EXECUTIVE SUMMARY The Recognized Obligation Payment Schedule (ROPS)for the July 1,2019 through June 30,2020 period is attached.The ROPS must be submitted to the Department of Finance by February 1,2019. It is planned for consideration by the Oversight Board (OB) on January 24, 2019. Successor Agency staff recommends that the Successor Agency Board and FRC approve the attached Joint Resolution approving the ROPS for submittal to the required entities. BACKGROUND State legislation,ABX1 26 and AB 1484,created Successor Agencies,which are tasked with the responsibility of winding down former Redevelopment Agencies.As a requirement of the wind-down process,the Successor Agencies under SB 107 are now required to provide a ROPS every twelve months identifying overall outstanding debt for all enforceable obligations with the Agency,as well as the estimated amount needed for each of those obligations during the twelve-month period covered by that ROPS.The ROPS is required to be considered and acted upon by the OB.Once approved, the ROPS and OB Resolution are submitted to the Department of Finance for subsequent review and final approval. ENVIRONMENTAL FINDINGS N/A LOCAL PREFERENCE N/A FISCAL IMPACT City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0169 Agenda Date:1/17/2019 Agenda #: N/A Attachment A: Resolution Exhibit 1 to Attachment: Recognized Obligation Payment Schedule 19-20 (July 2019 - June 2020) City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ 1 of 3 Date Adopted: Date Approved: Effective Date: City Attorney Approval: ______ SA Resolution No. _____________ SUCCESSOR AGENCY RESOLUTION NO. ____________ A RESOLUTION OF THE SUCCESSOR AGENCY TO THE REDEVELOPMENT AGENCY OF THE CITY OF FRESNO APPROVING THE RECOGNIZED OBLIGATION PAYMENT SCHEDULE FOR JULY 1, 2019 TO JUNE 30, 2020 WHEREAS, pursuant to Health and Safety Code Section 34177(o)(1), for each period from July 1 to June 30, a successor agency shall submit a Recognized Obligation Payment Schedule to the department of finance and to the county auditor- controller no later than February 1; and WHEREAS, the Recognized Obligation Payment Schedule is subject to approval by the Countywide Oversight Board which was established pursuant to Health & Safety Code Section 34179(j); and WHEREAS, under Title 14 of the California Code of Regulations, Section 15378(b)(4), the approval of this Recognized Obligation Payment Schedule is exempt from the requirements of the California Environmental Quality Act ("CEQA") in that it is not a project, but instead consists of the continuation of an existing governmental funding mechanism for potential future projects and programs, and does not commit funds to any specific project or program, because it merely lists enforceable obligations previously entered into and approved by the Agency. NOW, THEREFORE, BE IT RESOLVED that the Successor Agency to the Redevelopment Agency of the City of Fresno and the Fresno Revitalization Corporation do hereby resolve as follows: SECTION 1: The foregoing recitals are true and correct. 2 of 3 SECTION 2: The Successor Agency Board hereby approves and adopts the Recognized Obligation Payment Schedule for the period of July 1, 2019 to June 30, 2020, attached as Exhibit 1. SECTION 3: The Successor Agency Executive Director, or designee, is hereby authorized to take such actions as are necessary and appropriate to implement this Resolution including, but not limited to, transmitting the Recognized Obligation Payment Schedule to the Countywide Oversight Board for approval and meeting the filing requirement with the Department of Finance, State Controller's Office and Fresno County Auditor-Controller. SECTION 4: This Resolution shall take effect immediately upon its adoption. * * * * * * * * * * * * * * 3 of 3 STATE OF CALIFORNIA ) COUNTY OF FRESNO ) ss. CITY OF FRESNO ) I, YVONNE SPENCE, Ex-Officio Clerk of the Successor Agency to the Redevelopment Agency of the City of Fresno, certify that the foregoing resolution was adopted by the Successor Agency, at a regular meeting held on the ___ day of _______ 2019. AYES : NOES : ABSENT : ABSTAIN : YVONNE SPENCE, MMC CRM City Clerk By: Deputy Date APPROVED AS TO FORM: DOUGLAS T. SLOAN Ex-Officio Attorney to the Successor Agency to the Redevelopment Agency of City of Fresno By: Laurie Avedisian-Favini Date Assistant City Attorney Attachment: Exhibit 1 Successor Agency:Fresno City County:Fresno Current Period Requested Funding for Enforceable Obligations (ROPS Detail) 19-20A Total (July - December) 19-20B Total (January - June) ROPS 19-20 Total A -$ -$ -$ B - - - C - - - D - - - E 4,587,580$ 651,347$ 5,238,927$ F 4,462,580 526,347 4,988,927 G 125,000 125,000 250,000 H Current Period Enforceable Obligations (A+E):4,587,580$ 651,347$ 5,238,927$ Name Title /s/ Signature Date Recognized Obligation Payment Schedule (ROPS 19-20) - Summary Filed for the July 1, 2019 through June 30, 2020 Period Enforceable Obligations Funded as Follows (B+C+D): RPTTF Redevelopment Property Tax Trust Fund (RPTTF) (F+G): Bond Proceeds Reserve Balance Other Funds Administrative RPTTF Certification of Oversight Board Chairman: Pursuant to Section 34177 (o) of the Health and Safety code, I hereby certify that the above is a true and accurate Recognized Obligation Payment Schedule for the above named successor agency. A B C D E F G H I J K L M N O P Q R S T U V W Bond Proceeds Reserve Balance Other Funds RPTTF Admin RPTTF Bond Proceeds Reserve Balance Other Funds RPTTF Admin RPTTF $ 35,130,797 $ 5,238,927 $ 0 $ 0 $ 0 $ 4,462,580 $ 125,000 $ 4,587,580 $ 0 $ 0 $ 0 $ 526,347 $ 125,000 $ 651,347 9 Convention Center - Convention OPA/DDA/Construction 7/11/2005 6/30/2020 To Be Determined Site Preparation, maintenance, Convention Center 2,129,398 N $ - $ - $ - 10 Convention Center - Historic Houses (6) Litigation 7/1/2009 6/30/2020 To Be Determined Relocation/restoration of historic houses Convention Center N $ - $ - $ - 24 Mariposa - 2003 Mariposa Tax Allocation Bonds Payment Bonds Issued On or Before 12/31/10 8/1/2003 2/2/2023 Bank of New York Mellon Infrastructure projects Mariposa 1,760,084 N $ 439,072 43,036 $ 43,036 396,036 $ 396,036 25 Roeding - California Infrastructure Bank Loan & Fees (3) Third-Party Loans 6/3/2009 8/2/2033 California Infrastructure & Economic Development Bank Infrastructure improvements in Roeding Business Park Project Area Roeding 1,779,176 N $ 120,692 98,019 $ 98,019 22,673 $ 22,673 27 SVN - Foundry Park CFD#5 Developer Agreement (2) OPA/DDA/Construction 10/22/1999 9/1/2031 Willow Creek-Foundry Ventures LLC, San Joaquin Stairs, Flores Frank Trustee, Alan & Sherry Shufelberger, S&B Enterprises, Craig N. & Carolyn F. Crump, Teton Properties LLC, Express Business Resources LLC, Patrick & Elezabeth Cody Trustees, Foundry Park Investors LP, Wolverine Ventures LLC Reimbursement regarding Foundry Park infrastructure South Van Ness 1,040,000 N $ 80,000 $ - 80,000 $ 80,000 33 Property Maintenance (2)Property Maintenance 5/8/2008 6/30/2020 EOC Maintenance of Agency Owned Properties All N $ - $ - $ - 34 Property Sale/Disposition of Agency Properties - Part I - General (8) Property Dispositions 2/1/2012 6/30/2020 TBD Legal, project management, insurance, fence rental All N $ - $ - $ - 36 CALPERS Unfunded and Employee Leave Payout (12) Unfunded Liabilities 11/1/2000 12/31/2023 CALPERS, Employees CALPERS unfunded amount and payouts of accrued leave to employees N/A 4,897,227 N $ 49,976 25,338 $ 25,338 24,638 $ 24,638 38 Successor Agency Administrative Budget* (1) Admin Costs 7/1/2016 6/30/2020 TBD Administration, Operations/Maintenance N/A 250,000 N $ 250,000 125,000 $ 125,000 125,000 $ 125,000 41 Audit Professional Services 1/1/2017 6/30/2020 CPA's - Macias Gini, Kutka Required Annual FY Audit N/A 35,000 N $ 35,000 35,000 $ 35,000 $ - 44 CENTRAL BUSINESS DISTRICT/Promissory Note 11 City/County Loan (Prior 06/28/11), Cash exchange 1/26/1996 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Central Business District 324,649 N $ - $ - $ - 45 CENTRAL BUSINESS DISTRICT/Promissory Note 12 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Central Business District 409,522 N $ - $ - $ - 46 CENTRAL BUSINESS DISTRICT/Promissory Note 13 City/County Loan (Prior 06/28/11), Cash exchange 4/1/2001 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Central Business District Y $ - $ - $ - 49 CHINATOWN EXPANDED PROJECT/Promissory Note 3 City/County Loan (Prior 06/28/11), Cash exchange 4/22/1983 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Chinatown Y $ - $ - $ - 52 CHINATOWN EXPANDED PROJECT/Promissory Note 6 City/County Loan (Prior 06/28/11), Cash exchange 5/15/1996 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Chinatown 202,800 N $ - $ - $ - 53 CHINATOWN EXPANDED PROJECT/Promissory Note 7 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Chinatown 49,800 N $ - $ - $ - 57 FRUIT/CHURCH PROJECT/Promissory Note 7 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1992 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Fruit/Church Y $ - $ - $ - 58 FULTON (UPTOWN)/Promissory Note 1 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Fulton 249,000 N $ - $ - $ - 59 FULTON PROJECT/Promissory Note 1 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1988 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Fulton Y $ - $ - $ - 60 FULTON PROJECT/Promissory Note 2 City/County Loan (Prior 06/28/11), Cash exchange 1/22/1991 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Fulton Y $ - $ - $ - 64 FULTON PROJECT/Promissory Note 6 City/County Loan (Prior 06/28/11), Cash exchange 4/15/2001 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Fulton 334,387 N $ - $ - $ - 68 JEFFERSON PROJECT/Promissory Note 10 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 552,448 N $ - $ - $ - 69 JEFFERSON PROJECT/Promissory Note 11 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 505,026 N $ - $ - $ - 70 JEFFERSON PROJECT/Promissory Note 12 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 246,341 N $ - $ - $ - 71 JEFFERSON PROJECT/Promissory Note 13 City/County Loan (Prior 06/28/11), Cash exchange 4/29/1998 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 6,177,626 N $ - $ - $ - 75 JEFFERSON PROJECT/Promissory Note 5 City/County Loan (Prior 06/28/11), Cash exchange 7/6/1993 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson Y $ - $ - $ - 77 JEFFERSON PROJECT/Promissory Note 7 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1995 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 367,797 N $ 367,797 367,797 $ 367,797 $ - 78 JEFFERSON PROJECT/Promissory Note 8 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1996 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 775,203 N $ - $ - $ - 79 JEFFERSON PROJECT/Promissory Note 9 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1996 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Jefferson 1,692,687 N $ - $ - $ - 82 MARIPOSA PROJECT AREA/Promissory Note 11 City/County Loan (Prior 06/28/11), Cash exchange 4/4/1990 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa Y $ - $ - $ - 83 MARIPOSA PROJECT AREA/Promissory Note 12 City/County Loan (Prior 06/28/11), Cash exchange 4/29/1991 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa Y $ - $ - $ - 84 MARIPOSA PROJECT AREA/Promissory Note 13 City/County Loan (Prior 06/28/11), Cash exchange 6/26/1991 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa Y $ - $ - $ - 85 MARIPOSA PROJECT AREA/Promissory Note 14 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1992 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa Y $ - $ - $ - 86 MARIPOSA PROJECT AREA/Promissory Note 15 City/County Loan (Prior 06/28/11), Cash exchange 1/26/1996 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa 61,915 N $ - $ - $ - 87 MARIPOSA PROJECT AREA/Promissory Note 16 City/County Loan (Prior 06/28/11), Cash exchange 5/15/1996 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa 674,141 N $ - $ - $ - 88 MARIPOSA PROJECT AREA/Promissory Note 17 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1997 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa 105,244 N $ - $ - $ - 89 MARIPOSA PROJECT AREA/Promissory Note 4 City/County Loan (Prior 06/28/11), Cash exchange 6/30/1980 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Mariposa 8,269,395 N $ 1,673,059 1,673,059 $ 1,673,059 $ - 93 ROEDING BUSINESS PARK/Promissory Note 3 City/County Loan (Prior 06/28/11), Cash exchange 8/31/1999 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Roeding 145,877 N $ 145,877 145,877 $ 145,877 $ - Fresno City Recognized Obligation Payment Schedule (ROPS 19-20) - ROPS Detail July 1, 2019 through June 30, 2020 (Report Amounts in Whole Dollars) Item #Payee Description/Project Scope Project Area Total Outstanding Debt or Obligation Retired 19-20A (July - December) 19-20B Total Project Name/Debt Obligation Obligation Type Contract/Agreement Execution Date Fund Sources Fund Sources Contract/Agreement Termination Date ROPS 19-20 Total 19-20B (January - June) 19-20A Total A B C D E F G H I J K L M N O P Q R S T U V W Bond Proceeds Reserve Balance Other Funds RPTTF Admin RPTTF Bond Proceeds Reserve Balance Other Funds RPTTF Admin RPTTF Fresno City Recognized Obligation Payment Schedule (ROPS 19-20) - ROPS Detail July 1, 2019 through June 30, 2020 (Report Amounts in Whole Dollars) Item #Payee Description/Project Scope Project Area Total Outstanding Debt or Obligation Retired 19-20A (July - December) 19-20B Total Project Name/Debt Obligation Obligation Type Contract/Agreement Execution Date Fund Sources Fund Sources Contract/Agreement Termination Date ROPS 19-20 Total 19-20B (January - June) 19-20A Total 94 ROEDING BUSINESS PARK/Promissory Note 4 City/County Loan (Prior 06/28/11), Cash exchange 8/31/1999 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Roeding Y $ - $ - $ - 95 ROEDING BUSINESS PARK/Promissory Note 6 City/County Loan (Prior 06/28/11), Cash exchange 5/16/2003 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Roeding Y $ - $ - $ - 96 ROEDING BUSINESS PARK/Promissory Note 7 City/County Loan (Prior 06/28/11), Cash exchange 7/22/2003 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Roeding 2,071,254 N $ 2,071,254 2,071,254 $ 2,071,254 $ - 99 SOUTHWEST FRESNO PROJECT/Promissory Note 12 City/County Loan (Prior 06/28/11), Cash exchange 1/13/1994 6/30/2045 City of Fresno Project Area Loan for Legitimate Redevelopment Purposes Southwest Fresno Y $ - $ - $ - 110 Property Sale/Disposition of Agency Properties - Part II - Appraisals (8) Property Dispositions 2/1/2012 6/30/2016 TBD Appraisals All Y $ - $ - $ - 113 Property Sale/Disposition of Agency Properties - Part V - Loopnet (8) Property Dispositions 2/1/2012 6/30/2016 TBD Loopnet All Y $ - $ - $ - 115 Mariposa - 2003 Mariposa Tax Allocation Bond - Annual Trustee Fees (required by bond docs) Bonds Issued On or Before 12/31/10 8/1/2003 2/2/2023 Bank of New York Mellon Infrastructure projects Mariposa 12,800 N $ 3,200 3,200 $ 3,200 $ - 116 Mariposa - 2003 Mariposa Tax Allocation Bond - Annual Arbitrage Rebate Services (required by bond documents) Bonds Issued On or Before 12/31/10 8/1/2003 2/2/2023 Wildan Financial Services Infrastructure projects Mariposa 6,000 N $ 1,500 $ - 1,500 $ 1,500 117 Mariposa - 2003 Mariposa Tax Allocation Bond - Annual Continuing Disclosure Services (required by bond documents) Bonds Issued On or Before 12/31/10 8/1/2003 2/2/2023 Wildan Financial Services Infrastructure projects Mariposa 6,000 N $ 1,500 $ - 1,500 $ 1,500 121 Approved Attorney's Fees per Settlement Agreement dated 8/31/17 regarding Sacramento Superior Court Case 34-2017- 80002575 Litigation 8/31/2017 6/30/2019 City of Fresno Repay loan proceeds from the City of Fresno used to pay Attorney's Fees for Sacramento Superior Court Case 34- 2017-80002575 Y $ - $ - $ - 122 N $ - $ - $ - 123 N $ - $ - $ - 124 N $ - $ - $ - 125 N $ - $ - $ - 126 N $ - $ - $ - 127 N $ - $ - $ - 128 N $ - $ - $ - 129 N $ - $ - $ - 130 N $ - $ - $ - 131 N $ - $ - $ - 132 N $ - $ - $ - 133 N $ - $ - $ - 134 N $ - $ - $ - 135 N $ - $ - $ - 136 N $ - $ - $ - 137 N $ - $ - $ - 138 N $ - $ - $ - 139 N $ - $ - $ - 140 N $ - $ - $ - 141 N $ - $ - $ - 142 N $ - $ - $ - 143 N $ - $ - $ - 144 N $ - $ - $ - 145 N $ - $ - $ - 146 N $ - $ - $ - 147 N $ - $ - $ - 148 N $ - $ - $ - 149 N $ - $ - $ - 150 N $ - $ - $ - 151 N $ - $ - $ - 152 N $ - $ - $ - 153 N $ - $ - $ - 154 N $ - $ - $ - A B C D E F G H Reserve Balance Other Funds RPTTF Bonds issued on or before 12/31/10 Bonds issued on or after 01/01/11 Prior ROPS RPTTF and Reserve Balances retained for future period(s) Rent, Grants, Interest, etc. Non-Admin and Admin 1 Beginning Available Cash Balance (Actual 07/01/16) RPTTF amount should exclude "A" period distribution amount 4,869,785 2 Revenue/Income (Actual 06/30/17) RPTTF amount should tie to the ROPS 16-17 total distribution from the County Auditor-Controller 246,250 6,951,356 3 Expenditures for ROPS 16-17 Enforceable Obligations (Actual 06/30/17) 246,250 6,602,049 4 Retention of Available Cash Balance (Actual 06/30/17) RPTTF amount retained should only include the amounts distributed as reserve for future period(s) 4,869,785 5 ROPS 16-17 RPTTF Prior Period Adjustment RPTTF amount should tie to the Agency's ROPS 16-17 PPA form submitted to the CAC 349,307 6 Ending Actual Available Cash Balance (06/30/17) C to F = (1 + 2 - 3 - 4), G = (1 + 2 - 3 - 4 - 5) 0$ 0$ 0$ 0$ 0$ No entry required Fresno City Recognized Obligation Payment Schedule (ROPS 19-20) - Report of Cash Balances July 1, 2016 through June 30, 2017 (Report Amounts in Whole Dollars) y ( ) p p y ( ) y p y y funding source is available or when payment from property tax revenues is required by an enforceable obligation. For tips on how to complete the Report of Cash Balances Form, see Cash Balance Tips Sheet. Fund Sources Comments Bond Proceeds ROPS 16-17 Cash Balances (07/01/16 - 06/30/17) Item #Notes/Comments Fresno City Recognized Obligation Payment Schedule (ROPS 19-20) - Notes July 1, 2019 through June 30, 2020 Item #Notes/Comments Fresno City Recognized Obligation Payment Schedule (ROPS 19-20) - Notes July 1, 2019 through June 30, 2020 City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-01102 Agenda Date:1/17/2019 Agenda #: REQUEST TO APPEAR BEFORE THE CITY COUNCIL January 17, 2019 Appearance by Joseph and Ziona Brophy to request Council assistance with a long standing issue of their neighbors repairing and storing vehicles on their front yard. (Speakers reside in District 1) City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0191 Agenda Date:1/17/2019 Agenda #: REPORT TO THE CITY COUNCIL January 17, 2019 FROM:LEE BRAND, Mayor Office of the Mayor & City Manager BY:H. SPEES, Director, Strategic Initiatives Office of the Mayor & City Manager SUBJECT Approve Agreement with the State of California to receive $3,105,519.90 in Homeless Emergency Aid Program (HEAP) funding awarded to the City of Fresno December 20, 2018. RECOMMENDATION Agreement with the State of California Homeless Coordinating and Financing Council for City of Fresno’s Homeless Emergency Aid Program (HEAP) award. See attached HEAP Standard Agreement with Exhibits A through D (City of Fresno Agreement #18-HEAP-00028:CA 514 LC-CA- 514-Z94RTPX978). EXECUTIVE SUMMARY During the summer of 2018, Mayor Lee Brand joined with other Big 11 City Mayors in California to lobby the State for funding to relieve the burden Fresno and other cities face in addressing homelessness. The Mayors’ efforts were successful, resulting in $500 million in State assistance. Fresno’s pro-rata portion of these funds is $3,105,519, with an additional $9,501,363 going to the Fresno-Madera Continuum of Care (CoC). The State required a community planning process to determine how these funds would be invested in a coordinated way. BACKGROUND City Attorney has reviewed and approved the State’s HEAP Standard Agreement with Exhibits A through D (see attached). Planning for these expenditures has been done, as required by the State, in coordination with similar City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0191 Agenda Date:1/17/2019 Agenda #: funding in the amount of $9,501,363 through the Fresno Madera Continuum of Care. These plans call for the addition of 100 Shelter Beds; 60 Bridge Housing Beds; Rapid Rehousing for up to 154 households over a three year period; 718 households provided Diversion Services to keep them from becoming homeless; additional investments in Outreach, Coordinated Entry, Landlord Engagement; a Landlord Mitigation Fund and Services to Homeless Youth. (see attached HEAP Funding Plan) ENVIRONMENTAL FINDINGS Any CEQA findings or other regulatory requirements will be included with specific project agreements brought to your Council. LOCAL PREFERENCE N/A FISCAL IMPACT There is no increase in Net City Cost associated with the recommended action. There is no matching contribution requirement for these funds. Funds will be available for homeless services in both the City of Fresno and, through the parallel CoC funding in incorporated and unincorporated jurisdictions of Fresno and Madera Counties through June 30, 2021. The City Council may expect the following next steps: 1.) a joint procurement process with the County of Fresno based on a Memorandum of Understanding (MOU) to provide opportunities for local homeless service providers to apply for funding in the first quarter of 2019 2.) a plan for providing financial and program monitoring of all activities under this program. Both the MOU and the monitoring plan will be brought to the City Council for approval. Agreements resulting from the process will be brought to your Council for consideration, as appropriate. Attachments: Attachment A - HEAP Standard Agreement with Exhibits A through D Attachment B - HEAP Spending Plan City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0192 Agenda Date:1/17/2019 Agenda #: REPORT TO THE CITY COUNCIL January 17, 2019 FROM:LEE BRAND, Mayor Office of the Mayor and City Manager BY:H. SPEES, Director, Strategic Initiatives Office of the Mayor and City Manager SUBJECT Approve a Fourth Amendment to the Agreement between the City of Fresno and WestCare California for Street Outreach Services through the HERO Team in the amount of $420,000. RECOMMENDATION Staff recommends approval of the Fourth Amendment to the Agreement between the City of Fresno (City)and WestCare California for Street Outreach Services through the HERO Team (Fourth Amendment) and authorize the City Manager to execute the Fourth Amendment. EXECUTIVE SUMMARY On December 13,2018,Council adopted an annual appropriation resolution allocating $420,000 in carryover resources for the continuation of HERO Team services.The Fourth Amendment allows for the expenditure of those resources and includes additional reporting requirements requested by the Council. BACKGROUND As of March 1,2016,the City allocated $420,000 to provide critical street outreach connecting homeless individuals and families with needed services in order to fill an important gap in the City’s homeless services system. The Agreement with WestCare California includes three other partners:Poverello House,Fresno Economic Opportunities Commission,and Turning Point of Central California.Together they provide coverage seven days a week with a team of eight dedicated Outreach/Navigator positions.This team works alongside the Fresno Police Department’s Homeless Task Force to respond to requests for City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0192 Agenda Date:1/17/2019 Agenda #: works alongside the Fresno Police Department’s Homeless Task Force to respond to requests for street outreach,complete assessments,and coordinate with all MAP Points,housing and supportive services. The Fourth Amendment provides for the expenditure of the approved $420,000 in funding through March 31,2019,and requires that WestCare provide the City with a monthly report,broken down by zip code of services provided,including the number of people served and the types of services.The report will also provide a list of calls from the Council offices and the Mayor’s office with their disposition. The City Attorney’s office has reviewed and approved the attached Fourth Amendment as to form. ENVIRONMENTAL FINDINGS This is not a project pursuant to CEQA guidelines Section 15378. LOCAL PREFERENCE Local Preference was not implemented because this is an amendment to an existing agreement. FISCAL IMPACT The City Council previously appropriated the necessary $420,000 for the Fourth Amendment. Attachments: Attachment A -Fourth Amendment to Agreement between City of Fresno and WestCare California, Inc. City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ 1 FOURTH AMENDMENT TO AGREEMENT BETWEEN CITY OF FRESNO AND WESTCARE CALIFORNIA, INC. THIS FOURTH AMENDMENT TO AGREEMENT (Amendment) made and entered into as of this ____ day of ___________________ 2019, amends the Agreement entered into between the CITY OF FRESNO, a municipal corporation (City), and WESTCARE CALIFORNIA, INC, a California 501(c)(3) not for profit corporation (Consultant). RECITALS City and Consultant entered into an Agreement between WestCare California, Inc., and the City of Fresno regarding Street Outreach Services effective March 1, 2016, (the Agreement); and City and Consultant entered into a First Amendment to the Agreement on December 21, 2016, to extend the Agreement’s termination date through June 30, 2017; and City and Consultant entered into a Second Amendment to the Agreement on June 20, 2017, to extend the Agreement’s termination date through December 31, 2017; and City and Consultant entered into a Third Amendment to the Agreement on September 1, 2017, to extend the Agreement’s termination date through June 30, 2018; and City and Consultant now desire to extend the time for performance, provide for additional compensation to Consultant, and revise terms to the Agreement regarding reporting. AGREEMENT NOW, THEREFORE, the parties agree that the aforesaid Agreement be amended as follows: 1. Section 2 of the Agreement (Term of Agreement and Time for Performance) is deleted and replaced as follows: This Agreement shall be effective from July 1, 2018, (Revised Effective Date) and shall continue in full force and effect through March 31, 2019, subject to any earlier termination in accordance with this Agreement. The services of Consultant as described in Exhibit A are to commence upon the Revised Effective Date and shall be completed in a sequence assuring expeditious completion, but in any event, all such services shall be completed prior to expiration of this Agreement and in accordance with any performance schedule set forth in Exhibit A. 2. Section 3(b) of the Agreement is deleted and replaced as follows: Detailed statements shall be rendered monthly for services performed in the preceding month and will be payable in the normal course of City business. Consultant shall provide the City with a monthly report, broken down by Zip Code, of services 2 provided, including the number of people served and the types of services. A monthly report will also be made listing calls from each Council Member’s Office and the Mayor’s Office with their disposition. Consultant’s monthly report shall be due by the end of the following calendar month and provided directly to the City’s administration . Provision of these monthly reports is a requirement for subsequent payments under this Agreement. City shall not be obligated to reimburse any expense for which it has not received a detailed invoice with applicable copies of representative and identifiable receipts or records substantiating such expense. 3. Consultant’s sole compensation for satisfactory performance of all services required or rendered pursuant to this Amendment shall be an amount not to exceed $420,000; for total compensation of $840,000 under the Agreement. 4. In the event of any conflict between the body of this Amendment and any exhibit or attachment hereto, the terms and conditions of the body of this Amendment shall control and take precedence over the terms and conditions expressed within the exhibit or attachment. Furthermore, any terms or conditions contained within any exhibit or attachment hereto which purport to modify the allocatio n of risk between the parties, provided for within the body of this Amendment, shall be null and void. 5. Whenever the Agreement is referred to, it shall mean the Agreement as modified by this Amendment. Except as otherwise provided herein, the Agreement entered into by City and Consultant, regarding Street Outreach Services effective March 1, 2016, remains in full force and effect. [Signatures follow on the next page.] 3 IN WITNESS WHEREOF, the parties have executed this Amendment at Fresno, California, the day and year first above written. CITY OF FRESNO, A California municipal corporation By: Wilma Quan-Schecter City Manager APPROVED AS TO FORM: DOUGLAS T. SLOAN City Attorney By: Tracy N. Parvanian Date Senior Deputy City Attorney ATTEST: YVONNE SPENCE, CRM MMC City Clerk By: Date Deputy WESTCARE CALIFORNIA, INC., a California 501(c)(3) not-for-profit corporation By: Shawn Jenkins Senior Vice President Addresses: City: City of Fresno Attention: Wilma Quan-Schecter, City Manager 2600 Fresno Street, Room 3076 Fresno, CA 93721 Phone: (559) 621-8000 Fax: (559) 488-1078 Consultant: WestCare California, Inc. Attention: Shawn Jenkins, Senior Vice President 1505 N. Chestnut Fresno, CA 93703 Phone: (559) 251-4800 Fax: (559) 537-7827 City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0159 Agenda Date:1/17/2019 Agenda #:3-A REPORT TO THE CITY COUNCIL January 17, 2019 FROM:WILMA QUAN-SCHECTER, City Manager Office of the City Manager DOUGLAS T. SLOAN, City Attorney City Attorney’s Office SUBJECT Provide Anti-Slum Enforcement Team (ASET) Quarterly Report RECOMMENDATION City Manager’s Office and City Attorney’s Office to provide an ASET quarterly status report. EXECUTIVE SUMMARY The Administration,City Attorney’s Office (CAO),and the Development and Resource Management’s (DARM)Rental Housing Division staff are working in a coordinated effort to aggressively pursue compliance from landlords who are failing to maintain rental properties.The City does not have resources to address and remedy all code violations,but through ASET,is pursuing egregious violators with maximum fines,reimbursements,attorney fees,and other remedies such as receiverships.The mission of ASET is to increase the stock of habitable rental housing by pursuing violators to obtain code compliance.Quarterly reports are provided to the City Council concerning the status of ASET,results obtained,and any additional resources necessary to accomplish ASET’s mission.The ASET Weekly Status Report is also posted to the City’s website.ASET has successfully pursued compliance of approximately 5,041 violations in over 524 units.Currently,approximately 13,396 additional violations are being pursued in 464 units as part of 22 active ASET cases. BACKGROUND ASET is dedicated to increasing the stock of affordable and habitable rental housing by pursuing and improving slum properties with substantial health and safety violations through enforcement, education,fines,receiverships,and compliance agreements.This specialty unit was designed to handle a dozen egregious cases per year,but with effective coordination,this goal continues to be exceeded.The majority of cases are on a clear path towards compliance and rehabilitation.Other successes include new ownership, and improved property management. The CAO has three lawyers,a paralegal,a legal secretary assigned to ASET,and two legal investigators whose primary focus is ASET.Additionally,the CAO’s three law clerks assist with City of Fresno Printed on 3/22/2023Page 1 of 6 powered by Legistar™ File #:ID19-0159 Agenda Date:1/17/2019 Agenda #:3-A investigators whose primary focus is ASET.Additionally,the CAO’s three law clerks assist with related Code Enforcement Division matters.DARM has a Rental Housing Division manager,a supervisor, and six senior community revitalization specialists (inspectors) assigned to ASET. ASET cases are categorized into active, pending, potential, and completed. The ASET Weekly Status Report (Attachment A) is posted to the City’s website at www.fresno.gov/rentalhousing <http://www.fresno.gov/rentalhousing>. Because ASET is designed to pursue a handful of the most egregious violators, and does not operate like traditional code enforcement, it is essential all complaints continue to be reported through the City’s FresGo App, One Call Center, or the Code Enforcement Division. Other Divisions within DARM generate additional referrals to ASET. Please see below for highlights related to some of the current active cases (22). RESULTS OBTAINED Active ASET Case Highlights: 1.202-244 W.Shields -[Martin Nunez,Eduardo Robles,Absolon Ruiz,Ramiro Raygoza,District 1] This is an occupied and dilapidated 20-unit apartment complex with an extensive history of housing code violations,including multiple open and active cases for reports of rats,roaches,junk,and rubbish.In addition,Fresno PD has an excessive number of calls for service to the location for warrants,stabbings,drugs,and assaults.On November 29,2018,ASET conducted the initial inspection of the property. A Notice and Order will be issued. 2.1504 E.Yale (312 Violations)-[Quy Dinh Le,Maryann Mai Bach Le,Ngoc Bich Thi Le,District 7] This is a severely deteriorating,occupied 5-unit complex with multiple substandard conditions, including visible mold,water leaks,pest infestations,inoperable vehicle,and excessive calls for police and fire response.ASET completed the initial inspection on October 22,2018,and issued a Notice and Order for 312 violations on November 2, 2018. Settlement negotiations are in progress. 3.3279 and 3285 E.Clay (424 Violations)-[Jerry M.Saylor and Gail A.Saylor,Trustees,District 5] This is an occupied,substandard,and deteriorating 8-unit complex with significant health and safety issues,including dangerous stairs and landings,pest infestations,transients,and inoperable vehicles.ASET completed the initial inspection on November 5,2018,and issued a Notice and Order for 424 violations on November 20, 2018. 4.4805 E. University (337 Violations) - [Rodolfo and Carmen Rojas, District 4] This is a partially occupied,substandard 3-unit complex with an extensive history of housing code violations,including lack of water and electrical service,frequent calls for police service,and a history of squatters.ASET conducted an initial inspection on May 3,2018,and issued a Notice and Oder for the two occupied units on May 17,2018 for 237 violations.A Notice and Order for the vacant unit was issued on June 15,2018,for 100 violations.A first administrative citation was issued on July 31, 2018,for $38,750.On August 14,2018,the City posted a Health and Safety section 17980.6 Notice to Abate for 337 violations.On October 22,2018,the City petitioned the Court to appoint a health and safety receiver, and court appointed the receiver on January 3, 2019. Rehabilitations in Progress: City of Fresno Printed on 3/22/2023Page 2 of 6 powered by Legistar™ File #:ID19-0159 Agenda Date:1/17/2019 Agenda #:3-A 5.440 S. Chestnut (781 Violations) - [Sylvia Gutierrez, District 5] This is an occupied,substandard and deteriorating 12-unit complex with excessive calls for police service and significant health and safety violations,including junk/rubbish,damaged walkways, boarded or broken windows,a dangerous staircase,and a homeless encampment.It is located within close proximity to several schools.On September 6,2018,ASET completed an initial inspection and found numerous violations,including missing or inoperative smoke detectors,pest infestations, damaged security doors,no heat in several units,and lack of permits to install water heaters.The Notice and Order was issued on October 1,2018,for 781 violations.On November 19,2018,the parties entered into a Settlement Agreement. 6.701 W.Cambridge (617 Violations)-[Rick C.Torres (former owner)/Meganova,LP as of 6/28/18, District 1] This property is a partially occupied 10-unit apartment complex with significant health and safety issues,including mold,water damage,insect infestation,and boarded windows.ASET conducted an interior and exterior inspection of each unit,and a Notice and Order for 617 violations was issued on March 12,2018.A Settlement Agreement with the prior owner was entered into on July 31,2018,and $4,500 was paid in full.Compliance is being pursued with new owner,who intends to fully renovate the property. 7.1203 W. Simpson (700 Violations) - [Malcolm D. Powers and Judy Powers, District 1] This property is a partially occupied 14-unit apartment complex.ASET has completed inspections of all units and the exterior of this apartment complex.These inspections revealed significant substandard conditions and health and safety issues.A Settlement Agreement to include major renovations,the correction of all violations,and the payment of the City's hard costs,was entered into on April 9,2018.Rehabilitation is underway and the first,second,and third progress inspections have been completed.Hard costs in the amount of $7,835 have been paid pursuant to the agreement. 8.1309 and 1315 B Street (71 Violations) - [Vincent Medina, District 3] These are two single family homes on one Assessors Parcel Number.The City was seeking voluntary compliance for substandard conditions,including major structural damage,unsanitary conditions,missing smoke and carbon monoxide alarms,improper occupancy of the enclosed back porch,and unpermitted electrical wiring at the rear patio.Due to lack of compliance by owner,the City posted a Health and Safety section 17980.6 Notice for 71 violations and petitioned the Court for a health and safety receiver.The City's petition for a receiver was granted at hearing on June 12, 2018,the receiver has cleaned and secured the property,and negotiated with potential buyers who will be able to rehabilitate the property.The motion to confirm the sale of the property was granted on October 17, 2018. 9.2249 W. Princeton (686 Violations) - [Michael Hertz and Scott Jacoby, District 1] This is a dilapidated and occupied 12-unit apartment complex with an extensive code history and significant substandard conditions;including visible black mold,presence of junk and rubbish,and electrical and plumbing issues.The initial ASET inspection was completed on September 27,2018.A Notice and Order for 686 violations was issued on October 12,2018.A settlement agreement was executed on November 29, 2018. 10.2845 E. Madison (41 Violations) - [Jose Luis Garza Martinez and Juana Borja, District 7] This occupied,single-family residence has multiple health and safety violations,exterior public City of Fresno Printed on 3/22/2023Page 3 of 6 powered by Legistar™ File #:ID19-0159 Agenda Date:1/17/2019 Agenda #:3-A This occupied,single-family residence has multiple health and safety violations,exterior public nuisance,zoning violations,and structural damage,in addition to a significant accumulation of junk and rubbish.A Notice and Order for 41 violations was issued on September 19,2017.Due to lack of compliance by owner,the City petitioned the court for a health and safety receiver.The City's petition for a receiver was granted at hearing on May 30,2018.The motion to approve the sale of the property was granted on August 2, 2018. A rehabilitation of the property is in progress. 11.4460 E.Woodward (499 Violations)-[Abdo Saleh Nagi and Shiha Mohammed Abdo,District 5] This 4-unit,multi-family residence is occupied and severely dilapidated.The significant health and safety violations include junk/rubbish,a dangerous staircase,missing fire extinguishers,illegal use of extension cords,and deteriorating landings and garages.ASET completed the initial inspection on August 14,2018,and the City issued a Notice and Order on August 24,2018,for 499 violations.The property owners promptly completed work related to a serious mold issue at the property,and a settlement agreement was executed on November 15,2018.The first progress inspection was completed on November 29, 2018. 12.4518 E. Fountain Way (1,931 Violations) - [Sorento Holdings, District 4] This is a deteriorating and occupied 57-unit apartment complex with excessive calls for police service and an extensive code history,including an active case for bed bugs,roaches,and a lack of air conditioning,heating,and natural gas.The initial ASET inspection was completed on July 17,2018, and a Notice and Order for 1,931 violations was issued on August 2,2018.Hard costs in the amount of $14,947 were paid in full on August 16,2018.A settlement agreement was executed,and the priority list re-inspection was completed on November 20, 2018. 13.4538 E. Hamilton (2,315 Violations) - [Moen Trust and Kirkpatrick Trust, District 5] This is a severely dilapidated 28-unit apartment complex with significant health and safety violations including the presence of chickens/roosters and pest infestations.There is an extensive history of code violations for this property,as well as calls for police service.The initial ASET inspection was completed on April 5,2018,and a Notice and Order was issued on June 26,2018,for 2,315 violations.A settlement agreement was entered into on August 14,2018.The Phase One re- inspection was completed on September 28,2018;the Phase Two re-inspection was completed on October 15,2018;and the Phase Three re-inspection occurred on November 30,2018.A Notice of Breach of the Agreement was sent on December 13, 2018 regarding delayed and substandard work. 14.4608-4612 E. Inyo (854 Violations) - [Victor H. Martinez, District 7] This is an occupied and deteriorating 8-unit complex with significant substandard conditions, including pest infestation,junk/rubbish,mold,water leaks,and inoperable vehicles;in addition to excessive calls for police service.An initial ASET inspection was conducted on August 22,2018.A Notice and Order for 4608 E.Inyo was issued on September 10,2018,for 346 violations,and a Notice and Order for 4612 E.Inyo was issued on September 10,2018,for 508 violations.A settlement agreement was executed on November 1, 2018. 15.4811 E. Geary (9 Violations) - [Andrew and Gloria Adams, District 5] This dilapidated and occupied single-family residence has a severely deteriorating and hazardous roof,as well as evidence of mold and water damage,unsanitary bathroom and kitchen areas,and damaged interior and exterior walls.A Notice and Order was issued on March 26,2018,for nine violations,and a Health and Safety section 17980.6 Notice was posted on June 5,2018.These steps have motivated one of the lien holders,Wells Fargo Bank,to assume control of the property,as both City of Fresno Printed on 3/22/2023Page 4 of 6 powered by Legistar™ File #:ID19-0159 Agenda Date:1/17/2019 Agenda #:3-A have motivated one of the lien holders,Wells Fargo Bank,to assume control of the property,as both owners are deceased.A trustee's sale was scheduled for August 21,2018,and ownership of the property was transferred to Wells Fargo Bank on August 27,2018.Rehabilitation of the property is in progress;however,if Wells Fargo fails to bring the property into compliance,ASET will petition the Court for a health and safety receivership. 16.5035 - 5049 E. Lane (1,290 Violations) - [Sean Sanchez, District 5] ASET inspected 16 units,next door to a school,with significant substandard conditions and health and safety issues,including but not limited to,broken windows,roach infestation,egress violations, and missing smoke alarms.Additionally,the apartment complex generated frequent calls for police service,including gunfire.Notice and Orders identifying more than 330 exterior violations and 960 interior violations,were issued.An Extension and Settlement Agreement has been executed,and a compliance inspection was conducted March 15,2018.While some progress was made,significant violations remained.An inspection warrant was executed on April 25,2018,and an administrative citation for $86,000 was issued on June 22,2018.On July 10,2018,owner filed an appeal of the citation,and an administrative appeal hearing will be scheduled in February 2019.Owner has expressed his desire to sell the property, and he is reviewing offers. 17.West Shaw Estates (780 Violations)-[West Shaw Estates Homeowners Association / Regency Property Management (as of March 1, 2018) District 1] In February of 2017,inspections of the condominium complex known as West Shaw Estates revealed exterior common area code violations,including illegally occupied structures,electrical theft and damage,unsafe and unpermitted balconies,broken light fixtures,and a swimming pool requiring immediate action in order to mitigate potential health and safety issues.The parties entered in a settlement agreement,whereby the HOA will make the repairs to gutters,walkways and balconies. Additionally, $20,000 was paid to the City. Recently Completed ASET Cases (3): 18.1367 E.San Ramon and 6540 N.Winery (collectively 70+Violations)-[San Ramon-Brian H. Rosene, John and Leona Tosatto, District 4; Winery-Brian H. Rosene, District 6] On July 18,2017,City’s Petition to Appoint a Health and Safety Receiver was granted by the Superior Court concerning 1367 E.San Ramon and 6540 N.Winery owned by Brian Rosene and others.Mr.Rosene owns several properties in the Fresno area and has had a history of code violations,including a vacant home where five people were killed as a result of the home catching on fire. Pursuant to a court order,on December 12,2017,the San Ramon property was sold as-is to Mark and Janet Saleh (Buyers),for $125,000.The Buyers will post a performance bond in the amount of $108,000 to insure the property is rehabilitated, which will be returned upon rehabilitation. The rehabilitation of the Winery property has been completed by the receiver,and the motion to approve sale of property was granted by the Court.A hearing to terminate the completed receivership for both properties was held on January 8, 2018. 19.2248-2266 W.Princeton (1,651 Violations)-[Sanh X.Le and Marilyn M.Ly,Co-Trustees of the Le Family Living Trust, District 1] This property consists of two apartment complexes next to each other with the same owners.There are a total of 22 units with a long prior code enforcement history and many police calls for service.An ASET interior and exterior inspection was conducted on March 8,2018.A notice and order for 920 violations for 2266 W.Princeton was issued on April 10,2018,and a notice and order for 731 City of Fresno Printed on 3/22/2023Page 5 of 6 powered by Legistar™ File #:ID19-0159 Agenda Date:1/17/2019 Agenda #:3-A violations for 2266 W.Princeton was issued on April 10,2018,and a notice and order for 731 violations for 2248 W.Princeton was issued on April 26,2018.The parties entered into a settlement agreement on July 31,2018,and $12,000 in administrative costs was paid in full.Rehabilitation of the property is complete and passed a clearance inspection took place on October 2,2018.All permits are final. 20.4853 E. University (129 Violations) - [Ronald D. Mullins and Olga E. Mullins, District 4] This property was a vacant and abandoned 5-unit apartment complex regularly broken into and used by squatters and transients.It was constantly boarded up by the City.The court granted the petition to appoint a Health and Safety Receiver on December 19,2017.The Receiver took possession of the property and filed a first report of Receiver on February 20,2018.The property was sold on April 24, 2018, to an investor, and the rehabilitation is now complete. Hard costs and fees are paid in full. OBSERVATIONS During the past quarter,ASET has been actively working to identify and address properties with significant health and safety violations.The team has seen success with different tools for compliance,including demand letters and compliance agreements.Compliance has been achieved through neglectful property owners becoming engaged in their properties,and through sales of properties to investors willing and able to improve the property. The CAO and DARM continue working together very smoothly and have developed systems for handling each property in a thorough and consistent manner.Potential properties are investigated by CAO investigators,and this information is presented to DARM.Through collaboration,the CAO and DARM determine whether a property is to be placed on the pending list.If so,the CAO drafts a letter to the property owner describing ASET,its goals,and advising the property will be inspected.In many cases,these letters have led to contact with the property owner or a representative,and attempts at compliance have been seen prior to first inspections. ASET’s purpose and enforcement tools continue to spread among property owners.More and more, ASET is seeing properties listed for sale following inspections or at an early stage of the process. The reputation of this unit and its results are leading to greater compliance,and a change in ownership when necessary. The legal investigators are proving to be very valuable,as they are available to rapidly respond to Council and Administration requests,and serve a broader role than DARM inspectors.The law clerks are performing exceptionally well and taking on more responsibility as they gain experience.Working closely with DARM inspectors,the law clerks and investigators have seen success resulting in the complete rehabilitation of many vacant, blighted properties. At this time,the needs of ASET are being met,with sufficient resources to handle the current work load. Attachment:Attachment A - ASET Weekly Status Report (December 28, 2018) Attachment B - ASET PowerPoint Presentation CAR:cg;61568 City of Fresno Printed on 3/22/2023Page 6 of 6 powered by Legistar™ ANTI-SLUM ENFORCEMENT TEAM (ASET) Status Report 12/28/18 LOCATION OWNER UNITS STATUS UPDATE 5035 - 5049 E. Lane Ave (D-5) dilapidated and occupied multi-family housing complex with history of criminal activity, frequent calls for police service, and housing code violations Sean Sanchez 16 Notice and Order for 338 exterior violations issued 8/31/17; Notice and Order for 968 interior violations issued 9/26/17; Extension and Settlement Agreement executed; Reinspection started on 3/15/18; Significant violations remain; Notice of Breach sent on 3/28/18; Further reinspection on 4/11/18; Inspection Warrant executed on 4/25/18; Administrative Citation issued on 6/22/18 for $86,000; Appeal filed 7/10/18; Administrative Appeal hearing to be rescheduled 701 W. Cambridge (D-1) substandard, partially occupied multi- family housing complex with significant health & safety violations, including black mold, lack of AC/Heat, insect infestation, and boarded windows New Ownership as of 6/28/18: Meganova, LP 10 Initial ASET inspection conducted on 2/14/18; Notice and Order for 617 violations issued on 3/12/18; Appeal of Notice and Order filed on 3/27/18; Administrative Appeal Hearing rescheduled for 7/17/18; Settlement Agreement executed with prior owner on 7/31/18; $4,500 paid in full; Compliance to be pursued with new owner 4538 E. Hamilton (D-5) severely dilapidated, occupied apartment complex with multiple health and safety violations, including the presence of chickens/roosters and pest infestations; extensive history of code violations and calls for police service Paul E. Moen, Trustee of Paul E. Moen Living Trust; Dale E. and Vangi K. Kirkpatrick, Trustees of Dale E. and Vangi K. Kirkpatrick Family Trust 28 Initial ASET inspections completed 4/5/18; Notice & Order issued on 6/26/18 for 2,315 violations; Settlement Agreement executed 8/14/18; Phase One reinspection completed on 9/28/18; Phase Two reinspection completed on 10/15/18; Phase Three reinspection conducted on 11/30/18; Phase Four reinspection scheduled for 12/28/18 4518 E. Fountain Way (D-4) occupied and deteriorating apartment complex; excessive calls for police service; extensive code enforcement history and active case for bed bugs, roaches, lack of air/heat, and lack of natural gas Sorento Holdings 57 Initial ASET Inspection completed 7/17/18; Notice & Order for 1,931 violations issued 8/2/18; Billed hard costs in the amount of $14,947 paid in full 8/16/18; Settlement Agreement executed; Priority list reinspection completed 11/20/18; Reinspection scheduled to begin 1/8/19 202-244 W. Shields (D-1) occupied and dilapidated apartment complex with extensive code history, including several active cases, reports of rats and roaches, presence of junk and rubbish, excessive calls for police service (including warrants, stabbings, drugs, assaults), excessive calls to FFD and failed fire inspection Martin Nunez, Eduardo Robles, Absolon T. Ruiz, Ramiro Raygoza 20 Initial ASET letter sent 9/27/18; Initial ASET inspection completed 11/29/18; Priority reinspection completed 12/14/18; Notice and Order to be issued ACTIVE TARGET PROPERTIES 2 4460 E. Woodward (D-5) severely dilapidated and occupied multi- family residence; excessive calls for police service; significant substandard conditions including junk and rubbish, dangerous staircase, missing fire extinguishers, illegal use of extension cords, and deteriorated landings and garages Abdo Saleh Nagi and Shiha Mohammed Abdo 4 Initial ASET Inspection completed 8/14/18; Notice & Order for 499 violations issued 8/24/18; Rehabilitation in progress; Settlement Agreement executed 11/15/18; Progress inspection completed 11/29/18 4412 E. Olive (D-7) occupied and substandard multi-family residence with significant health and safety violations, including lack of heat, broken windows, visible mold, infestations, electrical issues, severe dilapidation and lack of maintenance; ongoing transient activity on the property; failed fire inspection Fermina Ramirez 4 Initial ASET letter sent 12/20/18; Initial ASET inspection scheduled to begin 1/3/19 3279 and 3285 E. Clay (D-5) occupied and severely dilapidated multi- family residence with evidence of substandard conditions, including presence of inoperable vehicles, boarded or broken windows, dangerous stairs and landings, pest infestation, transients, junk and rubbish, deteriorating exterior Jerry M. Saylor and Gail A. Saylor, Trustees of the Saylor Trust 8 Initial ASET letter sent 9/27/18; Initial ASET Inspection completed 11/5/18; Notice and Orders for 424 violations issued on 11/20/18; Settlement negotiations in progress 1504 E. Yale (D-7) severely deteriorating and occupied multi-family complex with multiple substandard conditions, including visible mold, water leaks, pest infestations, broken windows, junk/rubbish, inoperable vehicles; excessive calls for service to FPD and FFD Quy Dinh Le, Maryann Mai Bach Le, Ngoc Bich Thi Le 5 Initial ASET letter sent 8/31/18; Initial ASET inspection completed 10/22/18; Notice and Order issued for 312 violations on 11/2/18; Settlement negotiations in progress 440 S. Chestnut (D-5) substandard, dilapidated, and occupied multi-unit complex with excessive history of calls for police service and multiple health and safety violations, including junk/rubbish, dangerous staircase, damaged walkways, boarded or broken windows, encampment area; close proximity to schools Sylvia Gutierrez 12 Initial ASET inspection completed 9/6/18; Notice and Order issued for 781 violations on 10/01/18; Settlement Agreement executed on 11/19/18; Phase One reinspection scheduled to begin 1/10/19 3 4608-4612 E. Inyo (D-7) occupied and deteriorating multi-family complex with significant substandard conditions including junk/rubbish, mold, water leaks, cockroaches, inoperable vehicles; close proximity to several schools; excessive calls for police service Victor H. Martinez 8 Initial ASET Inspection completed 8/22/18 4608 E. Inyo: Notice & Order for 346 violations issued on 9/10/18 4612 E. Inyo: Notice & Order for 508 violations issued on 9/10/18 Settlement Agreement executed 11/1/18; Rehabilitation in progress 321 E. Strother (D-3) severely dilapidated and vacant single- family home with multiple housing violations, including lack of water and power, missing smoke alarms, lack of emergency egress, history of squatters and trespassing Daniel Romo and Maria Romo New Owner as of 12/12/18: Varo-Real Investments, Inc. 1 Notice and Order for 24 violations issued on 7/31/18; Notice to Abate issued for 24 violations on 9/4/18; Petition for Health & Safety Receivership filed 10/22/18; Hearing on Petition scheduled for 12/18/18; Property sold to investor; Petition for Receivership withdrawn 2249 W. Princeton (D-1) dilapidated and deteriorating occupied apartment complex with extensive code history and significant substandard conditions, including visible black mold, junk/rubbish, electrical and plumbing issues, no window screens, and excessive history of FPD calls for service Michael Hertz and Scott Jacoby 12 Initial ASET Inspection completed 9/27/18; Notice & Order for 686 violations issued on 10/12/18; Settlement Agreement executed 11/29/18 1309 and 1315 B Street (D-3) 2 occupied and dilapidated single-family residences contained on one APN; frequent calls for service; significant health and safety violations, including lack of water, lack of electricity, and improper occupancy Vincent Medina and Pearl Delgado 2 Notice & Order for 34 violations issued 11/3/17; Administrative Citation issued 12/1/17 for $6,400; Notice & Order for 71 violations issued 1/12/18; Reinspection completed 2/1/18; Notice to Abate 70 violations posted 2/14/18; Reinspection completed 3/6/18; Petition for Health & Safety Receivership filed 4/9/18; Petition granted at hearing on 6/12/18; Motion to Confirm Sale granted on 10/17/18; Rehabilitation in progress 4805 E. University (D-4) partially occupied, substandard and deteriorating multi-family complex with extensive history of housing code violations, including lack of water and electrical service; frequent calls for police service Rodolfo Rojas and Carmen Rojas 3 Initial ASET inspection conducted on 5/3/18; Notice and Order (Units 102 and 103) issued on 5/17/18 for 237 violations; Reinspection scheduled for 6/8/18; Notice and Order (Unit 101) issued on 6/15/18 for 100 violations; First Administrative Citation issued for $38,750 on 7/31/18; Notice to Abate posted on 8/14/18; Petition for Health & Safety Receivership filed 10/22/18; Hearing on Petition scheduled for 1/3/19 4 4811 E. Geary (D-5) dilapidated and occupied single-family residence with a deteriorating and hazardous roof, evidence of mold and water damage, unsanitary bathroom and kitchen areas, and damaged interior and exterior walls Andrew L. Adams, Sr. and Gloria Phillips-Adams 1 Notice and order issued on 3/26/18 for 9 violations; Notice to Abate posted on 6/5/18; Notice of Trustee's Sale recorded by bank and scheduled for 8/21/18; Transfer of ownership to Wells Fargo Bank recorded 8/27/18; Rehabilitation in progress 2845 E. Madison Ave (D-7) occupied single-family residence with multiple health and safety violations, exterior public nuisance and zoning violations, structural damage, and significant accumulation of junk and rubbish Jose Luis Garza Martinez and Juana Borja 1 Notice and Order issued on 9/19/17 for 41 violations; Reinspection on 1/9/18; Petition for Appointment of Receiver filed on 3/19/18; Petition for Appointment of Receiver granted on 5/30/18; Receiver's motion for sale of property approved on 8/2/18; Rehabilitation in progress 1203 W. Simpson Ave (D-1) dilapidated and occupied multi-family housing complex with multiple health and safety violations, including mold, structural damage and water leakage Malcolm D. Powers and Judy Powers 14 ASET inspection completed 10/17/17; Notice and Order for 700 violations issued 11/30/17; Reinspection completed 1/3/18; Settlement Agreement executed on 4/9/18; Rehabilitation in progress; Progress inspections completed on 5/17/18, 6/14/18, and 11/16/18 6540 N. Winery Ave (D-6) vacant, blighted single-family residence with history of occupancy by unauthorized persons, multiple board- ups, presence of attractive nuisances, theft of utilities, criminal activity, and frequent calls for police service Brian H. Rosene 1 Health & Safety Receiver appointed 7/18/17; Receivership Plan approved by Court 9/28/17; Rehabilitation completed; Hearing on Motion to Terminate Completed Receivership rescheduled for 1/8/19 1367 E. San Ramon Ave (D-4) 4-plex containing both occupied and vacant units with multiple health and safety violations; history of occupancy by unauthorized persons, multiple board- ups, and frequent calls for police service Brian H. Rosene; John and Leona Tosatto 4 Health & Safety Receiver appointed 7/18/17; Receivership Plan approved by Court 9/28/17; Status Hearing scheduled for 1/4/18; Rehabilitation completed; Final clearance inspection completed on 12/4/18; Hearing on Motion to Terminate Completed Receivership rescheduled for 1/8/19 West Shaw Estates (D-1) 4954 N. Holt Ave individually owned apartment-style condominiums with multiple rental units; excessive calls for police service, criminal activity, lack of maintenance and security, and attached garages occupied by unauthorized persons Various Owners x New management as of 3/01/18: Regency Property Management 228 Inspections completed on Phase I - III; Citations issued for exterior violations; Settlement reached; Compliance inspections in 2018; Progress inspection completed 7/17/18; First compliance inspection completed 8/8/18 1531-1535 N. Brooks (D-3)Fidelity Finance, Inc.3 Initial ASET letter sent 12/20/18 1539-1543 N. Brooks (D-3)Chen Liang as Trustee of the Chen Liang Living Trust 3 Initial ASET letter sent 12/20/18 2525 W. Andrews (D-1)Jesus Aceves and Emilia Aceves 15 Initial ASET letter sent 8/31/18 PENDING TARGET PROPERTIES 5 405-421 S. Recreation (D-5)Tiburcio Uribe Ramirez, Esperanza Ramires Membrila, and Maria Isabel Ramirez 9 1151-1159 W. McKinley (D-3) 1510-1578 N. Brooks Mike Chien Lu and Lina Luo 40 Initial ASET letter sent 11/15/18 2060 and 2064 S. Maple (D-5) JHS Family Limited Partnership, JCH Family Limited Partnership, and DBH Family Limited Partnership 38 Initial ASET letter sent 9/27/18 3960 N. Fruit Ave (D-1)Peter K. Anezinos and Chris Anezinos 54 4880 and 4896 E. University (D-4) Rodney Bernaldo and Ruanne Bernaldo, as Co-Trustees of the Bernaldo Family Trust 16 Initial ASET letter sent 4/27/18 2330 E. Ashlan Ave (D-7) 4139 N. Thesta Ave Secured Asset Fund Corporation, Inc.37 Continue monitoring 4040 E. Dakota Ave (D-4) K & K Home, LLC 42 Continue monitoring 4781 E. Ashlan Ave (D-4)K & K Home, LLC 24 Continue monitoring 3320 N. West Ave (D-1) 1212 W. Andrews Ave Secured Asset Fund Corporation, Inc.27 Continue monitoring 415 N. Manila Ave (D-5)K & K Home, LLC 9 Continue monitoring 431 N. Manila Ave (D-5)K & K Home, LLC 8 Continue monitoring 475 N. Manila Ave (D-5)K & K Home, LLC 21 Continue monitoring 424 S. Chestnut Ave (D-5)Secured Asset Fund Corporation, Inc.13 Continue monitoring 423 S. Dearing Ave (D-5)Secured Asset Fund Corporation, Inc.14 Continue monitoring 1115 W. Simpson Ave (D-1)K & K Home, LLC 22 Continue monitoring 441 S. Dearing Ave (D-5)Secured Asset Fund Corporation, Inc.13 Continue monitoring 2248-2266 W. Princeton (D-1) Sanh X. Le and Marilyn M. Ly, Co-Trustees of the Le Family Living Trust 22 Full compliance of 1,651 violations achieved at property; Full payment received per Settlement Agreement 345 S. Chestnut Ave (D-7) 4820 E. Laurel Ave Central Community Development Center 7 Final Judgment and Permanent Injunction obtained 4853 E. University Ave (D-4)Ronald D. Mullins and Olga E. Mullins 5 Health and Safety Receivership; Complete rehabilitation and compliance of 129 violations 611 N. Van Ness (D-3)JJM Investment Property Fresno LLC 14 Full compliance achieved at property; Full payment received per Settlement Agreement 619 N. Van Ness (D-3)JJM Investment Property Fresno LLC 5 Full compliance achieved at property; Full payment received per Settlement Agreement 4132 E. El Monte Way (D-5)Jasjit Kaur Khela and Baldev Singh Khela 1 Full compliance achieved at property; Full payment of citation 36 E. Saginaw Way (D-1)WITR, LLC and Brad J. Hardie 9 Voluntary compliance and rehabilitation of property undertaken by new owner pursuant to ASET involvement 358 and 360 N. Roosevelt (D-3)BDHOV LP and LEHOV LP 8 Full compliance achieved at property; Full payment of citation COMPLETED TARGET PROPERTIES POTENTIAL TARGET PROPERTIES 6 4242 E. Olive Ave (D-7) BDHOV LP and LEHOV LP 12 Rehabilitation complete; Full compliance of 548 violations 1464 E. Patterson Ave (D-3)BDHOV LP and LEHOV LP 13 All permits finaled; Full compliance achieved at property 1450 N. Archie Ave (D-7) Brian H. Rosene and Randy L. Cunningham 1 Demolition completed; Judgment for Fees and Costs granted 4538-4550 E. Olive Ave (D-7)Guadalupe Fernandez 6 Health and Safety Receivership; Complete rehab and compliance of 112 violations 1131 N. Jackson Ave (D-7)Guadalupe Fernandez 7 Health and Safety Receivership; Complete rehab and compliance of 113 violations 334 N. Roosevelt Ave (D-3)Rosalio M. Avila 4 Full compliance of 24 violations 2307 N. Maroa Ave (D-1)Catherine D. Senner 1 Full compliance of 20 violations; Full payment received per Settlement Agreement Hotel California (D-3) 530 N. Weber Ave Venu Sharma 52 Full compliance of 215 violations; Full payment received per Settlement Agreement 2748 N. Weber Ave (D-1) Sunny and Cecilia Chan 54 Full compliance of 1,043 violations; Full payment received per Settlement Agreement 2061/2075 S. Hayston Ave (D-5) Sunny and Cecilia Chan 34 Full compliance of 648 violations; Full payment received per Settlement Agreement 2005 W. Shields Ave (D-1)Lynn B. Sayavong 6 Full compliance of 165 violations; Full payment received Summerset Village (D-7) 2103 N. Angus St Chris Henry 220 Full compliance of 1,450 violations; Settlement payment approved 255 N. Diamond St (D-7)Luis Santos 4 Full compliance of 61 violations 5239 E. Huntington Ave (D-5)New Ownership 60 Full compliance of 291 violations 474 N. Glenn Ave (D-3)New Ownership 8 Full compliance of 37 violations [below items include actions of STOPP team prior to creation of ASET] ASET Quarterly Report January 2019 Highlighted Active Cases 202 W Shields This is an occupied and dilapidated apartment complex with extensive code history and several active cases. Before Before 202 W Shields Continued Before Before 202 W Shields Continued Before Before 1504 E Yale This is a severely deteriorating and occupied multi-family complex with multiple substandard conditions. Before Before 1504 E Yale Continued Before Before 1504 E Yale Continued Before Before 3279-3285 E Clay This is an occupied multi-family complex with evidence of substandard conditions. Before Before 3279-3285 E Clay Continued Before Before 3279-3285 E Clay Continued Before Before 4805 E University This is a partially occupied, substandard 3-unit complex with an extensive history of housing code violations, including lack of water and electrical service, frequent calls for police service, and a history of squatters. Before Before 4805 E University Continued Before Before 4805 E University Continued Before Before Rehabilitations In Progress 440 S Chestnut This is an occupied, substandard and deteriorating 12-unit complex with excessive calls for police service and significant health and safety violations, including junk/rubbish, damaged walkways, boarded or broken windows, a dangerous staircase, and a homeless encampment. It is located within close proximity to several schools. Before Before 440 S Chestnut Continued Before Before 440 S Chestnut Continued Before Before 701 W Cambridge This property is a partially occupied 10-unit apartment complex with significant health and safety issues, including mold, water damage, insect infestation, and boarded windows. Before Before 701 W Cambridge Continued Before Before 701 W Cambridge Continued In Progress In Progress 1203 W Simpson This property is a partially occupied 14-unit apartment complex. Before After 1203 W Simpson Continued Before After 1309 & 1315 B Street These are two single family homes on one APN. City was seeking voluntary compliance for substandard conditions, including major structural damage, unsanitary conditions, missing smoke and carbon monoxide alarms, improper occupancy of the enclosed back porch, and unpermitted electrical wiring at the rear patio. In Progress In Progress 2249 W Princeton This is a dilapidated and deteriorating occupied apartment complex with an extensive code history. Before Before 2249 W Princeton Continued Before Before 2249 W Princeton Continued Before Before 2845 E Madison This is an occupied single-family residence with multiple health & safety violations. Before In Progress 2845 E Madison Continued Before In Progress 2845 E Madison Continued Before In Progress 4460 E Woodward This 4-unit, multi-family residence is occupied and severely dilapidated. The significant health and safety violations include junk/rubbish, a dangerous staircase, missing fire extinguishers, illegal use of extension cords, and deteriorating landings and garages. Before Before 4460 E Woodward Continued Before Before 4460 E Woodward Continued In Progress In Progress 4518 E Fountain Way This is a deteriorating and occupied 57-unit apartment complex with excessive calls for police service and an extensive code history, including an active case for bed bugs, roaches, and a lack of air conditioning, heating, and natural gas. Before Before 4518 E Fountain Way Continued Before Before 4518 E Fountain Way Continued Before In Progress 4538 E Hamilton This is a severely dilapidated 28-unit apartment complex with significant health and safety violations including the presence of chickens/roosters and pest infestations. There is an extensive history of code violations for this property, as well as calls for police service. Before Before 4538 E Hamilton Continued Before After 4538 E Hamilton Continued Before After 4608-4612 E Inyo This is an occupied and deteriorating 8-unit complex with significant substandard conditions, including pest infestation, junk/rubbish, mold, water leaks, and inoperable vehicles; in addition to excessive calls for police service. Before In Progress 4608-4612 E Inyo Continued Before Before 4608-4612 E Inyo Continued Before In Progress 4811 E Geary This dilapidated and occupied single-family residence has a severely deteriorating and hazardous roof, as well as evidence of mold and water damage, unsanitary bathroom and kitchen areas, and damaged interior and exterior walls. Before Before 4811 E Geary Continued Before Before 4811 E Geary Continued Before Before 5035-5049 E Lane ASET inspected 16 units, next door to a school, with significant substandard conditions and health and safety issues, including but not limited to, broken windows, roach infestation, egress violations, and missing smoke alarms. Additionally, the apartment complex generated frequent calls for police service, including gunfire. Before After 5035-5049 E Lane Continued Before After 5035-5049 E Lane Continued Before In Progress West Shaw Estates Before Before West Shaw Estates Before In Progress West Shaw Estates Before In Progress Recently Completed Cases 1367 E San Ramon Before After 1367 E San Ramon Before After 1367 E San Ramon Before After 1367 E San Ramon Before After 6540 N Winery Before After 6540 N Winery Before After 6540 N Winery Before After 2248-2266 W Princeton This property is two apartment complexes next to each other with the same owners. There are a total of 22 units with a long prior code enforcement history and many police calls for service. Before In Progress 2248-2266 W Princeton Continued Before In Progress 2248-2266 W Princeton Continued Before After 4853 E University This property is a vacant and abandoned 5-unit apartment complex regularly broken into and used by squatters and transients. Before After 4853 E University Continued Before After 4583 E University Before After City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0196 Agenda Date:1/17/2019 Agenda #:3-B REPORT TO THE CITY COUNCIL January 17, 2019 FROM:MICHAEL LIMA, Finance Director/Controller Finance Department SUBJECT Submission and Acceptance of the City of Fresno Comprehensive Annual Financial Report and the Comprehensive Annual Debt Report for Fiscal Year 2018. RECOMMENDATION Staff recommends that the City Council accept the Comprehensive Annual Financial Report (CAFR) and the Comprehensive Annual Debt (CADR) for the fiscal year ended June 30, 2018 (FY 2018). EXECUTIVE SUMMARY The CAFR of the City of Fresno (City)for the fiscal year ended June 30,2018,is hereby formally submitted for the Council’s acceptance.This report is the official publication of the City's financial position as of June 30,2018;presenting the operational results for all City activities and funds.The CAFR is prepared in conformity with accounting principles generally accepted in the United States of America. The Auditor’s Opinion on the CAFR is an unqualified or unmodified opinion.This means that there are no reservations concerning the financial statements and that the auditors believe them to be fairly presented.City management is responsible for both the accuracy of the data and the completeness and fairness of the presentation, including all disclosures. The CADR is also being submitted for the Council’s acceptance.Production of the CADR is required under the Debt Management Policies adopted by Council.The CADR provides the readers with an overview of the City’s debt program as of June 30, 2018. BACKGROUND All governmental or public entities are required under law to have the financial statements for the entity’s fiscal year end be audited.Once those statements are audited,many agencies,including the City,release those statements in the form of a CAFR.Information from this document is used not only by City policy makers,but also by citizens,investors,and external agencies to assess and determine the organization’s financial viability.As required by the City Charter,the amounts reflected City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0196 Agenda Date:1/17/2019 Agenda #:3-B determine the organization’s financial viability.As required by the City Charter,the amounts reflected in the 2018 CAFR have been audited by an independent certified public accounting firm.The unqualified opinion of Brown Armstrong is included in the CAFR.Under Charter Section 1216,the CAFR must be submitted to the Council. The City will meet the reporting and disclosure requirements for the Electronic Municipal Market Access system (EMMA®),which is the official repository for financial and other information on virtually all municipal bonds. Additionally,the filing deadline for the Government Finance Officers Association (GFOA)will be met in order to participate in their Certificate of Achievement in Excellence in Financial Reporting Program.The City has been awarded the Certificate of Achievement for Excellence in Financial Reporting for 25 straight years.Staff believes the Fiscal Year 2018 CAFR has a strong probability of maintaining that streak. Under the Debt Management Policies adopted by Council,the Finance Department is required to issue a CADR “as soon as practical following the issuance of the [CAFR].”The FY 2018 CADR is being presented for acceptance in conjunction with the CAFR.The CADR provides policy makers, investors,and other interested parties an overview of the City’s debt portfolio:Including a summary of debt issued in FY 2018,a comparison of key metrics versus goals set within the Debt Management Policies,and a comparison of Fresno’s debt metrics versus the debt metrics of the ten largest California cities by population. ENVIRONMENTAL FINDINGS Per the definition provided in the California Environmental Quality Act Guidelines Section 15378,this item does not qualify as a “project”and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference was not a factor due to the fact that there is no bid involved,nor is State or federal money involved with this item. FISCAL IMPACT This report relates only to the submission of informational financial accounting data and calls for no approval for spending or acceptance of receipts. A complete copy of both the CAFR and the CADR for the fiscal year ended June 30,2018,may be viewed upon request at the City Clerk’s Office.The CAFR and the CADR will be published on the City of Fresno Website under the Financial Reports section on the Finance Department webpage upon acceptance by Council. The Letters to Management will be posted upon issuance. Attachments:City of Fresno Comprehensive Annual Financial Report City of Fresno Comprehensive Annual Debt Report City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0196 Agenda Date:1/17/2019 Agenda #:3-B City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ This page intentionally left blank CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS INTRODUCTORY SECTION PAGE Controller's Letter ....................................................................................................................... City Operating Fund Structure .................................................................................................... City Organizational Chart ............................................................................................................ Directory of City Officials ............................................................................................................ Certificate of Achievement - Government Finance Officers Association .................................. FINANCIAL SECTION Independent Auditor's Report ................................................................................................... Management's Discussion and Analysis (Unaudited)................................................................ BASIC FINANCIAL STATEMENTS Government-Wide Financial Statements: Statement of Net Position .................................................................................................... Statement of Activities .......................................................................................................... Fund Financial Statements: Balance Sheet - Governmental Funds ................................................................................... Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position ........................................................................................................................... Statement of Revenues, Expenditures and Changes in Fund Balances - Governmental Funds ............................................................................................................................... Reconciliation of the Statement of Revenues, Expenditures, and Changes in Fund Balances of Governmental Funds to the Statement of Activities ................................ Statement of Net Position - Proprietary Funds .................................................................... Statement of Revenues, Expenses and Changes in Fund Net Position - Proprietary Funds ............................................................................................................................... Statement of Cash Flows - Proprietary Funds ...................................................................... Statement of Fiduciary Net Position - Fiduciary Funds - Trust and Agency Funds .............. Statement of Changes in Fiduciary Net Position - Fiduciary Funds - Trust Funds ................ I IX X XI XIII 1 5 30 31 34 35 36 37 38 42 44 48 49 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS Notes to Financial Statements:PAGE Note 1 Summary of Significant Accounting Policies ............................................................. Note 2 Cash and Investments ................................................................................................ Note 3 Property Taxes ........................................................................................................... Note 4 Receivables ................................................................................................................ Note 5 Property, Plant and Equipment - Capital Assets ...................................................... Note 6 Long-Term Liabilities ................................................................................................. Note 7 Interfund Activity ....................................................................................................... Note 8 Defeasances ............................................................................................................... Note 9 Risk Management Fund ............................................................................................. Note 10 Employee Benefit Programs .................................................................................... Note 11 No-Commitment Debt .............................................................................................. Note 12 Commitments and Contingencies ............................................................................ Note 13 City of Fresno Cultural Arts Properties Corporation ............................................... Note 14 Securities Lending .................................................................................................... Note 15 Other Information .................................................................................................... Note 16 Deficit Fund Equity ................................................................................................... Note 17 Subsequent Events ................................................................................................... REQUIRED SUPPLEMENTARY INFORMATION Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis): General Fund .................................................................................................................... Grants Special Revenue Fund ......................................................................................... Notes to the Required Supplementary Information ............................................................ Schedule of Investment Returns - Employees, Fire and Police Retirement Systems ......... Schedule of Changes in Net Pension Liability and Related Ratios - Employees, Fire and Police Retirement Systems ............................................................................................ Schedule of Employer Contributions - Employees, Fire and Police Retirement Systems ... Schedule of Changes in the Net OPEB Liability and Related Ratios .................................... 51 73 85 86 88 93 110 116 117 119 138 139 147 149 150 151 152 156 158 160 163 164 165 166 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS OTHER SUPPLEMENTARY INFORMATION:PAGE Combining and Individual Fund Financial Statements and Schedules: Nonmajor Governmental Funds: Combining Balance Sheet - Nonmajor Governmental Funds ............................................... Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds ..................................................................................... Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis)............................................................................................................................... High Speed Rail ............................................................................................................ Special Gas Tax ............................................................................................................ Measure C .................................................................................................................... Community Services .................................................................................................... UGM Impact Fees ........................................................................................................ Low and Moderate Income Housing .......................................................................... Special Assessments .................................................................................................... City Combined .............................................................................................................. Proprietary Fund Types: Nonmajor Enterprise Funds: Combining Statement of Net Position .................................................................................. Combining Statement of Revenues, Expenses and Changes in Fund Net Position ............ Combining Statement of Cash Flows .................................................................................... Internal Service Funds: Combining Statement of Net Position .................................................................................. Combining Statement of Revenues, Expenses and Changes in Fund Net Position ............ Combining Statement of Cash Flows .................................................................................... Fiduciary Funds: Combining Statement of Fiduciary Net Position - Fiduciary Funds - Pension Trust Funds .. Combining Statement of Changes in Fiduciary Net Position - Fiduciary Funds - Pension Trust Funds ..................................................................................................................... Combining Statement of Changes in Assets and Liabilities - Agency Funds ........................ 168 170 172 173 174 175 176 177 178 179 181 182 183 186 187 188 192 193 194 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS OTHER SUPPLEMENTARY INFORMATION (continued)PAGE Discretely Presented Component Unit: Statement of Cash Flows in Liquidation ............................................................................... STATISTICAL SECTION Net Position by Component - Last Ten Fiscal Years ............................................................... Change in Net Position - Last Ten Fiscal Years ....................................................................... Fund Balances, Governmental Funds - Last Ten Fiscal Years ................................................. Changes in Fund Balances, Governmental Funds - Last Ten Fiscal Years .............................. Gross Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years ................................................................................................................. Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years ...................................... Principal Property Taxpayers - Current Year and Nine Years Ago ......................................... Property Tax Levies and Collections - Last Ten Fiscal Years .................................................. Ratios of Outstanding Debt by Type - Last Ten Fiscal Years .................................................. Ratios of General Bonded Debt Outstanding - Last Ten Fiscal Years .................................... Direct and Overlapping Governmental Activities Debt - As of February 1, 2018 ................... Debt Coverage Ratio - Airports - Last Ten Fiscal Years .......................................................... Debt Coverage Ratio - Water System - Last Ten Fiscal Years ................................................. Debt Coverage Ratio - Sewer System - Last Ten Fiscal Years ................................................ Pledged Revenue Coverage - Last Ten Fiscal Years ............................................................... Legal Debt Margin Information - Last Ten Fiscal Years .......................................................... Demographic and Economic Statistics - Last Ten Calendar Years ......................................... Principal Employers - Current Year and Nine Years Ago ........................................................ Full Time Equivalent City Government Employees by Function/Program - Last Ten Fiscal Years ................................................................................................................. Operating Indicators by Function/Program - Last Ten Fiscal Years ....................................... Capital Asset Statistics by Function/Program - Last Ten Fiscal Years .................................... 195 199 200 202 203 204 205 206 207 208 210 211 212 213 214 215 216 217 218 219 220 222 I LETTER OF TRANSMITTAL Lee Brand Wilma Quan-Schecter Mayor City Manager 2600 Fresno Street, Suite 2156 - Fresno, California 93721-3622 January 17, 2019 The Honorable Mayor Lee Brand and Members of the City Council Distinguished Citizens of the City of Fresno We are pleased to present the Comprehensive Annual Financial Report (CAFR) of the City of Fresno, California (City) for the fiscal year ended June 30, 2018 (Fiscal Year 2017-2018), with the Independent Auditor’s Report, submitted in compliance with City Charter Section 804(c) and Section 1216. The CAFR has been prepared by the Finance Department in conformance with the principles and standards for financial reporting set forth by the Governmental Accounting Standards Board (GASB). Responsibility for both the accuracy of the data, as well as the completeness and fairness of the presentation, including all disclosures, rests with the City. The existing comprehensive structure of internal accounting controls in the City provides reasonable assurance that the financial statements are free of any material misstatements. Since the cost of internal control should not exceed anticipated benefits, the objective is to provide reasonable, rather than absolute, assurance that the financial statements are free of any material misstatements. The City recognizes that even sound internal controls have inherent limitations. We believe that the City's internal controls adequately safeguard assets, that the reported data is accurate in all material respects, and that its presentation fairly depicts the City’s financial position and changes in its financial position as measured by the financial activity of its various funds. We are confident that the included disclosures provide the reader with an understanding of the City’s financial affairs. Accounting principles generally accepted in the United States of America (GAAP) require that management provide a narrative introduction, overview, and analysis to accompany the basic 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 it. The MD&A can be found immediately following the report of the independent auditors. General Background The City of Fresno is located near the geographical center of California, approximately 200 miles north of Los Angeles and 170 miles south of the State capital, Sacramento. The City has land area of 115.2 square miles. With over half a million residents (538,330 as of January 1, 2018), Fresno is the 5th largest city in California by population, and 34th largest in the nation. The City is part of the Fresno-Clovis metropolitan area, which is the second largest metropolitan area in the Central Valley after Sacramento. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 II LETTER OF TRANSMITTAL With its close proximity to Yosemite National Park (60 miles), Fresno also serves as gateway to Sequoia National Park (75 miles), Sierra National Forest (40 miles) and Kings Canyon National Park (75 miles). Named for the abundant ash trees lining the San Joaquin River, Fresno was founded in 1872 as a railway station of the Central Pacific Railroad before it was incorporated in 1885. Government and Budget The City operates under the strong-Mayor form of government. Under this form of government, the Mayor serves as the City’s Chief Executive Officer, appointing and overseeing the City Manager, recommending legislation, and presenting the annual budget to the City Council. The budget of the City of Fresno, within the meaning and context of Section 1205 of the City’s Charter, must be adopted by resolution by the City Council (Council) by June 30th of a given year. As provided by Section 1206 of the Charter, any adjustments in the amounts appropriated for the purposes indicated at the department/fund level shall be made only upon a motion to amend the resolution adopted by the affirmative votes of at least five Council members. Administrative changes within the department/ fund level may be made without approval of Council within written guidelines established by the City Manager. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 III LETTER OF TRANSMITTAL Industry and Economy The City of Fresno is the economic hub of Fresno County and the San Joaquin Valley, with much of the surrounding areas in the Metropolitan region predominantly tied to large-scale agricultural production. While agriculture still makes up a large component of the region's employment base (13% of jobs), the Fresno economy continues to diversify, as evidenced by the fact that services (29% of jobs) and govenment (19% of jobs) employ more people than agriculture. 1990 vs. 2018 Estimated Number of Workers by Industry Source: CA Employment Development Department Food processing leads the manufacturing sector with such notable companies as Conagra Foods, Lyons- Magnus, Del Monte, Wawona Foods, E & J Gallo Winery, Kraft Foods, Foster Farms, Harris Ranch and others. Distribution is playing a growing role in the City's economy, as evidenced by the Gap Pacific Distribution Center, the Ulta Beauty Fulfillment Center and the Amazon Fulfillment Center. Public sector and healthcare employment are also major contributors to the City’s economy. Principal Employers (Public & Private Sector) Employer Industry Full-Time Employees Fresno Unified School District Education 10,552 County of Fresno Government 6,655 Community Regional Medical Center Medical Care 5,863 Internal Revenue Service Government 4,040 City of Fresno Government 3,650 Saint Agnes Medical Center Medical Care 2,800 California State University, Fresno Education 2,542 Amazon.com, Inc.Distribution 2,500 Kaiser Permanente Medical Center Medical Care 2,450 State Center Community College District Education 1,780 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 IV LETTER OF TRANSMITTAL Economic Overview Agriculture remains one of the backbones of the Fresno area and continues to be robust. Fresno County’s agricultural strength rests with its diversity with more than 400 commercial crops providing gross production of just over $7 billion in 2018, an increase of 13.6% from 2017. Almonds again surpassed the $1 billion mark to beat out grapes for the number one spot on Fresno County’s Top Ten crop ranking. California produces most of the grapes grown in the United States with 99.5% of raisins coming from Fresno County. Many specialty crops are almost solely produced in California: almonds, kiwi fruit, nectarines, olives, and pistachios. Growers continue to expand into more lucrative products. In 2017, Fresno County exported 133 agriculture commodities to 97 countries around the world. Fresno has established itself as an ideal location for manufacturing and distribution due to strategic location, low business costs and affordable housing. Source: CA Employment Development Department CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 V LETTER OF TRANSMITTAL Fiscal Year 2018 Economic Conditions & Financial Impact Fresno generally showed little change in its economy during fiscal year 2018, as is shown in the table below: Economic Indicator 2017 2018 Change (%) Assessed Value $32,941,135,740 $34,453,902,554 4.6% Taxable Sales $13,250,486,000 $13,155,642,615 -0.7% Unemployment Rate 8.8%7.4%-15.9% Building Permits 13,175 12,874 -2.3% The trend of mixed results seen in the local economy had a similar effect on the City of Fresno’s finances. This effect was evident in several City-wide financial measures: • Total Assets increased $365.6 million (10.2%) from the fiscal year 2017 year-end Total Assets balance of $3,594.1 million. • Revenues decreased $4.6 million (-0.6%) from Revenues for fiscal year 2017, which totaled $804.3 million. • Expenses grew $15.1 million (2.4%) to $655.4 million . • Total Net Position grew $136.1 million (6.0%) from fiscal year 2017's total of $2,274.0 million (as restated). Most importantly, Unrestricted Net Position climbed $102.6 million (26.9%) to $484.3 million. While the City's overall financial position displayed little change, the General Fund displayed a more pronounced change in financial position. It must be noted that many of these changes are related to activity which occurred in fiscal year 2017 but didn't occur again in fiscal year 2018. Key metrics reflecting this change include: • Total Assets decreased $14.1 million (12.9%) over the fiscal year 2017 Total Assets year-end balance of $109.1 million. The decline was entirely in Advances to the Redevelopment Agency, which were recognized in fiscal year 2017 for which there was not a corresponding transaction in fiscal year 2018. • Total Liabilities increased $2.5 million (24.6%) from the fiscal year 2017 year- end Total Liabilities of $10.2 million. The increase in Liabilities was completely in the Advances from Other Funds account. • Revenues decreased $8.1 million (2.5%) from revenues for fiscal year 2017 of $317.5 million. A sharp drop was seen in Miscellaneous Revenues, which reflected one-time revenues in fiscal year 2017 that were not replicated in fiscal year 2018. • Expenditures increased $13.4 million (4.9%) from fiscal year 2017’s $274.4 million expenditure level. Increases in Public Protection expenditures, due to the addition of new positions and Capital Outlay expenditures related to the purchase or return of buildings, drove the overall increase in General Fund expenditures. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 VI LETTER OF TRANSMITTAL How Fresno Compares to the 25 Largest California Cities Despite recent improvement in its financial position, Fresno still lags behind the other large cities in California when it comes to assets available for use to support the City’s population. As the table on page VII demonstrates, the difference between our population figure and our assets per capita figure is one of the biggest among the 25 largest California cities by population. It is important to note that Fresno’s assets are increased because of the Net Pension Asset which no other city in the survey possesses. The lack of assets puts Fresno at a disadvantage when it comes to providing services to its citizens, because there is an inadequate asset base to efficiently address the needs. Thus, it is imperative that fiscal prudence is maintained and the plan to build all assets, especially cash and capital assets, is continued. These metrics and others are discussed in greater detail in the Management’s Discussion & Analysis. Subsequent Events The City continued to earn positive ratings actions on its bonds from the rating agencies. The latest ratings action was an upgrade of the Sewer bonds' rating outlook from "Stable" to "Positive" by Fitch in October 2018. The upgrade signifies the bond market's continued notice of the improvement in the City's finances. The City defeased $132.5 million of the $159.8 million in outstanding Series 2008 Sewer Bonds on September 1, 2018. Management is considering whether to defease the remaining Series 2008 Sewer Bonds as part of the fiscal year 2020 budget. The City finished fiscal year 2018 with a cash balance in its General Fund Emergency Reserve of $23.9 million. As part of the fiscal year 2019 budget adoption, Council voted to accrue the August 2019 Sales Tax revenue and deposit that revenue into the Emergency Reserve. It is estimated that $9.9 million will be deposited into the Emergency Reserve in August 2019, which (if the estimate reaches fruition) will result in the Emergency Reserve having a cash balance of $34.2 million in fiscal year 2020. Certificate of Achievement 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 for its CAFR for the fiscal year ended June 30, 2017. This was the 25th consecutive year that the City has achieved this prestigious national award. The Certificate of Achievement is the highest form of recognition in the area of governmental accounting and financial reporting. In order to be awarded a Certificate of Achievement, the City must publish an easily readable and efficiently organized CAFR whose contents conform to program standards. The CAFR must satisfy both Generally Accepted Accounting Principles and applicable legal requirements. A Certificate of Achievement is valid for a period of only one year. We believe that our current comprehensive annual financial report continues to meet the Certificate of Achievement Program’s requirements, and are submitting it to the GFOA to determine its eligibility for another certificate. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 VII LETTER OF TRANSMITTAL Total Government-Wide Assets per Capita Top 25 California Cities Comparison City Total Assets CAFR Year Population California Department of Finance As of January 1, 2018 Assets per Capita Population Ranking Per Capita Asset Rank Net Pension Asset/(Liability) Los Angeles $62,954,746,000 2017 4,054,400 $15,528 1 3 $(10,268,184,000) San Diego $14,808,611,000 2018 1,419,845 $10,430 2 9 $(2,532,590,000) San Jose $10,047,376,000 2018 1,051,316 $9,557 3 10 $(3,192,356,000) San Francisco $32,070,239,000 2017 883,963 $36,280 4 1 $(5,808,216,000) Fresno $3,959,732,792 2018 538,330 $7,356 5 15 $ 318,219,533** Sacramento $4,432,286,000 2017 501,344 $8,841 6 11 $(746,901,000) Long Beach $10,036,731,000 2017 478,561 $20,973 7 2 $(1,186,078,000) Oakland $3,326,851,000 2018 428,827 $7,758 8 13 $(1,703,925,000) Bakersfield $2,635,711,836 2017 386,839 $6,813 9 17 $(391,476,697) Anaheim $4,969,531,000 2018 357,084 $13,917 10 5 $(777,745,000) Santa Ana $1,546,427,583 2018 338,247 $4,572 11 25 $(548,129,198) Riverside $4,203,058,000 2018 325,860 $12,898 12 6 $(627,777,000) Stockton $2,232,379,874 2018 315,103 $7,085 13 16 $(509,212,031) Irvine*$2,884,285,000 2018 276,176 $10,444 14 8 $(151,025,000) Chula Vista $1,760,520,247 2017 267,503 $6,581 15 18 $(295,366,230) Fremont*$1,313,843,253 2018 235,439 $5,580 16 23 $(377,822,524) San Bernardino $1,026,570,412 2017 221,130 $4,642 17 24 $(374,580,615) Santa Clarita $1,299,799,782 2017 216,589 $6,001 18 20 $(39,511,900) Modesto $1,826,668,511 2018 215,692 $8,469 19 12 $(312,416,341) Fontana $1,299,420,598 2018 212,000 $6,129 20 19 $(146,180,506) Moreno Valley $1,233,844,181 2018 207,629 $5,943 21 21 $(72,410,028) Oxnard $2,935,159,815 2017 206,499 $14,214 22 4 $(285,892,601) Glendale $2,546,875,000 2018 205,536 $12,391 23 7 $(580,175,000) Huntington Beach $1,143,648,000 2018 202,648 $5,644 24 22 $(429,641,000) Santa Rosa $1,384,392,000 2017 178,488 $7,756 25 14 $(300,457,000) * These cities have governmental activities only. ** This figure represents the prefunded Pension Asset/ overfunding applicable to future years. For peer cities, it represents the underfunding of pension liabilities. Note: Only figures for each Primary Government were used as of June 30, 2018 CAFRs (2017 when 2018 not available). In cases where Component Units were reflected in separate Columns, Component Unit numbers were excluded. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 VIII LETTER OF TRANSMITTAL Acknowledgments The 2018 CAFR reflects the financial results of providing services to the citizens of Fresno. But, numbers cannot portray the level of commitment that is displayed by City employees day-in and day-out. Simply put, Fresno's citizens would not have the standard of living that they enjoy without the creativity and perseverance of City staff. Fresnans should be proud to have such dedicated public servants protecting their homes, maintaining their streets, delivering clean water to their residences, and providing many other services that make life manageable. We would like to express our appreciation to the entire staff of the Finance Department, but especially the core Finance CAFR team and their families, for their months of concerted group effort. The fact that this group has managed to reduce the production time of this document by four months over the past three years is a testament to their talent, professionalism and dedication. While the term "Rock Stars" is usually not associated with accountants, all of the Finance Department staff that worked on this report have earned that moniker. We would be remiss if we did not also thank the CAFR contacts in each department throughout the City for working with the Finance Department. Their invaluable contributions made the preparation of this report possible. We wish to also extend our sincere thanks to the staff in all City departments for their cooperative efforts in responding to the many questions and requests for detailed information that accompanies each annual audit. In addition, we would like to acknowledge the role of Brown Armstrong for their professional support in the preparation of the CAFR. Finally, we want to thank the Mayor, the City Council members, and the members of the City Manager's Office for their continued leadership and support in planning and conducting the City's financial operations. Respectfully submitted, Wilma Quan-Schecter Michael Lima City Manager Finance Director/City Controller CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 IX CITY OPERATING FUND STRUCTURE CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 X CITY ORGANIZATIONAL CHART CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 XI DIRECTORY OF CITY OFFICIALS City of Fresno, California Directory of Officials Elected Officials As of January 10, 2019 Mayor:Term Expires: Honorable Lee Brand January 2021 Council Members: Esmeralda Z. Soria, District 1 January 2023* Steve Brandau, District 2 January 2021 Miguel Arias, District 3 January 2023 Paul Caprioglio, District 4 January 2021 Luis Chavez, District 5 January 2023* Garry Bredefeld, District 6 January 2021 Nelson Esparza, District 7 January 2023 *Officials re-elected for a second term Appointed Executive Officials Wilma Quan-Schecter, City Manager Jane Sumpter, Assistant City Manager Jim Schaad, Assistant City Manager Douglas Sloan, City Attorney Yvonne Spence, City Clerk Michael Lima, Finance Director/ City Controller XII This page intentionally left blank CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 XIII CERTIFICATE OF ACHIEVEMENT - GFOA XIV This page intentionally left blank 1 INDEPENDENT AUDITOR’S REPORT To the Honorable City Council City of Fresno, California Report on the Financial Statements We have audited the accompanying financial statements of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City of Fresno, California (the City), as of and for the year ended June 30, 2018, and the related notes to the financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. Management’s Responsibility 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; this includes 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. Auditor’s Responsibility Our responsibility is to express opinions on these financial statements based on our audit. We did not audit the financial statements of the Successor Agency to the Fresno Redevelopment Agency Private-Purpose Trust Fund (the Successor Agency), which represents the following percentages of the assets, net position/fund balances, and additions/revenues of the following opinion unit: Opinion Unit Assets Net Position/Fund Balances Additions/Revenues Aggregate Remaining Fund Information 0% 0% 1% The financial statements of the Successor Agency were audited by other auditors whose report thereon has been furnished to us, and our opinion, insofar as it relates to the amounts included for the Successor Agency, is based on the report of the other auditors. We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free from material misstatement. 2 An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in the financial statements. The procedures selected depend on the auditor’s judgment, including the assessment of the risks of material misstatement of the financial statements, whether due to fraud or error. In making those risk assessments, the auditor considers internal control relevant to the City’s preparation and fair presentation of the financial statements 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, we express no such opinion. An audit also includes evaluating the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Opinions In our opinion, based on our audit and the report of the other auditors, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit, each major fund, and the aggregate remaining fund information of the City, as of June 30, 2018, and the respective changes in financial position, and, where applicable, cash flows thereof for the year then ended in accordance with accounting principles generally accepted in the United States of America. Emphasis of Matter As discussed in Note 1E to the financial statements, during the year ended June 30, 2018, the City adopted the provisions of Governmental Accounting Standards Board (GASB) Statement No. 75, Accounting and Financial Reporting for Postemployment Benefits Other than Pensions. Also, as discussed in Note 13 to the financial statements, the City Council voted to dissolve the City of Fresno Cultural Arts Properties Corporation (COFCAP) on May 25, 2017. Final separate audited financial statements on the liquidated basis were issued by other auditors as of June 30, 2017. The COFCAP information presented reflects transactions associated with the final closeout. Our opinion is not modified with respect to these matters. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the management’s discussion and analysis, the budgetary comparison schedules for the General Fund and the Grants Special Revenue Fund, schedule of investment returns, schedule of changes in net pension liability and related ratios and schedule of employer contributions for both the Employees Retirement System and the Fire and Police Retirement System, and the Other Postemployment Benefits (OPEB) Plan schedule of changes in the net OPEB liability and related ratios be presented to supplement the basic financial statements. Such information, although not a part of the basic financial statements, is required by Governmental Accounting Standards Board (GASB), 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. Other 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 introductory section, combining and individual nonmajor fund financial statements and schedules, and statistical section are presented for purposes of additional analysis and are not a required part of the basic financial statements. 3 The combining and individual nonmajor fund financial statements and schedules are the responsibility of management and were derived from and relate directly to the underlying accounting and other records used to prepare the basic financial statements. Such 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 combining and individual nonmajor fund financial statements and schedules are fairly stated in all material respects in relation to the basic financial statements as a whole. The introductory and statistical sections have not been subjected to the auditing procedures applied in the audit of the basic financial statements and, accordingly, we do not express an opinion or provide any assurance on them. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated January 10, 2019, on our consideration of the City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on 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. BROWN ARMSTRONG ACCOUNTANCY CORPORATION Bakersfield, California January 10, 2019 4 This page intentionally left blank CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 5 MANAGEMENT'S DISCUSSION & ANALYSIS MANAGEMENT’S DISCUSSION AND ANALYSIS (Unaudited) For the Fiscal Year Ended June 30, 2018 CITY OF FRESNO, CALIFORNIA This section of the City of Fresno’s (City) Comprehensive Annual Financial Report (CAFR) presents a narrative overview and analysis of the financial activities of the City for the fiscal year ended June 30, 2018. The reader is encouraged to consider the information presented here in conjunction with the City’s financial statements, which follow this section, and the additional information that is furnished in our letter of transmittal at the front of this report. This discussion and analysis provides comparisons primarily for the previous two years; but, may include more extensive comparisons in some instances. FINANCIAL HIGHLIGHTS • The assets of the City continue to set records, reaching a total of $3,959.7 million for the first time in the City’s history. • Capital assets grew by $144.5 million (5.7%) to $2,698.0 million. The increase reflects the completion or near completion of several major capital improvements. • Net Position for the entire City improved to a record $2,410.1 million; a $136.1 million (6.0%) increase over fiscal year 2017’s Net Position, as restated, of $2,274.0 million, or $116.9 million (5.1%) increase over fiscal year 2017's original Net Position of $2,293.3 million. Most notable, Total Net Position for Governmental Activities surpassed the $1 billion mark for the first time in the City's history. • The City continues to record a net pension asset. The fiscal year 2018 net pension asset of $318.2 million was up from fiscal year 2017’s net pension asset of $147.7 million thanks to strong returns from the stock market. Fresno remains one of very few government entities in the country with a net pension asset. OVERVIEW OF FISCAL YEAR 2018 FINANCIAL STATEMENTS The Management's Discussion and Analysis is intended to serve as an introduction to the City’s basic financial statements, which consist of three components: (1) Government-Wide Financial Statements, (2) Fund Financial Statements and (3) Notes to the Financial Statements. This report also contains other Supplementary Information in addition to the basic financial statements. Government-Wide Financial Statements are designed to provide both long-term and short-term information about the City’s overall financial status in a manner similar to a private-sector business. • The Statement of Net Position presents information on all assets/deferred outflows of resources and liabilities/deferred inflows of resources. The difference between them is reported as net position. Over time, increases or decreases in net position may serve as a useful indicator of whether the City’s financial position is improving or deteriorating. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 6 MANAGEMENT'S DISCUSSION & ANALYSIS • The Statement of Activities shows how the 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 result in cash flows in future periods. Examples include revenues pertaining to uncollected taxes and fees and expenses pertaining to earned but unused vacation and sick leave. Both of the Government-Wide Financial Statements distinguish functions of the City that are principally supported by taxes and inter-governmental 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 protection, public ways and facilities, culture and recreation, and community development. The Business-Type Activities of the City include two airports, public transportation system, water, sewer, solid waste, community sanitation, convention center, and stadium. The Government-Wide Financial Statements include not only the City (known as the primary government), but also legally separate component units including the Fresno Joint Powers Financing Authority, City of Fresno Fire and Police Retirement System, City of Fresno Employees Retirement System, City of Fresno Employees Healthcare Plan, Fresno Revitalization Corporation, and FRC Canyon Crest, LLC. The component units have been “blended” into the City’s financial statements because the governing board (although legally separate from the City) is substantially the same as the City’s, or they provide services entirely or almost exclusively for the benefit of the City even though they do not provide services directly to the City. As of February 1, 2012, a Successor Agency was created to replace the Redevelopment Agency of the City of Fresno (RDA). Dissolution law provided that the Successor Agency would pay all “enforceable obligations” of the former RDA. The Successor Agency is considered a separate legal entity under Assembly Bill (AB) 1484 for financial presentation purposes. Effective June 30, 2012, the Successor Agency was reported as a Private-Purpose Trust Fund. This means that the Successor Agency’s assets are considered to be held in a trustee or agency capacity for others and therefore cannot be used to support the City’s own programs. Also presented in the Government-Wide Financial Statements is a discretely presented component unit, the City of Fresno Cultural Arts Properties Corporation (COFCAP). COFCAP is a component unit because it is a legally separate entity for which the City is financially accountable through the appointment of the corporation’s board and the ability to approve the corporation’s budget. The tax-exempt entity is, however, discretely presented because it does not provide services exclusively or almost exclusively to the City of Fresno. Financial information for this component unit is reported separately from the financial information presented for the primary government in a separate column on the Government-Wide Financial Statements, as well as in the Notes to the Financial Statements. See Note 13 regarding COFCAP activities. The Government-Wide Financial Statements can be found on pages 30-31 of this report. Fund Financial Statements focus on individual parts of the City government, reporting the City’s operations in more detail than the Government-Wide Financial Statements. They are used to maintain CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 7 MANAGEMENT'S DISCUSSION & ANALYSIS control over resources that have been segregated for specific activities or objectives and to ensure compliance with finance-related legal requirements. They can be divided into three categories: • Governmental Funds are used to account for essentially the same functions reported as governmental activities in the Government-Wide Financial Statements (i.e., most of the City’s basic services are reported in Governmental Funds). These statements, however, focus on (1) how cash and other financial assets can be readily converted to available resources, and (2) the balances left at year-end that are available for spending. Such information may be useful in determining what financial resources are available in the near future to finance the City’s programs. Because the focus of Governmental Funds Financial Statements is narrower than that of the Government-Wide Financial Statements, it is helpful to compare the information presented for Governmental Funds with similar information presented for governmental activities in the Government-Wide Financial Statements. By doing so, readers may better understand the long- term impact of the government’s near-term financing decisions. Both the Governmental Funds Balance Sheet and Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances provide a reconciliation to facilitate this comparison between Governmental Funds and governmental activities. These reconciliations may be found on pages 35 and 37. The City maintains several individual Governmental Funds organized according to their type: general fund, special revenue, debt service, and capital projects. Information is presented separately in the Governmental Funds Balance Sheet and in the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances for the General Fund and Grants Special Revenue Fund (which are considered to be major funds). Data from the remaining Governmental Funds are combined into a single, aggregated presentation. Individual fund data for each of the Nonmajor Governmental Funds is provided in the form of combining statements elsewhere in this report. The City adopts an annual appropriated budget. The City’s budget reflects its priorities and tells the taxpayers and ratepayers what is being done with their money. Budgetary comparison schedules for the General Fund and the Grants Special Revenue Fund demonstrate compliance with the budget, and also reflect where actual results deviated from expected budgetary estimates. • Proprietary Funds are generally used to account for services for which the City charges customers (either outside customers, or internal units or departments of the City). Proprietary Funds provide the same type of information as shown in the Government-Wide Financial Statements, only in more detail. Proprietary Funds (Enterprise and Internal Service) utilize the same method used by the private sector businesses, or the accrual basis of accounting. The City maintains the following two types of Proprietary Funds: † Enterprise Funds are used to report the same functions as Business-Type Activities in the Government-Wide Financial Statements. The City uses Enterprise Funds to account for the operations of the Public Utilities [Water System, Sewer System, Solid Waste Management], Fresno Area Express [Transit], Fresno International Airport (FYI) and the Fresno Chandler Downtown Airport (FCH) [Airports], Fresno Convention Center, and Chukchansi Park Stadium [Stadium], all of which are considered to be major funds of the City. Community Sanitation and Parks and Recreation are considered to be Nonmajor Enterprise Funds of the City. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 8 MANAGEMENT'S DISCUSSION & ANALYSIS † Internal Service Funds are used to report activities that provide supplies and services for certain City programs and activities. The City uses Internal Service Funds to account for its fleet of vehicles, management information systems, property maintenance, and electronics/ communication support (General Services); self-insurance (Risk Management); billing, collecting, and servicing activities for the Water, Sewer, Solid Waste and Community Sanitation Funds (Billing and Collection); and healthcare plans (Employees Healthcare Plan, Retirees Healthcare Plan, Blue Collar Employees Healthcare Plan). Because Risk Management, General Services and the healthcare plans predominantly benefit Governmental rather than Business- Type functions, they have been included within governmental activities in the Government-Wide Financial Statements, whereas Billing and Collection is included in the Business-Type Activities in the Government- Wide Financial Statements. The Internal Service Funds are combined into a single, aggregated presentation in the Proprietary Fund Financial Statements. Individual Fund data for the Internal Service Funds is provided in the form of combining statements. • Fiduciary Funds are used to account for resources held for the benefit of parties outside the City. Since the resources of Fiduciary Funds are not available to support the City’s own programs, they are not reflected in the Government-Wide Financial Statements. The accounting used for Fiduciary Funds is much like that used for Proprietary Funds. The City maintains three types of Fiduciary Funds: † Pension Trust Funds consist of funds for Fire and Police and other Employees. † Private-Purpose Trust Fund is used to account for the assets and liabilities held in trust for the Successor Agency to the former RDA. † Agency Funds consist of funds used to account for City-related trust activity, such as payroll withholding and bid deposits. Agency Funds also include Special Assessment Funds that account for debt service transactions involving special assessment districts within the City. The basic financial statements can be found on pages 30-154 of this report. Notes to the Financial Statements The Notes to the Financial Statements provide additional information that is essential to the full understanding of the data provided in all of the financial statements. The Notes to the Financial Statements can be found on pages 51-154 of this report. Required Supplementary Information (RSI) In addition to the basic financial statements and accompanying notes, this report presents certain required supplementary information including budgetary comparison statements for major governmental funds as well as schedules of investment returns, changes in Net Pension Liability, employer contribution, and schedule of changes in Net Other Post-Employment Benefits (OPEB) Liability and related ratios. RSI and accompanying notes can be found on pages 156-166 of this report. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 9 MANAGEMENT'S DISCUSSION & ANALYSIS Combining and Individual Fund Statements and Schedules The combining statements referred to earlier in connection with nonmajor governmental funds, nonmajor enterprise funds, internal service funds, fiduciary funds and the Discretely Presented Component Unit are presented immediately following the appropriately labeled tabs. Combining and individual fund statements and schedules can be found on pages 168-195 of this report. GOVERNMENT-WIDE FINANCIAL ANALYSIS The City presents its financial statements under the reporting model required by the Governmental Accounting Standards Board Statement No. 34 (GASB 34), Basic Financial Statements - and Management’s Discussion and Analysis (MD&A) - for State and Local Governments. Net Position - Government-Wide / Primary Government (in thousands) Governmental Activities Business-Type Activities Total Total Change from Prior Year 2017 2018 2017 2018 2017 2018 $% Assets: Current and Other Assets $390,916 $384,668 $501,998 $558,839 $892,914 $943,507 $50,593 5.7% Net Pension Asset 126,306 256,562 21,347 61,657 147,653 318,220 170,567 115.5% Capital Assets: Not Being Depreciated 305,515 322,234 463,706 589,791 769,221 912,025 142,804 18.6% Net of Depreciation 644,677 633,684 1,139,643 1,152,297 1,784,320 1,785,981 1,661 0.1% Total Capital Assets 950,192 955,918 1,603,349 1,742,088 2,553,541 2,698,006 144,465 5.7% Total Assets 1,467,414 1,597,148 2,126,694 2,362,584 3,594,108 3,959,733 365,625 10.2% Deferred Outflows of Resources: Charge on Refunding 5,293 4,864 1,984 1,627 7,277 6,491 (786)(10.8)% Pension Contributions 26,260 64,153 7,480 10,554 33,740 74,707 40,967 121.4% Deferred Outflows - Pension 141,106 1,711 30,377 695 171,483 2,406 (169,077)(98.6)% Total Deferred Outflows of Resources 172,659 70,728 39,841 12,876 212,500 83,604 (128,896)(60.7)% Liabilities: Long-Term Liabilities Outstanding 547,096 549,479 717,121 849,680 1,264,217 1,399,159 134,942 10.7% Other Liabilities 23,397 23,600 127,470 108,496 150,867 132,096 (18,771)(12.4)% Total Liabilities 570,493 573,079 844,591 958,176 1,415,084 1,531,255 116,171 8.2% Deferred Inflows of Resources: Pension Revenue Applicable to Future Yrs 84,877 69,371 13,381 12,424 98,258 81,795 (16,463)(16.8)% Unamortized OPEB Expense —14,330 —5,820 —20,150 20,150 100.0% Total Deferred Inflows of Resources 84,877 83,701 13,381 18,244 98,258 101,945 3,687 3.8% Net Position: Net Investment in Capital Assets 787,522 796,242 955,128 958,169 1,742,650 1,754,411 11,761 0.7% Restricted 168,927 171,473 ——168,927 171,473 2,546 1.5% Unrestricted 28,252 43,381 353,436 440,871 381,688 484,252 102,564 26.9% Total Net Position $984,701 $1,011,095 $1,308,564 $1,399,041 $2,293,265 $2,410,136 $116,871 5.1% CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 10 MANAGEMENT'S DISCUSSION & ANALYSIS Changes in Net Position - Government-Wide / Primary Government (in thousands) Governmental Activities Business-Type Activities Total Total Change from Prior Year 2017 2018 2017 2018 2017 2018 $% Revenues Program Revenues: Charges for Services $118,176 $97,422 $270,774 $272,809 $388,950 $370,231 $(18,719)(4.8)% Operating Grants & Contributions 25,016 26,488 37,187 22,939 62,203 49,427 (12,776)(20.5)% Capital Grants & Contributions 44,586 38,584 47,576 69,570 92,162 108,154 15,992 17.4% General Revenues: Property Taxes 123,858 130,109 ——123,858 130,109 6,251 5.0% Business Tax 19,101 20,982 ——19,101 20,982 1,881 9.8% Sales Taxes - Shared Revenues 86,128 85,512 ——86,128 85,512 (616)(0.7)% Other Local Taxes 29,810 31,051 ——29,810 31,051 1,241 4.2% Investment Earnings 1,215 1,349 641 2,614 1,856 3,963 2,107 113.5% Gain on Sale of Capital Assets 214 223 —37 214 260 46 21.5% Total Revenues 448,104 431,720 356,178 367,969 804,282 799,689 (4,593)(0.6)% Expenses General Government 44,157 31,319 ——44,157 31,319 (12,838)(29.1)% Public Protection 196,006 206,163 ——196,006 206,163 10,157 5.2% Public Ways and Facilities 72,984 76,289 ——72,984 76,289 3,305 4.5% Culture and Recreation 23,500 19,771 ——23,500 19,771 (3,729)(15.9)% Community Development 28,913 30,412 ——28,913 30,412 1,499 5.2% Interest on Long-term Debt 18,658 14,413 ——18,658 14,413 (4,245)(22.8)% Sewer, Water and Solid Waste ——154,482 170,020 154,482 170,020 15,538 10.1% Transit ——47,958 53,937 47,958 53,937 5,979 12.5% Airports ——29,938 31,192 29,938 31,192 1,254 4.2% Fresno Convention Center ——10,798 8,855 10,798 8,855 (1,943)(18.0)% Community Sanitation ——8,978 10,077 8,978 10,077 1,099 12.2% Parks and Recreation ——410 283 410 283 (127)(31.0)% Stadium ——3,539 2,710 3,539 2,710 (829)(23.4)% Total Expenses 384,218 378,367 256,103 277,074 640,321 655,441 15,120 2.4% Increase in Net Position Before Transfers 63,886 53,353 100,075 90,893 163,961 144,246 (19,715)(12.0)% Transfers (4,356)(4,820)4,356 4,820 ———N/A Special Item - Loss on Receivable/ Transfer of Asset (Note 13)—(8,152)———(8,152)(8,152)(100.0)% Change in Net Position 59,530 40,381 104,431 95,713 163,961 136,094 (27,867)(17.0)% Net Position - Beginning 925,171 984,701 1,204,133 1,308,564 2,129,304 2,293,265 163,961 7.7% Cumulative Effect of Accounting Change —(13,987)—(5,236)—(19,223)(19,223)(100.0)% Net Position - Beginning Restated 925,171 970,714 1,204,133 1,303,328 2,129,304 2,274,042 144,738 6.8% Net Position - Ending $984,701 $1,011,095 $1,308,564 $1,399,041 $2,293,265 $2,410,136 $116,871 5.1% CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 11 MANAGEMENT'S DISCUSSION & ANALYSIS Analysis of Changes in Government-Wide Net Position The City’s overall Net Position improved to a record $2,410.1 million: a $136.1 million (6.0%) increase over fiscal year 2017’s Net Position as restated of $2,274.0 million, or $116.9 million (5.1%) increase over fiscal year 2017's original Net Position of $2,293.3 million. Most notably, the Unrestricted Net Position showed the most growth, going from $381.7 million in fiscal year 2017 to $484.3 million in fiscal year 2018. Several factors contributed to the overall increase in Net Position: • City Revenues fell $4.6 million (0.6%), going from $804.3 million in fiscal year 2017 to $799.7 million in fiscal year 2018. The drop in revenues was driven by decreases of $18.7 million (4.8%) in Charges for Services (specifically, revenues related to Sales Tax and the repayment of loans to the RDA recorded in fiscal year 2017 did not reoccur in fiscal year 2018), and $12.8 million (20.5%) in Operating Grants, mostly in the Transit Fund. These decreases were partially offset by $16.0 million (17.4%) of growth in Capital Grants (specifically, Bus Rapid Transit monies for the Transit Fund). • City Expenses grew from $640.3 million incurred in fiscal year 2017 to $655.4 million in fiscal year 2018. Governmental Activities expenses declined $5.9 million due to General Government costs incurred in fiscal year 2017 which were not incurred in fiscal year 2018. The drop in Governmental Activities expenses was completely offset by $21.0 million of growth in Business-Type Activities expenses. Most of the growth in Business-Type Activities expenses occurred in the Transit Fund, which reflects the initiation of Bus Rapid Transit service. • Total Assets grew from $3,594.1 million in fiscal year 2017 to $3,959.7 million in fiscal year 2018, a $365.6 million (10.2%) increase. A major factor in the overall increase was $142.8 million of growth in Land, Intangibles, and Construction in Progress (from $769.2 million in fiscal year 2017 to $912.0 million in fiscal year 2018, a 18.6% increase) that was the product of the construction of the Southeast Surface Water Treatment Plant and other capital projects. Also contributing to the growth in Total Assets was a rise of $170.6 million in the Net Pension Asset (from $147.7 million in fiscal year 2017 to $318.2 million in fiscal year 2018, a 115.5% increase), which was the result of higher than anticipated investment returns generated by the Retirement Systems. Growth in Unrestricted Cash of $86.0 million (28.1%) also contributed to the overall increase. • Total Deferred Outflows of Resources fell $128.9 million (60.7%) from fiscal year 2017's figure of $212.5 million, primarily as a result of substantially decreased Deferred Outflows - Pensions. • Total Liabilities rose $116.2 million (8.2%) from $1,415.1 million in fiscal year 2017 to $1,531.3 million in fiscal year 2018. The overall growth in Total Liabilities was entirely attributable to an increase of $122.0 million in Long-Term Liabilities Due in More than One Year. The Long-Term Liabilities which fueled the increase were new loans received from the State Water Resources Control Board for the Southeast Surface Water Treatment Plant's construction. • A $3.7 million (3.8%) increase in the Deferred Inflows of Resources, specifically, the Pension Revenue Applicable to Future Years. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 12 MANAGEMENT'S DISCUSSION & ANALYSIS Governmental Activities In fiscal year 2018, Governmental Activities increased their Net Position by $40.4 million (4.2%) over fiscal year 2017’s Governmental Activities Restated Net Position of $970.7 million. It is the first time in the City's history that the Net Position of Governmental Activities topped $1.0 billion. Almost all of the growth in Net Position occurred within the Unrestricted Net Position, which improved by $15.1 million to fiscal year 2018’s Net Position of $43.4 million. Key factors affecting the Net Position were: • Revenues went from $448.1 million in fiscal year 2017 to $431.7 million in fiscal year 2018, a $16.4 million (3.7%) decrease. The entire decrease can be attributed to the Charges for Services, which were down $20.8 million, or 17.6%. Within the Charges for Services, most of the decrease of $29.6 million (63.3% ) was in the General Government category; specifically, one-time revenues received in fiscal year 2017 for which a counterpart was not received in fiscal year 2018. This drop was partially offset by growth of $9.9 million (44.2%) in the Public Protection revenues. This growth was mostly comprised of an $8.0 million increase in Pension Revenue. • Expenses fell from $384.2 million in fiscal year 2017 to $378.4 million in fiscal year 2018, led by a 29.1% decrease in General Government expenses (from $44.2 million in fiscal year 2017 to $31.3 million in fiscal year 2018). The decrease in General Government expenses was due to one-time expenses for computer system purchases and other operating needs in fiscal year 2017 that were not duplicated in fiscal year 2018. • Total Assets increased by $129.7 million (8.8%) from fiscal year 2017’s Total Assets balance of $1,467.4 million. An increase of $130.3 million (103.1%) in the Net Pension Asset to $256.6 million was the primary driver in the overall growth of Total Assets. • Total Liabilities increased by 0.5%, or $2.6 million, from fiscal year 2017’s Total Liabilities of $570.5 million. A rise in total Long-Term Liabilities (Due Within a Year and Due in More than One Year, combined) of $2.4 million (0.4%) explains the overall increase in Total Liabilities. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 13 MANAGEMENT'S DISCUSSION & ANALYSIS Governmental Activities - Charts and Graphs The following charts and graphs illustrate the City’s governmental revenues by source and its expenses and revenues by function. As can be seen, Public Protection is by far the largest function reflecting the City’s greatest overall expenses. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 14 MANAGEMENT'S DISCUSSION & ANALYSIS The following is an analysis of some of the funds within the Governmental Activities category: General Fund Fund Balance in the General Fund decreased from $71.2 million in fiscal year 2017 to $51.9 million in fiscal year 2018. The decrease is mainly due to the purchase of the Fire Headquarters building and underlying land for $4.4 million, as well as a loss on return of asset involving the Old Bee Building from the COFCAP to the City of $8.2 million. It is significant to note that the Unassigned Fund Balance decreased from $26.7 million in fiscal year 2017 to $19.5 million in fiscal year 2018, a $7.2 million (27.0%) decline. Fiscal year 2018's revenues showed a marked decline when compared to fiscal year 2017’s revenues, decreasing by $8.1 million (2.5%) from fiscal year 2017’s total of $317.5 million. The decrease was primarily due to the fact that fiscal year 2017's figures reflected one-time revenues involving Sales Tax and Advances to the Redevelopment Agency for which corresponding revenues were not received in fiscal year 2018. Thus, Taxes Revenues were down $3.0 million (1.1%) and Miscellaneous Revenues dropped $7.6 million (81.1%) from fiscal year 2017's levels. Partially offsetting these declines was an increase of $1.4 million (34.3%) in Intergovernmental Revenues; specifically, State - Miscellaneous reimbursements associated with Fire personnel who assisted in addressing wildfires throughout the state. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 15 MANAGEMENT'S DISCUSSION & ANALYSIS While General Fund revenues were down, General Fund expenditures showed substantial growth. General Fund expenditures grew by $13.4 million, or 4.9%, to the fiscal year 2018 expenditure total of $287.8 million. The majority of the growth was attributable to the Public Protection activity, which increased from $201.1 million in fiscal year 2017 to $207.9 million in fiscal year 2018, a $6.8 million, or 3.4%, increase. The Public Protection increase was entirely due to additional personnel costs, partially from new positions added and partially from pay increases provided to current staff. In addition to the Public Protection increase, there was also a material increase in Capital Outlay expenditures. Capital Outlay expenditures rose $6.7 million (148.4%) over fiscal year 2017's figure of $4.5 million. The $4.4 million purchase of the Fire Headquarters Building and the return of the Old Bee Building at a capitalized value of $2.8 million were the primary causes for movement in Capital Outlay expenditures. Significant committed fund balance amounts of the General Fund include: – $23.9 million for the General Fund Emergency Reserve, and – $1.6 million for the 27th Pay Period Reserve. General Fund Budget to Actual Comparison The fiscal year 2018 Adopted Budget was made up of $365.1 million of budgeted revenues and $338.6 million of appropriations. After various amendments were made throughout the fiscal year, the General Fund ended the fiscal year with $378.3 million of budgeted revenues and $347.1 million of appropriations. Actual results on a budgetary (cash) basis of accounting were $391.6 million of revenues and $344.8 million of expenditures. Thus, the actual revenues were $13.3 million (3.5%) over the fiscal year-end budgeted revenues, while the actual expenditures were $2.2 million (0.6%) over fiscal year-end appropriations. The major differences between the budget and the actual results are noted below: Comparison of Revenues and Expenditures - Budget to Actual / General Fund (in thousands) Budgeted Original Budgeted Final Actual Budgetary Basis Over (Under) Final Budget Explanation Revenues: Property Taxes $126,531 $126,531 $129,109 $2,578 A stronger local economy led to an increase in assessed values, which resulted in actual Property Tax revenues above estimated levels. Sales Taxes $87,610 $87,610 $89,889 $2,278 A stronger local economy with a diversifying economic base produced sales tax that was higher than budgetary estimates. Other Taxes $34,352 $34,352 $35,961 $1,609 Room Tax receipts exceeded budgeted estimates. Expenditures: Fire Department $57,294 $57,730 $57,333 $(397)Fire overtime costs were below anticipated levels, generating a small budgetary savings. Transfers to Other Funds $19,418 $21,385 $27,062 $5,676 Unbudgeted transfers to replenish the Liability Self-Insurance Reserve and fund the new Southeast Police Sub-station Capital Outlay $4,999 $10,885 $10,699 $(186) The Capital Outlay budget was increased during the fiscal year to account for the Fire HQ purchase and return of the Old Bee Building to the City. Actual costs to obtain those assets came in slightly lower than budget. A more detailed look at the budget versus actual comparison for the General Fund can be found on page 156 in the Required Supplementary Information section. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 16 MANAGEMENT'S DISCUSSION & ANALYSIS The City made a change in its budgetary assumptions for the General Fund's budget. With the adoption of the fiscal year 2019 budget, General Fund revenue estimates now include a recognition period for Sales Tax revenues that goes from September through August. The change is anticipated to bring a one-time revenue of $9.9 million into the General Fund, as it will reflect 13 months of Sales Tax receipts in fiscal year 2019. The City Council (Council) directed that the $9.9 million be deposited in the General Fund Emergency Reserve, which will bring the reserve to a 10% of appropriations level which is required under the City's Reserve Management Act. Once the General Fund Emergency Reserve reaches the 10% of appropriations threshold, repayments of RDA loans that were being deposited in the Reserve will become a General Fund revenue stream. Grants Special Revenue Fund Fund Balance in the Grants Special Revenue Fund fell from $70.6 million in fiscal year 2017 to $68.7 million in fiscal year 2018. The drop in Total Fund Balance was concentrated in the Restricted Fund Balance, which declined $2.0 million (2.8%). The decline in Fund Balance was due primarily to a drop of $2.4 million (7.6%) in Intergovernmental Revenues, specifically Federal HOME Grant funding. Overall, fiscal year 2018 revenues in the Grants Special Revenue Fund exhibited a significant decrease from the $57.3 million shown in fiscal year 2017. Revenues fell $28.6 million (49.8%) to a total of $28.8 million. All of the decline was associated with the one-time recognition of the revenue associated with the repayment of loans made to the former RDA in fiscal year 2017. Expenditures also reflected a decrease, falling $5.4 million (16.0%) from fiscal year 2017’s level of $33.5 million to fiscal year 2018’s total of $28.1 million. The decline was due to the fiscal year 2017 completion of the Proposition 84 grant funded construction of Cultural Arts District Park, and a decline in Housing Grant funded Parks programs. Other Governmental Funds Fund Balance for the Other Governmental Funds rose $8.3 million between fiscal year 2017 and fiscal year 2018 ($104.5 million versus $112.9 million, respectively). The growth in the Fund Balance was primarily due to a $5.4 million increase in fund balance for the Urban Growth Management (UGM) Impact Fee Fund. The UGM Impact Fee Fund Balance increase was fueled by a $1.2 million increase in revenues generated by increased construction and a $1.5 million decrease in Transfers Out to cover debt service payments as a result of the April 2017 bond refinancing. Business-Type Activities Business-Type Activities for fiscal year 2018 increased their Net Position by $95.7 million (7.3%) over fiscal year 2017’s Business-Type Activities Restated Net Position of $1,303.3 million. Key factors affecting the Net Position were: • Total Assets increased by $235.9 million (11.1%) over fiscal year 2017’s Total Asset balance of $2,126.7 million. The increase was primarily due to the growth in the Land, Intangibles, and Construction in Progress account, which grew $126.1 million (27.2%) between fiscal year 2017 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 17 MANAGEMENT'S DISCUSSION & ANALYSIS and fiscal year 2018 mainly because of the ongoing construction work at the Southeast Surface Water Treatment Plant. Supplementing that increase was growth in Unrestricted Cash of $64.3 million (47.8%), primarily from Water as a result of operations. • Total Liabilities rose by 13.4%, or $113.6 million, from fiscal year 2017’s Total Liabilities of $844.6 million. The increase was primarily due to a $129.3 million (18.7%) increase in Long -Term Liabilities Due in More than One Year; specifically, loans with the State Water Resources Control Board used as funding for the Southeast Surface Water Treatment Plant. • Revenues went from $356.2 million in fiscal year 2017 to $369.7 million in fiscal year 2018, a $13.5 million (3.8%) increase. Most of the growth can be attributed to Capital Grant revenues received by the Transit Fund, which went from $32.1 million in fiscal year 2017 to $50.7 million in fiscal year 2018 , an $18.6 million (57.9%) increase. All of the increase was due to funding received for the Bus Rapid Transit system's construction. The other driver in the overall revenue growth was a $5.5 million (5.4%) increase in Charges for Services generated in the Water Fund with an increase in Water rates. Offsetting these increases was a $15.0 million (42.4%) decline in the Transit Fund's Operating Grants, which fell due to a reduction in Federal Transit Operating Grant allocation. • Expenses went from $256.1 million in fiscal year 2017 to $277.1 million in fiscal year 2018. A $6.0 million, or 12.5%, increase in the Transit Fund’s expenses associated with Bus Rapid Transit's inauguration contributed to the rise in overall expenses for Business-Type Activities. Also contributing was a $9.9 million (15.6%) increase in the Water Fund's expenses, due to water purchases. Business-Type Activities - Charts and Graphs The following charts and graphs illustrate the City’s Business-Type revenues and expenses by both source and function. Sewer, Water, and Solid Waste are by far the largest Business-Type Activities reflecting the City’s greatest overall expenses. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 18 MANAGEMENT'S DISCUSSION & ANALYSIS CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 19 MANAGEMENT'S DISCUSSION & ANALYSIS The following is an analysis of some of the funds within the Business-Type Activities category: Water Water’s Net Position showed an increase over fiscal year 2017’s levels. Net Position grew from $385.8 million in fiscal year 2017, as restated, to $424.0 million in fiscal year 2018, a $38.2 million (9.9%) increase. The change in net position was driven by the following factors: † Water revenues increased from $101.9 million in fiscal year 2017 to $107.4 million in fiscal year 2018, a $5.5 million (5.4%) increase. The increase was primarily driven by a $13.4 million rise in Customer User Charges, which was partially offset by a $7.3 million decrease in Water Sales revenue. The additional Customer User Charge revenue was the product of a five-year Water rate increase plan's implementation. The five-year rate plan approved in February 2015 is shown below: Initial Rate Year 1 Year 2 Year 3 Year 4 Year 5 $24.49 $27.76 $31.92 $36.84 $42.80 $49.22 The new rates went into effect in April 2015. Year 4’s rate was implemented in April 2018. † Operating expenses in the Water Fund increased by $3.7 million (5.8%) to $67.8 million in fiscal year 2018. The increase was mainly generated by a $4.2 million (12.2%) increase in Cost of Services (primarily water purchase expense). † Total Assets grew from $732.0 million in fiscal year 2017 to $896.4 million in fiscal year 2018, a $164.5 million (22.5%) increase. A $116.7 million (18.8%) increase in Capital Assets (resulting from the construction of the Southeast Surface Water Treatment Plant and associated water pipelines) was augmented by a $43.3 million increase in Unrestricted Cash. † Total Liabilities rose by $121.9 million (34.8%) from $349.8 million in fiscal year 2017 to $471.7 million in fiscal year 2018. The overall growth in Total Liabilities was fueled by a $147.5 million (91.2%) increase in Notes Payable related to the State Water Resources Board loans received to finance the Southeast Surface Water Treatment Plant. Sewer Net Position increased by $24.7 million (3.9%), from $638.6 million in fiscal year 2017, as restated, to $663.3 million in fiscal year 2018. The driver behind the net position increase was an increase of $25.0 million (2.7%) in Total Assets from fiscal year 2017’s figure of $919.3 million. Specifically, Sewer saw an increase of $12.3 million in Unrestricted Cash and a $12.1 million increase in Net Capital Assets. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 20 MANAGEMENT'S DISCUSSION & ANALYSIS The increase in Unrestricted Cash was generated by operating income of $21.2 million. While revenues were down slightly ($2.0 million, or 2.4%) due to a decrease in Customer User Charges, expenses were also down by $1.0 million (1.6%) as a result of a decrease in Repairs and Maintenance expenses. With revenues down only slightly more than expenses, the Sewer Fund enjoyed an operating income similar to that it earned in Fiscal Year 2017, which bolstered the Unrestricted Cash. The increase in Net Capital Assets is primarily caused by the capitalization of the Tertiary Treatment Facility and Pump Station at a value of $37.3 million. An increase in Accumulated Depreciation of $21.8 million partially offset the increase from the Tertiary Treatment Facility's capitalization. Solid Waste Management The Solid Waste Management Fund's Net Position grew modestly from fiscal year 2017’s restated figure of $44.6 million to fiscal year 2018’s figure of $44.8 million, a $0.2 million (0.4%) increase. A small decrease in Net Investment in Capital Assets ($0.5 million, or 7.3%) was offset by growth in Unrestricted Net Position ($1.1 million, or 3.0%). The growth in Unrestricted Net Position was due primarily to a $4.8 million (158.1% ) increase in the fund's Net Pension Asset. This increase was offset by a decrease of $3.2 million (87.8%) in Deferred Outflows - Pension and a decrease of $1.4 million (4.3%) in Unrestricted Cash. Transit Transit (known as Fresno Area Express, or FAX) experienced its first increase in ridership in thirteen years. FAX transported 9.8 million passengers in fiscal year 2018, a 1.3% increase from fiscal year 2017’s ridership of 9.6 million passengers. FAX management attributes the increase to the introduction of new service throughout fiscal year 2018, particularly the initiation of Bus Rapid Transit (BRT) service in February 2018. The introduction of BRT had a major impact on the Transit Fund's Net Position. Net Position grew $26.2 million (31.3%) after the restatement from $83.8 million in fiscal year 2017 to $110.0 million in fiscal year 2018. Much of the Net Position's growth stemmed from the capitalization of BRT-related assets, such as Net Capital Assets, which rose $18.3 million (23.2%) from fiscal year 2017's level of $79.1 million. Operationally, BRT's introduction did not have an impact on revenues, which decreased $0.7 million (6.2%) to $10.7 million due to a decline in Charges for Services revenues. However, BRT did have a substantial impact on the Transit Fund's Cost of Services and Administrative expenses, which increased $2.7 million (8.4%) and $2.4 million (21.4%) respectively. The Cost of Services increase was the result of increased Personnel costs for staff manning the BRT buses. The Administrative Expenses increase resulted from an increase in payments to the General Fund for Police services. In spite of its impact on operating expenses, BRT's introduction also generated $50.7 million of Capital Contributions, an $18.6 million (57.9%) increase over FY 17's amount. Airports Fiscal year 2018 origin and destination passengers numbered a record 1,635,323, 6.3% higher than prior year passengers of 1,537,876. Airports has set passenger records for three consecutive fiscal years. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 21 MANAGEMENT'S DISCUSSION & ANALYSIS The increase in passenger traffic had a direct impact on the Airport Fund's Net Position. Total Net Position was $174.9 million, $3.6 million (2.1%) higher than $171.3 million after the restatement of fiscal year 2017. While operating revenues (particularly Rental revenue and Concession revenue) grew $1.5 million (6.8%) to $24.0 million, Operating Expenses (in particular, Administrative Expenses such as Consulting expenses and Information Systems Equipment charges) grew by almost the same amount, rising about 5.5% ($1.5 million) to a total of $28.8 million. Instead, as has been historically the case with the Airports Fund, the largest contributor to the Net Position was Capital Contributions. While Capital Contributions decreased by $4.7 million (51.3% ), the Airports Fund still recorded $4.4 million in this revenue stream. The increase in passenger traffic had an impact on the Airports' assets. Nowhere was that impact better seen than in the dramatic ongoing improvement of Airports’ cash position. Cash and Investments increased to $29.7 million in fiscal year 2018, $9.8 million higher (49.1%) than the prior year amount of $19.9 million. As mentioned previously, the increased traffic also drove an increase in costs, which was reflected by a $2.7 million (95.5%) increase in Accrued Liabilities (such as Accounts Payable and Vouchers Payable) to $5.6 million. Convention Center The Convention Center saw a slight decrease in activity during fiscal year 2018 when compared to fiscal year 2017. Event days went from 313 in fiscal year 2017 to 300 in fiscal year 2018. Similarly, total attendance dropped, moving from 455,587 in fiscal year 2017 to 417,918 in fiscal year 2018. Convention Center management attributes the decline to the loss of the circus and other events. With the decline in both the number of event days and the attendance, it is no surprise that the Convention Center’s Net Position deteriorated. Net Position decreased from $(5.4) million in fiscal year 2017, as restated, to $(5.9) million in fiscal year 2018, a $0.5 million (9.6%) decline. While the declining attendance did impact revenues, decreasing them from $3.8 million in fiscal year 2017 to $3.3 million in fiscal year 2018 (a $0.4 million, or 11.6%, decline), it also impacted Operating Expenses. Operating expenses fell $1.2 million (13.8%) from fiscal year 2017’s expenses of $8.4 million. Instead of Operating Revenues and Operating Expenses being the largest influence on the decline in Net Position, a decline of $1.5 million (21.0%) in the subsidy made by the City to the Convention Center played the biggest role in the Convention Center's Net Position decrease. Stadium The Stadium showed a marked improvement in Net Position during fiscal year 2018. Net Position grew from $(0.5) million in fiscal year 2017, as restated, to $2.4 million in fiscal year 2018. All of the increase in Net Position is due to an increase of $2.3 million in Capital Contributions. The Capital Contributions growth was the result of payments made by the former and new ownership of the Fresno Grizzlies as a requirement of the franchise's sale. The requirement called for the former owner to contribute $1.5 million, the current owner to contribute $1.0 million, and the City to contribute $3 million to fund a Capital Improvement Fund for use in financing future capital improvements at the Stadium. The City's contribution was treated as a Transfer In. The City and the new owner are also required to contribute $300,000/year into this Capital Improvement Fund in future fiscal years. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 22 MANAGEMENT'S DISCUSSION & ANALYSIS Internal Service Funds The Net Position deficit in the Internal Service Funds was reduced by $8.1 million (19.5%) after the restatement from $(41.6) million in fiscal year 2017 to $(33.5) million in fiscal year 2018. The reduction in the Net Position deficit was primarily due to an increase in revenues. Fiscal year 2018's revenues for the Internal Service Funds increased by $6.8 million (4.7%) from fiscal year 2017’s revenues of $143.3 million. The main contributor to the increase in Internal Service Fund revenues was the Fleet Replacement Fund's Non-Recurring Revenue, which rose $4.4 million between fiscal year 2017 and fiscal year 2018. Non-Recurring Revenue increased due to the large number of vehicles that were ordered by user departments. CAPITAL ASSETS AND DEBT ADMINISTRATION Capital Assets The City’s capital assets for its Governmental and Business-Type Activities, before Component Units, as of June 30, 2018, amount to $2,553,541,000 (net of accumulated depreciation). Capital assets include land, buildings and improvements, machinery and equipment, park facilities, roads, streets, traffic signals, streetlights, bridges, and construction in progress. The net increase in the City’s capital assets for the current fiscal year was approximately 5.7% (a 0.6% increase for Governmental Activities, a 8.7% increase for Business-Type Activities) as shown in the table below. Capital assets for June 30, 2017 amounted to $2,553,541,136 (net of accumulated depreciation). The net increase for 2017 was approximately 4.1% (a 2.7% increase for Governmental Activities and a 5.1% increase for Business-Type Activities). Changes in Capital Assets, Net of Depreciation (in thousands) Asset Category Governmental Activities Business-Type Activities Total Government-Wide 2017 2018 2017 2018 2017 2018 Land $250,649 $260,055 $48,514 $49,466 $299,163 $309,521 Intangibles (Indefinite Life)——17,095 17,095 17,095 17,095 Buildings and Improvements, Net 135,252 133,655 558,964 577,842 694,216 711,496 Machinery and Equipment, Net 43,978 60,044 42,167 47,660 86,145 107,704 Infrastructure 465,447 439,985 538,512 526,796 1,003,959 966,781 Construction In Progress 54,866 62,179 398,097 523,229 452,963 585,409 Total $950,192 $955,918 $1,603,349 $1,742,088 $2,553,541 $2,698,006 Major capital asset events during the fiscal year ended June 30, 2018, some of which were in progress during the fiscal year ended June 30, 2017, included the following: † Sewer - Tertiary Treatment Facility and Pump Station The Sewer Division of the Department of Public Utilities constructed a tertiary treatment facility and pump station at the Fresno/Clovis Regional Wastewater Reclamation Facility (RWRF) to treat and disinfect approximately 5 million gallons a day (MGD) of the total MGD treated at the RWRF. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 23 MANAGEMENT'S DISCUSSION & ANALYSIS The tertiary treated effluent, due to the higher level of treatment, is permitted and available via a distribution system to provide recycled water for irrigation use to potential customers such as parks, schools, and cemeteries, as well as for freeway corridors and median islands. The use of this recycled water offsets existing potable water use. Total capitalized cost of the project was $37.3 million. † Airports - West Aviation Apron The Airports Department completed the reconstruction and rehabilitation of the aviation apron on the Fresno Yosemite International Airport's terminal's west side. The aviation apron is used both to stage aircraft that access the terminal and to provide a usable surface for airport support vehicles to transit the area. The project was funded with Airport Improvement Program grant funds and local match. The project was completed with a total cost of $12.1 million. † Fire - Fire Headquarters Purchase The Fire Department purchased the building it was previously renting as its headquarters. The headquarters building provides a central facility for Fire Administration to coordinate the department's activities. The building was purchased with a combination of General Fund resources and a loan from the Sewer Fund. The total capitalized value of the Fire Headquarters was $3.6 million. † Development and Resources Management - Accela Software The Development and Resources Management Department finished the installation of the Accela software during fiscal year (FY) 2018. Accela applies a work-flow functionality to the permitting process, which allows for more efficient processing of development permits. The software was purchased with General Fund resources. Capitalized costs of the software totaled $2.9 million. At June 30, 2018, the City had commitments related to various construction projects associated with Governmental Activities totaling $5.3 million. Commitments connected with Proprietary Activities at fiscal year-end amounted to $55.5 million. The most significant of the Governmental Activities projects were the Veterans Boulevard at the Highway 99/Union Pacific Railroad Overpass ($2.6 million) and the Eastbound Shields widening at Fowler ($2.0 million). The most significant of the Proprietary Activities projects were the Southeast Fresno Surface Water Treatment Plant ($13.9 million) and the Southwest Water Transmission Lines ($13.3 million). A complete list of projects appear in Note 12(H), page 145 under Construction and Other Significant Commitments. Debt Administration At the end of fiscal year 2018, the City had total long-term bond obligations, notes, and leases payable outstanding of $1,062,249,911. Of this amount, $124,245,000 are obligation bonds, backed by the full faith and credit of the City, while $778,701,050 are revenue bonds and notes of the City’s business enterprises and $3,291,251 are tax allocation debt issued by the Successor Agency of the Redevelopment Agency. The remaining $156,012,610 includes lease revenue bonds, notes and capital leases for general governmental projects. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 24 MANAGEMENT'S DISCUSSION & ANALYSIS During fiscal year 2018, the City’s total bonded debt decreased by $37,821,521. This decrease was due to normal debt service payments made during the year. The City took the following actions in fiscal year 2018: • Drew down from the California State Water Resources Control Board an additional $150.2 million in already-approved loans for water transport proejcts, and $8.3 million in already-approved loans for the transport of recycled water from the City's Wastewater Plant. • Borrowed an additional $12.8 million through the Master Equipment Lease Purchase Agreement with Banc of America Public Capital Corp. $6.8 million was for public safety vehicles, $5 million was for a new microwave data and radio console network for public safety communications, and $1 million was for vehicles for both the Development and Resource Management Department (DARM) and the Parks, After School, Recreation and Community Service Department (PARCS). The ratio of net general obligation bonded debt to taxable valuation and the amount of bonded debt per capita are useful indicators of the City's debt position to management, citizens and investors. A comparison of these indicators (as stated in thousands) follows: Fiscal Year 2018 2017 2016 General Bonded Debt (Par Amount)$124,245 $131,840 $140,000 General Bonded Debt Per Capita $230.80 $250.73 $269.00 Debt Service Tax Rate Per $100 Taxable Valuation $0.36 $0.40 $0.44 Although the City’s Charter imposes a limit on the amount of general obligation bonds that the City can have outstanding at any given time of 20% of the assessed value of property in the City, the City realizes that it cannot currently support debt of that magnitude with its current tax base and is very cautious about issuing general obligation debt. Currently, there are no general obligation bonds outstanding other than Pension Obligation Bonds issued in 2002. In April 2017, as part of the analysis for issuing new bonds to refinance several of the City’s Lease Revenue Bonds, the following ratings were assigned: Moody’s Investors Service, Inc.A3 Standard and Poor’s Corporation A+ Fitch Ratings A Since the close of the 2018 fiscal year, the City has issued no additional debt. Special District Debt The City is not obligated in any manner for the Special District debt, but is acting as an agent for property owners in collecting the assessments and forwarding the collections to the trustee or paying agent, and initiating foreclosure proceedings, if appropriate. Special District debt payable to bondholders was $3,423,431 at June 30, 2018, as compared to $3,610,429 at June 30, 2017. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 25 MANAGEMENT'S DISCUSSION & ANALYSIS Additional information on the City of Fresno’s long-term obligations can be found in Note 6, pages 93-109, of the Notes to the Financial Statements. Debt - Pledged Revenue Coverage Calculations The City has issued various Bonds in accordance with Indentures that set forth various covenants designed to provide security to bond holders, including rate covenants requiring that the City fix, prescribe and collect rates, fees and charges that will yield Net Revenues to equal at least certain designated percentages of estimated debt service. The Schedule of Pledged Revenue Coverage, as presented in the Statistical Section of the CAFR, beginning on page 212 shows the debt coverage calculations for those bonds which have a coverage calculation methodology detailed in their indentures. For those bonds that do not have a coverage calculation methodology detailed in their indentures, the GASB Statement No. 44 methodology for calculating debt coverage was used. FINANCIAL OUTLOOK Management believes that the City will continue to improve its financial position in fiscal year 2019. Several developments have occurred after the conclusion of fiscal year 2018, which provide management confidence in their belief. • The City finished fiscal year 2018 with a cash balance in its General Fund Emergency Reserve of $23.9 million. As part of the fiscal year 2019 budget adoption, Council voted to accrue the August 2019 Sales Tax revenue and deposit that revenue into the Emergency Reserve. It is estimated that $9.9 million will be deposited into the Emergency Reserve in August 2019, which (if the estimate reaches fruition) will result in the Emergency Reserve having a cash balance of $34.2 million in fiscal year 2019. • After a successful fiscal year of ratings actions, the trend has continued in fiscal year 2018 with the outlook upgrade of the Sewer bonds by Fitch in October 2018. The outlook upgrade was primarily due to a $132.5 million defeasance of $159.8 million in Sewer debt. Management is evaluating whether to defease the remainder of the debt in fiscal year 2020. • The Bus Rapid Transit System (BRT) became active in February 2018. The anticipated additional ridership generated by the BRT is expected to accelerate economic growth in the BRT corridors. • The Southeast Surface Water Treatment Plant became operational in September 2018. The plant will allow the City to make use of all the river water allotments it possesses, thereby reducing the drawdown of ground water that is currently used to meet Fresno’s water needs. • Both Ulta and Amazon opened Fresno fulfillment centers in 2018, while the Gap expanded its facilities to include a fulfillment center. The facilities are initially employing about 3,000 full- time, with the potential to employ 5,000 full-time. These facilities are expected to generate property and sales tax for the City's use. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 26 MANAGEMENT'S DISCUSSION & ANALYSIS In spite of all the positive momentum for the City’s finances, there are areas of concern that will need to be addressed in the upcoming fiscal years. • As was the case in fiscal year 2017, the type of revenue being received remains problematic for the long-term financial health of the organization. Revenues (in thousands) Category FY 2017 FY 2018 Change ($)Change (%) Charges for Services $388,950 $370,231 $(18,719)-4.8% Operating Grants $62,203 $49,427 $(12,776)-20.5% Capital Grants $92,162 $108,154 $15,992 17.4% General Revenues $260,967 $271,875 $10,908 4.2% As the table shows, grant revenues (Operating and Capital Grants combined) still made up almost 20% of the City's revenues, which is slightly up from the percentage of total revenues that grants made up in fiscal year 2017. Even more concerning is that grant revenues increased while City-controlled revenue sources (Charges for Services and General Revenues) fell in fiscal year 2018. The continued reliance on grant revenues to fund operations and capital needs is likely to continue to limit the organization in its delivery of services to the City's residents. • At the Citywide level, liabilities increased by $116.2 million (8.2%) from fiscal year 2017’s figure of $1,415.1 million. Most of the growth was in Long-Term Liabilities Due in More than One Year, or in other words, debt.While revenue streams are currently sufficient to address these Long-Term Liabilities, the City must continue to be vigilant about the growth of its Long-Term Liabilities. • While the Emergency Reserve cash balance has grown, it is still below where it should be for an organization of the City’s size. As noted previously, the Emergency Reserve had a cash balance of $23.9 million as of June 30, 2018. Given that an average payroll for the General Fund is about $7.8 million every two weeks, the anticipated Emergency Reserve cash balance represents a little over three General Fund payrolls. Thus, the need to continue to build the Emergency Reserve remains in spite of the progress that has been made thus far. • The Convention Center saw a decline in both event days and attendance during fiscal year 2018. The decline was due to the cancellation of several events, most notably, the circus. An additional drop in event days and attendance is expected in fiscal year 2019 with the departure of the state's Future Farmers of America conference. This decline in usage and corresponding revenues is distressing, particularly because the Convention Center requires the revenues to fund capital improvements on facilities that are showing their age. The challenge of addressing this situation is one that policymakers will need to confront sooner rather than later. • The City has not made much progress on addressing a large amount of deferred maintenance that exists with most of its facilities, particularly those funded through General Revenues. A challenge going forward will be to find the funds and the support of the governing body to address this deferred maintenance backlog. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 27 MANAGEMENT'S DISCUSSION & ANALYSIS While challenges remain, management believes that there are many more positive factors than challenges. Key among those factors is the commitment to the balanced approach of financial management that has been observed in the past few years. This balance includes: 1) restore services; 2) invest in deferred maintenance; 3) pay off debt; and 4) fund reserves for future economic downturns. Management believes that continued adherence to this approach will result in a continuation of the financial progress that has been made. Conclusion Fiscal year 2018’s results can be viewed as maintaining the previous fiscal year's gains, but not improving on them. While revenues were slightly down at the Citywide level, expenses were flat. Thus, the impact on the organization as a whole was minimal. Still, some funds (particularly the General Fund) saw expenses rise faster than revenues. Given this result, it is clear that there is a danger that the lessons of the Great Recession are being forgotten and that the focus is on immediate needs more than on fiscal prudence. Yet, it was that fiscal prudence that allowed the City to get through the effects of the Great Recession and bring it to the financial position it currently enjoys. The challenge with this organization , as it has been for years, is to maintain fiscal discipline so that it can continue providing services in an effective and efficient manner in years when the finances are strong, when they are stable, and even when they decline. REQUESTS FOR INFORMATION This financial report is designed to provide citizens, taxpayers, customers, investors and creditors with a general overview of the City’s finances and to demonstrate the City’s accountability for the money it receives. Below is the contact information for questions about this report or requests for additional financial information. Documents can be made accessible in alternative ADA compliant formats upon request. To request documents in alternative ADA Compliant formats, contact Lilly Banuelos at Lilly.Banuelos@fresno.gov or (559) 621-7071. CITY OF FRESNO Office of the Controller/Finance Department 2600 Fresno Street, Room 2156 Fresno, California 93721-3622 www.fresno.gov 28 This page intentionally left blank 29 This page intentionally left blank 30 CITY OF FRESNO, CALIFORNIA Statement of Net Position June 30, 2018 Primary Government Governmental Activities Business-Type Activities Total Assets Cash and Investments $193,681,650 $198,937,484 $392,619,134 Accounts Receivables, Net 81,997,029 47,046,065 129,043,094 Internal Balances 19,828,653 (19,828,653)— Inventories 1,106,258 6,554,148 7,660,406 Prepaid Items 2,026,926 667,749 2,694,675 Other Assets 1,427,541 2,023,502 3,451,043 Property Held for Resale 4,792,730 —4,792,730 Restricted Cash 2,320,922 293,457,263 295,778,185 Restricted Interest Receivable —436,552 436,552 Loans Receivables, Net 77,485,861 29,545,249 107,031,110 Net Pension Asset 256,562,417 61,657,116 318,219,533 Capital Assets: Not Being Depreciated 322,234,255 589,790,752 912,025,007 Net of Accumulated Depreciation 633,684,174 1,152,297,149 1,785,981,323 Total Assets 1,597,148,416 2,362,584,376 3,959,732,792 Deferred Outflows of Resources Charge on Refunding 4,863,913 1,627,268 6,491,181 Deferred Pensions 64,152,598 10,554,339 74,706,937 Deferred OPEB 1,711,333 695,086 2,406,419 Total Deferred Outflows of Resources 70,727,844 12,876,693 83,604,537 Liabilities Accrued Liabilities 16,969,945 34,158,877 51,128,822 Unearned Revenue 6,609,914 52,092,531 58,702,445 Deposits from Others 20,522 16,584,651 16,605,173 Other Liabilities —5,660,201 5,660,201 Long-Term Liabilities: Due Within One Year 66,525,785 29,720,773 96,246,558 Due in More than One Year 482,953,435 819,958,827 1,302,912,262 Total Liabilities 573,079,601 958,175,860 1,531,255,461 Deferred Inflows of Resources Pension Revenue Applicable to Future Years 69,371,382 12,424,037 81,795,419 Unamortized OPEB Expense 14,330,020 5,820,357 20,150,377 Total Deferred Inflows of Resources 83,701,402 18,244,394 101,945,796 Net Position Net Investment in Capital Assets 796,241,684 958,169,340 1,754,411,024 Restricted for: General Government 84,100 —84,100 Public Protection 6,384,011 —6,384,011 Public Ways and Facilities 62,610,488 —62,610,488 Culture and Recreation 4,603,245 —4,603,245 Community Development 97,791,175 —97,791,175 Unrestricted 43,380,554 440,871,475 484,252,029 Total Net Position $1,011,095,257 $1,399,040,815 $2,410,136,072 The notes to the financial statements are an integral part of this statement. 31 CITY OF FRESNO, CALIFORNIA Statement of Activities Year Ended June 30, 2018 Net (Expense) Revenue and Changes in Net Position Program Revenue Primary Government Operating Capital Charges for Grants and Grants and Governmental Business-Type Functions/Programs Expenses Services Contributions Contributions Activities Activities Total Primary Government Governmental Activities General Government $31,319,305 $17,170,595 $505,733 $—$(13,642,977)$—$(13,642,977) Public Protection 206,163,354 32,274,607 4,575,026 4,730,790 (164,582,931)—(164,582,931) Public Ways and Facilities 76,288,903 21,008,920 16,041,708 31,971,533 (7,266,742)—(7,266,742) Culture and Recreation 19,770,901 3,935,049 3,207,637 1,890,830 (10,737,385)—(10,737,385) Community Development 30,411,774 23,033,281 2,157,891 (8,694)(5,229,296)—(5,229,296) Interest on Long-term Debt 14,412,996 ———(14,412,996)—(14,412,996) Total Governmental Activities 378,367,233 97,422,452 26,487,995 38,584,459 (215,872,327)—(215,872,327) Business-Type Activities — Water System 73,677,235 107,377,135 1,435,231 4,121,115 —39,256,246 39,256,246 Sewer System 65,990,630 81,650,518 —8,042,456 —23,702,344 23,702,344 Solid Waste Management 30,352,573 30,100,375 335,040 ——82,842 82,842 Transit 53,937,007 10,746,028 20,325,254 50,742,458 —27,876,733 27,876,733 Airports 31,192,301 29,633,519 843,972 4,413,491 —3,698,681 3,698,681 Fresno Convention Center 8,855,395 3,317,795 ———(5,537,600)(5,537,600) Community Sanitation 10,077,306 9,422,010 ———(655,296)(655,296) Parks and Recreation 283,179 323,496 ———40,317 40,317 Stadium 2,709,649 237,967 —2,250,000 —(221,682)(221,682) Total Business-Type Activities 277,075,275 272,808,843 22,939,497 69,569,520 —88,242,585 88,242,585 Total Primary Government $655,442,508 $370,231,295 $49,427,492 $108,153,979 $(215,872,327)$88,242,585 $(127,629,742) General Revenues: Taxes and Licenses: Property Taxes 130,108,898 —130,108,898 Sales Taxes - Shared Revenues 85,511,677 —85,511,677 Franchise Taxes 14,810,807 —14,810,807 Business Tax 20,982,240 —20,982,240 Room Tax 13,935,727 —13,935,727 Other Taxes 2,304,305 —2,304,305 Investment Earnings 1,348,533 2,613,572 3,962,105 Gain on Sale of Capital Assets 223,090 36,520 259,610 Special Item - Loss on Receivable/Transfer of Assets (Note 13)(8,152,027)—(8,152,027) Transfers (4,820,111)4,820,111 — Total General Revenues and Transfers 256,253,139 7,470,203 263,723,342 Change in Net Position 40,380,812 95,712,788 136,093,600 Net Position - Beginning 984,701,351 1,308,564,173 2,293,265,524 Cumulative Effect of Accounting Change (13,986,906)(5,236,146)(19,223,052) Net Position - Beginning, Restated 970,714,445 1,303,328,027 2,274,042,472 Net Position - Ending $1,011,095,257 $1,399,040,815 $2,410,136,072 The notes to the financial statements are an integral part of this statement. 32 This page intentionally left blank 33 This page intentionally left blank 34 CITY OF FRESNO, CALIFORNIA Balance Sheet Governmental Funds June 30, 2018 General Fund Grants Special Revenue Fund Other Governmental Funds Total Governmental Funds ASSETS Cash and Investments $35,970,520 $2,166,620 $86,311,700 $124,448,840 Receivables, Net 17,369,309 7,684 747,893 18,124,886 Grants Receivable 340,008 7,500,105 34,909 7,875,022 Intergovernmental Receivables 31,189,143 —3,253,693 34,442,836 Due From Other Funds 4,562,927 2,196,359 984,466 7,743,752 Advances to Other Funds, Net 3,919,160 16,561,298 516,920 20,997,378 Property Held for Resale ——4,792,730 4,792,730 Restricted Cash 1,640,367 —8,467 1,648,834 Loans, Notes, Leases, Other Receivables, Net —56,971,703 20,514,158 77,485,861 Total Assets $94,991,434 $85,403,769 $117,164,936 $297,560,139 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities Accrued Liabilities $6,521,295 $1,845,319 $2,412,991 $10,779,605 Unearned Revenue 2,042,759 4,228,315 10,392 6,281,466 Due to Other Funds 748,568 3,684,066 1,522,221 5,954,855 Advances From Other Funds 3,402,071 —62,208 3,464,279 Deposits From Others 16,522 —4,000 20,522 Total Liabilities 12,731,215 9,757,700 4,011,812 26,500,727 Deferred Inflows of Resources Unavailable Revenue - Property Tax 8,330,165 ——8,330,165 Unavailable Revenue - Sales Tax 4,946,911 ——4,946,911 Unavailable Revenue - Other 17,105,163 6,984,726 301,083 24,390,972 Total Deferred Inflows of Resources 30,382,239 6,984,726 301,083 37,668,048 Fund Balances Nonspendable 3,919,160 ——3,919,160 Restricted 15,564 69,470,508 96,736,569 166,222,641 Committed 25,564,824 ——25,564,824 Assigned 2,845,150 —16,115,472 18,960,622 Unassigned 19,533,282 (809,165)—18,724,117 Total Fund Balances 51,877,980 68,661,343 112,852,041 233,391,364 Total Liabilities, Deferred Inflows of Resources and Fund Balances $94,991,434 $85,403,769 $117,164,936 $297,560,139 The notes to the financial statements are an integral part of this statement. 35 CITY OF FRESNO, CALIFORNIA Reconciliation of the Governmental Funds Balance Sheet to the Statement of Net Position June 30, 2018 Total Governmental Fund Balances $233,391,364 Amounts reported for Governmental Activities in the Statement of Net Position are different because: The Net Pension Asset is not a current financial resource, and therefore, is not reported in the funds.256,562,417 Capital assets used in governmental activities are not current financial resources, and therefore, are not reported in the funds.955,918,429 Prepaids in governmental activities are not current financial resources, and therefore, are not reported in the funds.2,026,926 Deferred outflows of resources reported in the Statement of Net Position 70,727,844 Accrued Interest on long-term debt is not accrued in the funds, but rather, it is recognized as an expenditure when due.(2,240,249) Long-Term liabilities, including bonds payable, are not due and payable in the current period and, therefore, are not reported in the funds.(538,733,040) Deferred inflows of resources reported in the Statement of Net Position (46,033,354) Prepaid bond insurance and original issue premium and discount represent costs associated with the issuance of long-term debt, which are deferred and amortized over the period the debt is outstanding. These costs are reported as expenditures of the current period in the funds.(9,318,639) Internal service funds are used by management to charge the costs of various activities, such as fleet and insurance to individual funds. Assets and liabilities of certain internal service funds are included in governmental activities in the Statement of Net Position.88,793,559 Net Position of Governmental Activities $1,011,095,257 The notes to the financial statements are an integral part of this statement. 36 CITY OF FRESNO, CALIFORNIA Statement of Revenues, Expenditures and Changes in Fund Balances Governmental Funds Year Ended June 30, 2018 General Fund Grants Special Revenue Fund Other Governmental Funds Total Governmental Funds Revenues Taxes $263,818,444 $—$25,321,723 $289,140,167 Licenses and Permits 7,829,062 ——7,829,062 Intergovernmental 5,305,967 29,614,469 4,398,113 39,318,549 Charges for Services 25,958,979 39,330 25,295,661 51,293,970 Fines 3,872,018 ——3,872,018 Use of Money and Property 874,648 (557,407)987,477 1,304,718 Miscellaneous 1,774,722 (342,136)3,071,050 4,503,636 Total Revenues 309,433,840 28,754,256 59,074,024 397,262,120 Expenditures Current: General Government 20,161,405 99,356 1,024,102 21,284,863 Public Protection 207,935,639 4,122,207 8,984,746 221,042,592 Public Ways and Facilities 8,032,553 5,306,802 28,342,848 41,682,203 Culture and Recreation 13,960,449 1,895,153 2,401,451 18,257,053 Community Development 24,103,629 4,770,461 2,608,882 31,482,972 Capital Outlay 11,196,068 11,941,788 8,262,912 31,400,768 Debt Service: Principal 2,099,129 —15,469,321 17,568,450 Interest 320,860 —14,430,871 14,751,731 Total Expenditures 287,809,732 28,135,767 81,525,133 397,470,632 Excess (Deficiency) of Revenues Over (Under) Expenditures 21,624,108 618,489 (22,451,109)(208,512) Other Financing Sources (Uses) Transfers In 4,551,281 2,852,096 41,993,243 49,396,620 Transfers Out (40,617,968)(5,456,095)(11,343,455)(57,417,518) Capital Lease Financing 3,161,984 ——3,161,984 Sale of Capital Assets 113,572 —109,093 222,665 Total Other Financing Sources (Uses)(32,791,131)(2,603,999)30,758,881 (4,636,249) Special Item Loss on Receivable (Note 13)(8,152,027)——(8,152,027) Net Changes in Fund Balances (19,319,050)(1,985,510)8,307,772 (12,996,788) Fund Balances - Beginning 71,197,030 70,646,853 104,544,269 246,388,152 Fund Balances - Ending $51,877,980 $68,661,343 $112,852,041 $233,391,364 The notes to the financial statements are an integral part of this statement. 37 CITY OF FRESNO, CALIFORNIA Reconciliation of the Statement of Revenues, Expenditures and Changes in Fund Balances of Governmental Funds to the Statement of Activities Year Ended June 30, 2018 Net change in fund balances - total governmental funds $(12,996,788) Amounts reported for governmental activities in the Statement of Activities are different because: Governmental funds report capital outlays as expenditures. However, in the Statement of Activities the cost of those assets is allocated over their estimated useful lives and reported as depreciation expense. This is the amount by which capital outlays of $42,738,629 were exceeded by depreciation of $46,218,029 in the current period.(3,479,400) Some expenses, retention payable, and Net OPEB Liability 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.(2,413,858) In the Statement of Net Position, acquiring debt increases Long-Term Liabilities and does not affect the Statement of Activities. Additionally, repayment of principal is an expenditure in the governmental funds but reduces liability in the Statement of Net Position.14,406,468 Under the modified accrual basis of accounting used in the governmental funds, expenditures are not recognized for transactions that are not normally paid with expendable available financial resources. In the Statement of Activities, however, which is presented on the accrual basis of accounting, expenses and liabilities are reported regardless of when financial resources are available. In addition, interest on long-term debt is not recognized under the modified accrual basis of accounting until due, rather than as it accrues.(3,383,435) Changes to the net pension asset and pension related deferred outflows and inflows of resources do not provide current financial resources, and therefore, are not reported in the governmental funds.40,285,634 Revenues recognized in the Statement of Activities in previous years and recognized in the governmental fund statements in the current year were more than revenues recognized in the Statement of Activities in the current year but not reported in the governmental funds as they do not provide current financial resources.1,770,924 Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and fleet, to individual funds. The net revenues of certain activities of internal service funds are reported with governmental activities in the statement of activities.6,191,267 Change in net position of governmental activities $40,380,812 The notes to the financial statements are an integral part of this statement. 38 CITY OF FRESNO, CALIFORNIA Statement of Net Position Proprietary Funds June 30, 2018 Business-Type Activities - Enterprise Funds Water System Sewer System Solid Waste Management Transit Airports Assets Current Assets: Cash and Investments $73,312,389 $53,958,807 $30,496,710 $2,189,562 $29,729,563 Interest Receivable 652,447 364,472 258,835 171,162 289,565 Accounts Receivables, Net 15,217,534 9,436,835 4,231,537 232,997 2,076,878 Grants Receivable ———4,717,151 1,600,742 Inventories 1,877,913 3,477,375 —831,358 319,858 Prepaid Items 83,154 90,549 546 68,525 324,046 Intergovernmental Receivables —700,085 —3,298,460 133,806 Due from Other Funds ———1,107,116 — Restricted Cash ————3,026,209 Total Current Assets 91,143,437 68,028,123 34,987,628 12,616,331 37,500,667 Noncurrent Assets: Restricted: Cash and Investments 48,510,348 180,814,490 2,663,471 27,548,378 15,876,506 Interest Receivable 119,883 316,669 ——— Total Restricted Assets 48,630,231 181,131,159 2,663,471 27,548,378 15,876,506 Other Assets: Other Receivables 1,302,094 7,648,945 ——— Other Assets 11,890 1,216,252 ——283,571 Net Pension Asset 12,142,095 11,289,422 7,845,412 19,044,038 4,960,373 Unamortized CVP Water Settlement 6,666,338 ———— Solid Waste Rate Payers ——13,927,872 —— Advances to Other Funds, Net 143,060 4,309,229 ——— Total Other Assets 20,265,477 24,463,848 21,773,284 19,044,038 5,243,944 Capital Assets: Land and Intangibles 30,468,771 17,512,812 849,137 2,168,536 10,074,567 Buildings, Systems and Improvements 47,789,041 561,371,368 1,801,459 23,518,960 210,151,587 Machinery and Equipment 2,682,822 10,818,264 6,541,104 81,850,134 6,456,370 Infrastructure 505,940,967 276,494,139 ——66,799,644 Construction in Progress 372,767,091 91,275,088 66,764 51,700,678 7,252,945 Less Accumulated Depreciation (223,240,233)(286,865,058)(2,384,091)(61,811,151)(123,666,085) Total Capital Assets, Net 736,408,459 670,606,613 6,874,373 97,427,157 177,069,028 Total Noncurrent Assets 805,304,167 876,201,620 31,311,128 144,019,573 198,189,478 Total Assets 896,447,604 944,229,743 66,298,756 156,635,904 235,690,145 Deferred Outflows of Resources Charge on Refunding 462,710 804,798 ——18,682 Pension Contributions 1,232,648 1,187,766 825,857 2,234,356 619,765 Deferred Outflows - Pension 659,689 634,281 444,920 1,093,910 361,047 Deferred Outflows - OPEB 115,407 110,133 75,840 245,325 58,693 Total Deferred Outflows of Resources $2,470,454 $2,736,978 $1,346,617 $3,573,591 $1,058,187 The notes to the financial statements are an integral part of this statement. 39 Business-Type Activities - Enterprise Funds Fresno Convention Center Stadium Other Enterprise Funds Total Internal Service Funds Assets Current Assets: $1,144,039 $76,846 $4,424,760 $195,332,676 $72,837,618 Cash and Investments —32,231 43,683 1,812,395 602,286 Interest Receivable 399,332 87,536 1,288,876 32,971,525 777,591 Accounts Receivables, Net ———6,317,893 —Grants Receivable 47,644 ——6,554,148 1,106,258 Inventories 88,867 —546 656,233 75,312 Prepaids ———4,132,351 —Intergovernmental Receivables ———1,107,116 2,119,884 Due from Other Funds 2,133,256 ——5,159,465 —Restricted Cash 3,813,138 196,613 5,757,865 254,043,802 77,518,949 Total Current Assets Noncurrent Assets: Restricted: 922,028 6,885,806 —283,221,027 5,748,859 Cash and Investments ———436,552 —Interest Receivable 922,028 6,885,806 —283,657,579 5,748,859 Total Restricted Assets Other Assets: ———8,951,039 —Other Receivables 218,138 276,041 17,610 2,023,502 —Other Assets ——2,735,112 58,016,452 13,464,681 Net Pension Asset ———6,666,338 —Unamortized CVP Water Settlement ———13,927,872 —Solid Waste Rate Payers ———4,452,289 —Advances to Other Funds, Net 218,138 276,041 2,752,722 94,037,492 13,464,681 Total Other Assets Capital Assets: 4,765,946 710,000 11,508 66,561,277 —Land and Intangibles 86,515,554 39,151,537 4,599,404 974,898,910 7,828,782 Buildings, Systems and Improvements 431,728 1,599,193 226,544 110,606,159 124,863,753 Machinery and Equipment ———849,234,750 —Infrastructure 116,907 —50,000 523,229,473 3,409,770 Construction in Progress (65,626,972)(16,210,833)(2,638,245)(782,442,668)(92,133,909)Less Accumulated Depreciation 26,203,163 25,249,897 2,249,211 1,742,087,901 43,968,396 Total Capital Assets, Net 27,343,329 32,411,744 5,001,933 2,119,782,972 63,181,936 Total Noncurrent Assets 31,156,467 32,608,357 10,759,798 2,373,826,774 140,700,885 Total Assets Deferred Outflows of Resources 229,307 38,042 73,729 1,627,268 —Charge on Refunding ——334,862 6,435,254 1,659,142 Pension Contributions ——150,550 3,344,397 847,885 Deferred Outflows - Pension 1,319 —28,357 635,074 164,869 Deferred Outflows - OPEB $230,626 $38,042 $587,498 $12,041,993 $2,671,896 Total Deferred Outflows of Resources The notes to the financial statements are an integral part of this statement. 40 CITY OF FRESNO, CALIFORNIA Statement of Net Position Proprietary Funds June 30, 2018 (continued) Business-Type Activities - Enterprise Funds Water System Sewer System Solid Waste Management Transit Airports Liabilities Current Liabilities: Accrued Liabilities $9,975,221 $11,372,753 $1,185,669 $3,436,010 $5,614,636 Accrued Compensated Absences and HRA 208,270 261,933 243,978 428,707 175,881 Liability for Self-Insurance ————— Unearned Revenue 5,374,457 17,655,458 268,925 28,006,113 — Due to Other Funds 155,769 168,622 526,255 112,871 27,717 Bonds Payable 5,730,000 10,090,000 ——1,740,000 Capital Lease Obligations ————— Notes Payable 2,718,153 963,854 ——— Total Current Liabilities 24,161,870 40,512,620 2,224,827 31,983,701 7,558,234 Noncurrent Liabilities Accrued Compensated Absences and HRA 1,812,672 1,650,330 1,196,719 2,626,758 1,317,179 Capital Lease Obligations ————— Liability for Self-Insurance ————— Bonds Payable 125,044,086 169,260,999 ——48,084,821 Accreted Interest Payable on Capital Appreciation Bonds ————— Notes Payable 309,179,819 51,491,755 ——— CVP Litigation Settlement 5,971,445 ———— Pollution Remediation Obligation ————576,068 Other Liabilities —5,660,201 ——— Accrued Closure Costs ——14,434,573 —— Net OPEB Liability 4,451,447 4,247,987 2,925,306 9,462,598 2,263,873 Deposits Held for Others 1,094,500 7,840,876 ——399,118 Total Noncurrent Liabilities 447,553,969 240,152,148 18,556,598 12,089,356 52,641,059 Total Liabilities 471,715,839 280,664,768 20,781,425 44,073,057 60,199,293 Deferred Inflows of Resources Unamortized Pension Expense 2,206,241 2,081,246 1,426,305 4,106,972 1,123,311 Unamortized OPEB Expense 966,372 922,202 635,059 2,054,251 491,468 Total Deferred Inflows of Resources 3,172,613 3,003,448 2,061,364 6,161,223 1,614,779 Net Position Net Investment in Capital Assets 294,199,111 439,604,803 6,874,373 97,427,157 127,262,889 Unrestricted (Deficit)129,830,495 223,693,702 37,928,211 12,548,058 47,671,371 Total Net Position (Deficit)$424,029,606 $663,298,505 $44,802,584 $109,975,215 $174,934,260 The notes to the financial statements are an integral part of this statement. 41 Business-Type Activities - Enterprise Funds Fresno Convention Center Stadium Other Enterprise Funds Totals Internal Service Funds Liabilities Current Liabilities: $1,286,973 $249,232 $277,823 $33,398,317 $4,710,651 Accrued Liabilities 21,056 —32,023 1,371,848 502,541 Accrued Compensated Absences and HRA ————34,903,966 Liability for Self-Insurance 66,669 ——51,371,622 1,049,357 Unearned Revenue 8,766 —178,918 1,178,918 3,836,058 Due to Other Funds 3,260,078 1,490,000 50,000 22,360,078 —Bonds Payable ————3,910,973 Capital Lease Obligations 270,516 ——3,952,523 —Notes Payable 4,914,058 1,739,232 538,764 113,633,306 48,913,546 Total Current Liabilities Noncurrent Liabilities 90,461 —503,177 9,197,296 4,015,152 Accrued Compensated Absences and HRA ————10,719,608 Capital Lease Obligations ————97,461,164 Liability for Self-Insurance 26,181,092 28,479,118 1,782,054 398,832,170 —Bonds Payable Accreted Interest Payable on Capital 3,960,871 ——3,960,871 —Appreciation Bonds ———360,671,574 —Notes Payable ———5,971,445 —CVP Litigation Settlement ———576,068 —Pollution Remediation Obligation ———5,660,201 —Other Liabilities ———14,434,573 —Accrued Closure Costs 50,865 —1,093,787 24,495,863 6,359,264 Net OPEB Liability 2,126,483 ——11,460,977 5,123,674 Deposits Held for Others 32,409,772 28,479,118 3,379,018 835,261,038 123,678,862 Total Noncurrent Liabilities 37,323,830 30,218,350 3,917,782 948,894,344 172,592,408 Total Liabilities Deferred Inflows of Resources ——734,085 11,678,160 2,871,801 Unamortized Pension Expense 11,042 —237,452 5,317,846 1,380,543 Unamortized OPEB Expense 11,042 —971,537 16,996,006 4,252,344 Total Deferred Inflows of Resources Net Position (3,008,700)(4,681,179)490,886 958,169,340 29,337,815 Net Investment in Capital Assets (2,939,079)7,109,228 5,967,091 461,809,077 (62,809,786)Unrestricted (Deficit) $(5,947,779)$2,428,049 $6,457,977 $1,419,978,417 $(33,471,971)Total Net Position (Deficit) Some amounts reported for Business-Type Activities in the Statement of Net Position are different due to certain Internal Service Fund assets and liabilities being included with Business-Type Activities.(20,937,602) Net position of Business-Type Activities $1,399,040,815 The notes to the financial statements are an integral part of this statement. 42 CITY OF FRESNO, CALIFORNIA Statement of Revenues, Expenses and Changes in Fund Net Position Proprietary Funds Year Ended June 30, 2018 Business-Type Activities - Enterprise Funds Water System Sewer System Solid Waste Management Transit Airports Operating Revenues: Charges for Services $107,377,135 $81,650,518 $30,100,375 $10,746,028 $24,035,217 Operating Expenses: Cost of Services 39,091,599 24,971,055 17,182,041 34,777,748 11,704,631 Administration 10,076,515 12,265,683 13,186,567 13,819,624 6,636,042 Depreciation 18,613,105 23,170,227 611,406 5,356,261 10,431,071 Total Operating Expenses 67,781,219 60,406,965 30,980,014 53,953,633 28,771,744 Operating Income (Loss)39,595,916 21,243,553 (879,639)(43,207,605)(4,736,527) Non-Operating Revenue (Expenses): Operating Grants 1,435,231 —335,040 20,325,254 843,972 Interest Income —2,046,349 176,904 —181,530 Interest Expense (6,611,892)(6,182,659)—(155,282)(2,509,728) Passenger Facility Charges ————3,419,433 Customer Facility Charges ————2,178,869 Gain (Loss) on Disposal of Capital Assets 32,520 (9,869)——— Total Non-Operating Revenue (Expenses)(5,144,141)(4,146,179)511,944 20,169,972 4,114,076 Income (Loss) Before Contributions & Transfers 34,451,775 17,097,374 (367,695)(23,037,633)(622,451) Capital Contributions 4,121,115 8,042,456 —50,742,458 4,413,491 Transfers In 99,000 —1,622,734 —— Transfers Out (428,778)(482,164)(1,054,718)(1,503,264)(208,581) Change in Net Position 38,243,112 24,657,666 200,321 26,201,561 3,582,459 Total Net Position (Deficit) - Beginning 387,003,060 639,844,052 44,256,557 85,268,450 172,192,831 Cumulative Effect of Accounting Change (1,216,566)(1,203,213)345,706 (1,494,796)(841,030) Total Net Position (Deficit) - Beginning Restated 385,786,494 638,640,839 44,602,263 83,773,654 171,351,801 Total Net Position (Deficit) - Ending $424,029,606 $663,298,505 $44,802,584 $109,975,215 $174,934,260 The notes to the financial statements are an integral part of this statement. 43 Business-Type Activities - Enterprise Funds Fresno Convention Center Stadium Other Enterprise Funds Totals Internal Service Funds Operating Revenues: $3,317,795 $237,967 $9,745,506 $267,210,541 $150,037,690 Charges for Services Operating Expenses: 3,204,537 73,437 5,502,802 136,507,850 115,882,662 Cost of Services 764,928 16,292 4,708,692 61,474,343 23,724,631 Administration 3,306,715 1,057,911 186,768 62,733,464 5,576,812 Depreciation 7,276,180 1,147,640 10,398,262 260,715,657 145,184,105 Total Operating Expenses (3,958,385)(909,673)(652,756)6,494,884 4,853,585 Operating Income (Loss) Non-Operating Revenue (Expenses): ———22,939,497 —Operating Grants 7,398 —60,006 2,472,187 713,457 Interest Income (1,579,215)(1,562,009)(66,889)(18,667,674)(301,467)Interest Expense ———3,419,433 —Passenger Facility Charges ———2,178,869 —Customer Facility Charges ———22,651 188,215 Gain (Loss) on Disposal of Capital Assets (1,571,817)(1,562,009)(6,883)12,364,963 600,205 Total Non-Operating Revenue (Expenses) (5,530,202)(2,471,682)(659,639)18,859,847 5,453,790 Income (Loss) Before Contributions & Transfers —2,250,000 —69,569,520 —Capital Contributions 5,008,247 3,181,874 267 9,912,122 4,208,272 Transfers In ——(859,174)(4,536,679)(1,562,817)Transfers Out (521,955)2,960,192 (1,518,546)93,804,810 8,099,245 Change in Net Position (5,378,470)(532,341)8,224,603 (40,307,025)Total Net Position (Deficit) - Beginning (47,354)198 (248,080)(1,264,191)Cumulative Effect of Accounting Change (5,425,824)(532,143)7,976,523 (41,571,216)Total Net Position (Deficit) - Beginning Restated $(5,947,779)$2,428,049 $6,457,977 $(33,471,971)Total Net Position (Deficit) - Ending Some amounts reported for Business-Type Activities in the Statement of Activities are different due to the net revenue (expenses) of certain Internal Service Funds being reported with Business-Type Activities.1,907,978 Change in net position of Business-Type Activities $95,712,788 The notes to the financial statements are an integral part of this statement. 44 CITY OF FRESNO, CALIFORNIA Statement of Cash Flows Proprietary Funds Year Ended June 30, 2018 Business-Type Activities - Enterprise Funds Water System Sewer System Solid Waste Management Transit Airports CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received from Customers $105,427,645 $80,313,426 $30,985,125 $9,392,570 $23,203,592 Cash Received from Interfund Services Provided 155,513 —64,771 80,882 35,372 Cash Payments (to) from Suppliers for Services (18,643,403)23,308,386 (6,289,453)(5,981,553)6,530,777 Cash Paid for Interfund Services Used (9,977,431)(8,217,754)(14,424,909)(8,068,792)(2,977,651) Cash Payments to Employees for Services (14,396,005)(14,019,035)(11,728,650)(32,828,511)(8,276,968) Cash Payments for Claims and Refunds ————— Net Cash Provided by (Used for) Operating Activities 62,566,319 81,385,023 (1,393,116)(37,405,404)18,515,122 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital Contributions 4,121,115 3,584,630 —49,574,490 4,413,491 Passenger and Customer Facility Charges ————5,598,298 Interest Payments on Capital Debt (11,981,040)(9,093,431)——(2,623,478) Proceeds from Issuance of Capital Debt 150,208,507 8,321,219 ——— Payment for Cost of Issuance ————— Principal Payments on Capital Debt-Bonds (5,465,000)(9,590,000)——(1,635,000) Principal Payments on Capital Debt-Notes (2,714,820)———— Principal Payments on Capital Lease Obligations ————— Proceeds (Loss) from Sale of Capital Assets 32,522 26,800 ——— Acquisition and Construction of Capital Assets (154,321,425)(71,255,207)—(32,080,179)(18,260,328) Net Cash Provided by (Used for) Capital and Related Financing Activities (20,120,141)(78,005,989)—17,494,311 (12,507,017) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Operating Grants 1,435,231 —270,596 27,322,632 (485,771) Borrowing Receipt from (Payment to) Other Funds ————— Transfers In 99,000 —1,622,734 —— Transfers Out (428,778)(482,164)(1,054,718)(1,503,264)(208,581) Net Cash Provided by (Used for) Non-Capital Financing Activities 1,105,453 (482,164)838,612 25,819,368 (694,352) CASH FLOWS FROM INVESTING ACTIVITIES: Interest and Dividends Received (Paid) on Investments (336,073)2,042,825 73,136 (207,620)126,676 Net Cash Provided by (Used for) Investing Activities (336,073)2,042,825 73,136 (207,620)126,676 Net Increase (Decrease) in Cash and Cash Equivalents 43,215,558 4,939,695 (481,368)5,700,655 5,440,429 Cash and Cash Equivalents, Beginning of Year 78,607,179 216,086,258 33,641,549 24,037,285 43,191,849 Cash and Cash Equivalents, End of Year $121,822,737 $221,025,953 $33,160,181 $29,737,940 $48,632,278 The notes to the financial statements are an integral part of this statement. 45 Business-Type Activities - Enterprise Funds Fresno Convention Center Stadium Other Enterprise Funds Totals Internal Service Funds CASH FLOWS FROM OPERATING ACTIVITIES: $3,383,157 $2,311,889 $9,660,301 $264,677,705 $25,910,381 Cash Received from Customers ———336,538 126,112,379 Cash Received from Interfund Services Provided (1,536,807)(52,330)(2,960,492)(5,624,875)(35,645,506)Cash Payments to Suppliers for Services —(128)(2,757,438)(46,424,103)(5,743,658)Cash Paid for Interfund Services Used (1,818,594)(14,531)(4,855,940)(87,938,234)(24,155,266)Cash Payments to Employees for Services ————(74,100,896)Cash Payments for Claims and Refunds 27,756 2,244,900 (913,569)125,027,031 12,377,434 Net Cash Provided by (Used for) Operating Activities CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: —2,250,000 —63,943,726 3,310,636 Capital Contributions ———5,598,298 —Passenger and Customer Facility Charges (1,943,756)(1,769,709)(79,396)(27,490,810)(317,662)Interest Payments on Capital Debt ———158,529,726 —Proceeds from Issuance of Capital Debt ——5,507 5,507 —Payment for Cost of Issuance (2,189,283)(1,355,000)(60,000)(20,294,283)—Principal Payments on Capital Debt-Bonds (46,437)——(2,761,257)(2,630,636)Principal payments on Capital Debt-Notes ————189,902 Principal Payments on Capital Lease Obligations ———59,322 (11,003,716)Proceeds from Sale of Capital Assets (1,123,315)—(50,000)(277,090,454)—Acquisition and Construction of Capital Assets (5,302,791)(874,709)(183,889)(99,500,225)(10,451,476) Net Cash Provided by (Used for) Capital and Related Financing Activities CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: ———28,542,688 —Operating Grants ————1,573,557 Borrowing Receipt from (Payment to) Other Funds 5,008,247 3,181,874 267 9,912,122 4,208,273 Transfers In ——(859,174)(4,536,679)(1,562,817)Transfers Out 5,008,247 3,181,874 (858,907)33,918,131 4,219,013 Net Cash Provided by (Used for) Non-Capital Financing Activities CASH FLOWS FROM INVESTING ACTIVITIES: 7,398 (25,598)55,536 1,736,280 481,900 Interest and Dividends Received (Paid) on Investments 7,398 (25,598)55,536 1,736,280 481,900 Net Cash Provided by (Used for) Investing Activities (259,390)4,526,467 (1,900,829)61,181,217 6,626,871 Net Increase (Decrease) in Cash and Cash Equivalents 4,458,713 2,436,185 6,325,589 408,784,607 71,959,606 Cash and Cash Equivalents, Beginning of Year $4,199,323 $6,962,652 $4,424,760 $469,965,824 $78,586,477 Cash and Cash Equivalents, End of Year (Continued) The notes to the financial statements are an integral part of this statement. 46 CITY OF FRESNO, CALIFORNIA Statement of Cash Flows Proprietary Funds Year Ended June 30, 2018 (Continued) Business-Type Activities - Enterprise Funds Water System Sewer System Solid Waste Management Transit Airports Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities: Operating income (loss)$39,595,916 $21,243,553 $(879,639)$(43,207,605)$(4,736,527) Adjustment to reconcile operating income (loss) to net cash provided by (used for) operating activities: Depreciation expense 18,613,105 23,170,227 611,406 5,356,261 10,431,071 Change in assets and liabilities: Decrease (increase) in accounts receivable 1,038,474 1,599,529 275,894 409,482 (588,574) Decrease (increase) in other receivables (75,102)677,763 932,503 —— Decrease (increase) in due from other funds 9,042 61,828 —(1,107,116)(67,480) Decrease (increase) in due from other governments —828,822 —(5,661,614)— Decrease (increase) in material and supplies inventory (241,225)(140,748)—(32,528)(299,858) Decrease (increase) in prepaid items (36,766)(90,549)6,584 (63,801)108,859 Decrease (increase) in net pension asset & deferred outflows (2,479,466)(2,290,506)(1,550,741)(4,697,315)(1,099,942) Decrease (increase) in advances to other funds (143,060)(3,992,055)——— Decrease (increase) in prepaid insurance 5,946 33,561 ——17,994 (Decrease) increase in accounts payable 6,596,313 41,182,885 36,240 4,997,223 14,597,649 (Decrease) increase in salaries payable (298,057)178,277 129,852 378,165 162,565 (Decrease) increase in due to other funds (40,790)(33,634)71,189 40,479 4,499 (Decrease) increase in other liabilities —(1,009,455)——— (Decrease) increase in retention payable 1 (1)35,291 75,449 — (Decrease) increase in accrued closure costs ——(1,003,480)—— (Decrease) increase in unearned revenue ——5,525,501 — (Decrease) increase in liability for self-insurance ————— (Decrease) increase in deposits 30,000 ———2,233 (Decrease) increase in pollution remediation liability ————(53,988) (Decrease) increase in Net OPEB liability (689,379)(657,869)(453,030)(1,465,437)(350,598) (Decrease) increase in deferred inflows of resources 681,367 623,395 394,815 2,047,452 387,219 Net Cash Provided by (Used For) Operating Activities $62,566,319 $81,385,023 $(1,393,116)$(37,405,404)$18,515,122 Reconciliation of Cash and Cash Equivalents to the Statement of Net Position: Cash and Investments: Unrestricted $73,312,389 $53,958,807 $30,496,710 $2,189,562 $29,729,563 Restricted - Current and Noncurrent 48,510,348 180,814,490 2,663,471 27,548,378 18,902,715 Total cash and investments 121,822,737 234,773,297 33,160,181 29,737,940 48,632,278 Less: Non-cash equivalents —13,747,344 ——— Cash and Cash Equivalents at End of Year on Statement of Cash Flows $121,822,737 $221,025,953 $33,160,181 $29,737,940 $48,632,278 Noncash Investing, Capital, and Financing Activities: Acquisition/construction of capital assets on accounts payable $4,241,645 $3,028,363 $66,764 $608,484 $1,389,793 Amortization of bond premium, discount and loss on refunding (330,132)(193,454)——(47,953) Borrowing under capital lease ————— Decrease (increase) in fair value of investments 1,349,904 (1,338,159)271,895 439,257 427,834 Developer and other capital contributions ———494,000 — Decrease in unamortized CVP water settlement receivable and decrease in CVP litigation settlement payable 2,464,878 ———— The notes to the financial statements are an integral part of this statement. 47 Business-Type Activities - Enterprise Funds Fresno Convention Center Stadium Other Enterprise Funds Totals Internal Service Funds Reconciliation of Operating Income (Loss) to Net Cash Provided by (Used for) Operating Activities: $(3,958,385)$(909,673)$(652,756)$6,494,884 $4,853,585 Operating income (loss) Adjustment to reconcile operating income (loss) to net cash provided by (used for) operating activities: 3,306,715 1,057,911 186,768 62,733,464 5,576,812 Depreciation expense Change in assets and liabilities: (58,032)2,073,922 54,410 4,805,105 59,211 Decrease (increase) in accounts receivable 2,881 ——1,538,045 —Decrease (increase) in other receivables ——14,550 (1,089,176)575,594 Decrease (increase) in due from other funds ———(4,832,792)—Decrease (increase) in due from other governments 6,864 ——(707,495)(339,465)Decrease (increase) in material and supplies inventory 1,538 —(16)(74,151)(46,095)Decrease (increase) in prepaid items ——(896,054)(13,014,024)(3,059,759)Decrease (increase) in net pension asset & deferred outflows —21,233 —(4,113,882)—Decrease (increase) in advances to other funds ——880 58,381 —Decrease (increase) in prepaid insurance 619,346 1,692 81,283 68,112,631 (195,388)(Decrease) increase in accounts payable (7,271)(186)59,731 603,076 1,034,559 (Decrease) increase in salaries payable 8,326 —(27,699)22,370 (2,202)(Decrease) increase in due to other funds ———(1,009,455)—(Decrease) increase in other liabilities ———110,740 —(Decrease) increase in retention payable ———(1,003,480)—(Decrease) increase in accrued closure costs 21,911 ——5,547,412 326,087 (Decrease) increase in unearned revenue ————3,230,262 (Decrease) increase in liability for self-insurance 82,017 ——114,250 183,185 (Decrease) increase in deposits ——(53,988)—(Decrease) increase in pollution remediation liability 1,846 —(169,391)(3,783,858)(984,835)(Decrease) increase in Net OPEB liability ——434,725 4,568,973 1,165,883 (Decrease) increase in deferred inflows of resources $27,756 $2,244,899 $(913,569)$125,027,030 $12,377,434 Net Cash Provided by (Used For) Operating Activities Reconciliation of Cash and Cash Equivalents to the Statement of Net Position: Cash and Investments: $1,144,039 $76,846 $4,424,760 $195,332,676 $72,837,618 Unrestricted 3,055,284 6,885,806 —288,380,492 5,748,859 Restricted - Current and Noncurrent 4,199,323 6,962,652 4,424,760 483,713,168 78,586,477 Total cash and investments ———13,747,344 —Less: Non-cash equivalents Cash and Cash Equivalents at End of Year on Statement $4,199,323 $6,962,652 $4,424,760 $469,965,824 $78,586,477 of Cash Flows Noncash Investing, Capital, and Financing Activities: $—$—$—$9,335,049 $128,132 Acquisition/construction of capital assets on accounts payable (302,569)(236,655)1,383 (1,109,380)—Amortization of bond premium, discount and loss on refunding ————5,644,512 Borrowing under capital lease —87,072 59,290 1,297,093 241,757 Decrease (increase) in fair value of investments ——494,000 —Developer and other capital contributions ———2,464,878 —Decrease in unamortized CVP water settlement receivable and decrease in CVP litigation settlement payable The notes to the financial statements are an integral part of this statement. 48 CITY OF FRESNO, CALIFORNIA Statement of Fiduciary Net Position Fiduciary Funds - Trust and Agency Funds June 30, 2018 Pension Trust Funds Successor Agency to the Fresno Redevelopment Agency Private- Purpose Trust Fund Agency Funds Assets Cash and Investments $4,063,113 $6,997,791 $9,526,718 Restricted Cash and Investments Held by Fiscal Agent —915,704 558,664 Total Cash and Investments 4,063,113 7,913,495 10,085,382 Receivables: Receivables for Investments Sold 2,718,157 —— Interest and Dividends Receivable 7,372,564 —18,909 Other Receivables 3,485,831 46,485 — Due from Other Governments ——793,491 Total Receivables 13,576,552 46,485 812,400 Investments, at Fair Value: Short-Term Investments 61,332,138 —— Domestic Equity 1,101,119,449 —— Corporate Bonds 277,258,738 —— International Developed Market Equities 530,218,894 —— International Emerging Market Equities 102,294,220 —— Government Bonds 326,592,597 —— Direct Lending 117,315,593 —— Real Estate 431,519,641 —— Total Investments 2,947,651,270 —— Collateral Held for Securities Lent 180,979,147 —— Capital Assets, Net of Accumulated Depreciation 1,933,304 —— Other Assets —2,295 — Prepaid Expense 75,616 —— Property Held for Resale —1,301,189 — Total Assets 3,148,279,002 9,263,464 10,897,782 Deferred Outflows of Resources Charge on Refunding —24,539 — Pension Contributions —149,914 — Total Deferred Outflows of Resources —174,453 — Liabilities Accrued Liabilities 13,402,860 145,554 2,412,395 Collateral Held for Securities Lent 180,979,147 —— Due To Other Funds ——921 Deposits Held for Others ——8,484,466 Other Liabilities 2,620,768 8,683 — Long-Term Debt: Due Within One Year —410,658 — Due in More than One Year —2,949,438 — Due To Other Funds (City of Fresno)—21,985,388 — Net Pension Liability —480,547 — Total Liabilities 197,002,775 25,980,268 10,897,782 Deferred Inflows of Resources Unamortized Pension Expense —92,082 — Net Position Restricted for Pension Benefits 2,951,276,227 —— Held in Trust for Redevelopment Dissolution —(16,634,433)— Total Net Position $2,951,276,227 $(16,634,433)$— The notes to the financial statements are an integral part of this statement. 49 CITY OF FRESNO, CALIFORNIA Statement of Changes in Fiduciary Net Position Fiduciary Funds - Trust Funds Year Ended June 30, 2018 Pension Trust Funds Successor Agency to the Fresno Redevelopment Agency Private- Purpose Trust Fund Additions Contributions: Employer $34,305,616 $— System Members 19,293,147 — Total Contributions 53,598,763 — Investment Income: Net Appreciation in Fair Value of Investments 204,919,500 — Interest 26,899,767 31,439 Dividends 23,742,512 — Other Investment Related 110,645 — Total Investment Income 255,672,424 31,439 Less Investment Expense (18,473,464)— Total Net Investment Income 237,198,960 31,439 Securities Lending Income: Securities Lending Earnings 3,683,879 — Less Securities Lending Expense (2,804,584)— Net Securities Lending Income 879,295 — Property Taxes —2,228,979 Other Income —87,201 Total Additions 291,677,018 2,347,619 Deductions Benefit Payments 118,752,739 — Refund of Contributions 1,984,195 — Redevelopment Expenses —308,569 General and Administrative Expenses 3,328,381 366,083 Enforceable Obligations —8,915 Remittances to County —1,584,226 Interest on Debt —513,840 Total Deductions 124,065,315 2,781,633 Change in Net Position 167,611,703 (434,014) Net Position - Beginning 2,783,664,524 (16,200,419) Net Position - Ending $2,951,276,227 $(16,634,433) The notes to the financial statements are an integral part of this statement. 50 This page intentionally left blank CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 51 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Note 1. Summary of Significant Accounting Policies The financial statements of the City of Fresno (City) have been prepared in conformity with accounting principles generally accepted in the United States of America (GAAP), as applied to governmental agencies. The Governmental Accounting Standards Board (GASB) is the accepted standard-setting body for establishing governmental accounting and financial reporting principles. The more significant accounting policies of the City are described below. A. Reporting Entity The City is a political subdivision chartered by the State of California and, as such, can exercise the powers specified by the Constitution and laws of the State of California. The City operates under its own Charter and is governed by a directly elected strong Mayor and a seven-member City Council (Council). The City Manager serves as the head of the administrative branch of the City and is appointed by the Mayor. As required by GAAP, these basic financial statements present the financial status of the City (the primary government) and its component units (entities for which the City is considered to be financially accountable). The blended component units, although legally separate entities, are substantially part of the City's operations. Thus, data from these units are combined with data of the primary government. A discretely presented component is not blended with the primary government, but rather is presented in separate columns. This presentation is due to the discretely presented component unit being legally separate from the City, as well as not providing its services exclusively or almost exclusively to the primary government. As a government agency, the City is exempt from both federal income taxes and state franchise taxes. B. Government-Wide and Fund Financial Statements The Government-Wide Financial Statements (the Statement of Net Position and the Statement of Activities) report information on all of the non-fiduciary activities of the primary government and its blended component units. For the most part, the effect of interfund activity has been removed from these statements. 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. The Statement of Activities demonstrates the degree to which the clearly identifiable direct expenses of a given function or segment is offset by program revenues. 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 included among program revenues are reported instead as general revenues. The accounts of the City are organized on the basis of funds. A fund is a separate accounting entity with a self-balancing set of accounts. Each fund was established for the purpose of accounting for specific activities in accordance with applicable regulations, restrictions, or limitations. Separate financial statements are provided for CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 52 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES governmental funds, proprietary funds, and fiduciary funds (though the latter are excluded from the Government-Wide Financial Statements). Major individual governmental funds and major individual enterprise funds are reported by separate columns in the Fund Financial Statements. C. Measurement Focus, Basis of Accounting, and Financial Statement Presentation The Government-Wide, Proprietary Fund, and Trust Fund 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. Grants and similar items are recognized as revenue as soon as all eligibility requirements have been met. Proprietary Funds distinguish operating revenues and expenses from non-operating items. Operating revenues and expenses generally result from providing services in connection with the fund’s principal, ongoing operations. The principal operating revenues of the City’s enterprise and internal service funds are charges to customers for sales and for services. Operating expenses for enterprise funds and internal service funds include the cost of services, administrative expenses, and depreciation on capital assets. All revenues and expenses not meeting this definition are reported as non-operating revenues and expenses. Agency Fund Financial Statements report only assets and liabilities. They use the accrual basis of accounting to recognize receivables and payables. 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. The City considers property tax revenues, local taxes, licenses, interest, and other intergovernmental revenues to be available if they are collected within 60 days of the end of the current fiscal period. All other revenue items are considered to be measurable and available only when the City receives cash. Expenditures generally are recorded when a liability is incurred. However, debt service, vacation, sick leave, claims and judgments expenditures are recorded only when payment is due. The City reports on the following major governmental funds, proprietary (enterprise) funds, and fiduciary funds: 1. Major Governmental Funds General Fund is the City’s primary operating fund. It accounts for all financial resources of the City except those required to be accounted for in another fund. Grants Special Revenue Fund accounts for grants received from federal, state, and other agencies, which are to be used for various purposes identified within the confines of the individual grant. 2. Major Proprietary (Enterprise) Funds Water System Fund accounts for the construction, operation, and maintenance of the City's water CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 53 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES distribution system. Revenues are derived from water service fees and various installation charges. Sewer System Fund accounts for the construction, operation, and maintenance of the City's sewer system. Revenues are derived from sewer service fees and various installation charges. Solid Waste Management Fund accounts for the operations of the City's residential solid waste disposal service. Revenues are primarily derived from solid waste service fees. Transit Fund accounts for the operation and maintenance of the City's mass transportation service. Primary revenue sources are rider fares, federal grants, and state operating grants. Airports Fund accounts for the City's two airport operations. Revenues are primarily derived from fees and rents. Fresno Convention Center Fund accounts for the operation and maintenance of the City's convention center. Revenues are primarily derived from fees charged for using the facilities, supplemented by General Fund support. Stadium Fund accounts for the construction, operation and maintenance of the City’s baseball stadium. Revenues are derived from the leasing of the facilities, supplemented by General Fund support. 3. Governmental Funds Nonmajor Special Revenue Funds are used to account for the proceeds of revenue sources that are restricted or committed to expenditure for specified purposes other than debt service and capital projects. Funds listed under Special Revenue Funds include High Speed Rail Fund, Fresno Revitalization Corporation Fund, Special Gas Tax Fund, Measure C Fund, Community Services Fund, Urban Growth Management (UGM) Impact Fees Fund, Low and Moderate Income Housing Fund, and Special Assessments Fund. Capital Projects Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditure for capital outlays. Debt Service Funds are used to account for and report financial resources that are restricted, committed, or assigned to expenditures for principal and interest. Numbers for City debt and Financing Authorities/Corporations debt are presented in separate columns on the financial statements. 4. Proprietary Funds Nonmajor Enterprise Funds account for operations that are financed and operated in a manner similar to private business enterprises. Costs are financed or recovered primarily through user charges. Funds listed under Nonmajor Enterprise Funds include Community Sanitation Fund and Parks and Recreation Fund. Internal Service Funds account for the financing of goods or services provided by one City department to another City department on a cost reimbursement basis. The General Services Fund CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 54 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES accounts for the activities of the equipment maintenance services, centralized telecommunications and information services. The Risk Management Fund accounts for the City’s self-insurance, including provision for losses on property, liability, workers’ compensation, and unemployment compensation. The Billing and Collection Fund accounts for the billing, collecting, and servicing activities for the Water System, Sewer System, Solid Waste Management, and Community Sanitation Funds. The Employees’ Healthcare Plan Fund and the Retirees’ Healthcare Plan Fund account for the assets held on behalf of the City of Fresno Employees’ Healthcare Plan for claim payments on behalf of qualified employees and retirees. While there is only one plan, there is separate accounting for active employees and retirees. 5. Fiduciary Funds Fiduciary Funds are used to account for resources held for the benefit of parties outside the government. Fiduciary Funds are not reflected in the Government-Wide Financial Statements because the resources of those funds are not available to support the City’s own programs. The accounting used for fiduciary funds is much like that used for other Proprietary Funds. Pension Trust Funds account for the assets held on behalf of the City of Fresno Fire and Police Retirement System and the City of Fresno Employees Retirement System for pension benefit payments to qualified employees and retirees. Pension Trust Funds are accounted for in essentially the same manner as other Proprietary Funds. • City of Fresno Fire and Police Retirement System (Fire and Police): Fire and Police was established on July 1, 1955, to provide benefits to the public safety employees and retirees of the City. Fire and Police is maintained and governed by Articles 3 and 4 of Chapter 3 of the Fresno Municipal Code. Fire and Police responsibilities include: administration of the trust fund; delivery of retirement, death and disability benefits to eligible members; administration of programs; and general assistance in retirement and related benefits. The governing board is made up of two members appointed by the Mayor, an elected police member, an elected fire member and a board-appointed member. The activity for Fire and Police is reflected within Fiduciary Funds. Separate financial statements are prepared for the Fire and Police Retirement System and may be obtained from the Retirement Office at 2828 Fresno Street, Fresno, CA 93721-3604 or at http://www.cfrs-ca.org/Fire-Police/Communications/Reports.asp. • City of Fresno Employees Retirement System (Employees): Employees was established on June 1, 1939, to provide benefits to the general employees and retirees of the City. Employees is governed by Article 5 of Chapter 3 of the Fresno Municipal Code. Employees responsibilities include: administration of the trust fund; delivery of retirement, disability, and death benefits to eligible members; administration of programs; and general assistance in retirement and related benefits. The governing board is made up of two Mayor-appointed members, two elected members and one board-appointed member. The activity for Employees is reflected within Fiduciary Funds. Separate financial statements are prepared for the Employees Retirement System and may be obtained from the Retirement Office at 2828 Fresno Street, Fresno, CA 93721-3604, or at http://www.cfrs-ca.org/Employee/Communications/Reports.asp. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 55 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Private-Purpose Trust Funds account for the custodial responsibilities that are assigned to the Successor Agency to the Redevelopment Agency with the passage of the Redevelopment Dissolution Act. Agency Funds account for assets held by the City in a custodial capacity on behalf of individuals or other governmental units. The City Departmental and Special Purpose Fund accounts for City-related trust activity, such as payroll withholding and bid deposits. The Special Assessments District Fund accounts for the receipts and disbursements for the debt service activity of bonded assessment districts within the City. Agency Funds, being custodial in nature (assets equal liabilities), do not involve the measurement of results of operations. When both restricted and unrestricted resources are available for use, it is the City’s policy to use restricted resources first, then unrestricted resources as they are needed. 6. Component Units In addition to the primary governmental unit, the City also has several component units whose functions are described below: a. Blended Component Units Although the following component units are legally separate from the City, the component units have been "blended" into the City's basic financial statements for financial reporting purposes because the governing board is substantially the same as the City Council, there is a financial benefit/burden relationship between the component unit and the City, or City management has the operational responsibility for the component unit. In addition, the component unit provides services exclusively to the primary government or the component unit’s total debt outstanding is expected to be repaid with resources of the primary government. All potential component units were evaluated, resulting in the inclusion of the following entities in the basic financial statements. Fresno Joint Powers Financing Authority (Authority): The Authority, an independent public entity created in 1988, acquires telecommunications equipment, office furniture, and streetlights; constructs facilities; and installs street improvements through the issuance of limited obligation bonds, certificates of participation and revenue bonds. The Authority currently is leasing these assets to the City. The Authority’s three member governing board, consisting of the Mayor and two Council Members, is responsible for the Authority’s fiscal and administrative decisions. The financial activity for the Authority is included in the Financing Authorities and Corporations Debt Service Fund. All lease obligations between the Authority and the City have been eliminated in the financial statements. The Authority does not issue separate financial statements. City of Fresno Employees Healthcare Plan: This component unit provides healthcare to City employees not represented by the Stationary Engineers Local and retired employees who elect CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 56 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES to be covered or are covered by the Fresno City Employees Health and Welfare Trusts (Trusts). The Trusts are self-insured trusts administered by an outside third party administrator. The activity for the Trusts is reflected within Internal Service Funds. Fresno Revitalization Corporation: The Fresno Revitalization Corporation (FRC) is a non-profit public benefit corporation created in 1995 for the purpose of developing a revitalization policy and assisting with the downtown Fresno area development, redevelopment and renewal. The organization received a substantial portion of its support from the former Redevelopment Agency (RDA) and the general public. The seven Council Members of the City and the Mayor became members of the FRC’s Governing Board on January 26, 2012. FRC Canyon Crest, LLC: FRC Canyon Crest, LLC is a special purpose limited liability company owned by the FRC. The purpose of FRC Canyon Crest, LLC was to acquire, operate, maintain, and rehabilitate a 118-unit low income multi-family complex. The complex was owned by a lender in Chicago as a result of a foreclosure of the previous owner. On March 4, 2010, the City Council approved the award of $2.7 million in Neighborhood Stabilization Program (NSP) set aside funds to the FRC to acquire the property. FRC Canyon Crest, LLC acquired the property, while the RDA guaranteed the loan from the seller. The RDA also provided administrative, financial, and technical support to FRC Canyon Crest, LLC in the acquisition and operation of the property through a contractual services agreement. The Agency Loan Guarantee and Operating Agreement also contained a Declaration of Restrictions creating the affordability covenants and long-term maintenance and operating restrictions, which were recorded against and run with the property. The RDA and FRC Canyon Crest, LLC marketed the property for sale upon rehabilitation and stabilization to a qualified affordable housing developer for ongoing management and property improvements. In September 2011, the FRC and FRC Canyon Crest, LLC entered into an Assignment/Assumption Agreement with a developer as required by the U.S. Department of Housing and Urban Development (HUD). Final purchase of the property by the developer occurred on April 2012. However, the FRC and FRC Canyon Crest, LLC still hold a $500,000 residual receipts note on the property. As the City is the sole member of FRC Canyon Crest, LLC, the seven City Council members and the Mayor are Board members of FRC Canyon Crest, LLC, the activities of FRC Canyon Crest, LLC are blended into the FRC (and, by extension, the City) because: (1) its governing board is substantially the same as the City Council; (2) it provides services exclusively or almost exclusively for the benefit of the City even though it does not provide services directly to the City; and (3) the City is financially accountable for FRC Canyon Crest, LLC. b. Fiduciary Component Unit Successor Agency to the Redevelopment Agency of the City of Fresno (Successor Agency): The Successor Agency was created to serve as custodian for the assets and to wind down the affairs of the former RDA. The Governing Board of the Successor Agency consists of the City Council. Over the Successor Agency’s Governing Board is the Oversight Board, which is comprised of seven-member representatives from local government bodies: two City representatives CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 57 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES appointed by the Mayor, two representatives appointed by the Fresno County Board of Supervisors, one member appointed by the Fresno County Superintendent of Schools, one appointed by the Metropolitan Flood Control District (a Special District) and one appointed by the State Center Community College District. In general, the Successor Agency’s assets can only be used to pay enforceable obligations in existence at the date of dissolution (including the completion of any unfinished projects that were subject to legally enforceable contractual commitments). In future fiscal years, the Successor Agency will only be allocated revenue in the amount that is necessary to pay the estimated annual installment payments on enforceable obligations of the former RDA until all of those enforceable obligations have been paid in full and all assets have been liquidated. The City became the Housing Successor Agency and has the sole legal authority to administer the former RDA’s housing assets. The City may move forward with completing projects under contract at the time of the dissolution and liquidate surplus real estate for the purpose of distributing proceeds to taxing entities, pursuant to approval of repayment of RDA obligations to the City. The Successor Agency is a separate legal entity under Assembly Bill (AB) 1484. The Successor Agency is reported as a Private-Purpose Trust Fund in the City’s financial statements. This means that the Successor Agency’s assets are considered to be held in a trustee or agency capacity for others and cannot be used to support the City’s government’s own programs. The housing activity of the former RDA is presented within the Low and Moderate Income Housing Fund. Separate financial statements are prepared for the Successor Agency and can be obtained from the Successor Agency Office at 2344 Tulare Street, Suite 200, Fresno, CA 93721. There is no separate financial report prepared for the Housing Successor Agency. c. Discretely Presented Component Unit City of Fresno Cultural Arts Properties Corporation (COFCAP): This nonprofit public benefit corporation (an independent public entity) was created in 2010. The specific charitable and public purpose for which COFCAP was organized was to support the City and the former RDA by: (1) purchasing, developing, financing, rehabilitating, and/or demolishing vacant and blighted properties; (2) assisting the City and the RDA in combating community blight and deterioration in the City by redeveloping vacant or blighted properties; and (3) acquiring, owning, operating, and leasing property within a Low-Income Community (as defined in Section 45D(e)(1) of the Internal Revenue Code) to community businesses, which promote and support the social welfare of the City. The COFCAP was formed as part of a New Market Tax Credits financing structure that was utilized by the City to assist in lessening a debt burden. Council authorized the dissolution of the COFCAP on May 25, 2017. The concluding transactions for the COFCAP resolved on August 29, 2017. Please see Note 13 (pages 147-148) for more information. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 58 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES D. Budgetary Data The budget of the City is a detailed operating plan which identifies estimated costs and results in relation to estimated revenues. The budget includes (1) programs, projects, services, and activities to be provided during the fiscal year, (2) the estimated resources (inflow) and amounts available for appropriation, and (3) the estimated charges to appropriations. The budget represents a process through which policy decisions are made, implemented, and controlled. The City charter prohibits expending funds for which there is no legal appropriation. 1. Fund Structure The budget document is organized to reflect the fund structure of the City’s finances. Fund revenues and expenditures are rolled up to the various object levels by division and department for presentation of information to the public. Budget adoption and subsequent administration is carried out on a fund basis. 2. Basis of Accounting The City adopts an annual operating and capital budget for the General Fund, Special Revenue Funds, Debt Service Funds (except Financing Authorities/Corporations and City Debt Service), Capital Projects Funds (except Financing Authorities/Corporations) and Proprietary Funds. These budgets are adopted on a cash basis. Supplemental appropriations during the year must be approved by the City Council. Budgeted amounts are reported as amended. Encumbrances are commitments related to executed contracts for goods or services. Encumbrance accounting is utilized for budgetary control and accountability and to facilitate cash planning and control. Encumbrances outstanding at year-end are reported as part of restricted, committed or assigned fund balance. As of June 30, 2018, encumbrances totaled $2.8 million in the General Fund, $10.4 million in the Grants Special Revenue Fund and $8.9 million in the Nonmajor Governmental Funds. 3. Revenue Estimation The methodology for calculating revenue estimates varies depending on the source of revenue. Considerable weight generally has been given to historical trends. This emphasis on historical trends is used because of the composition of the Fresno economy, which differs from California in general. The General Fund is the City’s most versatile funding source, since it has the fewest restrictions. Its revenue comes from property and sales taxes, business license fees, room tax (Transient Occupancy Tax), charges for services, development fees, and revenues from other governmental agencies. Property tax is the largest revenue source in the General Fund. The main source for projecting this revenue is assessed value information received from the County of Fresno. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 59 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Revenue estimates for Enterprise and Internal Service Funds are also rooted in historical trends. As those funds are generally self-supporting (meaning, they do not generally receive tax dollars to cover operational costs), revenue estimates also take into account any adjustments to fees assessed by the Enterprise or the Internal Service Funds. Additionally, any anticipated changes in service levels are also reflected in the revenue estimates. 4. Budget Administration The budget establishes appropriation and expenditure levels. Expenditures may be below budgeted amounts at year-end due to unanticipated or mandated savings. The existence of a particular appropriation in the budget does not automatically mean funds are expended. Because of the time span between preparing the budget and the subsequent adoption by the governing body, actual expenditures are likely to be different than the budgeted amounts. Each expenditure is reviewed prior to any disbursement. These expenditure review procedures assure compliance with the City’s requirements and provide some degree of flexibility for modifying programs to meet changing needs and priorities. E. New Accounting Pronouncements - Implemented 1. GASB Statement No. 75 - Accounting and Financial Reporting for Postemployment Benefits Other Than Pensions The primary objective of GASB Statement No. 75 is to improve accounting and financial reporting by state and local governments for postemployment benefits other than pensions (other postemployment benefits or OPEB). This statement establishes standards for recognizing and measuring liabilities, deferred outflows of resources, deferred inflows of resources, and expenses. The requirements of this statement became effective for fiscal years beginning after June 15, 2017, which for the City was the fiscal year ending June 30, 2018. Implementation of this statement impacts the City's Financial Statements. The most significant impact of implementing GASB Statement No. 75 is that the net OPEB obligation was eliminated and the entire unfunded liability went on the face of the financial statements resulting in the restatement of beginning net position. Government-Wide Beginning Net Position Net Position at June 30, 2017, as previously reported $2,293,265,524 Restatement: Adjustment to incorporate OPEB as a result of implementing GASB Statement No. 75 (19,223,052) Net Position at June 30, 2017, as Restated $2,274,042,472 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 60 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2. GASB Statement No. 85 - Omnibus 2017 The objective of GASB Statement No. 85 is to address practice issues that have been identified during the implementation/application of certain GASB Statements covering a variety of topics including issues related to blending component units, goodwill, fair value measurement and application, and postemployment benefits (pensions and other postemployment benefits). The requirements of this statement became effective for reporting periods beginning after June 15, 2017, which for the City was the fiscal year ending June 30, 2018. The impact of GASB Statement No. 85 was similar to that of GASB Statement No. 75 because this statement includes information on the application of GASB Statement No. 75. 3. GASB Statement No. 86 - Certain Debt Extinguishment Issues The primary objective of GASB Statement No. 86 is to improve consistency in accounting and financial reporting for in-substance defeasance of debt by providing guidance for transactions, in which cash and other monetary assets acquired with only existing resources—resources other than the proceeds of refunding debt—are placed in an irrevocable trust for the sole purpose of extinguishing debt. The requirements of this statement became effective for reporting periods beginning after June 15, 2017, which for the City was the fiscal year ending June 30, 2018. Implementation of this statement had no impact on the City's financial statements. F. New Accounting Pronouncements - Issued But Not Yet Adopted The City is assessing what effect, if any, the implementation of the following standards will have on the City’s financial statements. 1. GASB Statement No. 83 - Certain Asset Retirement Obligations The objective of GASB Statement No. 83 is to define the accounting and financial reporting for certain asset retirement obligations (AROs), which are legally enforceable liabilities associated with the retirement of a tangible capital asset. GASB Statement No. 83 establishes the criteria for determining the timing and pattern of recognition of a liability and a corresponding deferred outflow of resources for AROs. This statement is effective for reporting periods beginning after June 15, 2018, which for the City is the fiscal year ending June 30, 2019. 2. GASB Statement No. 84 - Fiduciary Activities The objective of GASB Statement No. 84 is to improve guidance regarding the identification of fiduciary activities for accounting and financial reporting purposes and how those activities should be reported by establishing criteria for identifying the fiduciary activities of all state and local governments. This statement is effective for reporting periods beginning after December 15, 2018, which for the City is the fiscal year ending June 30, 2020. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 61 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 3. GASB Statement No. 87 - Leases The objective of GASB Statement No. 87 is to improve the accounting and financial reporting of leases by governments. GASB Statement No. 87 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. This statement is effective for reporting periods beginning after December 15, 2019, which for the City is the fiscal year ending June 30, 2021. 4. GASB Statement No. 88 - Certain Disclosures Related to Debt, including Direct Borrowings and Direct Payments The primary objective of GASB Statement No. 88 is to improve the information that is disclosed in notes to government financial statements related to debt, including direct borrowings and direct placements. It also clarifies which liabilities governments should include when disclosing information related to debt. This statement is effective for reporting periods beginning after June 15, 2018, which for the City is the fiscal year ending June 30, 2019. 5. GASB Statement No. 89 - Accounting for Interest Cost Incurred Before the End of a Construction Period The objectives of GASB Statement No. 89 are (1) to enhance the relevance and comparability of information about capital assets and the cost of borrowing for a reporting period and (2) to simplify accounting for the interest cost incurred before the end of a construction period. Such interest cost includes all interest that previously was accounted for in accordance with Statement No. 62, which is superseded by this statement. 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. This statement is effective for reporting periods beginning after December 15, 2019 , which for the City is June 30, 2021. 6. GASB Statement No. 90 - Majority Equity Interests The primary objectives of GASB Statement No. 90 are to improve the consistency and comparability of reporting a government's majority equity interest in a legally separate organization and to improve the relevance of financial statement information for certain component units. A majority equity interest that meets the definition for an investment should be measured using the equity method, unless it is held by a special-purpose government engaged only in fiduciary activities, a fiduciary fund, or an endowment or a permanent fund. Those government funds should measure the majority equity interest at fair value. This statement is effective for reporting periods beginning after December 15, 2018, which for the City is June 30, 2020. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 62 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES G. Deposits and Investments 1. Investment in the Treasurer’s Pool - The City Controller/Treasurer invests on behalf of most funds of the City in accordance with the City’s investment policy and the California Government Code Section 53601. The City Treasurer, who reports investments and earnings on a monthly basis to the City Council, manages the Treasurer’s Investment Pool. The Treasurer’s Investment Pool consists of two components: 1) pooled deposits and investments and 2) dedicated investment funds. The dedicated investment funds represent restricted funds related to bond issuances of Enterprise Funds. In addition to the Treasurer’s Investment Pool, the City has other funds that are held by trustees. These funds are related to the issuance of Non-Enterprise Fund bonds and certain loan programs of the City. 2. Investment Valuation - The City categorizes its investments at fair value measurement within the fair value hierarchy established by generally accepted accounting principles as codified in GASB Statement No. 72, Fair Value Measurement and Application. Statutes authorize the City to invest in obligations of the U.S. Treasury, agencies and instrumentalities, commercial paper, bankers' acceptances, repurchase agreements, money market funds, and the State Treasurer’s investment pool. Except as noted in the following paragraph, investments are comprised of obligations of the U.S. Treasury, agencies and instrumentalities, cash, time certificates of deposit, mutual funds, bankers' acceptances, money market accounts, and deposits in the State of California Local Agency Investment Fund (LAIF), and are stated at amortized cost. Highly liquid money market investments, guaranteed investment contracts, and other investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. 3. Investment Income - Cash balances of each of the City’s funds, except for certain Trust and Agency Funds and other restricted accounts, are pooled and invested by the City. Interest income from pooled investments is allocated to the individual funds based on the fund participant’s average daily cash balance at month end in relation to total pooled investments. The City’s policy is to charge interest to those funds that have a negative average daily cash balance at month end. Fiscal year-end deficit cash balances are reclassified as Due to Other Funds and funded by operating funds with positive cash balances. H. Loans Receivable For the purposes of the Fund Financial Statements, Special Revenue and Capital Projects Funds expenditures relating to long-term loans arising from loan subsidy programs are recorded as loans receivable net of an estimated allowance for potentially uncollectible loans. In some instances, amounts due from external participants are recorded with an offset to an allowance account. The balance of long-term loans receivable includes loans that may be forgiven if certain terms and conditions of the loans are met. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 63 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES The Financing Authorities and Corporations Debt Service Fund also reflects a note due from FBB Investment Fund, LLC in connection with the new market tax credit loans recorded by the City’s discretely presented component unit, the COFCAP. The note is recorded for the full amount and the entire outstanding principal balance plus any unpaid interest is due on the maturity date: March 1, 2040. This note was paid off with the dissolution of the COFCAP in August 2017. Please see Note 13 (pages 147-148) for further detail. I. Inventories Inventories recorded in the Proprietary Funds primarily consist of construction materials and maintenance supplies. Generally, Proprietary Funds value inventory at cost or average cost. Inventory is expensed as it is consumed (the consumption method of inventory accounting). The City uses the purchases method of accounting for inventories in governmental fund types, whereby inventory items are considered expenditures when purchased and are not reported in the balance sheet. J. Former Redevelopment Agency Property Held for Resale Property of the former RDA, some of which was allocated to Low and Moderate Income Housing (LMIH - $4.8 million) and some to the Successor Agency ($1.3 million), is being held for resale per the law dissolving the RDA. The property is recorded at the current determination of the lower of estimated cost or market as documented in its approved Long-Range Property Management Plan (LRPMP). The LRPMP addresses the anticipated disposition and use of the real properties of the former RDA. At June 30, 2018, the adjusted value of the property was $6.1 million. Property held for sale may, during the period it is held by the City, generate rental income. This rental income is recognized as it becomes due and is considered collectible. The property held by the LMIH appears on the Nonmajor Governmental Fund Financial Statements and Government-Wide Financial Statements as Property Held for Resale. Property held for resale by the Successor Agency is included in the fiduciary funds. K. Restricted Assets Restricted cash is classified as restricted assets on the Statement of Net Position because it is maintained in separate bank accounts or tracked separately in the City Treasury group of accounts. Use of the proceeds is limited by applicable bond covenants and resolutions. Restricted assets account for the principal and interest amounts accumulated to pay debt service, unspent bond proceeds and amounts restricted for future capital projects. Restricted grants and interest receivable represent cash and receivables contributed for capital projects and the associated interest. L. Capital Assets Capital assets, which include land, buildings and improvements, machinery and equipment, infrastructure, and intangible assets, are reported in the applicable Governmental Activities or Business- Type Activities columns in the Government-Wide Financial Statements and in the Private-Purpose Trust Fund (former RDA). All land not included in property held for resale is defined as Capital Assets, regardless of the acquisition cost of the land. All other acquisitions or constructions (excluding CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 64 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Infrastructure) with an initial cost of $15,000 or more (excluding bundled purchases) and having an estimated useful life in excess of two years are defined as Capital Assets. Computer purchases acquired through a capital lease are capitalized in bulk and not on an individual basis. Infrastructure with an initial cost of more than $50,000 is capitalized. Improvements that extend an asset’s life or efficiency by over 25% are also capitalized. Such assets are recorded at historical cost or estimated historical cost if purchased or constructed unless they fall below the initial cost threshold. Capitalization Asset Category Threshold Land All Land Buildings, Improvements, and Machinery & Equipment More than $15,000 Infrastructure More than $50,000 Donated capital assets are recorded at estimated fair market value at the date of donation. Capital outlay is recorded as expenditures of the General, Special Revenue, and Capital Projects Funds and as assets in the Government-Wide Financial Statements to the extent the City’s capitalization threshold is met. Interest incurred during the construction phase of capital assets of Business-Type Activities is included as part of the capitalized value of the assets constructed. Capitalized interest totaled $8.2 million during fiscal year 2018. Amortization of assets acquired under capital lease is included in depreciation and amortization. Buildings and improvements, infrastructure, and machinery and equipment of the primary government, as well as the component units, are depreciated using the straight-line method over the following estimated used lives: Asset Category Useful Life (Years) Buildings and Improvements 20 to 40 Infrastructure 15 to 55 Machinery and Equipment 3 to 12 Works of art and historical treasures held for public exhibition, education, or research in furtherance of public service, rather than financial gain, are not capitalized. These items are protected, kept unencumbered, cared for and preserved by the City. Airports Department capitalizes noise mitigation costs consistent with GASB Statement No. 51 - Intangible Assets. Water Rights are also capitalized as Intangible Assets with indefinite useful lives and no amortization. The Airports noise mitigation program consists of improvements made to properties falling within Federal Aviation Administration (FAA) designated high noise impact areas. Although the CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 65 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES properties do not belong to Airports, noise insulation windows are installed along with other devices to reduce the impact of sound decibels inside properties located within the flight path of the airport. In exchange, property owners grant aviation easements to the Airports Department with the easement having an indefinite life. Funding for the program is provided through federal grants. As of fiscal year end 2018, $17.1 million has been capitalized as an intangible asset. Included in this amount are noise mitigation assets of $1.4 million and Water Rights in the amount of $15.7 million. Capital Leases Property, plant and equipment include the following property held under lease obligation at June 30, 2018: Governmental Activities Machinery and Equipment $38,981,178 Less: Accumulated Depreciation (16,161,464) Net Machinery and Equipment $22,819,714 M. Bond Prepaid Insurance, Bond Premiums and Discounts and Accreted Interest Payable In the Government-Wide Financial Statements, as well as in the Proprietary Fund type and the Fiduciary Fund type in the Fund Financial Statements, long-term debt and other long-term obligations are reported as liabilities in the applicable Governmental Activities, Business-Type Activities, or Proprietary Fund and Fiduciary Fund Statement of Net Position. Bond prepaid insurance is reported as other assets and amortized over the term of the related debt. Bond issuance premiums and discounts are amortized over the life of the bonds using the effective interest method. Bonds payable are reported net of the applicable bond issuance premium or discount. Interest accreted on capital appreciation bonds is reported as accreted interest payable in the Proprietary Fund and as Long-Term Liabilities, due in more than one year in the Government-Wide Statements. N. Deferred Outflows of Resources - Refunding of Debt The City records deferred outflows of resources in its Proprietary, Fiduciary, and Government-Wide Financial Statements for consumption of net position that is applicable to a future reporting period. These financial statement elements are distinct from assets. Unamortized losses occurring from advance refunding of debt are reported as deferred outflows of resources. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 66 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES As of June 30, 2018, the ending balance of refunding charges yet to be amortized into expense consists of the following: Bonds Charge on Refunding Governmental Activities: Lease Revenue Bonds 2008 A, NNLB Lease Revenue Bonds 2017 A&B, NNLB $181,564 Lease Revenue Bonds 2017, CH/Garage/Met/Bee/Granite 31,536 Lease Revenue Bonds 2017, Parks Impact 1,051,910 Lease Revenue Bonds 2017, Various Capital Projects 21,855 Lease Revenue Bonds 2017, City Hall Chiller 113,008 Lease Revenue Bonds 2017, Public Safety 3,464,040 Total Governmental Activities 4,863,913 Business-Type Activities: Water System Revenue Refunding Bonds 2003 58,232 Water System Revenue Bonds 2010 404,478 Sewer System Revenue Bonds 2008 A 804,798 Airport Revenue Refunding Bonds 2013 18,682 Lease Revenue Bonds 2017, Convention Center (12,151) Convention Center Improvements 2008 E&F 117,106 Lease Revenue Bonds 2017, Stadium 38,042 Lease Revenue Bonds 2017, Exhibit Hall 124,352 Lease Revenue Bonds 2017, Golf Course 73,729 Total Business-Type Activities 1,627,268 Fiduciary Funds: Successor Agency to the Fresno Redevelopment Agency: Tax Allocation Bonds Series 2003, Mariposa Project Area 24,539 Total Charge on Refunding $6,515,720 In the Government-Wide Financial Statements and the Proprietary Fund type in the Fund Financial Statements, deferred outflows of resources are recorded for the current year employer pension contributions to the retirement systems. O. Unearned Revenues Unearned revenues arise when resources are received by the City before it has a legal claim to them (i.e., upfront grants or when the City bills certain fixed rate services in advance). Amounts billed but not yet earned are amortized over the service period. P. Deferred Inflows of Resources The City records deferred inflows of resources in its Governmental, Proprietary, and Government-Wide Financial Statements for acquisition of net position that is applicable to a future reporting period. In the Government-Wide Financial Statements and the Proprietary Fund type in the Fund Financial Statements, deferred inflows of resources are recorded for unamortized pension revenue. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 67 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES In the governmental fund statements, deferred inflows of resources consist of revenues not collected within the availability period after fiscal year-end. The deferred inflows of resources balance as of June 30, 2018, consists of the following unavailable resources: Deferred Inflows of Resources General Fund Grants Special Revenue Fund Other Governmental Funds Total Governmental Funds Property Taxes $8,330,165 $—$—$8,330,165 Sales Taxes 4,946,911 ——4,946,911 Franchise Taxes 2,811,515 ——2,811,515 Business Tax 5,331,213 ——5,331,213 Measure C and Other Tax ——266,174 266,174 Code Enforcement Revenue 6,475,883 ——6,475,883 Grant Revenue 324,444 6,984,726 34,909 7,344,079 Parking Citations, Fines and Other Revenue 2,162,108 ——2,162,108 Total $30,382,239 $6,984,726 $301,083 $37,668,048 Q. Interfund Transfers Interfund transfers are generally recorded as transfers in (out), except for certain types of transactions that are described below: 1. Charges for services are recorded as both revenues of the performing fund and expenditures of the requesting fund. Unbilled costs are recognized as an asset of the performing fund at the end of the fiscal year. 2. Reimbursements for expenditures initially made by one fund which are properly applicable to another fund are recorded both as expenditures in the reimbursing fund and as a reduction of expenditures in the fund that is reimbursed. R. Fund Balance (Deficit) In the fund financial statements, fund balances of the governmental funds are reported in a hierarchy of classifications which are based on the extent to which the City is bound to honor constraints on the specific purposes for which the amounts in the funds can be spent. Governmental fund balance classifications consist of the following: 1. Nonspendable - Includes amounts that are either not in spendable form or are legally or contractually required to be maintained intact. Not in spendable form includes items that are not expected to be converted to cash, such as inventories, prepaid items and certain long-term receivables. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 68 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 2. Restricted - Includes amounts which have constraints placed on the use of the resources. The constraints are either externally imposed by creditors, grantors, contributors, the legally enforceable laws or regulations of other governments, or by the legally enforceable laws or enabling legislation of the government itself. 3. Committed - Includes amounts that can only be used for specific purposes. Various reserves, including the City’s Emergency Reserve, are included as a committed reserve. Resolution No. 2011-64 established the Reserve Management Act which set forth policy with stringent limitations on the reserve funds. This Act increased the minimum reserve balance to 10% of the adopted budget for the next year’s General Fund appropriations. A November 16, 2012 ballot measure amended Section 1212 of the City Charter to require that the Council establish a policy for managing the City Reserves. The measure also defined several “qualifying events” under which the City’s Emergency Reserve could be used. Qualifying events were deemed to be 1) Natural catastrophe; 2) An immediate threat to health and public safety; or 3) A significant decline in General Fund Revenues, which in the opinion of the City Manager, impairs his/her ability to administer the Council adopted budget. All qualifying events must be declared by the Mayor and ratified by a super majority Council vote. The Reserve Management Act (the Act) was further amended through Resolution 2015-77, which was adopted on May 15, 2015. The amendment to the Act permitted the use of the Emergency Reserve for year-end cash balancing purposes, with the approval of the Council. On June 30, 2018, the Reserve balance identified as Committed Fund Balance was at $25.6 million. On December 7, 2017, with the adoption of Resolution No. 2017-334, the Act was again amended. The Resolution stated that any real or personal asset sale of City property with proceeds greater than $15,000, which would otherwise be deposited into the General Fund, shall instead be deposited into an Asset Sale/Special Windfall Reserve Fund. Proceeds deposited into this new fund are amortized over a five-to-ten year period and used to provide a revenue stream for General Fund items deemed necessary to deliver core City services for the protection and benefit of the citizens of Fresno. In addition to the City's Emergency Reserve, the Committed Fund Balance as of June 30, 2018 also consists of $1.6 million designated exclusively for use in a year when a 27th pay period occurs. Monies are set aside each year to fund the extra pay period that is a product of paying employees bi-weekly. The next fiscal year containing a 27th pay period is fiscal year 2028. 4. Assigned - Includes amounts that are not classified as nonspendable, restricted, or committed, but which are intended by the City to be used for specific purposes. Intent is expressed by legislation or action of the City Council, the Mayor, or the City Manager which legislation has delegated the authority to assign amounts for specific purposes. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 69 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES 5. Unassigned - The residual classification for fund balance, which includes all amounts not reported as nonspendable, restricted, committed, or assigned. The General Fund may report either a positive or negative unassigned fund balance. Unassigned amounts are available for any purpose. Other governmental funds may report only negative unassigned fund balances if expenditures incurred for specific purposes exceeded amounts restricted, committed or assigned for those purposes. When multiple classifications of resources are available for use, it is the City’s policy to use resources in the order of restricted, committed, assigned, and unassigned. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 70 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES Fund Balances of the governmental funds at June 30, 2018, consist of the following: Grants Other Total General Special Revenue Governmental Governmental Fund Fund Funds Funds Fund Balances: Nonspendable: Advances Receivable from Other Funds $3,919,160 $—$—$3,919,160 Restricted: Debt Service ——1,848,676 1,848,676 CDBG and Home Loans —59,806,646 —59,806,646 Revitalization ——165,684 165,684 Street Works ——5,707,372 5,707,372 Transportation ——13,670,607 13,670,607 Pedestrian and Bicycle Program ——1,700,942 1,700,942 Prop 42 Traffic Congestion Relief ——597,780 597,780 AD #131 UGM Reimbursement ——1,689,942 1,689,942 Forfeitures ——145,941 145,941 CASP Program Senate Bill 1186 ——252,418 252,418 Grants —39,586 —39,586 Police and Fire Grants —4,017,957 —4,017,957 Parks Grants-Senior Hot Meals 15,564 3,105,799 —3,121,363 Streets and Traffic Grants —2,004,182 —2,004,182 DARM Grants —496,338 —496,338 Impact Fees ——23,472,848 23,472,848 Special Assessment Projects ——13,945,426 13,945,426 Low to Moderate Income Housing ——33,538,933 33,538,933 Committed: 27th Payperiod Reserve 1,640,367 ——1,640,367 Emergency Reserve General Fund 23,924,457 ——23,924,457 Assigned: Public Works Maintenance 73,837 ——73,837 Cable PEG, Nonprofit Media JPA ——229 229 Median Island Maintenance ——3,700 3,700 Parks Maintenance 364,044 —696,363 1,060,407 Right of Ways Acquisition ——990,004 990,004 Street Tree Fees ——825,466 825,466 Public Protection ——1,104,521 1,104,521 Public Works Projects ——1,174,474 1,174,474 General Purpose 878,478 ——878,478 Enterprise Zone ——3,811 3,811 City Hall Improvements ——164,910 164,910 Various Capital Projects ——6,382,199 6,382,199 Miscellaneous Paving ——4,135,893 4,135,893 PD Capital Projects ——166,837 166,837 Parking Garage 7 ——482,769 482,769 Local Agency Projects ——(9,928)(9,928) Woodward & Japanese Garden Projects ——55,908 55,908 Police Administration & Patrol 640,220 ——640,220 Current Planning Development 888,571 —(67,651)820,920 Housing ——5,967 5,967 Unassigned 19,533,282 (809,165)—18,724,117 Total Fund Balances $51,877,980 $68,661,343 $112,852,041 $233,391,364 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 71 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES S. Net Position/(Deficit) Net position represents the difference between assets/deferred outflows of resources and liabilities/ deferred inflows of resources in the Government-Wide and Proprietary Fund Statements of Net Position. Net investment in capital assets consists of capital assets, net of accumulated depreciation, reduced by the outstanding balances of any borrowings used for the acquisition, construction or improvement of those assets. The restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Generally, a liability relates to restricted assets if the asset results from a resource flow that also results in the recognition of a liability or if the liability will be liquidated with the reported restricted assets. Unrestricted net position represents net position elements which are not restricted. T. Cash Flows The Statements of Cash Flows are presented for Proprietary Fund types. Cash and cash equivalents include all unrestricted and restricted highly liquid investments with original purchase maturities of three months or less. Pooled cash and investments in the City’s Treasury represent monies in a cash management pool and such accounts are similar in nature to demand deposits. U. Regulatory Assets and Liabilities At June 30, 2018, the Statement of Net Position Business-Type Activities reflects approximately $6.7 million in regulatory assets related to the Central Valley Project (CVP) Water Settlement. These assets will continue to have an impact on water rates which are to be charged to customers over approximately the next 20 years. The settlement for past deficiencies was negotiated between the City and the United States Bureau of Reclamation (USBR). Under GASB Statement No. 62, Codification of Accounting and Financial Reporting Guidance, regulatory assets represent future revenue associated with certain costs (CVP Settlement) that will be recovered from customers through the ratemaking process. A portion of the CVP Settlement Liability was reduced due to early payment to the USBR. The corresponding asset was evaluated to determine whether the regulatory asset would require accelerated amortization or write-off, which it did not. Correspondingly, if the rate of recovery is over a period other than 20 years currently anticipated, the amortization period will also be adjusted. V. Pensions For purposes of measuring the net pension asset, deferred outflows/inflows of resources related to pensions and pension revenue/expense, information about the fiduciary net position of the City’s two pension plans, City of Fresno Employees Retirement System and the City of Fresno Fire and Police Retirement System (Plans) and additions to/deductions from the Plans’ fiduciary net position have been determined on the same basis as they are reported by the Plans, which is the accrual basis of accounting. Employer and employee contributions are recognized as revenue when due. Contributions are recorded in the period the related salaries are earned and become measurable. Investment income is recognized when it is earned. The net appreciation in fair value of investments held by the Plans is recorded as an increase to investment income based on the valuation of investments at fiscal year-end, which includes CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 72 NOTE 1 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES both realized and unrealized gains and losses on investments. Retirement benefits and refunds are recognized when due and payable under the terms of the Plans. W. Estimates The preparation of financial statements, in conformity with GAAP, requires management to make estimates and assumptions that affect certain reported amounts and disclosures. Accordingly, actual results could differ from those estimates. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 73 NOTE 2 - CASH AND INVESTMENTS Note 2. Cash and Investments A. City Cash and Investments 1. Sponsored Investment Pool As part of the City’s total cash and investment portfolio, the Treasury Officer and staff, under the supervision of the Controller, manage an investment pool that includes only internal investors and is available for use by all funds. The pool is not registered with the Securities and Exchange Commission as an investment company. Investment activity is reported monthly to the City Council by posting reports to the City’s web page and annually through an investment policy submitted to the Council for review and approval. The investments are reported at fair value, which is determined monthly. Participants’ shares are determined by the daily cash balance deposited in the pool (the value of its pool shares). Investment income earned by the pooled investments is allocated to the various funds on a monthly basis, based on each fund's daily cash balance. Interest payments are paid to the various funds also on a monthly basis. The value of the pool shares is based upon amortized cost in day-to-day operations, but is adjusted to the fair value at year-end. The value of the shares is supported by the value of the underlying investments. Each fund type's portion of this pool is displayed on the financial statements as “Cash and Investments.” In addition, certain funds related to debt issues have investments with trustees. The following is a summary of cash, deposits, and investments at June 30, 2018: Primary Government Category Governmental Activities Business-Type Activities Fiduciary Funds Total Cash and Investments $193,681,650 $198,937,484 $20,587,622 $413,206,756 Restricted Cash and Investments 2,320,922 293,457,263 1,474,368 297,252,553 Pension Trust Investments at Fair Value ——2,947,651,270 2,947,651,270 Collateral Held for Securities Lent ——180,979,147 180,979,147 Total $196,002,572 $492,394,747 $3,150,692,407 $3,839,089,726 2. Cash and Deposits At year-end, the City's bank balance was $34.8 million inclusive of Successor Agency to the Fresno Redevelopment Agency Private-Purpose Trust Fund and pension trust funds. The recorded balance reflected in the June 30, 2018, financial statements was $34.0 million. The difference is due to deposits in transit and outstanding checks. 3. Fair Value Hierarchy The City categorizes its fair value measurements within the fair value hierarchy established by generally accepted accounting principles. These principles recognize a three-tired fair value hierarchy, as follows: CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 74 NOTE 2 - CASH AND INVESTMENTS • Level 1: Investments reflect prices quoted (unadjusted) for identical assets or liabilities in active markets. • Level 2: Inputs other than quoted prices included in Level 1 that are observable for an asset or liability, either directly or indirectly. Inputs to the valuation include prices that are based on a similar observable asset either directly or indirectly, which may include inputs in markets that are not considered to be active. • Level 3: Inputs are unobservable inputs for an asset or liability where there are little market activities. The inputs into the determination of fair value are based upon unobservable sources and may require estimation. The City uses the market approach as a valuation technique in the application of GASB Statement No. 72. This method uses prices and other relevant information generated by market transactions involving identical or comparable assets or group of assets. Fair value is the price that would be received to sell an asset in an orderly transaction between market participants at the measurement date. Securities listed on the fair value hierarchy are valued by the custodial bank using Data Feed purchased from Interactive Date Corporation (IDC). The Level 2 Data Feed provides end of day independent valuations utilizing rules based on logic and standard valuation techniques. It maximizes the use of relevant observable inputs including quoted prices for similar assets, benchmark yield curves, and market corroborated inputs. The following is a summary of the fair value of the City’s investments using the hierarchy previously discussed: Pooled Investments by Fair Value Level June 30, 2018 Level 1 Level 2 Federal Farm Credit Bank Bonds $31,261,390 $—$31,261,390 Federal Home Loan Bank Bonds 55,230,441 —55,230,441 Federal Home Loan Mortgage Corporation Bonds 109,863,150 —109,863,150 Federal National Mortgage Association Bonds 53,698,103 —53,698,103 U.S. Treasury Securities 88,269,250 88,269,250 — Medium Term Corporate Notes 111,146,260 —111,146,260 Negotiable Certificate of Deposits 4,979,168 —4,979,168 Total Pooled Investments by Fair Value 454,447,762 88,269,250 366,178,512 Pooled Investments Not Subject to the Fair Value Hierarchy State Local Agency Investment Fund 9,960,429 Time Deposits 4,400,000 Money Market Funds 45,477,701 Total Pooled Investments Not Subject to the Fair Value Hierarchy 59,838,130 Total Pooled Investments 514,285,892 Investments Held Outside the Treasurer's Pool by Fair Value Level U.S. Treasury Securities 138,313,757 138,313,757 Investments Held Outside the Treasurer's Pool Not Subject to the Fair Value Hierarchy Guaranteed Investment Contracts 13,748,142 Money Market Mutual Funds 10,065,766 Total Investments Held Outside the Treasurer's Pool Not Subject to the Fair Value Hierarchy 23,813,908 Total Investments Held Outside the Treasurer's Pool 162,127,665 Grand Total of Investments $676,413,557 $226,583,007 $366,178,512 Note: There are no level 3 investments CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 75 NOTE 2 - CASH AND INVESTMENTS According to GASB Statement No. 72, money market investments and participating interest- earning investment contracts that have a remaining maturity at the time of purchase of one year or less should be measured at amortized cost, and as such, are not shown in the fair value hierarchy. Additionally, the City's investment in LAIF is not presented, as the amount available for withdrawal is based on the amortized cost. 4. Cash, Deposits, and Investments Cash includes amounts in demand and time deposits. Investments are reported in the accompanying financial statements at fair value, except for certain certificates of deposit and investment contracts that are reported at cost because they are not transferable and they have terms that are not affected by changes in market interest rates. Changes in fair value that occur during a fiscal year are recognized as income from property and investments. Income from property and investments includes interest earnings; changes in fair value; any gains or losses realized upon the liquidation, unrealized gains and losses, maturity, or sales of investments; property rentals and the sale of City owned property. 5. Investments Authorized by the California Government Code and the City’s Investment Policy The City maintains a formal investment policy, which is adopted annually by the City Council. All investments held in the Treasurer's Pool are consistent with the City's investment policy objectives of preservation of principal, adequacy of liquidity, and achievement of an average market rate of return. The policy addresses the soundness of financial institutions in which the City will deposit funds, types of investment instruments as permitted by the California Government Code, and the percentage of the portfolio that may be invested in certain instruments with longer terms to maturity. A copy of the City’s current investment policy can be found at www.fresno.gov/finance/ investmentpolicy.pdf. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 76 NOTE 2 - CASH AND INVESTMENTS The following graphs depict the allocation of the Treasury Pool’s assets among the various authorized investments, as well as maturity periods, as of June 30, 2017 and June 30, 2018: CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 77 NOTE 2 - CASH AND INVESTMENTS City of Fresno Treasurer's Pool Maturity Schedule 6. Investments Authorized by Debt Agreements Investment of debt proceeds held by bond trustees is governed by provisions of the debt agreements, rather than the general provisions of the California Government Code or the City’s investment policy. Investments held outside the Treasurer's Pool consist mainly of required reserve funds for various bond issues. They are held by trustees, and are not available for the City's general expenditures. Investment agreements are used for the investment of bond proceeds in accordance with the permitted investment provisions of the specific bond indentures, which are prepared in accordance with numerous safeguards to reduce the risk associated with a provider’s ability to meet its contractual obligations. The City has invested bond trust monies into securities with maturity periods of one to three years under a “ladder” approach to investing. Such a structure allows for reinvestment in the short-term until interest rates begin to rise. Staff believes that investing in the long-term at this time would commit the City into low earnings, instead of taking advantage of opportunities in case rates begin to rise. During fiscal year 2018, total interest of $2.7 million was earned from the following instruments: • Guaranteed Investment Contracts - $1.8 million • Federal Agency Bonds - $0.7 million • Money Market Funds - $0.2 million CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 78 NOTE 2 - CASH AND INVESTMENTS The City also invested the $116 million that has been placed in escrow for the upcoming defeasance of the 2008 Sewer Bonds. These funds were invested in Federal Housing securities that had a duration of 12 months. The investment of these escrowed monies had earned $996,305 in interest as of June 30, 2018. B. Types of Risk Associated with the Treasury Pool’s Investments 1. Investment Risk The City invests in no derivatives other than structured (step-up) notes, which guarantee coupon payments. These are minimal risk instruments. All investments are held by a third-party custodian in the City’s name. 2. Deposit and Investment Risk The risk disclosures below apply to the City's internal investment pool and deposits as well as investments held by trustees for debt service funds or bond proceeds. Portfolio investments are exposed to four main types of risk: concentration, interest rate, default, and custodial risk. Deposits are exposed primarily to custodial credit risk. 3. Concentration of Credit Risk The investment policy of the City contains limitations on the amount that can be invested in any one issuer, which are more restrictive than those stipulated by the California Government Code. While the State has no limit on the percentage of the Portfolio that can be invested in a single U.S. Government Agency Security, the City’s Investment Policy limits investment in any one issuer to 50% of the Portfolio. Also, while the State limits investments to 30% of the Portfolio for any single issuer of Medium Term Notes, the City's Investment Policy limits investments to 20% of the Portfolio invested in any single issuer. Investments in any one issuer (other than U.S. Treasury securities, money market funds, and external investment pools) that represent 5% or more of the total Treasurer’s Pool investments or investments with trustees are as follows: Treasurer's Pool Investments Issuer Investment Type Amount % of Total Treasurer's Pool Investments: Federal Farm Credit Bank U.S. Government Agency $31,261,390 5.69% Federal Home Loan Bank U.S. Government Agency 55,230,441 10.06% Federal Home Loan Mortgage Corp. (FHLMC)U.S. Government Agency 109,863,150 20.01% Federal National Mortgage Association (FNMA)U.S. Government Agency 53,698,103 9.78% $250,053,084 45.54% Investments with Trustees: FSA Capital Management Services, LLC Guaranteed Investment Contract $13,748,142 8.48% 4. 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 will be CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 79 NOTE 2 - CASH AND INVESTMENTS the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer term investments. Another way the City mitigates this risk is by timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time to provide the cash flow and liquidity needed for operations. The City monitors the interest rate risk inherent in its portfolio by measuring the weighted average maturity of its portfolio. The Investment Policy limits the weighted average maturity of the Portfolio to three years, except for debt agreements held by trustees which are governed by the indentures and may be longer. Interest rate risk for the Treasurer’s Pool and for investments with trustees is disclosed in the following table. As of June 30, 2018, the City had the following cash and investments in its portfolio: Investment Maturities Treasurer's Pool Fair Value Less than 1 Year 1 to 5 Years 5 to 10 Years More than 10 Years Cash Accounts $34,795,950 Treasurer's Pool Investments U.S. Government Agencies: Federal Farm Credit Bank 31,261,390 $—$31,261,390 $—$— Federal Home Loan Bank 55,230,441 —55,230,441 —— Federal Home Loan Mortgage Corp.109,863,150 —109,863,150 —— Federal National Mortgage Association 53,698,103 —53,698,103 —— Subtotal of U.S. Government Agencies 250,053,084 —250,053,084 —— U.S. Treasury Securities 88,269,250 —88,269,250 —— Medium Term Corporate Notes 111,146,260 —111,146,260 —— Negotiable Certificate of Deposit 4,979,168 4,979,168 ——— State Local Agency Investment Fund (CA LAIF)9,960,429 9,960,429 ——— Time Deposits 4,400,000 4,400,000 ——— Money Market Mutual Funds 45,477,701 45,477,701 ——— Total Treasurer's Pool 549,081,842 $64,817,298 $449,468,594 $—$— Investments Held Outside the Treasurer's Pool Debt Service Funds/Bond Proceeds: Guaranteed Investment Contracts 13,748,142 $—$—$—$13,748,142 Mutual Funds 10,065,766 10,065,766 ——— U.S. Government & Agency Securities 138,313,757 138,313,757 ——— $148,379,523 $—$—$13,748,142 Other Deposits 5,118,385 Outstanding Checks (6,806,601) Deposits in Transit 938,018 Pension Trust Assets (See Separate CAFRs)3,128,630,417 Total Cash and Investments $3,839,089,726 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 80 NOTE 2 - CASH AND INVESTMENTS 5. Default Credit Risk Generally, default credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This risk is measured by the assignment of a rating by a nationally recognized statistical rating organization. The following table represents the minimum rating required by (where applicable) the California Government Code, the City’s investment policy, or debt agreements, and the actual rating as of year-end for each investment type: Issuer Amount Minimum Legal Rating Rating at Year-End % of Treasurer's Pool Treasurer's Pool Investments: U.S. Government Agency Securities: Federal Farm Credit Bank $31,261,390 A AA+5.69% Federal Home Loan Bank 55,230,441 A AA+10.06% Federal Home Loan Mortgage Corporation 109,863,150 A AA+20.01% Federal National Mortgage Association 53,698,103 A AA+9.78% U.S. Treasury Securities 88,269,250 A AAA 16.08% Medium Term Corporate Notes: Bank of America 4,789,250 A A-0.87% Caterprillar, Inc.4,849,550 A A 0.88% Credit Suisse Ag/Nassau 4,753,750 A A1 0.87% General Electric Corp 4,888,150 A A 0.89% HSBC USA Inc.14,907,900 A A 2.72% IBM Credit Corp 5,740,380 A A+1.05% JPMorgan Chase & Company 7,958,800 A A+1.45% Merck & Co. Inc 4,925,650 A AA 0.90% EXXON Mobil Corporation 4,974,800 A AA+0.91% Royal Bank Canada Global 30,814,920 A AA-5.61% Toyota Motor Credit Corp 12,788,860 A AA-2.33% U.S. Bancorp 4,892,050 A A+0.89% Wells Fargo Bank 4,862,200 A A-0.89% Negotiable Certificate of Deposit 4,979,168 NA Unrated 0.91% State Local Agency Investment Pool 9,960,429 NA Unrated 1.81% Time Deposits 4,400,000 NA Unrated 0.80% Money Market Mutual Funds 45,477,701 NA Unrated 8.28% Total Treasurer's Pool Investments $514,285,892 93.68% Issuer Amount Minimum Legal Rating Rating at Year-End % of Investments with Trustees Investments with Trustees: Guaranteed Investment Contracts $13,748,142 NA Unrated 8.48% Mutual Funds 10,065,766 NA Unrated 6.21% U.S. Government & Treasury Securities 138,313,757 NA AAA 85.31% Total Investments with Trustees $162,127,665 100.00% CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 81 NOTE 2 - CASH AND INVESTMENTS The City of Fresno’s Investment Policy requires that the City only invest in high quality obligations, which means only those with a rating category of “A” or better by a nationally recognized rating service. 6. 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 City maintains cash accounts at Bank of America. The City maintains separate accounts for payment of general accounts payable checks, payroll checks, and utility refund checks. Amounts in excess of $250,000 are securitized in accordance with California Government Code Section 53652. The California Government Code and the City’s investment policy contain legal or policy requirements that limit the exposure to custodial credit risk for deposits. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The market value of the pledged securities in the collateral pool must equal at least 110% of the total amount deposited by the public agencies. California law also allows financial institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the secured public deposits. The collateral pledged to cover the public fund deposits in California is held in the name of the California Collateral Pool Administrator and is held in their name by the Federal Reserve Bank as custodian. The City had no uncollateralized cash at June 30, 2018. As of June 30, 2018, the City’s deposits with institutions in excess of federal depository insurance limits were $33.6 million held in accounts collateralized in accordance with California law as described above. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to the transaction, a government will not be able to recover the value of its investment of securities that are in the possession of the counterparty. As of June 30, 2018, in accordance with the City's investment policy, none of the City's investments were held with a counterparty. All of the City's investments were held with an independent third party custodian bank. The City uses Bank of New York Trust Company (BNY) as a third- party custody and safekeeping service for its investment securities. Custodial credit risk is the risk that the City will not be able to recover the value of its investments in the event of a BNY failure. All City investments held in custody and safe-keeping by BNY are held in the name of the City and are segregated from securities owned by the bank. This is the lowest level of custodial credit risk exposure. C. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (LAIF), which is regulated by the California Government Code 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 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 82 NOTE 2 - CASH AND INVESTMENTS based on the accounting records maintained by LAIF, which are recorded on a fair value cost basis. The total amount invested by all public agencies in LAIF as of June 30, 2018, was $22.5 billion. LAIF is part of the California Pooled Money Investment Account (PMIA), which at June 30, 2018, had a balance of $88.8 billion. Of that amount, 2.67% was invested in medium-term and short-term structured notes and asset- backed securities. The average maturity of PMIA investments was 193 days as of June 30, 2018. LAIF has the following restrictions on withdrawals: (a) For same day transactions, the requesting agency must contact LAIF by 10 a.m. PST. (b) Transaction calls received after 10 a.m. are processed the following business day. (c) A requesting agency can only conduct a maximum of 15 transactions (combination of deposits and withdrawals) per month. (d) 24-hour notice is needed for withdrawals of $10 million or more. (e) The minimum transaction amount is $5,000, with amounts above the minimum transacted in increments of $1,000. (f) Prior to the funds transfer, an authorized person from the requesting agency must call LAIF to do a verbal transaction. D. Pension Trust (Retirement Systems) Deposits and Investments The investment guidelines for the City of Fresno’s Retirement Systems (Systems) reflect the duties imposed by an investment standard known as the “prudent expert rule.” The prudent expert rule includes anyone who has discretionary authority with respect to the Systems’ investments. The Systems’ Investment Policy can be found at http://www.cfrsca.org/Employee-/Investment/ Policy.asp or by contacting the Retirement Office at 2828 Fresno Street, Suite 201, Fresno, CA 93721. Northern Trust serves as custodian of the Systems’ investments. The Systems’ asset classes include U.S. Equity, International Equity, U.S. Fixed Income, International Fixed Income, Direct Lending, and Real Estate. Any class may be held in direct form, pooled form, or both. The Systems have 15 external investment managers, managing 19 individual portfolios. Investments at June 30, 2018 consist of the following: Investments at Fair Value Domestic Equity $1,101,119,449 International Developed Market 530,218,894 International Emerging Market 102,294,220 Real Estate 431,519,641 Government Bonds 326,592,597 Corporate Bonds 277,258,738 Short-Term Investments 61,332,138 Direct Lending 117,315,593 Total Investments at Fair Value $2,947,651,270 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 83 NOTE 2 - CASH AND INVESTMENTS Both Retirement Boards have established policies for investing, specifying the following target allocations with a minimum and maximum range for each of these asset classes: Asset Class Minimum Target Maximum Domestic Large Cap Equities 13.0%15.8%27.0% Domestic Small Cap Equities 2.0%7.2%9.0% International Developed Market Equities 13.0%19.0%27.0% International Emerging Market Equities 0.0%6.0%10.0% Core Fixed Income 4.0%10.0%19.0% High Yield Bonds 3.0%5.0%12.0% Core Real Estate 5.0%11.0%20.0% Value Add Real Estate/REITs 1.0%4.0%9.0% Infrastructure 0.0%4.0%10.0% MLPs 0.0%5.0%10.0% Private Equity 0.0%5.0%10.0% Direct Lending/Private Debt 0.0%8.0%10.0% Cash & Equivalents 0.0%0.0%0.0% 100.0% The Retirement Systems have investments in Tiers 1, 2, and 3 as defined under GASB Statement No. 72. For further information regarding the Retirement Systems’ classification of investment, please see the Retirement Systems’ Comprehensive Annual Financial Reports (CAFRs). Investments of the Systems are exposed to custodial credit risk, credit and interest rate risk, concentration risk, and foreign currency risk. In addition to those risks, the Systems are also exposed to credit risk and market risk associated with their derivatives investments. For a detailed description of all of the risks associated with the Systems’ investments, please see the Systems’ CAFRs which can be found at http://www.cfrs-ca.org/Employee/Communications/Reports.asp and http://www.cfrs- ca.org/Fire-Police/Communications/Reports.asp or by contacting the Retirement Office at 2828 Fresno Street, Suite 201 Fresno, CA 93721. E. Stewardship, Compliance and Accountability There have been no material violations of finance-related legal or contractual provisions. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 84 NOTE 2 - CASH AND INVESTMENTS F. Restricted Assets Restricted cash includes funds held by trustees relating to bonds payable and those amounts held by each fund for which a specific, non-operating use has been determined. Restricted interest receivable is interest earned with the trustee. Restricted assets are as follows at June 30, 2018: Cash and Investments Current and Noncurrent Interest Receivable Total Governmental Activities: General Fund $1,640,367 $—$1,640,367 Nonmajor Governmental Funds 8,467 —8,467 Internal Service Funds 672,088 —672,088 Subtotal 2,320,922 —2,320,922 Business-Type Activities Water System 48,510,348 119,883 48,630,231 Sewer System 180,814,490 316,669 181,131,159 Solid Waste Management 2,663,471 —2,663,471 Transit 27,548,378 —27,548,378 Airports 18,902,715 —18,902,715 Convention Center 3,055,284 —3,055,284 Stadium 6,885,806 —6,885,806 Internal Service Funds 5,076,771 —5,076,771 Subtotal 293,457,263 436,552 293,893,815 Fiduciary: Private-Purpose Trust Fund 915,704 —915,704 Agency Funds 558,664 —558,664 Subtotal 1,474,368 —1,474,368 Total $297,252,553 $436,552 $297,689,105 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 85 NOTE 3 - PROPERTY TAXES Note 3. Property Taxes Article XIII of the California Constitution (Proposition 13) limits ad valorem taxes on real property to 1% of value plus taxes necessary to pay indebtedness approved by voters prior to July 1, 1978. The Article also established the 1975/1976 assessed valuation as the base and limits annual increases to the cost-of- living adjustment, not to exceed 2% for each year thereafter. Property may also be reassessed to full market value after a sale, transfer of ownership, or completion of new construction. The State is prohibited under the Article from imposing new ad valorem, sales, or transaction taxes on real property. Local government may impose special taxes (except on real property) with the approval of two-thirds of the qualified electors. All property taxes are collected and allocated by the County of Fresno to the various taxing entities. Property taxes are determined annually as of January 1 and attached as enforceable liens on real property. Taxes are due November 1 and February 1 and are delinquent if not paid by December 10 and April 10, respectively. Secured property taxes become a lien on the property on January 1. Property taxes on the unsecured roll are due on the January 1 (lien date) and become delinquent if unpaid on August 31. Property tax revenues are recognized in the governmental funds in the fiscal period for which they are levied and collected, adjusted for any amounts deemed uncollectible and amounts expected to be collected more than 60 days after the fiscal year. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 86 NOTE 4 - RECEIVABLES Note 4. Receivables Receivables are presented in the financial statements net of the allowance for uncollectible accounts. The uncollectible accounts related to accounts receivable at June 30, 2018, are $2.3 million for the General Fund, $1.7 million for Water System, $1.9 million for Sewer System, $1.4 million for Solid Waste Management, $0.1 million for Airports, and $3.0 million for Other Enterprise Funds. The uncollectible accounts related to notes receivable at June 30, 2018 are $10.6 million for Grants Special Revenue Fund and $2.7 million for Other Governmental Funds. Accounts not scheduled for collection during the subsequent year are $76.6 million for Governmental notes and loans and $25.3 million for Business- Type notes and loans. The allowance for doubtful accounts is a Statement of Net Position and/or Balance Sheet account that reduces the reported amount of a receivable. Providing an allowance for doubtful accounts presents a more realistic picture of how much of the receivable is likely to be turned into cash, particularly in the near term. The amount of the allowance for each fund is a determination made by management at the end of the fiscal year through a review of past collections received on each account. This analysis includes reviewing the aging of the receivable balance, past account write-offs and other known variables. Receivables, net of amounts uncollectible, as of June 30, 2018 were as follows: Interest Accounts Receivable Grants Receivables Property Taxes Other Inter- governmental Loans Receivable Total Governmental Activities General Fund $235,557 $17,133,752 $340,008 $9,539,428 $21,649,715 $—$48,898,460 Grants Special Revenue Fund —7,684 7,500,105 ——56,971,703 64,479,492 Other Governmental Funds 547,072 200,821 34,909 —3,253,693 20,514,158 24,550,653 Internal Service Funds 485,238 132,956 ————618,194 Subtotal $1,267,867 $17,475,213 $7,875,022 $9,539,428 $24,903,408 $77,485,861 $138,546,799 Advances to Successor Agency 20,936,091 Total $159,482,890 Business-Type Activities Water System $772,330 $15,217,534 $—$—$—$7,968,432 $23,958,296 Sewer System 681,141 9,436,835 ——700,085 7,648,945 18,467,006 Solid Waste Management 258,835 4,231,537 ———13,927,872 18,418,244 Transit 171,162 232,997 4,717,151 —3,298,460 —8,419,770 Airports 289,565 2,076,878 1,600,742 —133,806 —4,100,991 Fresno Convention Center —399,332 ————399,332 Stadium 32,231 87,536 ————119,767 Other Enterprise Funds 43,683 1,288,876 ————1,332,559 Internal Service Funds 117,048 644,635 ————761,683 Subtotal $2,365,995 $33,616,160 $6,317,893 $—$4,132,351 $29,545,249 $75,977,648 Advances to Successor Agency 1,050,218 Total $77,027,866 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 87 NOTE 4 - RECEIVABLES Receivables are presented on the Statement of Net Position as follows: Governmental Activities Business-Type Activities Total Accounts Receivables, Net $81,997,029 $47,046,065 $129,043,094 Restricted Interest Receivable —436,552 436,552 Loans, Notes, Leases and Other Receivables, Net 77,485,861 29,545,249 107,031,110 Total $159,482,890 $77,027,866 $236,510,756 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 88 NOTE 5 - CAPITAL ASSETS Note 5. Property, Plant and Equipment - Capital Assets A. Citywide Capital Assets The following is a summary of capital assets as of June 30, 2018: Primary Government Governmental Activities Business-Type Activities Fiduciary Funds Total Capital Assets Not Being Depreciated: Land $260,055,039 $49,466,490 $—$309,521,529 Intangibles (Indefinite Life)—17,094,787 —17,094,787 Construction in Progress 62,179,216 523,229,475 —585,408,691 Total Capital Assets Not Being Depreciated 322,234,255 589,790,752 —912,025,007 Capital Assets Being Depreciated: Buildings and Improvements 285,839,968 974,948,911 —1,260,788,879 Machinery and Equipment 178,168,351 110,753,719 2,933,045 291,855,115 Infrastructure 1,396,211,778 849,234,750 —2,245,446,528 Total Capital Assets Being Depreciated 1,860,220,097 1,934,937,380 2,933,045 3,798,090,522 Less: Accumulated Depreciation for: Buildings and Improvements (152,185,260)(397,107,306)—(549,292,566) Machinery and Equipment (118,124,194)(63,093,693)(999,741)(182,217,628) Infrastructure (956,226,469)(322,439,232)—(1,278,665,701) Total Accumulated Depreciation (1,226,535,923)(782,640,231)(999,741)(2,010,175,895) Total Capital Assets Being Depreciated, Net 633,684,174 1,152,297,149 1,933,304 1,787,914,627 Total Capital Assets, Net $955,918,429 $1,742,087,901 $1,933,304 $2,699,939,634 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 89 NOTE 5 - CAPITAL ASSETS B. Governmental Activities Capital asset activity related to governmental activities for the year ended June 30, 2018 was as follows: Beginning Balance Increases Decreases Ending Balance Capital Assets Not Being Depreciated: Land $250,648,609 $9,406,430 $—$260,055,039 Construction in Progress 54,866,333 24,439,225 (17,126,342)62,179,216 Total Capital Assets Not Being Depreciated 305,514,942 33,845,655 (17,126,342)322,234,255 Capital Assets Being Depreciated: Buildings and Improvements 279,320,198 7,716,730 (1,196,960)285,839,968 Machinery and Equipment 157,750,936 23,807,063 (3,389,648)178,168,351 Infrastructure 1,385,734,746 11,390,466 (913,434)1,396,211,778 Total Capital Assets Being Depreciated 1,822,805,880 42,914,259 (5,500,042)1,860,220,097 Less: Accumulated Depreciation for: Buildings and Improvements (144,068,257)(8,117,003)—(152,185,260) Machinery and Equipment (113,773,352)(7,738,802)3,387,960 (118,124,194) Infrastructure (920,287,433)(35,939,036)—(956,226,469) Total Accumulated Depreciation (1,178,129,04 2)(51,794,841)3,387,960 (1,226,535,92 3) Total Capital Assets Being Depreciated, Net 644,676,838 (8,880,582)(2,112,082)633,684,174 Total Capital Assets, Net $950,191,780 $24,965,073 $(19,238,424)$955,918,429 Depreciation was charged to functions as follows: Function Depreciation Amount General Government $6,180,117 Public Protection 4,731,651 Public Ways and Facilities 36,990,305 Culture and Recreation 3,883,373 Community Development 9,395 Total Governmental Activities Depreciation Expense $51,794,841 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 90 NOTE 5 - CAPITAL ASSETS C. Business-Type Activities Capital asset activity related to Business-Type Activities for the year ended June 30, 2018 was as follows: Beginning Balance Increases Decreases Ending Balance Capital Assets Not Being Depreciated: Land $48,514,356 $952,134 $—$49,466,490 Intangibles Indefinite Life 17,094,787 ——17,094,787 Construction in Progress 398,096,759 218,887,374 (93,754,658)523,229,475 Total Capital Assets Not Being Depreciated 463,705,902 219,839,508 (93,754,658)589,790,752 Capital Assets Being Depreciated: Buildings and Improvements 922,548,072 52,549,500 (148,661)974,948,911 Machinery and Equipment 100,401,402 11,735,925 (1,383,608)110,753,719 Infrastructure 837,947,683 11,287,067 —849,234,750 Total Capital Assets Being Depreciated 1,860,897,157 75,572,492 (1,532,269)1,934,937,380 Less: Accumulated Depreciation for: Buildings and Improvements (363,584,316)(33,522,990)—(397,107,306) Machinery and Equipment (58,233,833)(6,206,799)1,346,939 (63,093,693) Infrastructure (299,435,555)(23,003,677)—(322,439,232) Total Accumulated Depreciation (721,253,704)(62,733,466)1,346,939 (782,640,231) Total Capital Assets Being Depreciated, Net 1,139,643,453 12,839,026 (185,330)1,152,297,149 Total Capital Assets, Net $1,603,349,355 $232,678,534 $(93,939,988)$1,742,087,901 Depreciation was charged to functions as follows: Function Depreciation Amount Water System $18,613,104 Sewer System 23,170,227 Solid Waste Management 611,406 Transit 5,356,264 Airports 10,431,071 Fresno Convention Center 3,306,715 Stadium 1,057,911 Other Enterprise Funds 186,768 Total Business-Type Activities Depreciation Expense $62,733,466 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 91 NOTE 5 - CAPITAL ASSETS D. Fiduciary Funds Capital asset activity related to fiduciary funds for the year ended June 30, 2018 was as follows: Beginning Balance Increases Decreases Ending Balance Capital Assets Not Being Depreciated: Construction in Progress $—$—$—$— Capital Assets Being Depreciated: Machinery and Equipment 2,924,201 8,844 —2,933,045 Less: Accumulated Depreciation for: Machinery and Equipment (721,691)(278,050)—(999,741) Total Capital Assets Being Depreciated, Net 2,202,510 (269,206)—1,933,304 Total Capital Assets, Net $2,202,510 $(269,206)$—$1,933,304 Depreciation was charged to functions as follows: Function Depreciation Amount Fire & Police Retirement System Pension Trust Funds $139,025 Employee Retirement System Pension Trust Funds 139,025 Total Business-Type Activities Depreciation Expense $278,050 E. Component Unit - City of Fresno Cultural Arts Properties Corporation Capital asset activity related to the discretely presented component unit activities for the year ended June 30, 2018 was as follows: Beginning Balance Increases Decreases Ending Balance Capital Assets Not Being Depreciated: Land $424,766 $—$(424,766)$— Capital Assets Being Depreciated: Buildings and Improvements 13,360,594 —(13,360,594)— Less: Accumulated Depreciation for: Buildings and Improvements (2,318,039)—2,318,039 — Total Capital Assets Being Depreciated, Net 11,042,555 —(11,042,555)— Total Capital Assets, Net $11,467,321 $—$(11,467,321)$— CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 92 NOTE 5 - CAPITAL ASSETS F. Construction in Progress At June 30, 2018, Construction in Progress consisted of the following: Project Title Construction Costs To Date Governmental Activities: General Street Projects $56,568,900 Regional Park Improvements 978,672 Other Miscellaneous Projects 4,631,644 Total Governmental Activities $62,179,216 Business-Type Activities: Water Capital Projects $372,767,090 Sewer/Wastewater Capital Projects 91,275,091 Airports Capital Projects 7,252,942 Transit Capital Projects 51,700,679 Miscellaneous Projects 233,673 Total Business-Type Activities $523,229,475 Total Construction in Progress $585,408,691 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 93 NOTE 6 - LONG-TERM LIABILITIES Note 6. Long-Term Liabilities A. Summary of Long-Term Liabilities The following is a summary of the City's Long-Term Liabilities as of June 30, 2018: Primary Government Governmental Activities Business-Type Activities Fiduciary Funds Total Primary Government Long-Term Debt Revenue and Other Bonds $249,520,000 $414,076,955 $—$663,596,955 Tax Allocation Bonds ——1,869,000 1,869,000 Notes Payable 2,466,214 364,624,095 1,422,251 368,512,560 Subtotal Net Principal Due 251,986,214 778,701,050 3,291,251 1,033,978,515 Accreted Interest —3,960,871 —3,960,871 Issuance Premiums (Discounts)10,746,180 7,115,293 (4,819)17,856,654 Subtotal Accreted Interest, Issuance Prem/(Disc)10,746,180 11,076,164 (4,819)21,817,525 Capital Lease Obligations 28,271,396 ——28,271,396 Total Long-Term Debt 291,003,790 789,777,214 3,286,432 1,084,067,436 Other Long-Term Liabilities Retention Payable 443,548 ——443,548 Compensated Absences and Health Retirement Arrangement (HRA)59,657,647 12,109,698 73,664 71,841,009 Net OPEB Liability *66,009,105 26,810,601 —92,819,706 Liabilities for Self-Insurance 132,365,130 ——132,365,130 CVP Litigation Settlement —5,971,445 —5,971,445 Accrued Closure Cost —14,434,574 —14,434,574 Pollution Remediation —576,068 —576,068 Total Other Long-Term Liabilities 258,475,430 59,902,386 73,664 318,451,480 Total Long-Term Liabilities Government-Wide Statement of Net Position $549,479,220 $849,679,600 $3,360,096 $1,402,518,916 Due Within One Year $66,525,785 $29,720,773 $410,658 $96,657,216 Due Within More Than One Year 482,953,435 819,958,827 2,949,438 1,305,861,700 Total Long-Term Liabilities Government-Wide Statement of Net Position $549,479,220 $849,679,600 $3,360,096 $1,402,518,916 * The implementation of GASB Statement No. 75 in fiscal year 2018, caused the beginning balances of the OPEB liabilities to be restated. Internal service funds (ISFs), except for Utility Billing and Collection, primarily serve the governmental funds. Accordingly, Long-Term Liabilities for ISFs are included as part of the above totals for governmental activities, while the long-time liabilities for Utility Billing and Collection are included as part of the totals for Business-Type Activities. Governmental Activities also reflect compensated absences which are generally liquidated by the General Fund and claims/judgments which are liquidated by Risk Management and the Employees Healthcare Plan. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 94 NOTE 6 - LONG-TERM LIABILITIES Activity of Long-Term Liabilities - Governmental Beginning Balance Additions Reductions Ending Balance Due Within One Year Governmental Activities: Bonds Payable (Revenue and Other Bonds): Lease Revenue Bonds, Series 2004 $13,880,000 $—$745,000 $13,135,000 $790,000 Lease Revenue Bonds, Series 2008 A, NNLB 2,630,000 —2,630,000 —— Lease Revenue Bonds, Series 2008 C & D Parks Projects 860,000 —860,000 —— Taxable Pension Obligation Bonds Refunding Series 2002 131,840,000 —7,595,000 124,245,000 8,085,000 Lease Revenue Bonds 2017A, City Hall Refunding, Fresno Bee Building, Granite Park, Improvements 32,105,000 —3,085,000 29,020,000 3,035,000 Lease Revenue Bonds, Series 2017A, City Hall Chilled 2,710,000 ——2,710,000 — Lease Revenue Bonds, Series 2017A Parks Projects 22,965,000 ——22,965,000 695,000 Lease Revenue Bonds, Series 2017A&B, NNLB 12,950,000 —5,000 12,945,000 2,365,000 Lease Revenue Bonds, Series 2017A, Police and Fire/Public Safety 32,065,000 ——32,065,000 1,015,000 Lease Revenue Bonds, Series 2017A, Various 12,435,000 ——12,435,000 525,000 Total Revenue and Other Bonds 264,440,000 —14,920,000 249,520,000 16,510,000 Less: Unamortized Amounts: For Issuance Premiums/(Discounts)12,097,403 —1,351,223 10,746,180 — Notes Payable: California Infrastructure Bank - City 1,714,535 —75,321 1,639,214 77,979 HUD Sec 108 Note Reg. Med Center 1997-A 270,000 —270,000 —— HUD Sec 108 Note FMAAA 365,000 —110,000 255,000 120,000 HUD Sec 108 Note Neighborhood Streets/ Parks 666,000 —94,000 572,000 100,000 Total Notes Payable 3,015,535 —549,321 2,466,214 297,979 Capital Leases 20,884,029 12,848,599 5,461,232 28,271,396 5,909,299 Total Long-Term Debt 300,436,967 12,848,599 22,281,776 291,003,790 22,717,278 Other Liabilities: Retention Payable —443,548 —443,548 443,548 Compensated Absences and Health Retirement Arrangement 55,279,732 13,377,338 8,999,423 59,657,647 8,460,993 Net OPEB Liability 60,191,663 5,817,442 —66,009,105 — Liability for Self-Insurance 129,134,868 78,881,177 75,650,915 132,365,130 34,903,966 Total Other Liabilities 244,606,263 98,519,505 84,650,338 258,475,430 43,808,507 Governmental Long-Term Liabilities Total $545,043,230 $111,368,104 $106,932,114 $549,479,220 $66,525,785 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 95 NOTE 6 - LONG-TERM LIABILITIES Activity of Long-Term Liabilities - Business-Type Beginning Balance Additions Reductions Ending Balance Due Within One Year Business-Type Activities: Bonds Payable (Revenue and Other Bonds): Water System Revenue Refunding Bonds 2003 $3,735,000 $—$1,180,000 $2,555,000 $1,245,000 Water System Revenue Bonds 2010 132,455,000 —4,285,000 128,170,000 4,485,000 Sewer System Revenue Bonds 1993 A 26,660,000 —9,590,000 17,070,000 10,090,000 Sewer System Revenue Bonds 2008 A 159,845,000 ——159,845,000 — Lease Revenue Bonds 1998 - Exhibit Hall Expansion 2,641,238 —289,283 2,351,955 275,078 Airport Revenue Refunding Bonds 2013 29,540,000 —1,420,000 28,120,000 1,475,000 Lease Revenue Bonds 2001 A and B - Stadium 15,880,000 —705,000 15,175,000 755,000 Airport Revenue Bonds 2007 - Cons. Rental Car 21,550,000 —215,000 21,335,000 265,000 Lease Revenue Bonds 2008 - Riverside Golf Course 60,000 —60,000 —— Lease Revenue Bonds 2008 - Convention Center 10,955,000 —1,675,000 9,280,000 1,790,000 Lease Revenue Bonds 2017A - Exhibit Hall Expansion 11,665,000 ——11,665,000 830,000 Lease Revenue Bonds 2017A - Convention Center 4,260,000 —225,000 4,035,000 365,000 Lease Revenue Bonds 2017A - Stadium 13,510,000 —650,000 12,860,000 735,000 Lease Revenue Bonds 2017A - Riverside Golf Course 1,615,000 ——1,615,000 50,000 Total Revenue and Other Bonds 434,371,238 —20,294,283 414,076,955 22,360,078 Plus Accreted Interest: Accreted Interest on Capital Appreciation Bonds 4,089,945 331,643 460,717 3,960,871 — Less: Unamortized Amounts For Issuance Premiums/(Discounts)8,242,232 —1,126,939 7,115,293 — Notes Payable: Construction of Water Supply Disinfection Buildings 1,498,164 —88,188 1,409,976 90,221 Improvements on the Enterprise and Jefferson Canals 957,456 —56,360 901,096 57,660 Water Meter Project 43,694,617 —2,570,272 41,124,345 2,570,272 Southeast Surface Water Treatment Facility 81,666,670 71,893,502 —153,560,172 — Tertiary Treatment Facility 32,249,924 ——32,249,924 963,854 Convention Center: Employee Benefits Cost Reimbursement Settlement 316,953 —46,437 270,516 270,516 Enterprise Canal Raw Water Pipeline 15,398,386 4,123,662 —19,522,048 — Regional Transmission Mains 12,068,369 36,543,302 —48,611,671 — Kings River Pipeline 9,120,622 37,648,040 —46,768,662 — Southwest Quadrant Recycled Water Dist. System 11,884,466 8,321,219 —20,205,685 — Total Notes Payable 208,855,627 158,529,725 2,761,257 364,624,095 3,952,523 Total Long-Term Debt 655,559,042 158,861,368 24,643,196 789,777,214 26,312,601 Other Long-Term Liabilities: Compensated Absences & Health Retirement Arrangement 11,330,810 2,344,676 1,565,788 12,109,698 1,508,172 Net OPEB Liability 24,447,759 2,362,842 —26,810,601 — CVP Litigation Settlement 8,436,323 —2,464,878 5,971,445 1,000,000 Accrued Closure Cost 15,438,054 —1,003,480 14,434,574 900,000 Pollution Remediation 630,056 —53,988 576,068 — Total Other Long-Term Liabilities 60,283,002 4,707,518 5,088,134 59,902,386 3,408,172 Business-Type Long-Term Liabilities Total $715,842,044 $163,568,886 $29,731,330 $849,679,600 $29,720,773 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 96 NOTE 6 - LONG-TERM LIABILITIES Activity of Long-Term Liabilities - Fiduciary Beginning Balance Additions Reductions Ending Balance Due Within One Year Fiduciary Funds: Successor Agency to the Fresno Redevelopment Agency: Tax Allocation Bonds: 2001 Redevelopment Agency Merger 2 $1,360,000 $—$1,360,000 $—$— Series 2003, Mariposa Project Area 2,182,000 —313,000 1,869,000 331,000 Total Tax Allocation Bonds 3,542,000 —1,673,000 1,869,000 331,000 Less: Unamortized Amounts: For Issuance Premiums/(Discounts)(3,616)—1,203 (4,819)— Total Unamortized Amounts (3,616)—1,203 (4,819)— Notes Payable: California Infrastructure Bank 1,487,602 —65,351 1,422,251 67,658 Total Notes Payable 1,487,602 —65,351 1,422,251 67,658 Total Long-Term Debt 5,025,986 —1,739,554 3,286,432 398,658 Other Liabilities: Compensated Absences 78,825 22,490 27,651 73,664 12,000 Total Other Long-Term Liabilities 78,825 22,490 27,651 73,664 12,000 Fiduciary Funds Long-Term Liabilities Total $5,104,811 $22,490 $1,767,205 $3,360,096 $410,658 97 NOTE 6 - LONG-TERM LIABILITIES The following is a description of Long-Term Liabilities which had activity in 2018: Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Governmental Revenue and Other Bonds Taxable Pension Obligation Bonds 2002 $205,335,000 taxable Refund 2000 Taxable Pension Obligation Bonds 6.46% to 6.55% 2/21/2002 6/1/2029 Repayment of bonds not limited to any special source of City funds. Principal due annually, interest due semiannually. City uses funds throughout the City based on full-time employees assigned to funds. For the General Fund, the City uses dedicated Property Tax Override (PTO) revenue first, and then other General Fund revenues to make its portion of the bond payment. Other citywide revenues make up the difference between total debt service and the General Fund portion. During 2018 $12,234,039 of PTO revenue was used. In addition to PTO revenue, $1,426,870 of General Fund and $2,530,731 of Enterprise Fund/Internal Service Fund revenues were used to make the 2018 debt service payment of $16,191,640. $8,085,000 to $15,195,000 $124,245,000 $0 $124,245,000 $178,090,500 $16,191,640 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A&B, No Neighborhood Left Behind (NNLB) A = $11,010,000 tax-exempt; B = $1,940,000 taxable Refinance No Neighborhood Left Behind Projects 2.34% to 5.00% 5/10/2017 4/1/2023 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $544,329 was equal to debt service in 2018. $2,365,000 to $2,830,000 $14,002,546 $(1,057,546)$12,945,000 $14,823,206 $544,329 Fresno Joint Powers Financing Authority: Lease Revenue Bonds 2008 A, No Neighborhood Left Behind (NNLB) A = $38,210,000 tax-exempt Refund 2005A Lease Revenue Bonds (No Neighborhood Left Behind Project) N/A 4/29/2008 4/1/2018 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $2,768,075 was equal to debt service in 2018. $0 $0 $0 $0 $0 $2,768,075 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds (Chiller) 2017 A, City Hall Chiller A = $2,710,000 tax-exempt Refinance City Hall Chiller 5.000%5/10/2017 4/1/2024 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $120,821 was equal to debt service in 2018. $610,000 to $2,100,000 $3,126,160 $(416,160)$2,710,000 $3,492,500 $120,821 Fresno Joint Powers Financing Authority: Lease Financing Refunding 2017 A&B, City Hall, Garage #7, Bee Bldg & Granite Park A = $10,125,000 tax-exempt; B = $21,980,000 taxable Refinance City Hall, Parking Garage #7, Fresno Bee Building and Granite Park 2.34% to 5.00% 5/10/2017 4/1/2031 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $4,241,820 was equal to debt service in 2018. $1,645,000 to $3,565,000 $29,505,363 $(485,363)$29,020,000 $36,451,581 $4,241,820 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Various Capital Projects A = $12,435,000 tax-exempt Refinance Various Capital Improvement Projects 5.000%5/10/2017 4/1/2035 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $554,334 was equal to debt service in 2018. $40,000 to $1,785,000 $14,167,855 $(1,732,855)$12,435,000 $19,496,000 $554,394 Fresno Joint Powers Financing Authority: Lease Revenue Bonds 2004 A,B,C, Various Capital Projects A = $15,810,000 tax-exempt; B = $8,100,000 tax-exempt; C = $28,870,000 taxable Calcot Project, Fire Department Projects, Downtown Parking Projects, Santa Fe Depot Project, Roeding Business Park Project Area, other capital projects 5.900%4/28/2004 10/1/2034 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $1,541,943 was equal to debt service in 2018. $790,000 to $1,400,000 $13,150,626 $(15,626)$13,135,000 $18,284,373 $1,541,943 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds (Parks Projects) 2017 A, Parks Impact Fee Projects A = $22,965,000 tax-exempt Refinance Improvements to Various Park Facilities 5.000%5/10/2017 4/1/2018 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $1,004,295 was equal to debt service in 2018. $695,000 to $1,755,000 $26,051,472 $(3,086,472)$22,965,000 $36,415,750 $1,004,295 98 NOTE 6 - LONG-TERM LIABILITIES Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Fresno Joint Powers Financing Authority: Lease Revenue Bonds (Parks Projects) 2008 C & D, Parks Impact Fee Projects C = $33,675,000 tax-exempt; D = $1,530,000 taxable Refinance improvements to various park facilities N/A 6/12/2008 4/1/2018 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $894,400 was equal to debt service in 2018. $0 $0 $0 $0 $0 $894,400 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Police and Fire/Public Safety A = $32,065,000 tax-exempt Refinance Public Safety Capital Improvement Projects (Police & Fire) 5.000%5/10/2017 4/1/2039 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $1,379,185 was equal to debt service in 2018. $1,015,000 to $2,300,000 $36,017,158 $(3,952,158)$32,065,000 $50,982,500 $1,379,185 Revenue and Other Bonds Total $260,266,180 $(10,746,180)$249,520,000 $358,036,410 $29,240,902 Notes Payable HUD: Regional Medical Center (RMC) $3,000,000 Loaned Improvements to Regional Medical Center N/A 10/28/1997 8/1/2017 Section 108 Notes. Annual principal payments, semiannual interest payments. $0 $0 $0 $0 $0 $273,929 HUD: Fresno/Madera Area Agency on Aging (FMAAA) $1,500,000 Loaned Acquire and improve FMAAA facilities 3.120% to 3.300% 6/14/2000 8/1/2019 Section 108 Notes. Annual principal payments, semiannual interest payments. $120,000 to $135,000 $255,000 $0 $255,000 $263,555 $119,800 HUD: Neighborhood Streets/Parks $1,500,000 Loaned Improvements to various neighborhood streets & parks 5.850% to 6.120% 8/8/2002 8/1/2022 Section 108 Notes. Annual principal payments, semiannual interest payments $100,000 to $130,000 $572,000 $0 $572,000 $663,051 $131,048 Roeding Business Park $2,441,000 Loaned Loaned from the California Infrastructure and Economic Development Bank to be used to complete the Roeding Business Park 3.530%3/18/2004 8/1/2033 Secured by Facility Lease on City Hall Annex. Annual principal payments, semiannual interest payments. $77,979 to $131,212 $1,639,214 $0 $1,639,214 $2,144,567 $134,514 Notes Payable Total $2,466,214 $0 $2,466,214 $3,071,173 $659,291 Governmental Total $262,732,394 $(10,746,180)$251,986,214 $361,107,583 $29,900,193 Business-Type Revenue and Other Bonds Water System Revenue Refunding Bonds 2003 A A = $16,155,000 tax-exempt Refund 1993 Water Bonds & finance improvements to the Water System 5.250%4/23/2003 6/1/2020 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged senior to the pledges securing the 2010 Bonds and State loans for Water. Principal paid annually, interest semiannually. $1,245,000 to $1,310,000 $2,575,385 $(20,385)$2,555,000 $2,757,913 $1,376,088 Water System Revenue Bonds (Non-Taxable) 2010 A-1, Water A-1 = $66,810,000 tax-exempt Current Refund 1998 Water Bonds & improvements to the Water System 4.00% to 5.00% 2/3/2010 6/1/2024 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 2003 Bonds and in parity with the pledges securing State loans for Water. Principal payable annually, interest semiannually. $4,485,000 to $7,455,000 $38,221,969 $(1,391,969)$36,830,000 $44,256,025 $6,411,575 99 NOTE 6 - LONG-TERM LIABILITIES Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Water System Revenue Bonds (Taxable Build America Bonds) 2010 A-2, Water A-2 = $91,340,000 taxable Improvements to the Water System 6.50% to 6.75% 2/3/2010 6/1/2040 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 2003 Bonds and in parity with the pledges securing State loans for Water. Principal payable annually, interest semiannually. During Fiscal Year 2018, a federal Build America Bonds subsidy of $1,992,110 was received. $4,090,000 to $7,715,000 $89,976,732 $1,363,268 $91,340,000 $185,601,813 $6,097,263 Sewer System Revenue Bonds 1993 A A = $196,280,000 tax-exempt Rehabilitation and expansion of the City's Wastewater Treatment Facility 4.50% to 5.25% 10/6/1993 9/1/2023 Repayment of bonds solely from revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged senior to the pledges of the 2008 Sewer Bonds and State loans for Sewer. Principal payable annually, interest semiannually. $45,000 to $10,090,000 $17,064,578 $5,422 $17,070,000 $18,236,056 $10,701,025 Sewer System Revenue Bonds 2008 A, Sewer A = $159,845,000 tax-exempt Refund 1995 & 2000 Sewer Bonds; Improvements to the City's Wastewater Reclamation Facility 4.625% to 5.00% 7/24/2008 9/1/2037 Repayment of bonds solely from revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 1993 Bonds and in parity with the pledges of State loans for Sewer. Principal payable annually, interest semiannually. $5,410,000 to $13,090,000 $162,286,422 $(2,441,422)$159,845,000 $257,551,697 $7,948,844 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 - Convention Center A = $4,260,000 tax-exempt Refinance Convention Center Improvement Projects (Phase I) 5.000%5/10/2017 4/1/2027 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $414,925 which was equal to debt service in 2018. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make these future payments, which the Authority will then use to make the debt service payment. $365,000 to $540,000 $4,583,218 $(548,218)$4,035,000 $5,108,750 $414,925 Fresno Joint Powers Financing Authority: Lease Revenue Bonds (Conv. Ctr.) 2008 - Convention Center F = $21,410,000 taxable Refund a portion of 2006 Convention Center Bonds & finance various Convention Center improvements 6.700%8/14/2008 4/1/2023 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $2,408,985, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make these future payments, which the Authority will then use to make the debt service payment. $1,370,000 to $2,175,000 $9,257,490 $22,510 $9,280,000 $11,106,755 $2,408,985 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Exhibit Hall Expansion Project Refunding A = $11,665,000 tax-exempt Refinance Exhibit Hall Expansion Project 5.000%5/10/2017 4/1/2029 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $520,064 was equal to debt service in 2018. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make these future payments, which the Authority will then use to make the debt service payment. $830,000 to $1,330,000 $13,352,065 $(1,687,065)$11,665,000 $15,440,750 $520,064 100 NOTE 6 - LONG-TERM LIABILITIES Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Fresno Joint Powers Financing Authority: Lease Revenue Bonds 1998, Exhibit Hall Expansion Project $32,609,535 tax-exempt Construction of an exhibit hall. N/A 9/1/1998 9/1/2028 Current Interest Serial Bonds ($25,395,000) and Capital Appreciation Serial Bonds ($7,214,535). Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to a Facilities Lease. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $750,000, which was equal to the debt service payment. All remaining bonds are Capital Appreciation Bonds, so interest is accreted. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $162,405 to $275,078 $2,248,397 $103,558 $2,351,955 $8,250,000 $750,000 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Stadium Project A = $13,510,000 tax-exempt Refinance Multi- Purpose Stadium Project 5.000%5/10/2017 4/1/2031 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $1,252,321, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $735,000 to $1,300,000 $14,773,795 $(1,913,795)$12,860,000 $17,786,500 $1,252,321 Fresno Joint Powers Financing Authority: Lease Revenue Bonds 2001 A & B, Stadium Project A = $23,615,000 tax-exempt; B = $22,235,000 taxable Acquire and construct a multipurpose outdoor stadium 6.93% to 7.03% 6/12/2001 6/1/2031 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to a Facilities Lease. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $1,816,324, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $755,000 to $1,700,000 $15,195,322 $(20,322)$15,175,000 $23,626,238 $1,816,324 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds (Riverside Golf Course) 2017 A, Riverside Golf Course A = $1,615,000 tax-exempt Refinance Improvements to Riverside Golf Course 5.000%5/10/2017 4/1/2038 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $70,609, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $50,000 to $125,000 $1,832,054 $(217,054)$1,615,000 $2,555,500 $70,609 Fresno Joint Powers Financing Authority: Lease Revenue Bonds (Riverside Golf Course) 2008 C & D, Riverside Golf Course C = $2,375,000 tax-exempt; D = $105,000 taxable Improvements to Riverside Golf Course N/A 6/12/2008 4/1/2038 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to the Facilities Sublease. Principal due annually, interest due semiannually. During 2016, the City chose to make these lease payments from the General Fund in the amount of $62,400, which was equal to the debt service payment. While the City has the right to use any unencumberd funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. N/A $0 $0 $0 $0 $62,400 Airport Revenue Refunding Bonds 2013, Concourse Expansion A = $10,810,000 Non-AMT; B = $22,820,000 AMT (Subject to Alternative Minimum Tax) Refund 2000 Airport Revenue Bonds 4.00% to 5.125% 8/6/2013 7/1/2030 Repayment of bonds solely from operation of the City Airport System. Bond Indenture requires a minimum $1,600,000 of PFC Contribution toward annual debt service from Passenger Facility Charges (PFC). During Fiscal Year 2018 $1,600,000 of PFC and $1,174,744 of eligible Airports operation revenues were used to make the debt service payment. $1,475,000 to $5,335,000 $28,489,821 $(369,821)$28,120,000 $38,567,947 $2,774,744 101 NOTE 6 - LONG-TERM LIABILITIES Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Airport Revenue Bonds 2007, Consolidated Rental Car Facility $22,000,000 taxable Construction of a consolidated rental car facility and related improvements 5.833%6/14/2007 7/1/2037 Repayment of bonds solely from operation of the City Airport System. While not required under the Bond Indenture, Airports uses Customer Facility Charge (CFC) revenues first to meet the debt payment, and then uses other permitted revenues to cover any difference between CFC's and the debt payment. Principal due annually, interest due semiannually. During Fiscal Year 2018 $1,465,741 of CFC revenues was used to fully cover the debt service payment. $265,000 to $2,265,000 $21,335,000 $0 $21,335,000 $37,783,914 $1,465,741 Revenue and Other Bonds Total $421,192,248 $(7,115,293)$414,076,955 $668,629,858 $44,070,908 Notes Payable Water: Safe-Drinking Water Program $51,405,432 Loaned Installation of water meters throughout the City of Fresno 0.000%4/10/2012 10/1/2022 Contract between the State Water Resources Control Board (SWRCB) and the City. No interest loan. Repayment of the loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal due in semiannual installments of $1,285,136. $1,285,136 to $2,570,272 $41,124,345 $0 $41,124,345 $41,124,345 $2,570,272 Water: Safe Drinking Water Program $1,946,686 Loaned To protect the City's drinking water supplies from possible contaminating activities (PCA's) 2.292%7/1/2009 7/1/2031 Contract between the SWRCB and the City. Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $61,014. $90,222 to $119,962 $1,409,976 $0 $1,409,976 $1,647,377 $122,028 Water: Safe Drinking Water Program $1,245,485 Loaned Improvements on the Enterprise and Jefferson Canals 2.292%7/1/2009 1/1/2032 Contract between the SWRCB and the City. Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $38,993. $57,659 to $76,666 $901,096 $0 $901,096 $1,052,817 $77,986 Water: Drinking Water State Revolving Fund Project 1010007-029C $26,520,000 Loaned Construction of a raw water pipeline to replace the Enterprise Canal for the Northeast Surface Water Treatment Facility 1.600%4/5/2016 7/1/2048 Contract between the SWRCB and the City. Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. $19,522,048 $0 $19,522,048 $19,522,048 $267,892 Water: Drinking Water State Revolving Fund Project 1010007-028C $195,489,000 Loaned Construction of a Southeast Surface Water Treatment Facility. 1.663%7/15/2015 1/1/2049 Contract between the SWRCB and the City. Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. $153,560,172 $0 $153,560,172 $153,560,172 $1,924,233 Water: Drinking Water State Revolving Fund Project 1010007-030C $75,900,000 Loaned Construction of the Friant-Kern Canal Raw Water Pipline 1.600%8/23/2016 1/1/2049 Contract between the SWRCB and the City. Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. $48,611,671 $0 $48,611,671 $48,611,671 $577,879 102 NOTE 6 - LONG-TERM LIABILITIES Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Water: Drinking Water State Revolving Fund Project 1010007-031C $65,875,669 Loaned Construction of a Kings River Pipeline. 1.600%4/5/2016 7/1/2048 Contract between the SWRCB and the City. Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. $46,768,662 $0 $46,768,662 $46,768,662 $480,779 Sewer: Clean Water State Revolving Fund Project $33,212,590 Loaned Construction of a tertiary treatment facility 1.000%10/17/2015 7/12/2046 Contract between the SWRCB and the City. Repayment of loan solely from all revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 1993 Bonds, and in parity with the pledge securing the 2008 Bonds and State loans for Sewer. Principal and interest due in annual installments of $1,279,885. Payment for FY2018 was made in FY2017. $963,854 to $1,282,163 $32,249,924 $0 $32,249,924 $37,312,878 $0 Sewer: Clean Water State Revolving Fund Project No. 8061-110 $52,475,049 Loaned Construction of a recycled water distribution system in the southwest quadrant of the City 1.000%7/1/2016 5/30/2047 Contract between the SWRCB and the City. Repayment of loan solely from all revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 1993 Bonds, and in parity with the pledge securing the 2008 Bonds and State loans for Sewer. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. Repayment of the note is funded from revenues of the Wastewater Fund. No amortiza- tion schedule available until project is complete. $20,205,685 $0 $20,205,685 $20,205,685 $0 Convention Center: Management Agreement $781,000 Loaned Management Agreement between the City of Fresno and SMG to settle a conflict with employee benefits costs incurred by SMG 3.423%1/1/2009 12/31/2018 Principal and interest due in monthly installments of $4,167 through 12/31/2018 with an additional payment of $250,000 to be paid no later than 12/31/2018. Repayment of the note is funded from revenues of the Convention Center operating fund. $270,516 $270,516 $0 $270,516 $275,000 $50,004 Notes Payable Total $364,624,095 $0 $364,624,095 $370,080,655 $6,071,073 Business-Type Total $785,816,343 $(7,115,293)$778,701,050 $1,038,710,513 $50,141,981 Fiduciary Tax Allocation Bonds Fresno Joint Powers Financing Authority: Tax Allocation Revenue Bonds 2001, Redevelopment Agency Merger 2 $10,000,000 tax-exempt Redevelopment purposes within the Agnecy's Merger No. 2 Project Area N/A 2/1/2012 8/1/2018 Principal is due in annual installments, interest is due semiannually. Repayment of bonds is payable solely from tax increment revenues allocated by the Successor Agency to the City of Fresno Redevelopment Agency's Merger No. 2 Project area. All such revenues are pledged. Tax increment in Merger Area No. 2 of $480,217 plus $915,483 from the Debt Service Reserve Fund was used to pay the bonds off one year early. $0 $0 $0 $0 $0 $1,395,700 Tax Allocation Refunding Bonds 2003, Mariposa Project Area $5,005,000 tax-exempt Refund the Agency's 1993 Tax Allocation Bonds (Mariposa Project Area) 5.50% to 5.625% 2/1/2012 2/1/2023 Principal is due in annual installments, interest is due semiannually. Repayment of bonds is payable solely from tax increment revenues allocated by the Successor Agency to the City of Fresno Redevelopment Agency's Mariposa Project area. All such revenues are pledged. Tax increment in Mariposa Project Area of $434,100 was equal to debt service in 2018. $331,000 to $418,000 $1,864,181 $4,819 $1,869,000 $2,195,360 $434,100 Tax Allocation Bonds Total $1,864,181 $4,819 $1,869,000 $2,195,360 $1,829,800 103 NOTE 6 - LONG-TERM LIABILITIES Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Notes Payable RDA: Roeding Business Park $2,118,000 Loaned Loaned from the California Infrastructure and Economic Development Bank to be used to complete the Roeding Business Park 3.530%3/18/2004 8/1/2033 Principal and interest due in annual installments. Secured by Tax Increment revenue received into the Roeding Business Park Project area. $67,658 to $113,845 $1,422,251 $0 $1,422,251 $1,860,716 $116,710 Notes Payable Total $1,422,251 $0 $1,422,251 $1,860,716 $116,710 Fiduciary Total $3,286,432 $4,819 $3,291,251 $4,056,076 $1,946,510 Grand Total $1,051,835,169 $(17,856,654)$1,033,978,515 $1,403,874,172 $81,988,684 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 104 NOTE 6 - LONG-TERM LIABILITIES B. Debt Service Requirements - excluding capital leases The annual debt service requirements excluding capital lease obligations for the City's long-term debt outstanding as of June 30, 2018, are as follows: Governmental Activities Business-Type Activities Fiduciary Funds Year Ending June 30 Principal Interest Principal Interest Accretion Interest Principal Interest 2019 $16,807,979 $14,144,108 $26,312,601 $474,922 $23,275,035 $398,658 $153,287 2020 17,752,732 13,197,882 22,071,617 488,437 22,236,943 423,047 132,652 2021 18,837,582 12,197,032 23,434,351 503,925 21,280,357 442,519 110,721 2022 17,827,532 11,153,842 24,175,550 516,127 20,249,602 472,079 87,303 2023 19,434,587 10,151,853 24,332,536 527,722 19,164,557 495,729 62,275 2024-2028 93,372,664 34,462,411 114,357,220 3,386,909 80,003,314 431,794 149,903 2029-2033 43,976,926 10,482,861 118,583,803 —49,915,841 513,579 66,674 2034-2038 21,676,212 3,245,128 110,633,320 —21,784,519 113,845 2,009 2039-2043 2,300,000 86,250 21,104,216 —1,972,900 —— 2044-2048 ——293,695,840 —126,444 —— 2049-2053 ——————— Subtotal 251,986,214 109,121,367 778,701,054 5,898,042 260,009,512 3,291,250 764,824 Issuance Premiums/ (Discounts)10,746,180 —7,115,293 ——(4,819)— Unaccreted Interest ———(1,937,171)——— Total $262,732,394 $109,121,367 $785,816,347 $3,960,871 $260,009,512 $3,286,431 $764,824 C. Debt Compliance There are a number of limitations and restrictions contained in the various loan, note and bond indentures. The City believes it is in compliance with all significant limitations, restrictions and covenants. D. Debt Management Policy The City maintains a Debt Management Policy (Policy) which sets forth certain debt management objectives, establishes overall parameters, and provides general direction in the planning, issuing, and administering of the City’s debt. The purpose of the Policy is to assist in the City’s ability to incur debt and other long-term obligations at favorable interest rates for capital improvements, facilities and equipment which are beneficial to the City and necessary for providing essential services. The Policy integrates the best practices of other debt management plans utilized by similar California cities and is consistent with the provisions of the City Charter, and any enabling legislation. As part of the Lease Revenue Bond refinancing that took place in 2017, the City’s Debt Management Policy was reviewed to insure compliance with Senate Bill 1029 (SB 1029). SB 1029, which was signed into law in September 2016, mandated certain requirements for debt management policies that are adopted by local governments and agencies. The SB 1029 review found that the City’s existing Debt CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 105 NOTE 6 - LONG-TERM LIABILITIES Management Policy met all of SB 1029’s requirements, with one exception. That exception was the lack of language addressing internal controls on debt transactions. However, while the City’s policy was generally in compliance with SB 1029, the review turned up some outdated language. That outdated language usually took the form of referencing an entity that no longer exists (e.g., the Redevelopment Agency) or a milestone that was to occur in a now previous year (e.g. “The City in Fiscal Year 2010….”). Given the change required under SB 1029, the outdated language in the current policy, and the fact that the policy has not been updated since 2010, the decision was made to perform a comprehensive update of the Debt Management Policy. That update was approved by Council on April 6, 2017. E. Legal Debt Limit and Legal Debt Margin Article XVI, Section 18 of the California Constitution, (the “debt limit”) prohibits cities (including chartered cities), counties, and school districts from entering into indebtedness or liability that in any year exceeds the income and revenue provided for such year unless the local agency first obtains two- thirds voter approval for the obligation. This general limitation has several important exceptions as described below. It is important to remember that this limitation applies not only to traditional bonds, but could apply to many forms of indebtedness or liability, such as installment payment obligations, long-term service or construction contracts, letter-of-credit reimbursement agreements, and other types of arrangements commonly seen in public finance transactions. In determining whether the arrangement under consideration might pose a problem under the debt limit it is useful to ask the following questions: • Does the arrangement provide for payment in future fiscal years that comes out of revenue generated in those years? • Does the arrangement call for payments by a city, county, or school district (as opposed to other types of governmental agencies)? If the answer to these two questions is “yes,” then the analysis should proceed to determine if one of the exceptions to the debt limit applies. There are three major exceptions to the debt limit that have been recognized by California courts: the Offner-Dean lease exception, the special fund doctrine, and the “obligations imposed by law” exception. As of June 30, 2018, the City’s debt limit (20% of valuation subject to taxation) was $6.89 billion. This number was calculated by taking the Total Assessed Values (Gross) from the County of Fresno Tax Rate Book, page 12 x 20%. This is in comparison with debt limits of $6.59 billion in 2017. The City’s legal debt margin is equal to the City’s debt limit because it has no debt subject to the limitation. F. Arbitrage Under U.S. Treasury Department regulations, all governmental tax-exempt debt issued after August 31, 1986 is subject to arbitrage rebate requirements. The requirements stipulate, in general, the earnings from the investment of tax-exempt bond proceeds that exceed related interest expenditures on the bonds must be remitted to the federal government on every fifth anniversary of each bond issue. The City has evaluated each general obligation bond and lease revenue bond issue subject to the arbitrage CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 106 NOTE 6 - LONG-TERM LIABILITIES rebate requirements and has deferred credits and other liabilities in the governmental funds. Each Enterprise Fund has performed a similar analysis of the debt the respective enterprise has issued which is subject to arbitrage rebate requirements. Any material arbitrage liability related to the debt of the Enterprise Funds has been recorded as a liability in the respective fund. In addition, the Successor Agency to the former Redevelopment Agency records any arbitrage liability in deferred credits and other liabilities. G. State Loan Program On October 17, 2014, the City entered into a loan program with the California State Water Resources Control Board's Clean Water State Revolving Fund to borrow funds for the purpose of building a tertiary treatment facility and related projects. The loan was amended on March 16, 2015 from $49,034,336 to $33,138,638 as a result of the restructuring of the project into component parts. This restructuring was based upon construction timing as well as the ineligibility of portions of the project which did not qualify for the lowest interest rate under the State program. The term of the amended loan will be 30 years at an interest rate of 1%. Interest charged during construction of $73,952 was deferred and added to the principal balance, which increased the loan to $33,212,590. As of June 30, 2018, the outstanding balance of the loan is $32,249,924. Starting in fiscal year 2019, the annual debt service payment will be $1,286,353 payable from Public Utilities (DPU) revenues, consisting of sewer rates, fees and charges. On July 15, 2015, the City entered into a 30-year agreement to borrow $195,489,000 from the California State Water Resources Control Board for construction of a new surface water treatment facility in southeast Fresno. The interest rate is fixed at 1.663% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $153,560,172 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, annual debt services are estimated to be $8,302,895. On September 14, 2015, the City entered into a 30-year agreement to borrow $52,475,049 from the California State Water Resources Control Board’s Clean Water State Revolving Fund for construction of a recycled water distribution system in the southwest quadrant of the City. The interest rate is fixed at 1.0% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $20,205,685 in proceeds. The note will be funded from revenues of the Sewer Enterprise. Once construction is completed, annual debt is estimated to be $2,028,979. On June 8, 2016, the City entered into a 30-year agreement to borrow $26,520,000 from the California State Water Resources Control Board for construction of a raw water pipeline to replace the Enterprise Canal as a primary conveyance system for the Northeast Surface Water Treatment Facility. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $19,522,048 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, the annual debt is estimated to be $1,116,533. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 107 NOTE 6 - LONG-TERM LIABILITIES On July 19, 2016, the City entered into a 30-year agreement to borrow $65,875,669 from the California State Water Resources Control Board for construction of a pipeline from Kings River to the Southeast Water Treatment Facility. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $46,768,662 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, the annual debt is estimated to be $2,773,546. On August 23, 2016, the City entered into a 30-year agreement to borrow $75,900,000 from the California State Water Resources Control Board for construction of regional transmission mains to transport water from facilities throughout the City. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $48,611,671 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, the annual debt is estimated to be $3,195,506. H. Capital Lease Obligations The City has entered into several Master Lease Agreements that allowed for a set amount of financing over the term of the Master Lease. Several financings took place under these Master Leases whose maturities exceeded the term of the Master Lease. These lease agreements qualify as capital leases for accounting purposes and, therefore, have been recorded at present value of their future minimum lease payments as of the inception date. Prior lease agreements with outstanding balances are with All Points Capital Corp., DeLage Landen, PNC Equipment Financing, Dell Financial Services, Kansas State Band and Community Leasing Partners. Two of the leases were assigned to Capital One Public Funding Group by All Points Capital Corp. The terms of the City, however, were unaffected. On December 13, 2013, the City entered into a Master Lease Agreement with Dell Financial Services to lease/purchase computers. Each lease schedule represents a separate lease with annual upfront payment terms provided by the lender at the time the computers are purchased. To date, there have been forty-one lease schedules executed totaling $944,081 with interest rates ranging from 4.99% to 10.15% and terms between three and five years. As of June 30, 2018 twenty of these leases remain outstanding. On January 13, 2017, the City entered into a Master Equipment Lease-Purchase Agreement with Banc of America Public Capital Corp. The purpose of the lease is to finance new and replacement equipment throughout the City. The lease will expire at an aggregate of $25 million financed or June 30, 2019, whichever comes first. Each lease schedule represents a separate lease at rates determined immediately prior to financing. To date, there have been ten lease schedules executed totaling $20,248,252 with interest rates ranging from 1.92% to 3.16% and terms between five and ten years. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 108 NOTE 6 - LONG-TERM LIABILITIES The following table lists the City’s Capital Lease Obligations by lender as of June 30, 2018: Lender Date of Loan Term (Years)Purchased Interest Rate Annual (P&I Payment) All Points Capital Corp 2/26/2008 10 Triple Combination Fire Trucks (3)3.29%$167,609 All Points Capital Corp 6/11/2008 10 105' Smeal Aerial Ladder Fire Truck 3.61%93,753 Community First National Bank 6/12/2015 5 Various Equipment 2.31%205,653 Community First National Bank 7/13/2015 10 2015 Smeal Engines on Spartan Metrostar Chassis (4)2.92%210,414 Community First National Bank 9/22/2015 10 2015 Smeal Engines on Metrostar (3) & Aerial on Gladiator (1)2.69%339,846 Community First National Bank 2/22/2016 10 2012 Smeal Engine & 2016 Water Tender on Kenworth 2.09%156,795 Community First National Bank 4/13/2016 5 2016 Toyota Camrys (2)1.75%9,538 Community First National Bank 6/2/2016 5 2016 Light Vehicles & Upfitting 1.87%231,735 De Lage Landen Public Finance 12/1/2010 10 2009 Spartan 1500 Fire Trucks (3)3.07%199,578 Dell Financial Services 12/1/2013 5 Computers (17) Optiplex 7010 Mini 4.99%776 Dell Financial Services 8/1/2014 4 Computers (400)5.17%88,829 Dell Financial Services 10/20/2015 3 Computers 10.15%16,196 Dell Financial Services 1/15/2016 3 Microsoft Surface Laptops (50)5.52%31,393 Dell Financial Services 1/25/2016 3 Computers 5.71%524 Dell Financial Services 7/1/2016 4 Dell Optiplex 7040 SFF Computers (3)5.01%908 Dell Financial Services 9/1/2016 4 Optiplex 7040 Computers (7) & 19" Monitors (10)5.01%2,343 Dell Financial Services 9/1/2016 4 Optiplex 7040 SFF Computers (16)7.59%5,860 Dell Financial Services 9/1/2016 3 Cisco Equipment 6.27%17,698 Dell Financial Services 1/1/2017 3 Dell Lattitude Laptop & Docking Station 5.63%3,345 Dell Financial Services 1/1/2017 3 Dell OptiPlex 7040 Computers (1)5.63%1,446 Dell Financial Services 1/1/2017 3 Dell OptiPlex 7040 Computers (10)5.63%3,566 Dell Financial Services 1/1/2017 3 Dell OptiPlex 7040 Computers (7)5.63%2,498 Dell Financial Services 2/1/2017 3 Dell OptiPlex 7040 Computers (11)5.63%4,002 Dell Financial Services 2/1/2017 3 Dell OptiPlex 7040 Computers (2)5.63%2,186 Dell Financial Services 2/1/2017 3 Dell OptiPlex 7040 Computers (3)5.63%3,277 Dell Financial Services 2/1/2017 3 Dell OptiPlex 7040 Computers (4)6.61%5,730 Dell Financial Services 2/1/2017 3 Dell OptiPlex 7040 Computers (8)5.63%5,758 Dell Financial Services 4/1/2017 3 Dell OptiPlex 7040 Computers (5)5.63%5,466 Dell Financial Services 1/8/2018 3 Dell OptiPlex 7040 Computers (7)5.63%2,282 Kansas State Bank Public Finance 10/10/2013 5 Patrol Cars (50 Replacement Vehicles)3.39%514,906 Kansas State Bank Public Finance 5/23/2014 4 Motorola APX6000 Digital Portable Radios (275 Units)3.27%166,884 Kansas State Bank Public Finance 9/26/2014 5 Police & Parks Vehicles 3.39%796,594 Kansas State Bank Public Finance 9/10/2015 5 Police Vehicles 3.39%647,920 PNC Equipment Finance, LLC 10/4/2012 8 Self-Contained Breathing Apparatus 3.30%154,138 Banc of America Public Capital Corp 4/10/2017 5 Fire Chevy Silverado Pickup 2.07%10,281 Banc of America Public Capital Corp 5/2/2017 10 Fire Engines & Pumpers 2.52%463,904 Banc of America Public Capital Corp 5/11/2017 5 Police Vehicles (84)1.96%691,736 Banc of America Public Capital Corp 11/20/2017 5 Police Vehicles (50)2.14%293,360 Banc of America Public Capital Corp 8/1/2017 5 Police Motorcycles (14) & Fire Vehicles (9)1.92%82,079 Banc of America Public Capital Corp 11/29/2017 5 DARM Ford F-150 Pickup Trucks (24)2.14%57,466 Banc of America Public Capital Corp 11/23/2017 7 Microwave Date & Radio Console Network 2.46%391,621 Total $6,089,893 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 109 NOTE 6 - LONG-TERM LIABILITIES Capital Lease Debt service requirements are presented below. Interest rates range from 1.75% to 10.15%. Year Ended Governmental Activities June 30 Principal Interest 2019 $5,909,299 $691,807 2020 5,334,890 533,547 2021 4,277,833 403,230 2022 3,709,729 306,313 2023 2,660,171 220,952 2024-2028 6,379,474 353,100 Total $28,271,396 $2,508,949 I. General Fund Short-Term Borrowing Obligations The City did not issue any short-term debt during fiscal year 2018 and did not have any short-term debt outstanding during the fiscal year. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 110 NOTE 7 - INTERFUND ACTIVITY Note 7. Interfund Activity A. Due to/from Other Funds Due to/from Other Funds represents short-term borrowings resulting from a fund’s temporary need for additional cash. Primarily, these amounts have been recorded when timing differences between when the services are provided and when they are paid for/reimbursed causes the funds to temporarily overdraw their share of pooled cash. These balances are generally expected to be repaid within the next few months and not longer than a 12-month fiscal operating cycle. The composition of interfund balances as June 30, 2018, is as follows: Receivable Fund Payable Fund Amount General Fund Grants Special Revenue Fund $3,683,283 Nonmajor Governmental Funds 222,634 Internal Service Funds 656,089 Fiduciary Funds 921 4,562,927 Grants Special Revenue Fund Nonmajor Governmental Funds 5,011 Internal Service Funds 2,191,348 2,196,359 Nonmajor Governmental Funds Fresno Convention Center 4,936 Internal Service Funds 979,530 984,466 Transit Nonmajor Governmental Funds 1,107,116 Internal Service Funds General Fund 748,568 Grants Special Revenue Fund 783 Nonmajor Government Funds 187,460 Water System 155,769 Sewer System 168,622 Solid Waste Management 526,255 Transit 112,871 Airports 27,717 Fresno Convention Center 3,830 Nonmajor Enterprise Funds 178,918 Internal Service Funds 9,091 2,119,884 Total Due to/from Other Funds $10,970,752 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 111 NOTE 7 - INTERFUND ACTIVITY B. Advances Advances represent long-term borrowing between funds. Fire Headquarters In fiscal year 2018, the General Fund borrowed $3.1 million from the Wastewater Operation Fund and the Sewer Stabilization Fund in order to provide sufficient funding for the purchase of the Fire Department's Headquarters Building. The governing resolution formalizing this advance was adopted by Council on May 10, 2018. The term of the advance is five years and the rate of interest is equal to the rate of interest paid on the City's pooled deposits and investments. As of the effective date of the agreement, June 25, 2018, the interest rate was 1.35%. Redevelopment Agency Advances over the years between the City and the former Redevelopment Agency (RDA) were made to provide funds to eliminate blight and to develop, construct, rehabilitate and revitalize Fresno’s inner city neighborhoods, downtown and industrial areas. The advances had all been secured by and payable from the incremental property tax revenues of the redeveloped properties. Interest rates varied between 5% and 9% with payments on the advances and related interest based upon budgetary priority as approved by the former RDA. In June 2011, all California RDAs were required to dissolve effective February 1, 2012. The law dissolving the RDAs called for the creation of a Successor Agency (SA) to wind down RDA business. The initial dissolution law provided that the SA would pay “enforceable obligations” of the former RDA. However, the law initially excluded debt a former agency owed to the city that created it from the definition of enforceable obligations, unless the debt was created in the first two years following the agency’s creation or was debt that represented third party obligations. Subsequent legislation allowed limited, conditional repayment of loans by the SA to the community that created it. When the RDA dissolution process began, City staff considered it to be premature to consider the debt owed by the former RDA to the City as being current. Thus, an allowance for doubtful accounts was created by the City which at June 30, 2011 totaled $80.1 million. This amount, which was equal to the calculated amount of the debt, was reflective primarily of principal and interest accrued over the years on the advances. As payments on the debt have been received and legal decisions have been rendered which further defined an "enforceable obligation", staff revisited that initial allowance for doubtful accounts amount and refined it. At the end of fiscal year 2018, the allowance for doubtful accounts stands at $6.1 million. As the funds are received, twenty percent of any loan repayment received by the City must be deducted from the loan repayment amount and be transferred to the Low and Moderate Income Housing Fund. In fiscal year 2018, this amount totaled $0.8 million. The repayment is reflected on the CAFR on the Combining Statement of Revenues, Expenditures and Changes in Fund Balances - Nonmajor Governmental Funds, under the Special Revenue-Low and Moderate Income Housing Fund. On June 23, 2016, the City Council approved a resolution requiring any amount of the annual repayments CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 112 NOTE 7 - INTERFUND ACTIVITY of RDA debt that are received and not related to Enterprise Funds related loans would go toward the rebuilding of the City’s Emergency Reserve Fund. Through June 30, 2018, the City had received $16.6 million in loan repayments from the SA. With the adoption of the FY2019 budget, this will become a General Fund revenue source. City of Fresno Advances to Former Redevelopment Agency Principal Cumulative Interest Cumulative Total Receivable Fund Beginning Balance Advances/ Adjustments Payments/ Write-offs Ending Balance Beginning Balance Accruals/ Adjustments Payments/ Write-offs Ending Balance Total Receivable Allowance for Doubtful Receivable (Net of Allowance) General Fund: General Fund $3,710,412 $119,768 $(1,223,537)$2,606,643 $3,628,194 $188,806 $(1,132,128)$2,684,872 $5,291,515 $(1,383,181)$3,908,334 General Revenue Sharing 144,296 (119,768)(19,440)5,088 133,376 (110,452)(17,186)5,738 10,826 —10,826 Parking Trust 150,000 ——150,000 93,600 4,500 —98,100 248,100 (248,100)— 4,004,708 —(1,242,977)2,761,731 3,855,170 82,854 (1,149,314)2,788,710 5,550,441 (1,631,281)3,919,160 Grants Special Revenue Fund 10,437,251 —(722,659)9,714,592 9,490,889 291,439 (888,671)8,893,657 18,608,249 (2,046,951)16,561,298 Nonmajor Governmental Funds: Gas Tax 1,376,142 ——1,376,142 878,534 41,284 —919,818 2,295,960 (1,904,528)391,432 Measure C ————63,280 ——63,280 63,280 —63,280 1,376,142 ——1,376,142 941,814 41,284 —983,098 2,359,240 (1,904,528)454,712 Water System 93,876 ——93,876 46,368 2,816 —49,184 143,060 —143,060 Sewer System 592,971 ——592,971 296,398 17,789 —314,187 907,158 —907,158 Fresno Convention Center 304,233 ——304,233 182,539 9,127 —191,666 495,899 (495,899)— 991,080 ——991,080 525,305 29,732 —555,037 1,546,117 (495,899)1,050,218 Total $16,809,181 $—$(1,965,636)$14,843,545 $14,813,178 $445,309 $(2,037,985)$13,220,502 $28,064,047 $(6,078,659)$21,985,388 Subsequent to year-end, the City received a reimbursement on loans made to the former RDA. The amount received was $5.2 million, of which $4.2 million was paid to the City and $1.0 million was paid to the Housing Successor. Redevelopment Agency - Housing Assets The City became the “Housing Successor” of the former RDA’s Housing Assets. These assets were transferred to the City, who has sole legal authority to administer housing assets pursuant to the Redevelopment Dissolution Laws. This allows the City to complete projects under contract, liquidate surplus real estate and distribute proceeds to taxing entities, pursue repayment of RDA obligations to the City, and administer housing assets. Other Advances The Sewer System sold land to the General Fund for the purpose of constructing a regional public safety training facility. Interest for the advance is equal to two percent (2%) above the City’s monthly Pooled Investment Rate. The first interest only payment was due July 31, 2008. Principal, at not less than 1/29th of the original principal, and interest payments are due annually thereafter. The remaining advances are interest free and payable on demand. The amounts are not expected to be repaid within the next twelve-month fiscal operating cycle. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 113 NOTE 7 - INTERFUND ACTIVITY The composition of interfund balances (advances from/to other funds) as of June 30, 2018, is as follows: Receivable Fund Payable Fund Amount General Fund Fiduciary Funds $3,919,160 Grants Special Revenue Fund Fiduciary Funds 16,561,298 Nonmajor Governmental Funds Nonmajor Governmental Funds 62,208 Fiduciary Funds 454,712 516,920 Water System Fiduciary Funds 143,060 Sewer System General Fund 3,402,071 Fiduciary Funds 907,158 4,309,229 Total Advances $25,449,667 C. Transfers Transfers represent subsidies by one fund to another in accordance with the budget and provide for various City programs and provide resources for the payment of debt service. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 114 NOTE 7 - INTERFUND ACTIVITY The following is a summary of interfund transfers for the year ended June 30, 2018: Receiving Fund Paying Fund Amount General Fund Grants Special Revenue Fund $2,709,187 Nonmajor Governmental Funds 522,125 Water System 926 Solid Waste Management 708,350 Transit 597,148 Internal Service Funds 13,546 4,551,282 Grants Special Revenue Fund General Fund 487 Nonmajor Governmental Funds 2,761,937 Nonmajor Enterprise Funds 89,672 2,852,096 Nonmajor Governmental Funds General Fund 27,551,295 Grants Special Revenue Fund 2,746,908 Nonmajor Governmental Funds 8,053,651 Water System 427,852 Sewer System 383,164 Solid Waste Management 346,368 Transit 906,116 Airports 208,581 Nonmajor Enterprise Funds 102,475 Internal Service Funds 1,266,832 41,993,242 Water System Sewer System 99,000 Solid Waste Management General Fund 673,268 Nonmajor Enterprise Funds 667,027 Internal Service Funds 282,439 1,622,734 Fresno Convention Center General Fund 5,005,375 Nonmajor Governmental Funds 2,872 5,008,247 Stadium General Fund 3,179,271 Nonmajor Governmental Funds 2,603 3,181,874 Nonmajor Enterprise Funds Nonmajor Governmental Funds 267 Internal Service Funds General Fund 4,208,272 Total Transfers $63,517,014 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 115 NOTE 7 - INTERFUND ACTIVITY The General Fund transferred $27.6 million to Nonmajor Governmental Funds to provide support for debt service payments and capital projects; $5.0 million to the Convention Center for debt service as well as general operating support; $4.2 million to Internal Service Funds for provided services and $3.2 million to the Stadium Fund for debt service payments. The Grants Special Revenue Fund transferred $2.7 million to the General Fund for an RDA Advance and $2.7 million to Nonmajor Governmental Funds. Nonmajor Governmental Funds transferred $11.3 million for debt service and miscellaneous purposes. Internal Service Funds transferred $1.3 million to Nonmajor Governmental Funds for debt service payments. D. Recap of Interfund Activity The following schedule recaps Interfund Activity at June 30, 2018: Due from Other Funds Due to Other Funds Advances Receivable from Other Funds Advances Payable to Other Funds Transfers In Transfers Out Governmental Funds: General Fund $4,562,927 $748,568 $3,919,160 $3,402,071 $4,551,282 $40,617,968 Grants Special Revenue Fund 2,196,359 3,684,066 16,561,298 —2,852,096 5,456,095 Nonmajor Governmental Funds 984,466 1,522,221 516,920 62,208 41,993,242 11,343,455 Total Governmental Funds 7,743,752 5,954,855 20,997,378 3,464,279 49,396,620 57,417,518 Proprietary Funds: Water System —155,769 143,060 —99,000 428,778 Sewer System —168,622 4,309,229 ——482,164 Solid Waste Management —526,255 ——1,622,734 1,054,718 Transit 1,107,116 112,871 ———1,503,264 Airports —27,717 ———208,581 Fresno Convention Center —8,766 ——5,008,247 — Stadium ————3,181,874 — Nonmajor Enterprise Funds —178,918 ——267 859,174 Internal Service Funds 2,119,884 3,836,058 ——4,208,272 1,562,817 Total Proprietary Funds 3,227,000 5,014,976 4,452,289 —14,120,394 6,099,496 Fiduciary Funds: Major Governmental Funds —921 —21,985,388 —— Total Fiduciary Funds —921 —21,985,388 —— Total $10,970,752 $10,970,752 $25,449,667 $25,449,667 $63,517,014 $63,517,014 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 116 NOTE 8 - DEFEASANCES Note 8. Defeasances Current Year Defeasances The City of Fresno did not defease any debt in fiscal year 2018. Prior Year Defeasances On May 10, 2017, the City refinanced several bonds, including the 2009 Fresno Joint Powers Financing Authority Lease Revenue Bonds (Public Safety Projects). These bonds are not callable until April 1, 2019. An escrow account was established at Zion’s National Bank with a deposit from bond proceeds of $35.5 million and a transfer from the Reserve Fund of $3.4 million to pay debt service on the 2009 Bonds until April 1, 2019. As of June 30, 2018, $36.3 million remains in the escrow account. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 117 NOTE 9 - RISK MANAGEMENT FUND Note 9. Risk Management Fund The City is exposed to various risks of loss related to torts; theft of, damage to, and destruction of assets; business interruption; errors and omissions; automobile liability and accident claims; natural disasters; employee health benefit claim payments; and injuries to employees (workers’ compensation). With certain exceptions, it is the policy of the City to use a combination of self-insurance and purchased commercial insurance against property, liability, or workers’ compensation risks. The City believes it is more economical to manage its risks internally and set aside funds as needed for estimated current claim settlements and unfavorable judgments through annual appropriations and supplemental appropriations. The City maintains limited coverage for certain risks that cannot be eliminated. The Risk Management Division investigates and manages all liability claims and property losses, evaluates risk exposure and insurance needs, protects against contractual loss by reviewing/preparing insurance and indemnification portions of contractual documents, emphasizes ongoing operational loss control, and purchases all insurance coverage for the City. The City maintains General Liability insurance, with limits of liability of $25 million per occurrence and $50 million aggregate in Excess Liability coverage. There is a $3 million self-insured retention (SIR). Coverage is provided by the Security National Insurance Company ($2 million/$4 million) or Safety Specialty $2 million, depending on the line of coverage and thereafter Safety Specialty Insurance Company ($8 million/$16 million) and Arch Insurance Company ($15 million/$30 million). The City has procured Automobile Physical Damage coverage through Hanover Insurance Company with a $10 million limit, for vehicles valued at less than $150,000 the deductible is $50,000 for vehicles valued at $150,000 or more the deductible is $100,000. The City carries Government Crime coverages with a $5 million limit secured through Zurich Insurance Company with a $50,000 deductible and Cyber liability coverage under Indian Harbor with a $200,000 SIR and a $2 million limit. The City also maintains Airport Owners and Operators General Liability insurance and Aviation (Aircraft Liability), with limits of liability of $100 million. There is no deductible or SIR. Coverage is provided by Old Republic Insurance Company through Phoenix Avaition Managers (Texas), Inc. Furthermore, the City maintains Property insurance and Boiler and Machinery insurance, with total insured values of $1,462,245,250 and limits of liability of $1 billion. There is a $100,000 deductible. Property insurance does not cover losses due to seismic events. Finally, the City maintains Aviation (Aircraft Hull) insurance for two helicopters and one airplane, with limits of liability of $50 million. There is a 1.0% of insured value each claim, subject to a maximum of $15,000, rotors in-motion deductible and $0 rotors not in-motion deductible of each helicopter. Coverage is provided by Old Republic Insurance Company through Phoenix Aviation Managers (Texas), Inc. The City’s Workers’ Compensation Program consists of $2 million SIR, with purchased excess insurance layers up to the statutory limits. Settled claims have not exceeded the SIR in any of the last four fiscal years. The claims liabilities and workers’ compensation liabilities reported on the Statement of Net Position have been actuarially determined and include an estimate of incurred but not reported losses. The estimated liabilities of the Risk Management ISF as of June 30, 2018 are determined by the City based on recommendations from an independent actuarial evaluation. The liabilities are based on estimates of the ultimate cost of claims (including future claim adjustments expenses) that have been reported but not settled, and claims that have been incurred but not reported (IBNR). The claims liability CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 118 NOTE 9 - RISK MANAGEMENT FUND of $127.5 million reported in the Risk Management Internal Service Fund at June 30, 2018 is based on the requirement that claims be reported if information prior to the issuance of the financial statements indicates it is probable that a liability has been incurred at the date of the financial statements and the amount of loss can be reasonably estimated. The recorded liabilities for each program at June 30, 2018 are as follows: Workers' Compensation *$98,228,152 Liability and Property Damage *29,236,978 Total $127,465,130 * The liabilities for workers' compensation and general liability are presented at present value, using a discount rate of 3%. Changes in the funds claims liability amount for the last two fiscal years are as follows: Fiscal Year Ended June 30 Beginning of Fiscal Year Liability Current Year Claims and Changes in Estimates Claims Payments End of Fiscal Year Liability 2017 $109,773,891 $35,864,021 $21,103,044 $124,534,868 2018 124,534,868 31,871,603 28,941,341 127,465,130 See Note 10 (G) on page 137 for changes in funds claims liability related to Employees Healthcare Plan. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 119 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Note 10. Employee Benefit Programs A. Retirement Plans The City sponsors two single-employer, contributory, defined benefit pension plans. The City of Fresno Employees Retirement System and the City of Fresno Fire and Police Retirement System (Systems) were established under Charter Section 910 and are governed by Article 5 Chapter 3 (Employees) and Articles 3 and 4 Chapter 3 (Fire and Police) of the City of Fresno Municipal Code, respectively. The Systems provide lifetime retirement, disability, and death benefits to its members. The Systems are administered by their respective Retirement Boards (Boards) which operate in compliance with the City of Fresno Municipal Code, and also in accordance with the California Pension Protection Act of 1992. The Boards do not operate under the control of the City Council. Rather, the Boards have the sole and exclusive responsibility to administer the respective Systems in a manner that will assure prompt delivery of benefits and related services to the members and their beneficiaries. Membership and Benefit Eligibility All permanent full-time employees of the City, except sworn Fire and Police personnel, are eligible to participate in the Employees’ plan. The Fire and Police is one System with two tiers. Effective August 28, 2008, the City of Fresno added the Fire and Police Tier 2 for all full-time sworn Fire, Police and Airport safety personnel hired on or after that date (and closed the Fire and Police Tier 1 to new entrants). Employees become eligible for membership on their first day of full-time regular employment, and become fully vested after earning 5 years of service credit. Employees working in limited, interim, provisional, temporary, seasonal or part-time positions are not eligible to participate in the Systems. Participation is mandatory if an employee is eligible, except in the case of the City Manager, City Attorney, City Clerk, Department Heads and Council Assistants who may negotiate other retirement benefits if such an agreement is established by resolution of the Council as provided for in the Fresno Municipal Code (FMC) Section 5-318. Total participants in each System were comprised of the following, as of June 30, 2018: Employees Fire & Police Total Active Members Vested 1,285 808 2,093 Non-vested 887 330 1,217 Total Active Members 2,172 1,138 3,310 Retirees and Beneficiaries of Deceased Retirees Retirees, Currently Receiving Benefits 1,970 1,062 3,032 Inactive Vested Members 251 94 345 Total Retirees and Inactive Members 2,221 1,156 3,377 Grand Total 4,393 2,294 6,687 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 120 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Benefit Provisions The retirement (pension) benefits that Employees members receive are based upon a combination of age at retirement, years of credited service, final average monthly salary, and the distribution option selected by the participant. For Fire and Police, the benefits are further based upon the tier and option selected by the participant. Members' contributions, including interest, are 100% vested at all times. Employer contributions do not become vested until completion of five years of credited service, and are not payable until the member attains the age of 55. Effective January 28, 2008, members may retire between ages 50-55 with an actuarially equivalent service retirement benefit. For Fire and Police, the employer contributions do not become vested until completion of ten years of credited service under Tier 1 and five years of credited service under Tier 2. Those benefits are not payable until the member attains the age of 50 under both tiers. Contributions are made by the members and the employer at rates recommended by the Systems’ actuary and adopted by the Boards. Member Retirement Benefits Employee members are eligible for service retirement benefits upon completion of at least five years of service upon termination of service (if they have left their contributions and interest with the System) and are at least age 55. They are also eligible if their permanent termination from City service was caused by a layoff. In those cases, they can retire at age 50 at a reduced benefit. They may also be eligible for service retirement benefit if they have less than five years of service with the City, have established reciprocity with a prior employer, and are eligible to retire from that agency. The service retirement monthly benefit calculated pursuant to the provisions of the Fresno Municipal Code is equal to 2% of final compensation times each of the first 25 years of accrued retirement service credit plus 1% of final compensation times any years of accrued retirement service credit in excess of 25 years, multiplied by the age factor at retirement age. Final average compensation consists of the highest average consecutive 36 months of earnable compensation calculated using the rate of pay in effect at the time of retirement. Fire and Police members of Tier 1 are eligible to retire once they attain the age of 65 regardless of service, or at age 50 and have acquired ten or more years of retirement service credit. The Tier 1 monthly benefit for a member with at least 20 years of service who retires from active status is equal to 55% of final compensation plus 2% of final compensation for each year of service in excess of 20 years completed after age 50. For Tier 1, final average compensation consists of the final highest consecutive 36 months of compensation earnable calculated using the rate of pay actually earned by the member in effect at the time of retirement. Some members can elect to have their final compensation based on a rank average. Members of Tier 2 are eligible to retire once they attain the age of 65 regardless of service or at age 50 and have acquired 5 or more years of retirement service credit. The Tier 2 monthly benefit for a member who is age 55 or older is equal to 2.70% of final compensation times years of accrued retirement service credit. The maximum monthly retirement allowance is 75% of final compensation. Tier 2 final average compensation consists of the highest consecutive 36 months of compensation earnable before the date of retirement. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 121 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS The members of each System may elect an unmodified retirement allowance, or choose one of four optional retirement allowances. Each of the optional retirement allowances require a reduction in the unmodified retirement allowance in order to allow the members the ability to provide certain benefits to a surviving spouse, domestic partner, or named beneficiary having an insurable interest in the life of the member. For Employees members, the unmodified retirement allowance provides the highest monthly benefit and 50% continuance to an eligible surviving spouse or domestic partner. For Fire and Police members, the unmodified retirement allowance also provides the highest monthly benefit and a 66 2/3% continuance to an eligible surviving spouse or domestic partner. The Municipal Code provides that the Retirement staff must research the percentage change in the Consumer Price Index (CPI) (US city-average for urban wage earners and clerical workers - all items) and propose that percentage to the appropriate Boards as the cost-of-living adjustments (COLA) to be adopted for the following year. This procedure must be completed by the end of April of each year for implementation in July (employees) or January (public safety). The COLA is limited to a 5% maximum change per year (employee) or 3% maximum change (public safety). Any excess over the maximum change is “banked” for use in a year where the percent of CPI change is less than the maximum. The Fire and Police Tier 1 COLA depends on the type of method chosen by the employee at retirement. If the employee chose the Career Rank method, the COLA is a recalculation of his/her retirement based on the new salaries adopted for the current year. If the method chosen by the retiree is the final 3-year method, the COLA is based on the change in the weighted mean average compensation attached to all ranks in the department, with a cap of 5% per year. Any excess over the 5% is “banked” for use in years when the COLA calculated is less than 5%. Each System also has a Deferred Retirement Option Program (DROP), which is an optional voluntary program that allows the member to have his or her retirement benefits deposited in a special account within the Systems while the member continues to work in his or her current position. It is a voluntary method of receiving a distribution of their retirement benefits; it is not an additional retirement benefit. Additional information may be found in the CAFR for each respective System. Terminated Member Benefits If a member terminates before earning five years of credited service, the member forfeits the right to receive his or her service retirement benefit and is entitled to withdraw refundable contributions made, together with accumulated interest. If the member enters a reciprocal retirement system within 180 days (6 months) of terminating employment with the City and elects to leave their accumulated contributions on deposit with the System, then the member will receive a deferred retirement allowance when eligible. Death and Disability Benefits Death benefits are based upon whether the death occurred before or after retirement. Disability benefits are based upon whether the member has at least ten years of credited service, over or under age 55 and whether the permanent incapacity is found to be service or non-service connected. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 122 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Basis of Accounting The Systems’ financial statements are prepared using the accrual basis of accounting and in accordance with generally accepted accounting principles in the United States of America (GAAP), under which revenues are recognized when earned and deductions are recorded when the liability is incurred. Securities lending transactions are accounted for in accordance with GASB Statement No. 28, Accounting and Financial Reporting for Securities Lending Transactions. Valuation of Investments For financial reporting purposes, the Systems’ investments are reported at fair value. Fair value for investments of publicly traded securities is based upon closing sales prices reported on recognized securities exchanges on the last business day of the period or for listed securities having no sales reported and for unlisted securities, based upon last reported bid prices. All purchases and sales of securities are accounted for on a trade date basis. Dividends declared but not received are accrued on the ex-dividend date. Short-term investments are reported at cost, which approximates fair value. Securities traded on national or international exchanges are valued at the last reported sales price at current exchange rates. Investments in both bonds and mortgage backed pass- through certificates are carried at fair value. Cost values are derived from Master Custodial Transaction Records. The fair value of real estate investments is based on independent appraisals. Investments that do not have an established market are reported at estimated fair values. For asset/liability calculation purposes and for actuarial purposes, asset valuation is based on market value of assets less unrecognized returns from each of the last five years. Unrecognized returns are equal to the difference between the actual market return and the expected return on a market value basis and are recognized over a five-year period. The Actuarial Value of Assets is reduced by the value of the non-valuation reserves. Rate of Return For the year ended June 30, 2018, the annual money-weighted rate of return on pension plan investments, net of pension plan expense was 8.57%, for the Employees and Fire and Police. The money- weighted rate of return expresses investment performance, net of investment expense, adjusted for the changing amounts actually invested. Reporting The following data is for employer reporting as required by GASB Statement No. 68 as of June 30, 2018. The results used in preparing the GASB Statement No. 68 report are comparable to those used in preparing the GASB Statement No. 67 report for the plan based on a reporting date and measurement date as of June 30, 2017. The valuation is based upon: • The benefit provisions of the Systems as administered by the Boards; CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 123 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS • The characteristics of covered active members, terminated vested members, and retired members and beneficiaries as of June 30, 2017; • The assets of each Plan as of June 30, 2017; • Economic assumptions regarding future salary increases and investment earnings; and • Other actuarial assumptions, regarding employee termination, retirement, death, etc. The Total Pension Liability (TPL) and the Plans’ Fiduciary Net Positions include liabilities and assets held for DROP, Post-Retirement Supplemental Benefits (PRSB) and City Surplus reserves. The Net Pension Liability (NPL) is equal to the difference between the TPL and the each Plan’s Net Position. Each Plan’s Fiduciary Net Position is equal to the market value of assets and therefore, the NPL measure is very similar to an Unfunded/(Prefunded) Actuarial Accrued Liability calculated on a market value basis. The NPL was measured as of June 30, 2017 and determined from the actuarial valuations as of June 30, 2017. The Plans’ Fiduciary Net Positions (Plan Assets) were valued as of the measurement dates. Consistent with the provisions of GASB Statement No. 68, the assets and liabilities measured as of June 30, 2017 were not adjusted or rolled forward to the June 30, 2018 reporting date. The discount rates used for each Plan to determine the TPL and NPL as of June 30, 2017 was 7.25%, following the same assumptions used by the Retirement Systems in the funding valuations as of the same dates. Funding Policy The City contributes to the retirement plans based upon actuarially determined contribution rates adopted by the Boards. Employer contribution rates are adopted annually based upon recommendations received from the Retirement Systems actuary after the completion of the annual actuarial valuation. For the Employees System, the average employer contribution rate as of June 30, 2018, for 2017-2018 (based on the June 30, 2016 valuation) was 11.37% of compensation. The average employee member contribution rate as of June 30, 2018 for 2017-2018 (based on the June 30, 2016 valuation) was 8.04% of compensation. For the Fire and Police System, the average employer contribution rate as of June 30, 2018, for 2017-2018 (based on the June 30, 2016 valuation) was 18.93% of compensation. The average employee member contribution rate as of June 30, 2018 for 2017-2018 (based on the June 30, 2016 valuation) was 3.32% of compensation. All active Fire and Police members are required to make contributions to the System. Employee contribution rates vary in the First Tier according to entry age. The Tier 1 average member contribution rate as of June 30, 2018 for 2017-2018 (based on the June 30, 2016 valuation) was 5.02% of compensation. Employee contribution rates in the Second Tier are established at 9% of pensionable base pay. The aggregate employer contribution rate for the Fire and Police System as of June 30, 2018 for 2017-2018 (based on the June 30, 2016 valuation) was 18.92% of compensation. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 124 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Actuarial Funding Policy and Actuarial Cost Methodology for Funding Purposes The City currently funds, at a minimum, the amounts recommended by the actuary and approved by the Boards. These minimum contributions are recognized currently in each System’s statement of changes in fiduciary net position. Employees' contributions are funded and recognized currently through payroll deductions in amounts recommended by the actuary. Costs of administering the System are charged against System assets. Funding Status and Method The Employees System Board adopted a Comprehensive Actuarial Funding Policy on November 7, 2012. For the Employees Retirement System, this policy included a change in actuarial cost methodology from the Projected Unit Credit (PUC) method previously used for funding purposes to the Entry Age Normal (EAN) method. On the same date, the Fire and Police Board adopted a Comprehensive Actuarial Funding Policy. For the Fire and Police Retirement System, this policy included a change in actuarial cost methodology from the aggregate EAN funding method to the individual EAN method. The Boards made the change due to the adoption of GASB Statement No. 67 in fiscal year 2014. Funding Requirements and Policy Components The Systems’ annual funding requirements are comprised of a payment of the Normal Cost and a payment on the Unfunded Actuarial Accrued Liability (UAAL), if applicable. The Normal Cost and the amount of the payment on UAAL are determined by three components of the respective Board’s funding policy: 1) Actuarial Cost Method - the techniques used to allocate the cost/liability of retirement benefits to a given period; 2) Asset Smoothing Method - the techniques that spread the recognition of investment gains or losses over a period of time for the purposes of determining the Actuarial Value of Assets used in the actuarial valuation process; and 3) Amortization Policy - the decisions on how, in terms of duration and pattern, to fund the difference between the AAL and the Actuarial Value of Assets in a systematic manner. As of June 30, 2018, the Systems did not have UAAL. The Boards adopted an Amortization Policy, which sets forth the amortization procedures for funding any UAAL or amortization and allocation of any available Surplus in the Systems. A detailed description of the policy can be found in the Notes to the Financial Statements for the Retirement Systems, which are located at http://www.cfrs-ca.org/Employee/Communications/Reports.asp for the Employees System or at http://www.cfrs-ca.org/Fire-Police/Communications/Reports.asp for the Fire and Police System. The Systems use a 5-year smoothing of market gains and losses above and below the assumed actuarial rate of return to derive the actuarial value of assets. As of the fiscal year ended June 30, 2018, the actuarial valuation value of the Employees’ System assets was $1.203 billion with a funded percentage of 114.8% on a valuation value of assets, whereas the actuarial value of Fire and Police assets was $1.437 billion CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 125 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS with a funded percentage of 120.3% on a valuation value of assets. Contributions Required and Contributions Made The employer’s required normal contributions to the Systems have two components: basic and COLA. For fiscal year 2018, the City’s required normal contributions (basic and COLA) to the Systems were as follows: Normal Cost Employees System FY 2018 Member Contributions $10,329,475 Employer Contribution Rate 11.69% Employer Contributions $15,017,145 Prior Year Contribution (Surplus)/Shortfall (408,486) Net Employer Contributions $14,608,659 Pensionable Payroll $128,461,461 Employer and employee contributions represented 11.37% and 8.04% respectively, of the fiscal year 2018 covered payroll for the Employees System. Normal Cost Fire and Police System FY 2018 Tier 1 Tier 2 Total Member Contributions $208,894 $8,754,778 $8,963,672 Employer Contribution Rate 28.38%23.15% Employer Contributions $1,783,709 $22,605,777 $24,389,486 Prior Year Contribution (Surplus)/Shortfall (593,669)(4,098,860)(4,692,529) Net Employer Contributions $1,190,040 $18,506,917 $19,696,957 Pensionable Payroll $6,285,092 $97,649,142 $103,934,234 Employer and employee contributions represented 18.93% and 3.32%, respectively, of the fiscal year 2018 covered payroll for the Fire and Police System. Net Pension Liability The net pension liability reported as of June 30, 2018 was measured as of June 30, 2017, and determined based upon the total pension liability (on GASB Statement No. 68 basis) from actuarial valuations as of June 30, 2017. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 126 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS The City’s total pension liability, plan fiduciary net position, and net pension liability for each System as of June 30, 2018, were as follows: Employees System Fire and Police System Total Pension Liability $1,150,077,445 $1,315,367,546 Plan Fiduciary Net Position (1,274,121,736)(1,509,542,788) Net Pension Liability (Asset)$(124,044,291)$(194,175,242) Plan Fiduciary Net Position as a percentage of the total pension liability 110.79%114.76% Changes in Net Pension Liability The components of the net pension liability for each System as of June 30,2017 and a measurement date of June 30, 2017, were as follows: Employees System Fire and Police System Total Pension Liability (Asset) Beginning Balance $1,102,212,920 $1,244,721,462 Service Cost 18,884,800 28,838,335 Interest 79,265,901 90,184,441 Differences between expected & actual experience 5,263,729 10,896,246 Benefit payments, including refunds (55,549,905)(59,272,938) Changes of Assumptions —— Net Change in Total Pension Liability 47,864,525 70,646,084 Ending Balance $1,150,077,445 $1,315,367,546 Plan Fiduciary Net Position Beginning Balance $1,143,299,019 $1,351,288,640 Contributions - employer 15,205,360 18,543,308 Contributions - employee 10,180,589 8,169,019 Net Investment Income 162,373,451 192,314,904 Benefit payments (including refunds, PRSB)(55,549,905)(59,272,938) Administrative & professional expense (1,386,778)(1,500,145) Net Change in Plan Fiduciary Net Position 130,822,717 158,254,148 Ending Balance 1,274,121,736 1,509,542,788 Net Pension Liability (Asset)$(124,044,291)$(194,175,242) CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 127 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Discount Rate and Sensitivity of the Net Pension Liability to Changes in the Discount Rate The discount rate used to measure the TPL was 7.25% as of June 30, 2017. The following presents the NPL of the Employees and Fire and Police Retirement Systems as of June 30, 2017. The Systems use the current discount rate to measure the TPL for the measurement date of June 30, 2017, as well as what the NPL would be if it were calculated using a discount rate that is 1-percentage-point lower (6.25%) or 1-percentage-point higher (8.25%) than the current rate: 1% Decrease Current Discount Rate 1% Increase 6.25%7.25%8.25% Employees System $7,181,726 $(124,044,291)$(232,579,400) Fire and Police System (24,471,747)(194,175,242)(332,093,958) Long-Term Expected Real Rate of Return The long-term expected rate of return on the Systems’ 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 net of inflation) are developed for each major asset class. This information is combined to produce the long-term expected rate of return by weighting the expected future real rates of return by the target asset allocation percentage and by adding expected inflation and deducting expected investment expenses and a risk margin. The target allocation and projected arithmetic real rates of return for each major asset class, are summarized in the following table: Asset Class/Target Allocation/Long-Term Expected Rate Return Table As of June 30, 2018 Asset Class Target Asset Allocation Weighted Average Long-Term Expected Rate of Return (Arithmetic) Large Cap U.S. Equity 22.5%5.8% Small Cap U.S. Equity 7.5%6.47% Developed International Equity 22.0%6.98% Emerging Market Equity 8.0%8.99% Domestic Fixed Income 15.0%0.83% High Yield Fixed Income 6.0%3.44% Real Estate 15.0%4.45% Private Debt/Direct Lending 4.0%5.73% Total 100.0% CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 128 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Mortality Rates For the Employees System, the mortality rates used in the latest actuarial valuation are based on the Headcount-Weighted RP-2014 Healthy Annuitant Mortality Table (separate tables for males and females) for healthy members, projected 20 years with the two-dimensional scale MP-2015, set forward one year. For disabled members, the ages are set forward four years. For beneficiaries, ages are set forward one year, weighted 35% male and 65% female. For the Fire and Police System the mortality rates used in the latest actuarial valuation are based on the Headcount-Weighted RP-2014 Healthy Annuitant Mortality Table (separate tables for males and females) for healthy members, projected 20 years with the two-dimensional scale MP-2015, with no setback for healthy males and set forward one year for healthy females. For disabled members, the ages are set forward four years. For beneficiaries, there is no setback for males and set forward one year for females, weighted 80% male and 20% female. Actuarial assumptions The TPL as of June 30, 2017 was determined by an actuarial valuation of June 30, 2017. The actuarial assumptions used in the valuation were based on the results of an experience study for the period from July 1, 2012 through June 30, 2015. These assumptions have been applied since the June 30, 2013 valuation. In particular, the following actuarial assumptions were applied to all periods included in the measurement: Inflation 3.00% Salary increases 3.75% to 11.50%, varying by service, including inflation (Employees). 4.00% to 12.00%, varying by service, including inflation (Fire and Police). Investment rate of return 7.25%, net of pension plan investment expense, including inflation. Other assumptions See Appendix A in the CAFR for the Employees' Plan and the Fire and Police Plan for the service retirement rates after they have been adjusted to treat DROP participation as service retirement. Net Position Restricted for Pension Benefits Net position restricted for pension benefits is segregated into Active Members Reserve (members’ accumulated contributions) and reserves established by the Boards for various benefit payments. Reserves are established by the Systems from member and employer contributions and the accumulation of investment income after satisfying investment and administrative expenses. Pension Expenses and Deferred Outflows/Inflows of Resources Related to Pensions For the fiscal year ending June 30, 2018, the City incurred a pension expense of $14.2 million for the Employees Plan and $9.7 million for the Fire and Police Plan. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 129 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS As of June 30, 2018, the City has deferred outflows and deferred inflows of resources related to the pensions as follows: Pension Expense and Deferred Outflows and Inflows of Resources Employees Fire and Police Components of Pension Expense System System Service cost $18,884,800 $28,838,335 Interest on the total pension liability 79,265,901 90,184,441 Expensed portion of current-period difference between expected and actual experience in the Total Pension Liability 1,530,154 2,394,779 Actual member contributions (10,180,589)(8,169,019) Projected earnings on plan investments (81,745,465)(96,733,724) Expensed portion of current-period differences between actual and projected earnings on plan investments (16,125,597)(19,116,236) Administrative expense 1,386,778 1,500,145 Recognition of beginning of year deferred outflows of resources as pension expense 29,913,421 43,201,180 Recognition of beginning of year deferred inflows of resources as pension expense (37,162,629)(51,834,093) Pension Expense $(14,233,226)$(9,734,192) Deferred Outflows of Resources and Deferred Inflows of Resources Deferred Outflows of Resources Contributions subsequent to Measurement Date $14,257,355 $18,279,684 Changes of assumptions or other outputs 3,604,547 26,330,309 Difference between expected and actual experience in the Total Pension Liability 3,733,575 8,501,467 Deferred Outflows of Resources $21,595,477 $53,111,460 Deferred Inflows of Resources Net difference between projected and actual earnings on pension plan investments $13,801,588 $16,638,964 Difference between expected and actual experience in the Total Pension Liability 10,097,415 41,257,452 Deferred Inflows of Resources $23,899,003 $57,896,416 Deferred outflows of resources and deferred inflows of resources related to pension will be recognized as follows: 2018 N/A N/A 2019 $(12,666,481)$(21,829,729) 2020 11,390,325 13,660,137 2021 840,873 2,904,058 2022 (16,125,598)(17,799,106) Thereafter —— Any differences between projected and actual investment earnings on pension plan investments are recognized over a period of five years beginning with the year in which they occur. Differences between expected and actual experiences are recognized over the average of the expected remaining service lives of all employees that are provided with pensions through the Retirement Systems determined as of June 30, 2016 (the beginning of the measurement period ending June 30, 2017) and is 3.44 years for the Employees System and 4.55 years for the Fire & Police System. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 130 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Administrative Expenses The Fresno Municipal Code (FMC) provides that all administrative costs of the Systems shall be a charge against the assets of the Systems. Per the FMC, the Administrative expenses are a component of the City’s contribution calculation. The Systems issue publicly available financial reports that include financial statements and required supplementary information for the Employees Retirement System and the Fire and Police Retirement System. The reports may be obtained by writing the City of Fresno Retirement Office, 2828 Fresno Street, Suite 201, Fresno, California 93721, or by visiting: http://www.cfrs-ca.org/Employee/Communications/Reports.asp for the Employee System, or http://www.cfrs-ca.org/Fire-Police/Communications/Reports.asp for the Police and Fire System. Successor Agency Retirement Plan The Successor Agency participates in a public agency cost-sharing multiple-employer defined benefit pension plan (the Plan) administered by the California Public Employees' Retirement System (CalPERS). Employer contribution rates are determined on an annual basis by an actuary and are effective on the July 1 following notice of a change in the rate. The Plan fiduciary net position disclosed in the Successor Agency’s accounting valuation may differ from the Plan assets reported in the Successor Agency’s funding actuarial valuation report due to CalPERS keeping various items included in its fiduciary net position which are excluded for rate setting purposes in the Successor Agency’s funding actuarial valuation. Differences may also result from timing of financial reporting by CalPERS and final reconciled reserves. As of the beginning of the measurement period (July 1, 2017), the net pension liability for the Plan is $400,742. For the measurement period ended June 30, 2018 (the measurement date), the net pension liability for the Plan is $480,547 and the Successor Agency incurred pension expense of $48,241 for the Plan. As of June 30, 2018, the Successor Agency reports other amounts for the Plan as deferred outflows and deferred inflows of resources related to pensions as follows: Deferred Outflows of Resources Deferred Inflows of Resources Contributions made after the measurement date $33,442 $— Difference between expected and actual experience 94,369 7,196 Changes in assumptions 761 10,897 Net Difference between projected and actual earnings on pension plan Investments 21,342 — Changes in employer's proportions —25,046 Difference between the employer's contributions and the employer's proportionate share of contributions —48,943 Total $149,914 $92,082 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 131 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS For more detailed information related to the Successor Agency’s retirement plan, refer to the Successor Agency’s separate audited financial statements which can be obtained by contacting the Successor Agency at 2344 Tulare Street, Suite 200, Fresno, CA 92721. B. Deferred Compensation Plan The City offers its employees a deferred compensation plan in accordance with Internal Revenue Code (IRC) Section 457. The deferred compensation plan (the Plan), available to all permanent full-time and part-time employees and Council Members, permits deferral of a portion of the employee’s salary into a tax-deferred program. The deferred compensation is not available to employees or other beneficiaries for withdrawal until termination, retirement, death, or unforeseeable emergency, or loan program. Upon separation from employment with the City, an individual may roll over their deferred account into another IRS Allowable Plan or, upon receipt, the distribution will become taxable. The Deferred Compensation Board contracted with Fidelity Management Trust Company (Fidelity) as the trustee and plan administrator. The City’s Retirement System Administration assists Fidelity in the administration of the Plan. In addition to the Retirement Office, City staff in the Payroll section of the Finance Department, the City Attorney’s Office and Information Services Department all assist in the administration of the Plan. The City has no fiduciary accountability for the Plan. Accordingly, the Plan assets and related liabilities to Plan participants are not included in the basic financial statements. C. Compensated Absences Vacation pay, which may be accumulated up to 600 hours depending on an employee’s bargaining group and length of service, is payable upon termination. Sick leave, which may be accumulated up to 12 hours per month, has no maximum. If eligible, most bargaining units receive a portion of the value of their sick leave balance at termination in their Health Reimbursement Account (HRA). Otherwise, employees do not receive any value from their sick leave balances at termination. Annual leave, which may be accumulated up to 1,200 hours, depending upon bargaining unit and length of service, is payable upon termination or retirement. Holiday leave may be accumulated indefinitely depending upon the bargaining groups and is payable for active employees as well as at termination or retirement. Annual leave allows for the cashing out of the higher of 25% of the accumulated balance or 48 hours, once per fiscal year. Supplemental sick leave is awarded to unrepresented management, professionals and to white collar employees at the rate of 40 hours at the beginning of each fiscal year. The balance can only be used after other leave balances are exhausted, or for other specific reasons outlined in the various Memoranda of Understanding (MOU’s) or the current Salary Resolution. The balance is payable at termination/retirement or is accounted for as part of an HRA which is unfunded and expended on a pay-as-you-go basis. Starting in fiscal year 2006, some bargaining units selected to account for some or all of their sick leave and supplemental sick leave balances as an HRA. The book value of these balances is accounted for (by employee) in off-line spreadsheets, administered by HealthComp, is given credit for calculated interest, and is used to pay health premiums for the employee, their spouse and dependents until their individual balance is exhausted. The HRA is not held in a trust, but is funded on a pay-as-you-go-basis. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 132 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS The portion of the City's obligation relating to employees' rights to receive compensation for leave balances attributable to services already rendered is accrued when incurred in the Government-Wide, Proprietary, and Fiduciary Fund Financial Statements. Compensated absences upon termination are funded through a cost allocation formula which is based upon a citywide history of payouts (approximately $2 million per year). Accruals are reviewed by bargaining unit and the $2 million base is allocated in proportion to each unit’s current liability for a contribution per unit cost. This unit cost is then converted to a cost per employee and becomes part of the budgeted employee service cost in each department’s annual base budget. Accrued Employee Leave balances as of June 30, 2018, are as follows: Department/Activity Total Accrued Vacation, Sick Leave, and HRA Current Portion Governmental Activities: General Fund $53,438,710 $7,516,715 Grants Special Revenue Fund 541,403 150,677 High Speed Rail 25,511 7 Special Gas Tax 647,304 49,495 Measure C 1,494,419 299,687 Community Services 341,417 52,262 Special Assessment 191,743 25,933 General Services 2,850,833 346,092 Risk Management 126,307 20,125 Total Governmental Activities $59,657,647 $8,460,993 Business-Type Activities: Water System 2,020,943 208,270 Sewer System 1,912,263 261,933 Solid Waste Management 1,440,698 243,978 Transit 3,055,465 428,707 Airports 1,493,060 175,881 Convention Center 111,517 21,056 Community Sanitation 535,200 32,023 Billing and Collection 1,540,552 136,324 Total Business-Type Activities $12,109,698 $1,508,172 Fiduciary Funds: Private-Purpose Trust Fund 73,664 12,000 Total $71,841,009 $9,981,165 Accrued employee leave balances related to governmental activities are recorded in the Government- Wide Financial Statements. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 133 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS D. Termination Benefits During fiscal year 2018, there were no employees who received severance pay. E. Health Benefit Plan The City offers its employees participation in the Fresno City Employees Health and Welfare Trust Plan (Trust). The Trust offers a self-insured medical plan for full-time and permanent part-time employees and their dependents. The Trust also provides dental, vision, pharmacy, mental health and chiropractic coverage. There are two medical plan options available to employees. Employees have the opportunity, on an annual basis, to elect either a higher benefit level Preferred Provider Organization (PPO) option or a reduced benefit level PPO option. Employees electing to receive the higher benefit level option pay a percentage of the monthly premium through payroll deductions. Employees electing the lower benefit level pay nothing for their coverage. The first option is a higher benefit level PPO plan which has a $200 individual annual deductible and a $600 family maximum annual deductible. Under this option, the plan pays 80% of covered charges and the employee is responsible for 20% of the covered charges. Once a covered member incurs $15,000 in covered charges, the plan then pays 100% until the end of the plan year. The second option is a reduced benefit level PPO plan which has a $1,300 individual annual deductible with a $2,600 family maximum annual deductible. The benefit reduction amount is set by the Board of Trustees for the plan and depends on the amount of contributions received by the Trust on behalf of the employee. The percentage of the premium the employee is required to pay to receive the higher benefit level is negotiated by each bargaining unit. During fiscal year 2014, a number of units negotiated a 75% - 25% contribution split. For these units, the City contributes 75% of the premium and the employees, if they wish to have the higher benefit level PPO, contribute 25% of the premium. If they choose not to make the contribution, the medical benefits are reduced by 30%. This reduction results in the plan paying 56% of covered charges and the employee is responsible for 44% of covered charges. Only one bargaining unit continues to have a different contribution amount than the balance of the Unions. For Fresno City Employees Association, Inc. (FCEA) employees hired after July 11, 2011, the City contributes 70% of the premium and the employees, if they wish to have the higher benefit level PPO, contribute 30% of the premium. If they choose not to make the contribution, the medical benefits are reduced by 35%. This reduction results in the plan paying 52% of covered charges and the employee is responsible for 48% of covered charges. Employees in the FCEA hired before July 11, 2011, continue to have an 80% - 20% contribution split as described above. City retirees are also eligible for participation in the plans by paying the full blended premium cost. The City continues to assess the impact of the federal healthcare reform legislation on the City’s liabilities. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 134 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS The Health and Welfare Trust Board approved the purchase of a $500,000 stop-loss insurance policy on May 11, 2016. The policy was purchased in fiscal year 2017. The purpose of the policy was to protect the Trust from having to pay any claim or series of claims associated with one case that totaled more than $500,000. In addition to the stop-loss insurance, the Health and Welfare Trust Board also approved a policy of setting aside a portion of the Health and Welfare Trust Fund's fund balance for the payment of catastrophic health claims. F. Other Post-Employment Benefits Plan Description The City of Fresno Retirees Healthcare Plan is a single-employer defined benefit medical plan administered by HealthComp and funded through the City of Fresno Health and Welfare Trust. It is reported as an Internal Service Fund of the City and provides Other Post-Employment Benefits (OPEB) to eligible retirees and his/her dependents, spouse or domestic partner. The trust does not issue separate publicly available financial statements. GASB Statement No. 75, Accounting and Financial Reporting by Employers for Post-Employment Benefits Other than Pensions, requires governments to account for OPEB on an accrual basis, rather than on a pay-as-you-go basis. The effect is the recognition of an actuarially determined expense on the Statement of Activities when a future retiree earns their post-employment benefits, rather than when they use their post-employment benefits. The post-employment benefit liability is recognized on the Statement of Net Position over time. Contributions The City provides post-employment healthcare benefits for certain eligible retirees. OPEB includes the authorization for retirees to purchase health insurance through the plan at current employee rates. The establishment and amendment of benefit provisions are negotiated between the employee bargaining units and the City, and are recommended by the City Manager subject to the approval of the Mayor and the City Council. While participant retirees pay 100% of their premium costs, they are allowed to purchase insurance at blended premium rates. Thus, the City's contribution is deemed to be that portion of retiree claims costs over premiums required to be contributed by retirees. Currently, the City does not pre-fund retiree health benefits and instead provides for benefits on a pay-as-you-go basis. Employees Covered As of July 1, 2017, the following employees were covered by the benefit terms: Inactive employees or beneficiaries currently receiving benefit payments 423 Inactive employees entitled to but not yet receiving benefit payments — Active employees 3,325 Total participants covered by OPEB plan 3,748 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 135 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Net OPEB Liability The City's net OPEB liability of $92.8 million was measured as of July 1, 2017, and was determined by an actuarial valuation as of that date to determine the June 30, 2018 total OPEB liability. Actuarial Assumptions and Other Inputs The net OPEB liability was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Measurement Date July 1, 2017 Valuation Date July 1, 2017 Discount Rate 3.58% Healthcare Cost Trend Rates: Current Year Trend 3.33% / 3.070% Second Year Trend 7.00% Decrement N/A Ultimate Trend 6.00% Year Ultimate Trend is Reached 2039 Salary Increases 2.50% Actuarial Cost Method Entry Age Normal (Percent of Salary) The discount rate was based on the index provided by Bond Buyer 20-Year General Obligation Index based on the 20 year AA municipal bond rate as of July 1, 2017. Mortality rates were based on the RP-2000 Combined Healthy Participant Table Project 10 Years using Projection Scale AA. Sensitivity of the Net OPEB Liability to Changes in the Discount Rate The July 1, 2017 valuation was prepared using a discount rate of 3.58%. If the discount rate were 1% higher than what was used in this valuation, the Net OPEB Liability would decrease to $79.1 million or by 14.83%. If the discount rate were 1% lower than was used in this valuation, the Net OPEB Liability would increase to $104.5 million or by 12.60%. 1% Decrease Current Discount Rate 1% Increase 2.58%3.58%4.58% Net OPEB Liability $104,517,723 $92,819,706 $79,052,334 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 136 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS Sensitivity of the Net OPEB Liability to Changes in the Healthcare Cost Trend Rates The July 1, 2017 valuation was prepared using an initial trend rate of 3.33% / 3.070%. If the trend rate were 1% higher than what was used in this valuation, the Net OPEB Liability would increase to $112.4 million or by 21.05%. If the trend rate were 1% lower than was used in this valuation, the Net OPEB Liability would decrease to $77.4 million or by 16.58%. 1% Decrease Current Healthcare Cost Trend Rates 1% Increase 2.33% / 2.07%3.33% / 3.070%4.33% / 4.07% Net OPEB Liability $77,434,655 $92,819,706 $112,358,922 Changes in the Net OPEB Liability The changes in the Net OPEB Liability for the City Plan are as follows: Net OPEB Liability Increase / (Decrease) Net OPEB Liability as of June 30, 2017 $84,639,422 Changes for the Year: Service Cost 4,769,251 Interest 2,995,295 Assumption Changes and Difference between Actual and Expected Experience 415,738 Net Changes 8,180,284 Net OPEB Liability as of June 30, 2018 $92,819,706 OPEB Expense, Deferred Outflows of Resources, and Deferred Inflows of Resources For the year ended June 30, 2018, the City recognized an OPEB expense of $5.4 million. At June 30, 2018, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred Outflows of Resources Deferred Inflows of Resources OPEB Contributions subsequent to the measurement date $1,990,681 $— Changes of Assumptions —20,150,377 Difference between Actual and Expected Experience 415,738 — Total $2,406,419 $20,150,377 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 137 NOTE 10 - EMPLOYEE BENEFIT PROGRAMS The $2.0 million reported as deferred outflows of resources related to contributions subsequent to the July 1, 2017 measurement date will be recognized as a reduction of the total OPEB liability during the fiscal year ending June 30, 2019. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Deferred Outflows/(Inflows) of Resources 2019 $2,358,832 2020 2,358,832 2021 2,358,832 2022 2,358,832 2023 2,358,832 Thereafter 7,940,479 Total:$19,734,639 G. Healthcare Plan Claims Liability The recorded liability for the Employees Healthcare Plan at June 30, 2018 for employee health benefit claim payments for direct provider care is $4.9 million. Changes in the funds claims liability amount for the last two fiscal years are as follows: Fiscal Year Ended June 30 Beginning of Fiscal Year Liability Current Year Claims and Changes in Estimates Claims Payments End of Fiscal Year Liability 2017 $4,000,000 $42,301,431 $41,701,431 $4,600,000 2018 4,600,000 47,009,574 46,709,574 4,900,000 CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 138 NOTE 11 - NO-COMMITMENT DEBT Note 11. No-Commitment Debt The City is not liable for repayment of any of the following bonds, and accordingly, they are not reflected in the accompanying basic financial statements. A. Multifamily Housing Revenue Bonds The City has outstanding multifamily housing revenue bonds totaling $19.65 million. The bonds were issued to provide funds for the purchase and/or construction of multifamily housing facilities to provide low-income housing to Fresno residents. B. Special District Debt The City is not obligated in any manner for the Special District debt, but is acting as an agent for property owners in collecting the taxes/assessments, forwarding the collections to the trustee/paying agent, and initiating foreclosure proceedings, if appropriate. Special District debt payable to bond holders was $3.42 million at June 30, 2018, as compared to $3.61 million at June 30, 2017. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 139 NOTE 12 - COMMITMENTS AND CONTINGENCIES Note 12. Commitments and Contingencies A. Closure and Post-Closure Care Cost The City continues to monitor a former landfill site as part of the Environmental Protection Agency's (EPA) Superfund program. Management estimates the remaining monitoring costs as of June 30, 2018 to be $14.4 million. A liability in this amount has been recorded in the Solid Waste Management Fund. It is anticipated that approximately $0.9 million in monitoring costs and landfill site closure costs will be paid in fiscal year 2019. The former landfill site has not received solid waste since 1987. It was redesigned as part of a 350-acre “green” facility to integrate the former landfill site into a championship caliber sports complex/regional park. The estimated total remaining post-closure care costs are based on the equipment, facilities, and services required to monitor/maintain the closed landfill. The liability for post-closure care costs is an estimate and subject to change resulting from inflation, deflation, technology or changes in applicable laws. Fees paid by utility users will be used to cover the remaining monitoring costs. A receivable totaling $13.9 million has been recorded in the Solid Waste Management Fund. B. CVP Water Contract The City’s 60,000 acre-foot water supply entitlement from the United States Bureau of Reclamation (USBR, or the Bureau) is equivalent to approximately 40% of the City’s annual water demand. This supply, derived from the Friant Dam on the San Joaquin River, is the primary resource for the operation of the City’s current and future surface water treatment facilities. The City and the Bureau have what is known as a Repayment Contract. While most traditional federal Reclamation Law provisions continue to apply, the City receives some important benefits by utilizing the Repayment Contract, including: 1. Permanent water supply - The Repayment Contract provides for an ongoing, permanent annual supply of up to 60,000 acre-feet of water from the Friant Division of the CVP. No further periodic renewal negotiations are required. 2. Pricing benefits - Certain components of the Bureau water rate structure, such as tiered pricing, are eliminated. 3. Financing cost savings - Under the previous Bureau rate structure, the City paid certain financing costs and interest on the outstanding capital and operation and maintenance obligations that the Bureau attributed to the City. Under a Repayment Contract, those costs are not passed on to the City. Because repayment contracts do not require periodic renewal, compliance with the California Environmental Quality Act (CEQA) and the National Environmental Policy Act (NEPA) need not be repeated. This obligation is amortized and included in the volumetric water rates the City pays the USBR. The present value of the City’s debt obligation to the Bureau has been fully capitalized in the CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 140 NOTE 12 - COMMITMENTS AND CONTINGENCIES Water Fund under the caption “Unamortized CVP Water Settlement”, and is being amortized against expected future revenues generated through water rates. The “Unamortized CVP Water Settlement” totaled $6.7 million on June 30, 2018, while the related liability reported as “CVP Litigation Settlement” totaled $6.0 million on June 30, 2018. C. Other Litigation There are various other lawsuits and claims pending against the City. Although the outcome of these claims and lawsuits is not presently determinable, management, after consultation with legal counsel, is of the opinion that a majority of these matters will not have a material adverse effect on the financial condition of the City at June 30, 2018. D. Toxics Mitigation Old Hammer Field Contamination, primarily from the common solvent trichloroethylene (TCE) was discovered and identified in 1989 in soils and groundwater beneath property currently owned by the City. The site known as Old Hammer Field (OHF), a prior Army military base in the 1940’s, was the subject of investigation and cleanup efforts which had previously been jointly funded by the Boeing Company, the U.S. Army Corps of Engineers and the City of Fresno. The area had been used for the repair, overhaul, maintenance, refurbishing and construction of aircraft during and after World War II. The California Department of Toxic Substances Control (DTSC) was the lead regulatory agency overseeing site cleanup. After years of legal negotiations, a settlement agreement between the U.S. Army Corps of Engineers, the Boeing Company, and the City was reached. The settlement called for the Airports Department to be responsible, going forward, for 10% of the cleanup costs. The settlement also called for the U.S. Army Corps of Engineers and Boeing to make a joint one-time payment of $1,350,000 for past costs. This payment was made in fiscal year 2011. The Court approved the settlement agreement which included the one-time payment noted above, covenants not to sue and an operating agreement for purposes of coordinating further efforts to implement the State-Approved Remedial Action Plan to obtain Site Closure. All parties agreed to bear their own costs and expenses, including attorney’s fees in the case. A liability for future cleanup costs on the Old Hammer Field site is recorded on the fiscal year 2018 CAFR in the amount of $576,068. Total costs have been estimated to range between $10 and $20 million, with the City’s share of cleanup costs to be 10%. The cleanup time frame has also been estimated and is expected to continue for 20 to 40 years. Cleanup costs totaled $53,988 in fiscal year 2018. The City will re-evaluate this accrual annually and make adjustments as necessary. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 141 NOTE 12 - COMMITMENTS AND CONTINGENCIES DBCP Groundwater Contamination The occurrence of DBCP, an agricultural pesticide, in certain groundwater has been identified throughout the Fresno Metropolitan Area. At various City well sites, DBCP exceeds drinking water limits and is removed by Granular Activated Carbon (GAC) treatment. The City fronted the costs of clean up with respect to the known wells and reimbursed itself from a litigation settlement in an original amount of approximately $21 million. $10 million was stipulated to be used toward past costs, and $11 million was to be applied toward the installation of additional GAC treatment units, all of which have been completed. Subject to numerical limits, the settlement arrangement also provides for the City to be reimbursed for the capital costs of the installation of GAC treatments at wells exceeding maximum contaminant levels, with reimbursements ranging from $337,500 to $540,000 depending on the well site. Funding also is provided for the ongoing operation and maintenance cleanup costs of approximately $27,900 to $31,000 per contaminated well (depending on type), adjusted for inflation, with such payment obligations ending on June 26, 2035. The City is not responsible for “cleanup” in the context common to hazardous material remediation. The City can elect to treat wells or simply shut them down. Future costs to clean up and monitor new discoveries of contamination at existing sites or additional sites that may be identified are eligible for reimbursement under the settlement agreement through June 26, 2035. An obligating event as defined by GASB Statement No. 49 has not occurred during the fiscal year; therefore, no liability exists. Pollution Remediation Although the Successor Agency is generally not involved with operations that pose a high risk for environmental liabilities, properties acquired for redevelopment purposes could be contaminated or may contain hazardous substances, such as petroleum products, lead, and/or asbestos. The former RDA’s due diligence property acquisition policies required that the RDA obtain a Phase I Environmental Site Assessment (ESA) report on all properties to be acquired by the RDA to minimize or avoid potential environmental liabilities. If the Phase I ESA findings and conclusions indicate the need for further environmental investigation, a Phase II ESA is commissioned. In the event of an acquisition leading to demolition, the former RDA obtained a Phase I and/or Phase II report and, if necessary, remediated the property according to state and federal laws prior to demolition. In instances where hazardous substances or petroleum products were detected by the Phase II ESA, environmental remediation (cleanup) is subsequently planned and executed. The Phase II ESA and cleanup work are normally supervised and sanctioned by local environmental agencies such as the California Regional Water Quality Control Board (RWQCB). This agency accepts the completion of the cleanup work by issuing a “Case Closure” letter that officially declares the property free of hazardous substances or petroleum products. During fiscal year 2016, the Successor Agency held one parcel subject to environmental investigation at 655 “G” Street - Chinatown. In February 2009, the City transferred title to four parcels in the Chinatown project area to the RDA. In October 1995, a Phase II ESA was completed for the four parcels. The parcel at 718 “F” Street and two parcels at 705 “G” Street were free of hazardous substances or petroleum products. The fourth parcel at 655 “G” Street was found to be in need of further assessment CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 142 NOTE 12 - COMMITMENTS AND CONTINGENCIES (Phase II ESA) because suspected leaking gasoline tanks had been removed from the site. The RWQCB advised the City that additional assessment was necessary to further evaluate impacted soils and groundwater and required a work plan outlining the assessment. Recently, the Successor Agency obtained an EPA grant to assess 655 “G” Street, as required by the RWQCB. The work plan and field work have been completed and test results have been received. Monitoring wells have been installed at the site and water samples are to be tested quarterly. RWQCB will review the results and advise if further action is needed. At this time, any potential costs cannot be estimated with any degree of certainty. Until such time as the costs can be estimated with more certainty, no liability will be accrued. E. Measure Z, Zoo Accreditation, Fresno Chaffee Zoo Corporation In accordance with an agreement between the City and the Fresno Chaffee Zoo Corporation (FCZC), a California benefit corporation, a non-profit board operates the Chaffee Zoo (Zoo). The City and the FCZC also negotiated a lease and a financing arrangement. The lease agreement, dated January 1, 2006, was negotiated for a 30-year period. There is also a 25- year renewal of the term if the Zoo Tax was reinstated after its initial 10-year term, or two additional 10-year renewal options if the tax was not renewed. On November 4, 2014, a new incarnation of Measure Z which extends the tax for another 10 years was passed triggering the 25-year lease renewal. The lease rate is at $1.00 per year. The lease agreement sets forth the terms and conditions between the City and FCZC, with respect to the Zoo premises and any expansion that might occur in a designated expansion area. The City is responsible for all maintenance and operation costs in the expansion area, until such time as the FCZC takes possession of the expansion area by exercising its rights in accordance with lease provisions. The City retained ownership of the land, buildings, structures, permanent fixtures, and improvements in existence at the commencement date of the lease, while the FCZC is the owner of all buildings, structures, and improvements constructed thereafter until the end of the lease term. The Financing Agreement conveyed the Zoo animals and Zoo personal property to the FCZC, along with all obligations the City had with respect to the animals exhibited, housed or otherwise kept or cared for at the Zoo during the term of the lease. At the termination of the lease or the end of the lease term, should the City decide not to continue operations of the Zoo, the FCZC has the right to sell or dispose of the Zoo animals and keep the proceeds of any sale or disposition at its sole cost or expense. The FCZC also has the authority to acquire, sell or dispose of Zoo animals in the course of the lease so long as the compliment of animals at all times is similar in type and proportion to the Zoo animals on hand upon commencement of the lease. The FCZC must maintain Association of Zoo & Aquariums (AZA) accreditation of the Chaffee Zoo. F. Granite Park In 2005, the City entered into a Contingent Debt Purchase Agreement guaranteeing a loan regarding a 20-acre sports-related complex under development and adjacent to office and commercial retail amenities, known as Granite Park. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 143 NOTE 12 - COMMITMENTS AND CONTINGENCIES On June 30, 2009, a formal demand was made on the City to purchase the Loan Package for a stipulated purchase price. On September 17, 2009, the City deposited $5,105,271 in a loan purchase escrow. The City utilized funds from its cash pool with the intention of ultimately issuing long-term bonds to finance the acquisition over 30 years. The City proceeded to purchase the Granite Park property at a unified foreclosure sale and took title to and possession of Granite Park sports fields pursuant to a Trustee’s Deed recorded in Fresno County on March 16, 2010. The City paid $5,105,218 and holds the property for possible use, development and/ or disposition. The City entered into a 25-year ground lease and 10-year service contract with Central Valley Community Sports Foundation (CVCSF) on September 24, 2015. The ground lease calls for the CVCSF to make rent payments of $62,500/year, which are increased annually by 2.75%/year. The CVCSF is responsible for maintenance of Granite Park's sports-related complex, as well as the financing of various capital improvements. Under the service contract, the City pays the CVCSF $150,000/year to provide a variety of sports and recreational programming. G. Operating Leases The City has operating leases for certain buildings, parking areas, ponding basins, hanger space and storage areas which require the following minimum annual payments: Governmental Activities Fiscal Years Police Fire Public Works Other Departments Total 2019 $664,661 $13,200 $147,420 $282,830 $1,108,111 2020 564,821 13,200 149,940 252,283 980,244 2021 583,522 13,200 153,090 258,431 1,008,243 2022 529,349 13,200 156,240 264,729 963,518 2023 513,244 13,200 159,390 136,163 821,997 2024-2028 3,420 66,000 —4,500 73,920 Total $2,859,017 $132,000 $766,080 $1,198,936 $4,956,033 Operating lease expense incurred for fiscal year 2018 was approximately $1.1 million for governmental activities. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 144 NOTE 12 - COMMITMENTS AND CONTINGENCIES Business-Type Activities Fiscal Years Airports Water Other Departments Total 2019 $356,576 $498,542 $76,278 $931,396 2020 362,576 498,542 13,540 874,658 2021 368,577 498,542 13,946 881,065 2022 374,577 498,542 14,365 887,484 2023 380,577 498,542 14,796 893,915 2024-2028 387,577 2,492,712 80,910 2,961,199 2029-2033 —2,492,712 93,796 2,586,508 Total $2,230,460 $7,478,134 $307,631 $10,016,225 Operating lease expense incurred for fiscal year 2018 was approximately $1.0 million for Business-Type Activities. The City has various other operating leases (both Governmental and Business-Type) that have either expired and are now functioning on a month-to-month basis, or were written on a month-to-month or some other basis, or which state no specified expiration date. The City also leases property to others outside of the City. All of these leases generally operate on a month-to-month basis. The combined current annual income from these leases total approximately $11.7 million. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 145 NOTE 12 - COMMITMENTS AND CONTINGENCIES H. Construction and Other Significant Commitments At June 30, 2018, the City had commitments for the following major construction projects: Project Title Remaining Construction Committed Governmental Fulton Mall Improvements $265,470 Overlay at Various Locations 451,371 Shields EB Widening at Fowler 1,957,842 Veteran's Boulevard at Highway 99 & Union Pacific Railroad 2,601,906 Total Governmental 5,276,589 Proprietary: Airport West Comm Ramps 595,894 BRT-Bus Rapid Transit 474,066 Bus Stop Improvements 292,715 Friant/Kern Canal 219,388 Merced Glenn-Thorne Rehab 1,561,376 North East Recycled Water Distribution System 2,236,830 North West Recycled Water Distribution System 5,727,008 Odor Control Units Headworks 1,541,039 Sewer Manhole Rehab 212,827 South East Fresno Surface Water Treatment 13,903,924 South East/South West Transmission Pipelines 13,318,701 South West Recycled Water Distribution System 6,939,773 Transit Facility Station 457,830 Water Main Renewal & Extensions 7,620,644 Water Well Construction & Rehab 441,521 Total Proprietary 55,543,536 Total Major Construction Projects $60,820,125 I. Discolored Water In February 2016, the City undertook a broad investigation into reports of discolored water and the presence of lead in drinking water in certain homes located in Northeast Fresno. The City conducted the investigation with oversight from the State Water Resources Control Board - Division of Drinking Water (DDW), Fresno County Department of Public Health, and the U.S. Environmental Protection Agency (EPA). The investigation has included, for example, water quality sampling, soil sampling, pipe testing, field investigations and home inspections, consultations with national corrosion experts, multiple community meetings and presentations, and public distribution of information and education materials. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 146 NOTE 12 - COMMITMENTS AND CONTINGENCIES In early 2017, the EPA conducted a comprehensive review of the City and the State of California’s oversight of the City’s drinking water treatment and testing program. The EPA concluded that the City has historically complied with the regulatory action level for lead, and that the City’s water system has been optimized for corrosion control since 1996. In September 2016 and May 2017, groups of residents filed two lawsuits against the City and other parties seeking damages for harm allegedly caused by the City’s water supply. Litigation is currently ongoing. The City will continue to vigorously defend itself in these matters. The City continues to work with residents by regularly monitoring their water. For more information regarding the City’s continued efforts to resolve discolored water issues, please see https:// www.fresno.gov/publicutilities/water-quality-delivery-testing. The City has spent $4,726,105 through June 30, 2018 to investigate and address the discolored water complaints. All of these costs have been and will continue to be recorded in the Water Fund. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 147 NOTE 13 - COFCAP NOTE 13. City of Fresno Cultural Arts Properties Corporation (COFCAP) In July 2007, the City Council approved a Contingent Debt Purchase Agreement, by which the City guaranteed a proposed interim, commercial, draw loan on behalf of the Fresno Metropolitan Museum of Art & Science (Met). As a condition precedent to the City entering into the Purchase Agreement, the Met entered into a Performance Guarantee with the City, which was secured by a Deed of Trust that gave the City a lien on certain real property owned by the Met. The City was required on July 14, 2009 to purchase the loan for the Met in the amount of $15,111,940. The City utilized funds from its cash pool to fund the payoff of the bank loan, with the intention of ultimately issuing long-term bonds to finance the acquisition over 30 years. The City used New Market Tax Credits (NMTC) to lessen the debt burden of the Met. Through conversations with US Bank Community Development Corporation (USB) and Clearinghouse CDFI (CDFI), negotiations were finalized, and City Council approval was given for the establishment of a Qualified Active Low Income Community Business (QALICB) and a Community Development Entity (CDE). Once those entities were established, the City took title to the Met real estate. At the same time as the Met NMTC transaction was being finalized, the City worked on financing to reimburse itself for the borrowings from the Treasurer’s Investment Pool that had been undertaken in order to pay off the debt for the Met. Bank of America, the City’s banking services provider, partnered with the City for a Private Placement transaction for both Granite Park and the Met. The deal included the refunding of previously issued City Hall debt, which resulted in debt service savings and freed up equity in City Hall that could then be pledged as security for the new City Hall financing and serve as collateral for the Met portion of the deal. The bond deal was concluded on June 4, 2010. The NTMC were designed to infuse private sector capital into distressed communities by providing a tax credit for taxpayers who make qualified investments into designated CDE. The investor in the Met transaction was CDFI (Investor). The credit provided to investors totals 39% of the investment in the CDE and is claimed over a seven-year credit allowance period. To complete the transaction, several new structures were created, one of which was a non-profit entity created for purposes of holding title to the property involved in the NMTC deal. The City created a 501(c) (3) non-profit public benefit corporation to act as the QALICB, as the City was not eligible to be the QALICB. The QALICB, known as the City of Fresno Cultural Arts Properties Corporation (COFCAP), was formed on March 15, 2010. The Mayor, Council President and the Chairperson of the Successor Agency to the Former RDA served as the members of the board of COFCAP. A Master Capital Lease existed between COFCAP and the City, with the City being the Master Lessee. Beginning in late 2012, COFCAP and the City agreed to sell several parcels of the Met properties to an investor for the development of mixed used developments. All those parcels were sold with the approval of CDFI. The remaining Met properties under the NMTC arrangement were the Met Building itself, a small attached green space and a parking lot. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 148 NOTE 13 - COFCAP The NMTC transaction was active for seven years. As the seven-year tax period came to a close, the City was notified by the other parties in the transaction that they would be exercising the option to exit the NTMC arrangement. The City Council voted on March 23, 2017 to begin the City's extrication from the NTMC transaction. With all parties expressing their intent to exit, the NTMC unwound on March 31, 2017. On May 25, 2017, the City Council voted to dissolve the COFCAP and transfer the Met Building and any other COFCAP assets back to the City. This transfer of assets was completed on August 29, 2017. The COFCAP has been presented as a component unit in the CAFR since its inception because it was a legally separate entity for which the City was financially accountable through the appointment of COFCAP’s board and the ability to approve COFCAP’s budget. COFCAP has also been discretely presented because it did not provide services exclusively or almost exclusively to the City of Fresno. For purposes of the fiscal year 2018 CAFR, COFCAP information presented reflects the transactions associated with the COFCAP's closeout. The June 30, 2018 COFCAP Statement of Cash Flows shows the closeout transactions. The June 30, 2018 COFCAP Statement of Net Position as well as the June 30, 2018 COFCAP Statement of Revenues and Expenses show all zero balances, therefore these statements are not presented. When the COFCAP was initially created, the Met properties were recorded at an amount of $12.7 million. This amount represented the properties' appraised value as of the date of the loan. When the COFCAP was dissolved, another appraisal of the properties was done, which produced a value of $3.3 million. Land and Building assets totaling $3.3 million were recorded in the General Fund as part of the COFCAP closing entries, along with $1.2 million of Cash that was received as part of the closeout. The difference between the sum of these assets and the $12.7 million that was originally recorded as the value of the assets was recorded in the General Fund as a Special Item - Loss on Receivable/Transfer of Assets of $(8.2 million). This Special Item is reflected on the General Fund's Statement of Revenues, Expenditures, and Changes in Fund Balance. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 149 NOTE 14 - SECURITIES LENDING Note 14. Securities Lending The City does not engage in securities lending with any investment instruments that it holds. The City’s Retirement Systems are permitted under the City’s Municipal Code and Retirement Boards’ policies to enter into securities lending transactions. For a detailed description of the Retirement Systems’ security lending policies and the financial effect of such lending, please see the Retirement Systems’ CAFRS, which can be found at http://www.cfrs-ca.org/Employee/Communications/Reports.asp. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 150 NOTE 15 - OTHER INFORMATION Note 15. Other Information Construction Retainage Escrow Accounts The City enters into construction contracts with various outside third-party contractors with respect to major capital projects. As the construction progresses, progress payments are made to the contractors. Portions of the payments, called retention payments, are paid into an escrow account. While these funds are earned by the contractors, generally 5% to 10% of the contract amount, they are not released out of the escrow account to the contractor until some agreed upon date, usually the completion of the job. These amounts are retained for a variety of reasons, as an incentive to complete the job in a timely manner, or as a fund for the benefit of suppliers and subcontractors. The City may not convert the funds in these escrow accounts for its use unless a breach of contract occurs. At June 30, 2018, the City had made payments into various contract escrow accounts in the amount of $11.5 million. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 151 NOTE 16 - DEFICIT FUND EQUITY Note 16. Deficit Fund Equity The Convention Center Fund, Risk Management Internal Service Fund, and High Speed Rail Fund all had deficit net position balances as of June 30, 2018. The deficit net position in the Convention Center Fund of $5.9 million is a continuation of many years of annual operating deficits. The 2018 fiscal year saw a $0.6 million increase in the deficit net position, from $5.4 million to $5.9 million. The main driver of the increase in the deficit net position was a $0.4 million decrease in revenue, primarily charges for services. The deficit net position in the Risk Management Fund at June 30, 2018 was $118.4 million, an increase of $4.2 million. The increase was due to the City reflecting a Liability for Self-Insurance on its Combining Statement of Net Position in the amount of $127.5 million. This liability is not required to be prefunded. The liability grew by $2.9 million between fiscal years 2017 and 2018, explaining the majority of the growth in the deficit net position. The deficit net position in the High Speed Rail Fund at June 30, 2018 was $67,651. The deficit net position of this fund at the end of fiscal year 2017 was $740,436. The decrease in the deficit net position of $0.7 million is due to the $0.5 million increase in federal reimbursement and state contracted services along with a $0.3 million decrease in operating expenses. The City management continues to evaluate strategies for reducing and eliminating these deficit fund equity balances. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 152 NOTE 17 - SUBSEQUENT EVENTS Note 17. Subsequent Events A. Bond Ratings Fitch reaffirmed the Sewer bonds' AA- (Subordinate)/AA (Senior) ratings on October 23, 2018. Fitch also raised the outlook on the Sewer bonds from Stable to Positive. The prior and most current City ratings are as follows: Rating Agency Effective Date Prior Rating Prior Outlook Effective Date New Rating New Outlook Lease Revenue Bonds Fitch 6/2016 A-/A-Stable 6/2016 A-Stable Standard & Poor’s 2/2015 BB+Stable 3/2017 A Stable Moody’s 8/2016 Baa2/Baa3 Positive 3/2017 Baa1/Baa2 Stable General Obligation (GO) Fitch 6/2016 A Stable 6/2016 A Stable Standard & Poor’s 2/2015 BBB-Stable 3/2017 A+Stable Moody’s 8/2016 A3 Stable 3/2017 A3 Stable B. Tax and Revenue Anticipation Bonds The City chose to once again not issue Tax and Revenue Anticipation Notes subsequent to the end of fiscal year 2018. C. North Central Fire District Contract The North Central Fire District (NCFD) entered into an agreement with the City to provide fire protection services in August 2007. The agreement called for the City to assume the NCFD's sworn staff in exchange for the City providing staffing at NCFD's station. NCFD agreed to provide annual compensation to the City for the service. Both revenues and expenditures associated with this contract were recorded in a special revenue fund. After several years of the contract being in place, it became apparent that the compensation from the NCFD was not keeping pace with the expenditures the City was incurring to provide the service. This disparity was primarily caused by contract language which limited the increase in the City's compensation to the growth rate of property tax assessments within the NCFD's boundaries. As a result of this difference, a negative fund balance began to grow in the special revenue fund that was being used to track NCFD service revenues and expenses. The City initiated discussions with NCFD to resolve the growing negative fund balance. When those discussions did not produce a resolution acceptable to both parties, the City Council gave notice on March 10, 2017, that the City would be terminating the contract with NCFD. Appropriations were CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 153 NOTE 17 - SUBSEQUENT EVENTS included in the City's fiscal year 2018 Adopted Budget to cover the cost of services to the NCFD through December 15, 2017. After the notice was provided, the City and the NCFD resumed negotiations to resolve the situation. The negotiations produced an agreement which was approved by the Council on December 4, 2017. The agreement (effective January 1, 2018) called for payments of $600,000/month during the 18-month term of the contract as compensation for costs the City incurs in providing fire protection services to the NCFD. NCFD agreed to use the 18-months to explore options for delivering fire service to residents and businesses in their district, including entering into a long-term contract with the City. The City was notified by NCFD on June 21, 2018 that it would not be renewing the service agreement with the City. Thus, the City's agreement with the NCFD will terminate on June 30, 2019. The City is currently exploring options for incorporating staff currently being paid by the NCFD back into the City firefighting force. The special revenue fund which is being used to track NCFD related revenues and expenditures had a cash balance of approximately $(1.6) million as of October 31, 2018. City staff is currently studying alternatives for addressing the remaining negative cash balance in this fund. However, it is likely that the General Fund will fund whatever negative cash balance remains in the fund after service to the NCFD is terminated on June 30, 2019. D. COFCAP Transactions to close the COFCAP were made in July and August 2017. For further details, please see Note 13 - City of Fresno Cultural Arts Properties Corporation (pages 147-148). E. Housing and Urban Development Department Audit of Community Development Block Grant Monies Utilized By The City The Office of Inspector General (OIG) of the Housing and Urban Development Department (HUD) began an audit of the City's Community Development Block Grant (CDBG) expenditures on August 25, 2016. The audit, which covered expenditures made between July 1, 2014 and September 30, 2016, was in response to two HUD monitoring visits that were conducted in 2012 and 2015. Both of those visits had turned up eligibility issues with the City's CDBG expenditures. The OIG's fieldwork was completed on April 28, 2017. The OIG issued its audit report on August 9, 2017. In the report, the OIG concluded that the City still had eligibility issues with its CDBG expenditures. Specifically, the report stated that the City did not: - meet requirements for the expenditure of CDBG monies on code enforcement activities, - ensure that CDBG funds were spent on non-general government expenditures for its anti-graffiti program, - ensure that one program met a CDBG national objective, - properly monitor its sub-recipient or City departments, - use its program income before its entitlement funds, and CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 154 NOTE 17 - SUBSEQUENT EVENTS - report program income to HUD in a timely manner. The OIG attributed these errors to a lack of experience and capacity to administer and implement the program on the City's part, the lack of adequate procedures and controls in place, and a disregard for HUD requirements. The OIG recommended the payback of $163,555 that were identified as being spent on ineligible costs. The OIG noted that $428,373 would be deemed ineligible expenditures in the upcoming program year if the City did not develop proper code enforcement policies and procedures. Finally, the OIG identified approximately $7.9 million in CDBG funded expenditures whose eligibility was questionable. The OIG requested additional supporting documentation for the $7.9 million of expenditures to make a final determination on eligibility. The City has repaid the $412,204 that the OIG recommended be paid back. The City also ceased funding its code enforcement program with CDBG funds, thus preserving the $428,373 that was noted for possible disallowance. Additionally, the City provided, and HUD accepted, documentation that supported $1.2 million in questioned expenditures. City staff continues to work with HUD to provide documentation to support the remaining $5.9 million of questioned expenditures. The City believes HUD will opine on the validity of the documentation to support the remaining questioned expenditures by the end of Fiscal Year 2019. F. Sewer Bond Defeasance On September 1, 2018, the City defeased $132.5 million of its $159.8 million Sewer System Revenue Bonds Series 2008 with surplus cash on hand, interest earned by setting sufficient funds to pay down the debt in an escrow account, and surplus funds in the Debt Service Reserve Fund due to a recalculation of the Debt Service Reserve Requirement subsequent to the defeasance. G. Legal Settlement Payout The City paid $2.8 million on August 16, 2018 as a settlement for an officer-involved shooting case. Funds for the payment came from the City's Risk Fund. The date to which events occurring after June 30, 2018, have been evaluated for possible adjustments to the financial statements or disclosures is January 10, 2019, which is the date that the financial statements were available to be issued. 155 This page intentionally left blank 156 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - General Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final BudgetOriginalFinal Budgetary Fund Balance, July 1 $30,941,600 $40,232,600 $42,523,344 $2,290,744 Resources (inflows): Taxes: Property Taxes 126,531,000 126,531,000 129,108,808 2,577,808 Sales Taxes 87,610,300 87,610,300 89,888,577 2,278,277 Other Taxes 34,352,000 34,352,000 35,961,411 1,609,411 Franchise Taxes 12,828,700 12,828,700 12,799,348 (29,352) Licenses and Permits 6,741,100 6,809,400 7,282,140 472,740 Intergovernmental: State Motor Vehicle In-Lieu 250,000 250,000 276,790 26,790 Other State Revenue 1,973,500 2,041,500 3,309,350 1,267,850 Other Intergovernmental 1,045,300 1,633,600 1,631,539 (2,061) Charges for Services: Charges for Services 29,810,400 29,871,400 30,442,183 570,783 Fines and Violations 3,739,900 3,741,800 3,819,640 77,840 Use of Money and Property 1,083,000 1,083,000 1,141,306 58,306 Miscellaneous 22,798,900 22,830,900 26,669,060 3,838,160 Other Financing Sources: Transfers from Other Funds 5,416,900 8,516,900 6,749,161 (1,767,739) Total Available for Appropriations 365,122,600 378,333,100 391,602,657 13,269,557 Charges to Appropriations (outflows): General Government: Mayor and City Council 7,618,200 7,650,100 6,628,533 (1,021,567) Other General Government 26,828,000 27,909,400 24,700,811 (3,208,589) Public Protection: Police Department 162,911,700 160,805,500 160,673,552 (131,948) Fire Department 57,294,400 57,730,100 57,333,496 (396,604) Public Ways & Facilities 18,031,900 18,506,000 16,617,037 (1,888,963) Culture and Recreation 13,617,600 14,407,100 14,468,467 61,367 Community Development 27,501,100 27,413,000 26,655,879 (757,121) Capital Outlay 4,998,500 10,885,200 10,699,060 (186,140) Debt Service 375,000 375,000 —(375,000) Other Financing Uses: Transfers to Other Funds 19,417,500 21,385,200 27,061,530 5,676,330 Total Charges to Appropriations 338,593,900 347,066,600 344,838,365 (2,228,235) Less Estimated Attrition Savings 5,137,900 5,137,900 —(5,137,900) Excess Resources Over Appropriations $31,666,600 $36,404,400 $46,764,292 $10,359,892 See accompanying notes to the required supplementary information. 157 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - General Fund Year Ended June 30, 2018 (Continued) Explanation of differences between budgetary inflows and outflows and GAAP Revenues and Expenditures: Sources/Inflows of Resources: Actual amounts (budgetary basis) available for appropriation from the Budget to Actual Comparison Schedule.$391,602,657 Differences - Budget to GAAP: The City budgets for taxes, intergovernmental and miscellaneous revenue on the cash basis of accounting, rather than on the modified accrual basis of accounting.(4,777,594) Interfund reimbursements are not revenues and are expenditures for financial reporting.(22,247,584) Carryovers are inflows of budgetary resources but are not revenues for financial reporting purposes.(42,523,344) Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes.(6,749,161) Nonreciprocal interfund activity is not revenue and is a transfer for financial reporting.(5,757,563) The proceeds from the sale of capital assets are inflows of budgetary resources but are not revenues for financial reporting purposes.(113,571) Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds.309,433,840 Uses/Outflows of Resources: Actual amounts (budgetary basis) "total charges to appropriations" from the Budget to Actual Comparison Schedule.$344,838,365 Differences - Budget to GAAP: The City budgets for expenditures on the cash basis of accounting, rather than on the modified accrual basis of accounting.(1,135,230) Interfund reimbursements are a reduction of expenditures for financial reporting.(22,247,584) Pension Obligation bond debt payments and City Hall rent are recognized as transfers out to other funds.(15,043,834) Transfers to other funds are outflows of budgetary resources, but are not expenditures for financial reporting purposes.(27,061,530) Return on capital asset as offset for Advances to Other Funds 3,339,000 Capital Lease additions are expenditures for financial reporting purposes.5,120,545 Total charges to appropriations as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds.$287,809,732 See accompanying notes to the required supplementary information. 158 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures- Budget and Actual (Non-GAAP Budgetary Basis) - Grants Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final BudgetOriginalFinal Budgetary Fund Balance, July 1 $(8,714,800)$(7,612,600)$(21,080,857)$(13,468,257) Resources (inflows): Intergovernmental: Federal Grants 47,697,400 49,158,000 23,325,974 (25,832,026) State Grants 3,805,400 6,016,100 6,869,526 853,426 Local Support 2,980,000 3,009,500 147,515 (2,861,985) Charges for Services 1,157,500 1,157,500 1,196,829 39,329 Use of Money and Property (17,300)(17,300)828,065 845,365 Miscellaneous 2,000 2,000 1,704,815 1,702,815 Other Financing Sources: Transfers from Other Funds 1,496,600 1,496,600 2,852,239 1,355,639 Total Available for Appropriations 48,406,800 53,209,800 15,844,106 (37,365,694) Charges to Appropriations (outflows): General Government 700,000 700,000 —(700,000) Public Protection 4,580,100 5,745,000 5,330,607 (414,393) Public Ways & Facilities 6,626,700 8,661,800 5,342,950 (3,318,850) Culture and Recreation 1,715,300 3,315,700 2,921,603 (394,097) Community Development 14,149,100 14,394,700 5,962,907 (8,431,793) Capital Outlay 29,453,100 29,210,100 13,018,713 (16,191,387) Other Financing Uses: Transfers to Other Funds 1,200,000 1,200,000 3,183,044 1,983,044 Total Charges to Appropriations 58,424,300 63,227,300 35,759,824 (27,467,476) Excess (Deficit) Resources Over Appropriations $(10,017,500)$(10,017,500)$(19,915,718)$(9,898,218) See accompanying notes to the required supplementary information. 159 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Grants Special Revenue Fund YEAR ENDED JUNE 30, 2018 (Continued) Explanation of differences between budgetary inflows and outflows and GAAP Revenues and Expenditures: Sources/Inflows of Resources: Actual amounts (budgetary basis) available for appropriation from the Budget to Actual Comparison Schedule.$15,844,106 Differences - Budget to GAAP: Grant reimbursements are budgeted on the cash basis of accounting rather than on the modified accrual basis of accounting.(728,545) Transfers from other funds are inflows of budgetary resources but are not revenues for financial reporting purposes.(2,852,239) Interfund reimbursements are not revenues and are expenditures for financial reporting.(1,157,500) Carryovers are inflows of budgetary resources but are not revenues for financial reporting purposes.21,080,857 Payments from the Successor Agency to the Fresno Redevelopment Agency on advances with full allowance are revenues.(2,046,951) The receipt of loan payments are inflows of budgetary resources but are not revenues for financial reporting purposes.(1,385,472) Total revenues as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds.$28,754,256 Uses/Outflows of Resources: Actual amounts (budgetary basis) "total charges to appropriations" from the Budget to Actual Comparison Schedule.$35,759,824 Differences - budget to GAAP: The City budgets for expenditures on the cash basis of accounting rather than on the modified accrual basis of accounting.(2,815,765) Interfund reimbursements are a reduction of expenditures for financial reporting.(1,157,500) Pension Obligation bond debt, HUD debt, and City Hall rent are recognized as transfers out to other funds.(661,864) The issuance of notes receivable are outflows of budgetary resources but are not expenditures for financial reporting purposes.(34,491) Changes in allowance for doubtful accounts on notes receivable, notes that should become grants, and adjustments are expenditures for financial reporting purposes.228,607 Transfers to other funds are outflows of budgetary resources but are not expenditures for financial reporting purposes.(3,183,044) Total charges to appropriations as reported on the Statement of Revenues, Expenditures, and Changes in Fund Balances-Governmental Funds.$28,135,767 See accompanying notes to the required supplementary information. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 160 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION A. Budgetary Data The City of Fresno (the City) operates under the Strong-Mayor form of government. Under the Strong- Mayor form of government, the Mayor serves as the City’s Chief Executive Officer, appointing and overseeing the City Manager, recommending legislation, and presenting the annual budget to the City Council. The City adopts annual budgets for all governmental funds on the cash basis of accounting plus encumbrances. The budget includes: (1) the programs, projects, services, and activities to be provided during the fiscal year, (2) the estimated resources (inflows) and amounts available for appropriation, and (3) the estimated charges to appropriations. The budget represents a process through which policy decisions are made, implemented, and controlled. The City Charter (the Charter) prohibits expending funds for which there is no legal appropriation. The budget of the City of Fresno, within the meaning and context of Section No. 1205 of the Charter, must be adopted by resolution of the City Council by June 30 of a given year. The following procedures are used in establishing the budgetary data reflected in the budgetary comparison schedules. As provided by Section No. 1206 of the Charter, any adjustments in the amounts appropriated for the purposes indicated at the department/fund level are made only upon a motion to amend the resolution adopted by the affirmative votes of at least five City Council members. B. Original Budget Prior to June 1, the Mayor submits to the City Council a proposed detailed operating budget for the fiscal year commencing July 1. The operating budget includes proposed expenditures and the means of financing them. Public hearings are conducted to obtain taxpayer comment on the proposed annual budget. The Mayor and his staff analyze, review and refine the budget submittals. Prior to July 1, the budget is legally enacted through adoption of a resolution by the City Council. C. Final Budget Certain annual appropriations are budgeted on a project or program basis. If such projects or programs are not completed at the end of the fiscal year, unexpended appropriations are carried forward to the following year though either an encumbrance or an amendment to the budget. In certain circumstances, other programs and regular annual appropriations may be carried forward after appropriate approval. Annually appropriated funds not authorized to be carried forward lapse at the end of the fiscal year. Appropriations carried forward from the prior year are included in the final budgetary data. The City Manager is authorized to transfer funds already appropriated within a department's budget within a fund. However, any revisions that alter the total appropriations of a department within a fund must be approved by the City Council. Expenditures may not legally exceed budgeted appropriations at the department level within a fund. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 161 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION The City adopts an annual budget for the General Fund, Special Revenue Funds and Capital Projects Fund. No budgets are legally adopted for Fresno Revitalization Corporation, Financing Authorities and Corporations, and City Debt. Budgeted amounts are reported as amended. During the year, several supplementary appropriations were necessary, but were not material in relation to the original appropriations. D. Budget Development The preparation of the budget document is the result of a Citywide effort. Each department is presented with an operating base budget that is used as the foundation for building their requests for the operations of their organizations. All one-time expenditure increases are removed, except for those demonstrable and mandatory. A five-year capital budget is required from all departments. The purpose is to give the Mayor and City Council a tool to plan for the future as well as to more realistically reflect the timing of many capital projects that take more than one year to complete. Departments submit their requests to be analyzed and reviewed by the City’s Budget and Management Studies Division (BMSD). Requests are evaluated based on individual operations, City funding resources and the goals and strategies identified by each organization related to the impact on performance measures. Recommendations are presented to the Mayor and City Manager in a series of review meetings comprised of the Mayor, Mayor’s Chief of Staff, City Manager, Assistant City Managers, Budget Manager, Department Directors and representatives from each department and BMSD. Upon final decisions of format and content, the Mayor’s Proposed Budget Document is printed and presented to the City Council for deliberation and adoption. The Adopted Budget Document is prepared to include all the various changes approved by the City Council. E. Budgetary Results Reconciliation 1. Basis Differences The City’s budgetary process is based upon an accounting basis other than generally accepted accounting principles (GAAP). The results of operations (actual) are presented in the budget and actual comparison schedule in accordance with the budgetary process (Budget basis) to provide a meaningful comparison with the budget, while the financial statements are presented using the GAAP basis. Loan proceeds, loan repayments, transfers and interfund reimbursements primarily cause the basis differences. 2. Timing Differences One of the major differences between the Budget basis and GAAP basis are timing differences. Timing differences represent transactions that are accounted for in different periods for the Budget basis as opposed to the GAAP basis of reporting. Revenues such as property tax, sales tax and grant revenues recognized on a cash basis are unavailable for GAAP reporting, while various expenditures not recognized on a cash basis have been accrued for GAAP reporting. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 162 NOTES TO THE REQUIRED SUPPLEMENTARY INFORMATION Administrative amendments within the same department/fund level may be made without approval of the City Council within written guidelines established by the Chief Administrative Officer/City Manager. For accounting and auditing convenience, appropriations for capital improvements may be established in two or more different funds for the same capital project. The objective of budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the City Council. Activities of the General Fund and Special Revenue Funds are included in the annual appropriated budget. Project-length financial plans are adopted for certain capital projects. The level of budgetary controls (the level at which expenditures cannot legally exceed the appropriated amount) is maintained at the department level by major expenditure category. Purchase orders that result in an overrun (encumbrance exceeding available appropriations) of department-level balances by object are not released until additional appropriations are made available. Open encumbrances at June 30, are reported as restricted, committed, or assigned fund balance in the governmental funds balance sheet. The City assumed an attrition savings amount of $5,137,900 in its fiscal year 2018 budget. The amount was in recognition of the fact that not all positions budgeted in the General Fund are filled during the entire fiscal year. The attrition savings was established as a negative appropriation in each General Fund department's Personnel Services budget. However, no actual savings accrued against the attrition savings account. For purposes of the Budget-to-Actual report in the Required Supplementary Information, the difference between the negative appropriation and the actual lack of activity results in the account appearing to be over-budget. Actual Transfers from Other Funds were $1,767,739 lower than budgeted levels in fiscal year 2018. The reduction was entirely due to transfers for debt service payments being lower than budgeted, which was the result of the Lease Revenue bond refinancing completed in April 2017. Actual Transfers to Other Funds were $5,676,330 higher than fiscal year 2018 budgeted levels. The overage was caused by unbudgeted transfers of $3 million to replenish the Liability Self-Insurance Reserve and $3.9 million to the Southeast Police Sub-station Capital Fund to fund the construction and furnishing of the new Southeast Police Sub-station scheduled to be completed in fiscal year 2020. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 163 Schedule of Investment Returns PENSION TRUST FUNDS EMPLOYEES, FIRE AND POLICE RETIREMENT SYSTEMS Last Ten Fiscal Years Fiscal Year Ending June 30 Annual Money-Weighted Rate of Return Gross of Investment Expenses Annual Money-Weighted Rate of Return Net of Investment Expense 2018 8.93%8.57% 2017 14.73%14.35% 2016 0.82%0.53% 2015 3.32%2.93% 2014 17.61%17.16% 2013 13.65%13.20% 2012 (0.20)%(0.57)% 2011 24.42%23.88% 2010 15.13%14.55% 2009 (20.14)%(20.50)% The Schedule of Investment Returns above shows the annual money-weighted rate of return on the assets of the Systems, both gross and net of investment expense for ten fiscal years (2009-2018). The money-weighted rate of return expresses investment performance adjusted for timing of cash flows and the changing amounts actually invested. These returns differ slightly from the time-weighted rate of returns calculated and reported by the Systems' custodian, Northern Trust, and as independently reported by the Systems' investment consulting firm, NEPC, LLC. The Systems' custodian and investment consulting firm must use time-weighted returns as opposed to money-weighted returns in order to meet Global Investment Performance Standards for the purposes of effectively evaluating and reporting the performance of the Systems' investment managers. The time-weighted return method is a measure of the compound rate of return of a portfolio over a stated period of time. It requires a set of sub- period returns to be calculated whenever there is an external cash flow, such as a deposit or withdrawal from the portfolio. In essence, it calculates the geometric total and mean return as opposed to the arithmetic total and mean return. This method does not include or have any distortions created when money is deposited or withdrawn from a portfolio. This is in contrast to money-weighted returns. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 164 Schedule of Changes in the Net Pension Liability and Related Ratios PENSION TRUST FUNDS EMPLOYEES, POLICE AND FIRE RETIREMENT SYSTEMS Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30, 2018 Reporting Date: 6/30/2018 Measurement Date: 6/30/2017 Change in Net Pension Liability Employees Police & Fire Total Pension Liability Service Cost $18,884,800 $28,838,335 Interest 79,265,901 90,184,441 Change of benefit terms —— Differences between expected & actual experience 5,263,729 10,896,246 Changes of assumptions —— Benefit payments, including refunds (55,549,905)(59,272,938) Net Change in Total Pension Liability 47,864,525 70,646,084 Total Pension Liability - Beginning 1,102,212,920 1,244,721,462 Total Pension Liability - Ending (a)*$1,150,077,445 $1,315,367,546 Plan Fiduciary Net Position Contributions - employer $15,205,360 $18,543,308 Contributions - employee 10,180,589 8,169,019 Net Investment Income 162,373,451 192,314,904 Benefit Payments including Refunds, PRSB (55,549,905)(59,272,938) Administrative & Professional Expense (1,386,778)(1,500,145) Net Change in Plan Fiduciary Net Position 130,822,717 158,254,148 Plan Fiduciary Net Position - Beginning 1,143,299,019 1,351,288,640 Plan Fiduciary Net Position - Ending (b)$1,274,121,736 $1,509,542,788 System Net Pension Liability (Surplus) - Ending (a) - (b)$(124,044,291)$(194,175,242) Plan Fiduciary Net Position as a percentage of Total Pension Liability 110.79 %114.76 % Covered Payroll(1)$119,006,918 $97,368,618 Plan Net Pension Liability as a percentage of covered payroll (104.23)%(199.42)% * Data above, as of June 30, 2018 is provided in accordance with provisions of GASB Statement No. 68 for determining Total Pension Liability which for financial reporting purposes uses a version of the Entry Age method whereby the Actuarial Accrued Liability is fully accrued when a member either enters DROP or is expected to elect DROP. (1) Covered payroll represents pensionable compensation. Only pensionable compensation that would possibly go into the determination of retirement benefits is included. CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 165 Schedule of Employer Contribution - Pension Trust Funds EMPLOYEES RETIREMENT SYSTEM Schedule of Employer Contributions Last Ten Fiscal Years Fiscal Year Ending June 30 Actuarially Determined Contribution (ADC) Contributions in Relation to the ADC Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll 2018 $14,608,659 $14,608,659 $—$128,461,461 11.37% 2017 15,205,360 15,205,360 —119,006,918 12.78% 2016 13,060,088 13,060,088 —108,541,068 12.03% 2015 12,326,570 12,326,570 —105,820,382 11.65% 2014 11,439,981 11,439,981 —103,596,902 11.04% 2013 13,329,655 13,329,655 —105,508,591 12.63% 2012 11,373,870 11,373,870 —110,492,026 10.29% 2011 8,214,569 8,214,569 —119,260,220 6.89% 2010 3,267,115 3,267,115 —129,258,191 2.53% 2009 1,345,274 1,345,274 —132,511,895 1.02% FIRE AND POLICE RETIREMENT SYSTEM Schedule of Employer Contributions Last Ten Fiscal Years Fiscal Year Ending June 30 Actuarially Determined Contribution (ADC) Contributions in Relation to the ADC Contribution Deficiency (Excess) Covered Payroll Contributions as a Percentage of Covered Payroll 2018 $19,696,957 $19,696,957 $—$103,934,234 18.95% 2017 18,543,308 18,543,308 —97,368,618 19.04% 2016 18,737,948 18,737,948 —94,266,174 19.88% 2015 18,966,930 18,966,930 —91,075,093 20.83% 2014 18,574,840 18,574,840 —91,720,968 20.25% 2013 18,724,714 18,724,714 —94,368,329 19.84% 2012 22,875,005 22,875,005 —96,194,537 23.78% 2011 19,397,178 19,397,178 —96,757,692 20.05% 2010 12,094,355 12,094,355 —99,166,002 12.20% 2009 8,938,488 8,938,488 —99,327,134 9.00% CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 166 SCHEDULE OF CHANGES IN THE NET OPEB LIABILITY AND RELATED RATIOS For Fiscal Year Ending June 30 2018 OPEB Liability Beginning of Year $84,639,422 Changes for the Year: Service Cost $4,769,251 Interest 2,995,295 Assumption Changes and Difference between Actual and Expected Experience 415,738 Net Changes 8,180,284 OPEB Liability End of Year $92,819,706 Covered Payroll as of December 31 $229,256,057 Net OPEB Liability as a percentage of covered payroll 40.49% Note to Schedule Historical information is required only for measurement periods for which GASB 75 is applicable. Future years information will be displayed up to 10 years as information becomes available. 167 This page intentionally left blank 168 CITY OF FRESNO, CALIFORNIA Combining Balance Sheet Nonmajor Governmental Funds June 30, 2018 Special Revenue High Speed Rail Fresno Revitalization Corporation Special Gas Tax Measure C Community Services UGM Impact Fees Assets Cash and Investments $161,535 $234,676 $5,001,591 $12,370,884 $10,064,120 $22,770,367 Receivables, Net —4,786 38,189 111,245 250,501 160,514 Grants Receivable 34,909 ————— Intergovernmental Receivables ——1,264,267 1,941,848 1,326 — Due From Other Funds ——8,732 —345,136 605,783 Advances to Other Funds ——391,432 63,280 —— Property Held for Resale —————— Restricted Cash —————— Loans, Notes, Leases, Other Receivables, Net —————— Total Assets 196,444 239,462 6,704,211 14,487,257 10,661,083 23,536,664 Liabilities Accrued Liabilities $6,552 $11,570 $962,097 $437,968 $347,876 $58,805 Unearned Revenue ————10,392 — Due to Other Funds 222,634 —34,742 112,508 1,107,257 5,011 Advances From Other Funds —62,208 ———— Deposits From Others ————4,000 — Total Liabilities 229,186 73,778 996,839 550,476 1,469,525 63,816 Deferred Inflows of Resources Unavailable Revenue-Other 34,909 ——266,174 —— Total Deferred Inflows of Resources 34,909 ——266,174 —— Fund Balances Restricted —165,684 5,707,372 13,670,607 4,387,023 23,472,848 Assigned (67,651)———4,804,535 — Total Fund Balances (67,651)165,684 5,707,372 13,670,607 9,191,558 23,472,848 Total Liabilities, Deferred Inflows of Resources and Fund Balances $196,444 $239,462 $6,704,211 $14,487,257 $10,661,083 $23,536,664 169 Debt Service Capital Projects Low and Moderate Income Housing Special Assessments City Debt Financing Authorities and Corporations City Combined Total Nonmajor Governmental Funds Assets $8,169,837 $14,202,793 $5,760 $1,825,623 $11,504,514 $86,311,700 Cash and Investments —102,593 681 9,152 70,232 747,893 Receivables, Net —————34,909 Grants Receivable —46,252 ———3,253,693 Intergovernmental Receivables ————24,815 984,466 Due From Other Funds 62,208 ————516,920 Advances to Other Funds 4,792,730 ————4,792,730 Property Held for Resale ——542 7,925 —8,467 Restricted Cash 20,514,158 ————20,514,158 Loans, Notes, Leases, Other Receivables, Net 33,538,933 14,351,638 6,983 1,842,700 11,599,561 117,164,936 Total Assets Liabilities —366,181 —1,007 220,935 2,412,991 Accrued Liabilities —————10,392 Unearned Revenue —40,031 ——38 1,522,221 Due to Other Funds —————62,208 Advances From Other Funds —————4,000 Deposits From Others —406,212 —1,007 220,973 4,011,812 Total Liabilities Deferred Inflows of Resources —————301,083 Unavailable Revenue-Other —————301,083 Total Deferred Inflows of Resources Fund Balances 33,538,933 13,945,426 6,983 1,841,693 —96,736,569 Restricted ————11,378,588 16,115,472 Assigned 33,538,933 13,945,426 6,983 1,841,693 11,378,588 112,852,041 Total Fund Balances $33,538,933 $14,351,638 $6,983 $1,842,700 $11,599,561 $117,164,936 Total Liabilities, Deferred Inflows of Resources and Fund Balances 170 CITY OF FRESNO, CALIFORNIA Combining Statement of Revenues, Expenditures and Changes in Fund Balances Nonmajor Governmental Funds Year Ended June 30, 2018 Special Revenue High Speed Rail Fresno Revitalization Corporation Special Gas Tax Measure C Community Services UGM Impact Fees Revenues Taxes $—$—$12,481,891 $11,499,705 $1,340,127 $— Intergovernmental 1,153,044 ———3,245,069 — Charges for Services 288 182,199 ——9,209,140 11,234,060 Use of Money and Property (217)—79,395 272,994 438,360 67,148 Miscellaneous 5,055 —673,911 661,421 356,279 11,046 Total Revenues 1,158,170 182,199 13,235,197 12,434,120 14,588,975 11,312,254 Expenditures Current: General Government ————776,489 — Public Protection ————8,505,098 479,648 Public Ways and Facilities 832,624 —11,366,535 7,537,792 860,399 2,553,975 Culture and Recreation ————2,396,004 5,447 Community Development 240,044 184,505 ——9,593 — Capital Outlay ——1,928,388 2,711,769 624,087 811,325 Debt Service: Principal —————— Interest —————— Total Expenditures 1,072,668 184,505 13,294,923 10,249,561 13,171,670 3,850,395 Excess (Deficiency) of Revenues Over (Under) Expenditures 85,502 (2,306)(59,726)2,184,559 1,417,305 7,461,859 Other Financing Sources (Uses) Transfers In 662,820 —85,283 3,735,735 1,502,864 265,169 Transfers Out (75,537)—(1,034,257)(6,099,897)(1,599,992)(2,329,693) Sale of Capital Assets ———109,093 —— Total Other Financing Sources (Uses)587,283 —(948,974)(2,255,069)(97,128)(2,064,524) Net Change in Fund Balances 672,785 (2,306)(1,008,700)(70,510)1,320,177 5,397,335 Fund Balances - Beginning (740,436)167,990 6,716,072 13,741,117 7,871,381 18,075,513 Fund Balances (Deficit) - Ending $(67,651)$165,684 $5,707,372 $13,670,607 $9,191,558 $23,472,848 171 Debt Service Capital Projects Low and Moderate Income Housing Special Assessments City Debt Financing Authorities and Corporations City Combined Total Nonmajor Governmental Funds Revenues $—$—$—$—$—$25,321,723 Taxes —————4,398,113 Intergovernmental —4,669,974 ———25,295,661 Charges for Services 23,607 75,070 1,216 23,445 6,459 987,477 Use of Money and Property —3,671 ——1,359,667 3,071,050 Miscellaneous 23,607 4,748,715 1,216 23,445 1,366,126 59,074,024 Total Revenues Expenditures Current: 109,350 109,011 8,317 20,935 —1,024,102 General Government —————8,984,746 Public Protection —5,191,523 ———28,342,848 Public Ways and Facilities —————2,401,451 Culture and Recreation 2,174,740 ————2,608,882 Community Development —1,477 ——2,185,866 8,262,912 Capital Outlay Debt Service: ——8,144,321 7,325,000 —15,469,321 Principal ——8,706,609 5,724,262 —14,430,871 Interest 2,284,090 5,302,011 16,859,247 13,070,197 2,185,866 81,525,133 Total Expenditures (2,260,483)(553,296)(16,858,031)(13,046,752)(819,740)(22,451,109) Excess (Deficiency) of Revenues Over (Under) Expenditures Other Financing Sources (Uses) 800,724 208 16,859,433 13,029,667 5,051,340 41,993,243 Transfers In —(64,111)—(5,742)(134,226)(11,343,455)Transfers Out —————109,093 Sale of Capital Assets 800,724 (63,903)16,859,433 13,023,925 4,917,114 30,758,881 Total Other Financing Sources (Uses) (1,459,759)(617,199)1,402 (22,827)4,097,374 8,307,772 Net Change in Fund Balances 34,998,692 14,562,625 5,581 1,864,520 7,281,214 104,544,269 Fund Balances - Beginning $33,538,933 $13,945,426 $6,983 $1,841,693 $11,378,588 $112,852,041 Fund Balances (Deficit) - Ending 172 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - High Speed Rail - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAPOriginalFinal Budgetary Fund Balance, July 1 $(2,091,200)$(2,091,200)$(1,134,231)$956,969 $1,134,231 $— Resources (inflows): Intergovernmental 12,594,300 12,594,300 1,153,044 (11,441,256)—1,153,044 Charges for Services ——288 288 —288 Use of Money and Property (9,000)(9,000)(217)8,783 —(217) Miscellaneous ——5,056 5,056 (1)5,055 Other Financing Sources: Transfers from Other Funds 12,000 12,000 663,477 651,477 (657)662,820 Total Available for Appropriations 10,506,100 10,506,100 687,417 (9,818,683)1,133,573 1,820,990 Charges to Appropriations (outflows): Public Ways and Facilities 2,019,200 2,019,700 833,478 (1,186,222)(854)832,624 Community Development 3,148,900 3,148,900 277,026 (2,871,874)(36,982)240,044 Capital Outlay 23,888,000 23,887,500 —(23,887,500)—— Other Financing Uses: Transfers to Other Funds ——74,094 74,094 1,443 75,537 Total Charges to Appropriations 29,056,100 29,056,100 1,184,598 (27,871,502)(36,393)1,148,205 Excess (Deficit) Resources Over (Under) Appropriations $(18,550,000)$(18,550,000)$(497,181)$18,052,819 $1,169,966 $672,785 173 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Special Gas Tax - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAP BasisOriginalFinal Budgetary Fund Balance, July 1 $5,161,400 $5,300,800 $5,038,520 $(262,280)$(5,038,520)$— Resources (inflows): Taxes 13,762,100 13,762,100 12,071,541 (1,690,559)410,350 12,481,891 Use of Money and Property 64,700 64,700 68,861 4,161 10,534 79,395 Miscellaneous 318,500 318,500 324,641 6,141 349,270 673,911 Other Financing Sources: Transfers From Other Funds ——104,438 104,438 (19,155)85,283 Total Available for Appropriations 19,306,700 19,446,100 17,608,001 (1,838,099)(4,287,521)13,320,480 Charges to Appropriations (outflows): Public Ways and Facilities 13,849,200 14,413,500 11,414,605 (2,998,895)(48,070)11,366,535 Capital Outlay 3,465,400 3,443,200 2,111,211 (1,331,989)(182,823)1,928,388 Other Financing Uses: Transfers to Other Funds 692,600 692,600 949,622 257,022 84,635 1,034,257 Total Charges to Appropriations 18,007,200 18,549,300 14,475,438 (4,073,862)(146,258)14,329,180 Excess (Deficit) Resources Over (Under) Appropriations $1,299,500 $896,800 $3,132,563 $2,235,763 $(4,141,263)$(1,008,700) 174 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Measure C - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAP BasisOriginalFinal Budgetary Fund Balance, July 1 $4,367,500 $5,074,400 $7,017,590 $1,943,190 $(7,017,590)$— Resources (inflows): Taxes 19,096,800 19,968,400 13,402,419 (6,565,981)(1,902,714)11,499,705 Use of Money and Property 72,400 72,400 272,994 200,594 —272,994 Miscellaneous 75,400 325,400 398,142 72,742 263,279 661,421 Other Financing Sources: Transfers from Other Funds 11,400 11,400 4,077,435 4,066,035 (341,700)3,735,735 Sale of Capital Assets ——109,093 109,093 —109,093 Total Available For Appropriations 23,623,500 25,452,000 25,277,673 (174,327)(8,998,725)16,278,948 Charges to Appropriations (outflows): Public Ways and Facilities 9,034,600 10,922,000 8,038,352 (2,883,648)(500,560)7,537,792 Capital Outlay 7,599,700 8,037,600 2,967,051 (5,070,549)(255,282)2,711,769 Other Financing Uses: Transfers to Other Funds 4,690,800 4,690,800 6,060,093 1,369,293 39,804 6,099,897 Total Charges to Appropriations 21,325,100 23,650,400 17,065,496 (6,584,904)(716,038)16,349,458 Excess (Deficit) Resources Over (Under) Appropriations $2,298,400 $1,801,600 $8,212,177 $6,410,577 $(8,282,687)$(70,510) 175 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Community Services - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget to GAAP Reconciliation Actual Amounts GAAP BasisOriginalFinal Budgetary Fund Balance, July 1 $4,385,500 $4,394,300 $6,832,426 $2,438,126 $(6,832,426)$— Resources (inflows): Taxes 997,100 997,100 1,354,812 357,712 (14,685)1,340,127 Intergovernmental 4,486,200 5,792,200 4,334,462 (1,457,738)(1,089,393)3,245,069 Charges for Services 8,334,600 10,043,800 9,714,198 (329,602)(505,058)9,209,140 Use of Money and Property 444,800 444,800 540,605 95,805 (102,245)438,360 Miscellaneous 481,500 606,500 356,531 (249,969)(252)356,279 Other Financing Sources: Transfers from Other Funds 108,900 1,476,500 1,502,864 26,364 —1,502,864 Total Available For Appropriations 19,238,600 23,755,200 24,635,898 880,698 (8,544,059)16,091,839 Charges to Appropriations (outflows): General Government 1,000,000 1,500,000 771,693 (728,307)4,796 776,489 Public Protection 5,612,000 10,290,200 8,420,798 (1,869,402)84,300 8,505,098 Public Ways and Facilities 2,675,900 2,819,900 863,835 (1,956,065)(3,436)860,399 Culture and Recreation 2,709,100 2,885,100 2,366,352 (518,748)29,652 2,396,004 Community Development 179,000 179,000 11,543 (167,457)(1,950)9,593 Capital Outlay 4,385,200 5,595,000 590,709 (5,004,291)33,378 624,087 Other Financing Uses: Transfers to Other Funds 995,100 995,100 1,589,193 594,093 10,799 1,599,992 Total Charges to Appropriations 17,556,300 24,264,300 14,614,123 (9,650,177)157,539 14,771,662 Excess (Deficit) Resources Over (Under) Appropriations $1,682,300 $(509,100)$10,021,775 $10,530,875 $(8,701,598)$1,320,177 176 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - UGM Impact Fees - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAP BasisOriginalFinal Budgetary Fund Balance, July 1 $14,740,100 $15,467,900 $16,418,612 $950,712 $(16,418,612)$— Resources (inflows): Intergovernmental —————— Charges for Services 6,772,200 7,087,700 11,249,982 4,162,282 (15,922)11,234,060 Use of Money and Property 119,800 120,500 290,108 169,608 (222,960)67,148 Miscellaneous 856,300 856,300 11,046 (845,254)—11,046 Other Financing Sources: Transfers from Other Funds —535,000 838,688 303,688 (573,519)265,169 Total Available for Appropriations 22,488,400 24,067,400 28,808,436 4,741,036 (17,231,013)11,577,423 Charges to Appropriations (outflows): Public Protection 359,100 411,600 339,648 (71,952)140,000 479,648 Culture and Recreation —121,700 87,698 (34,002)(82,251)5,447 Public Ways and Facilities 3,104,900 3,922,000 2,536,653 (1,385,347)17,322 2,553,975 Capital Outlay 5,928,900 6,908,500 888,331 (6,020,169)(77,006)811,325 Other Financing Uses: Transfers to Other Funds 2,654,400 3,189,400 2,903,212 (286,188)(573,519)2,329,693 Total Charges to Appropriations 12,047,300 14,553,200 6,755,542 (7,797,658)(575,454)6,180,088 Excess (Deficit) Resources Over (Under) Appropriations $10,441,100 $9,514,200 $22,052,894 $12,538,694 $(16,655,559)$5,397,335 177 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Low and Moderate Income Housing - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAP BasisOriginal Budgetary Fund Balance, July 1 $—$—$—$—$— Resources (inflows): Use of Money and Property 23,607 23,607 ——23,607 Transfers from Other Funds 800,724 800,724 ——800,724 Total Available for Appropriations 824,331 824,331 ——824,331 Charges to Appropriations (outflows): General Government 109,350 109,350 ——109,350 Community Development 2,174,740 2,174,740 ——2,174,740 Total Charges to Appropriations 2,284,090 2,284,090 ——2,284,090 Excess (Deficit) Resources Over (Under) Appropriations $(1,459,759)$(1,459,759)$—$—$(1,459,759) 178 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - Special Assessments - Special Revenue Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAP BasisOriginalFinal Budgetary Fund Balance, July 1 $14,490,700 $14,490,700 $14,664,580 $173,880 $(14,664,580)$— Resources (inflows): Charges for Services 5,877,600 5,877,600 4,669,974 (1,207,626)—4,669,974 Use of Money and Property 173,700 173,700 190,809 17,109 (115,739)75,070 Miscellaneous 1,600 1,600 15,383 13,783 (11,712)3,671 Other Financing Sources: Transfers from Other Funds ——240,208 240,208 (240,000)208 Total Available for Appropriations 20,543,600 20,543,600 19,780,954 (762,646)(15,032,031)4,748,923 Charges to Appropriations (outflows): General Government ————109,011 109,011 Public Ways and Facilities 6,719,100 6,719,100 5,085,137 (1,633,963)106,386 5,191,523 Capital Outlay 2,688,900 2,688,900 65,571 (2,623,329)(64,094)1,477 Other Financing Uses: Transfers to Other Funds 340,000 340,000 240,017 (99,983)(175,906)64,111 Total Charges to Appropriations 9,748,000 9,748,000 5,390,725 (4,357,275)(24,603)5,366,122 Excess (Deficit) Resources Over (Under) Appropriations $10,795,600 $10,795,600 $14,390,229 $3,594,629 $(15,007,428)$(617,199) 179 CITY OF FRESNO, CALIFORNIA Schedule of Revenues and Expenditures - Budget and Actual (Non-GAAP Budgetary Basis) - City Combined - Capital Projects Fund Year Ended June 30, 2018 Budgeted Amounts Actual Amounts Budgetary Basis Over (Under) Final Budget Budget To GAAP Reconciliation Actual Amounts GAAP BasisOriginalFinal Budgetary Fund Balance, July 1 $6,400,400 $6,542,000 $5,576,956 $(965,044)$(5,576,956)$— Resources (inflows): Use of Money and Property 59,600 62,600 129,551 66,951 (123,092)6,459 Miscellaneous 673,600 823,600 1,359,666 536,066 1 1,359,667 Other Financing Sources: Transfers Budgeted as Bond Proceeds 5,093,800 5,093,800 5,051,340 (42,460)—5,051,340 Total Available for Appropriations 12,227,400 12,522,000 12,117,513 (404,487)(5,700,047)6,417,466 Charges to Appropriations (outflows): Capital Outlay 10,884,400 11,179,001 2,152,761 (9,026,240)33,105 2,185,866 Other Financing Uses: Transfers to Other Funds ——109,262 109,262 24,964 134,226 Total Charges to Appropriations 10,884,400 11,179,001 2,262,023 (8,916,978)58,069 2,320,092 Excess (Deficit) Resources Over (Under) Appropriations $1,343,000 $1,342,999 $9,855,490 $8,512,491 $(5,758,116)$4,097,374 180 This page intentionally left blank 181 CITY OF FRESNO, CALIFORNIA Combining Statement of Net Position Nonmajor Enterprise Funds June 30, 2018 Business-Type Activities - Enterprise Funds Community Sanitation Parks and Recreation Total Nonmajor Enterprise Funds Assets Current Assets: Cash and Investments $4,013,810 $410,950 $4,424,760 Interest Receivable 39,160 4,523 43,683 Accounts Receivable, Net 1,288,876 —1,288,876 Prepaids 546 —546 Total Current Assets 5,342,392 415,473 5,757,865 Noncurrent Assets: Other Assets: Other Assets —17,610 17,610 Net Pension Asset 2,735,112 —2,735,112 Total Other Assets 2,735,112 17,610 2,752,722 Capital Assets: Land —11,508 11,508 Buildings, Systems and Improvements —4,599,404 4,599,404 Machinery and Equipment 226,544 —226,544 Construction in Progress —50,000 50,000 Less Accumulated Depreciation (198,552)(2,439,693)(2,638,245) Total Capital Assets, Net 27,992 2,221,219 2,249,211 Total Noncurrent Assets 2,763,104 2,238,829 5,001,933 Total Assets 8,105,496 2,654,302 10,759,798 Deferred Outflows of Resources Charge on Refunding —73,729 73,729 Deferred Outflows - Pensions 485,412 —485,412 Deferred Outflows - OPEB 28,357 —28,357 Total Deferred Outflows of Resources 513,769 73,729 587,498 Liabilities Current Liabilities: Accrued Liabilities 255,217 22,606 277,823 Accrued Compensated Absences and HRA 32,023 —32,023 Due to Other Funds 178,918 —178,918 Bonds Payable —50,000 50,000 Total Current Liabilities 466,158 72,606 538,764 Noncurrent Liabilities: Accrued Compensated Absences and HRA 503,177 —503,177 Bonds Payable —1,782,054 1,782,054 Net OPEB Liability 1,093,787 —1,093,787 Total Noncurrent Liabilities 1,596,964 1,782,054 3,379,018 Total Liabilities 2,063,122 1,854,660 3,917,782 Deferred Inflows of Resources Unamortized Pension Expense 734,085 —734,085 Unamortized OPEB Expense 237,452 —237,452 Total Deferred Inflows of Resources 971,537 —971,537 Net Position Net Investment in Capital Assets 27,992 462,894 490,886 Unrestricted 5,556,614 410,477 5,967,091 Total Net Position $5,584,606 $873,371 $6,457,977 182 CITY OF FRESNO, CALIFORNIA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Nonmajor Enterprise Funds Year Ended June 30, 2018 Business-Type Activities - Enterprise Funds Community Sanitation Parks and Recreation Total Nonmajor Enterprise Funds Operating Revenues: Charges for Services $9,422,010 $323,496 $9,745,506 Operating Expenses: Cost of Services 5,467,311 35,491 5,502,802 Administration 4,706,251 2,441 4,708,692 Depreciation 8,410 178,358 186,768 Total Operating Expenses 10,181,972 216,290 10,398,262 Operating Income (759,962)107,206 (652,756) Non-Operating Revenue (Expenses): Interest Income 51,607 8,399 60,006 Interest Expense —(66,889)(66,889) Total Non-operating Revenue (Expenses)51,607 (58,490)(6,883) Income Before Transfers (708,355)48,716 (659,639) Transfers In —267 267 Transfers Out (858,674)(500)(859,174) Change in Net Position (1,567,029)48,483 (1,518,546) Total Net Position - Beginning 7,404,153 820,450 8,224,603 Cumulative Effect of Accounting Change (252,518)4,438 (248,080) Total Net Position - Beginning Restated 7,151,635 824,888 7,976,523 Total Net Position - Ending $5,584,606 $873,371 $6,457,977 183 CITY OF FRESNO, CALIFORNIA Combining Statement of Cash Flows Nonmajor Enterprise Funds Year Ended June 30, 2018 Business-Type Activities - Nonmajor Enterprise Funds Community Sanitation Parks and Recreation Total Nonmajor Enterprise Funds CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received from Customers $9,336,805 $323,496 $9,660,301 Cash Payments to Suppliers for Services (2,936,506)(23,986)(2,960,492) Cash Paid for Interfund Services Used (2,755,838)(1,600)(2,757,438) Cash Payments to Employees for Services (4,824,225)(31,715)(4,855,940) Net Cash Provided by Operating Activities (1,179,764)266,195 (913,569) CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Interest Payments on Capital Debt —(79,396)(79,396) Receipt of Restricted Deposits —5,507 5,507 Retirement of Debt —(60,000)(60,000) Acquisition and Construction of Capital Assets —(50,000)(50,000) Net Cash (Used for) Capital and Related Financing Activities —(183,889)(183,889) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Transfers In —267 267 Transfers Out (858,674)(500)(859,174) Net Cash (Used for) Non-Capital Financing Activities (858,674)(233)(858,907) CASH FLOWS FROM INVESTING ACTIVITIES: Interest and Dividends on Investments 49,111 6,425 55,536 Net Cash Provided by Investing Activities 49,111 6,425 55,536 Net Decrease in Cash and Cash Equivalents (1,989,327)88,498 (1,900,829) Cash and Cash Equivalents, Beginning of Year 6,003,137 322,452 6,325,589 Cash and Cash Equivalents, End of Year $4,013,810 $410,950 $4,424,760 184 CITY OF FRESNO, CALIFORNIA Combining Statement of Cash Flows Nonmajor Enterprise Funds Year Ended June 30, 2018 (Continued) Business-Type Activities - Nonmajor Enterprise Funds Community Sanitation Parks and Recreation Total Nonmajor Enterprise Funds Reconciliation of Operating Income to Net Cash Provided by Operating Activities: Operating income $(759,962)$107,206 $(652,756) Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense 8,410 178,358 186,768 Change in assets and liabilities: Decrease (increase) in accounts receivable 54,410 —54,410 Decrease (increase) in due from other funds 14,550 —14,550 Decrease (increase) in prepaid items (16)—(16) Decrease (increase) in net pension asset and deferred outflows pensions (896,054)—(896,054) Decrease (increase) in prepaid insurance —880 880 (Decrease) increase in accounts payable 101,633 (20,350)81,283 (Decrease) increase in salaries payable 59,630 101 59,731 (Decrease) increase in due to other funds (27,699)—(27,699) (Decrease) increase in Net OPEB liability (169,391)—(169,391) (Decrease) increase in deferred inflows of resources pensions 434,725 —434,725 Net Cash Provided by Operating Activities $(1,179,764)$266,195 $(913,569) Reconciliation of Cash and Cash Equivalents to the Statement of Net Position: Cash and Investments: Unrestricted $4,013,810 $410,950 $4,424,760 Cash and Cash Equivalents at End of Year on Statement of Cash Flows $4,013,810 $410,950 $4,424,760 Noncash Investing, Capital, and Financing Activities: Amortization of bond premium, discount and loss on refunding $—$1,383 $1,383 Decrease in fair value of investments 59,290 —59,290 185 This page intentionally left blank 186 CITY OF FRESNO, CALIFORNIA Combining Statement of Net Position Internal Service Funds June 30, 2018 Billing and Collection General Services Risk Management Employees Healthcare Plan Retirees Healthcare Plan Totals Assets Current Assets: Cash and Investments $3,604,808 $34,324,699 $9,579,217 $25,328,894 $—$72,837,618 Interest Receivable 117,048 196,620 90,160 198,458 —602,286 Accounts Receivable, Net 644,635 —132,956 ——777,591 Inventories —1,106,258 ———1,106,258 Prepaids 11,516 47,199 16,597 ——75,312 Due from Other Funds —2,119,884 ———2,119,884 Total Current Assets 4,378,007 37,794,660 9,818,930 25,527,352 —77,518,949 Noncurrent Assets: Restricted: Cash and Investments 5,076,771 —672,088 ——5,748,859 Total Restricted Assets 5,076,771 —672,088 ——5,748,859 Other Assets: Net Pension Asset 3,640,664 9,824,017 ———13,464,681 Total Other Assets 3,640,664 9,824,017 ———13,464,681 Capital Assets: Buildings, Systems & Improvements 50,000 7,778,782 ———7,828,782 Machinery & Equipment 147,565 124,716,188 ———124,863,753 Construction in Progress —3,409,770 ———3,409,770 Less Accumulated Depreciation (197,565)(91,936,344)———(92,133,909) Total Capital Assets, Net —43,968,396 ———43,968,396 Total Noncurrent Assets 8,717,435 53,792,413 672,088 ——63,181,936 Total Assets 13,095,442 91,587,073 10,491,018 25,527,352 —140,700,885 Deferred Outflows of Resources Pension Contributions 507,148 1,151,994 ———1,659,142 Deferred Outflows - Pension 267,540 580,345 ———847,885 Deferred Outflows - OPEB 60,012 98,921 5,936 ——164,869 Total Deferred Outflows of Resources 834,700 1,831,260 5,936 ——2,671,896 Liabilities Current Liabilities: Accrued Liabilities 760,560 2,567,124 1,032,340 350,627 —4,710,651 Accrued Compensated Absences & HRA 136,324 346,092 20,125 ——502,541 Liability for Self-Insurance ——30,003,966 4,900,000 —34,903,966 Unearned Revenue 720,909 328,448 ———1,049,357 Due to Other Funds 9,049 3,826,967 42 ——3,836,058 Capital Lease Obligations —3,910,973 ———3,910,973 Total Current Liabilities 1,626,842 10,979,604 31,056,473 5,250,627 —48,913,546 Noncurrent Liabilities: Accrued Compensated Absences & HRA 1,404,229 2,504,741 106,182 ——4,015,152 Capital Lease Obligations —10,719,608 ———10,719,608 Liability for Self-Insurance ——97,461,164 ——97,461,164 Net OPEB Liability 2,314,738 3,815,540 228,986 ——6,359,264 Deposits Held for Others 5,123,674 ————5,123,674 Total Noncurrent Liabilities 8,842,641 17,039,889 97,796,332 ——123,678,862 Total Liabilities 10,469,483 28,019,493 128,852,805 5,250,627 —172,592,408 Deferred Inflows of Resources Unamortized Pension Expense 745,877 2,125,924 ———2,871,801 Unamortized OPEB Expense 502,511 828,321 49,711 ——1,380,543 Total Deferred Inflows of Resources 1,248,388 2,954,245 49,711 ——4,252,344 Net Position Net Investment in Capital Assets —29,337,815 ———29,337,815 Unrestricted (Deficit)2,212,271 33,106,780 (118,405,562)20,276,725 —(62,809,786) Total Net Position (Deficit)$2,212,271 $62,444,595 $(118,405,562)$20,276,725 $—$(33,471,971) 187 CITY OF FRESNO, CALIFORNIA Combining Statement of Revenues, Expenses and Changes in Fund Net Position Internal Service Funds Year Ended June 30, 2018 Billing and Collection General Services Risk Management Employees Healthcare Plan Retirees Healthcare Plan Totals Operating Revenues: Charges for Services $10,219,618 $57,680,474 $29,823,717 $45,061,299 $7,252,582 $150,037,690 Operating Expenses: Cost of Services 6,214,448 30,602,345 32,356,295 39,897,866 6,811,708 115,882,662 Administration 2,817,228 11,321,469 5,180,170 3,964,890 440,874 23,724,631 Depreciation —5,576,812 ———5,576,812 Total Operating Expenses 9,031,676 47,500,626 37,536,465 43,862,756 7,252,582 145,184,105 Operating Income (Loss)1,187,942 10,179,848 (7,712,748)1,198,543 —4,853,585 Non-operating Revenue (Expenses): Interest Income 141,385 127,463 84,793 359,816 —713,457 Interest Expense —(301,467)———(301,467) Gain on Disposal of Capital Assets 4,000 184,215 ———188,215 Total Non-operating Revenue (Expenses)145,385 10,211 84,793 359,816 —600,205 Income (Loss) Before Contributions & Transfers 1,333,327 10,190,059 (7,627,955)1,558,359 —5,453,790 Transfers In —749,249 3,459,023 ——4,208,272 Transfers Out (555,332)(958,004)(49,481)——(1,562,817) Change in Net Position 777,995 9,981,304 (4,218,413)1,558,359 —8,099,245 Total Net Position (Deficit) - Beginning 1,965,287 53,233,786 (114,224,464)18,718,366 —(40,307,025) Cumulative Effect of Accounting Change (531,011)(770,495)37,315 ——(1,264,191) Total Net Position (Deficit) - Beginning Restated 1,434,276 52,463,291 (114,187,149)18,718,366 —(41,571,216) Total Net Position (Deficit) - Ending $2,212,271 $62,444,595 $(118,405,562)$20,276,725 $—$(33,471,971) 188 CITY OF FRESNO, CALIFORNIA Combining Statement of Cash Flows Internal Service Funds Year Ended June 30, 2018 Billing and Collection General Services Risk Management Employees Healthcare Plan Retirees Healthcare Plan Total CASH FLOWS FROM OPERATING ACTIVITIES: Cash Received from Customers $3,339,428 $7,691,159 $—$9,578,359 $5,301,435 $25,910,381 Cash Received from Interfund Services Provided 7,297,300 50,203,585 31,177,407 35,482,940 1,951,147 126,112,379 Cash Payments to Suppliers for Services (1,761,614)(24,955,579)(4,892,635)(3,594,804)(440,874)(35,645,506) Cash Paid for Interfund Services Used (1,677,114)(3,681,609)(384,935)——(5,743,658) Cash Payments to Employees for Services (6,496,944)(14,442,445)(3,215,877)——(24,155,266) Cash Payments for Claims and Refunds ——(27,391,322)(39,897,866)(6,811,708)(74,100,896) Net Cash Provided by Operating Activities 701,056 14,815,111 (4,707,362)1,568,629 —12,377,434 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Capital Contributions —3,310,636 ———3,310,636 Interest Payments on Capital Debt —(317,662)———(317,662) Principal Payment on Capital Lease Obligations —(2,630,636)———(2,630,636) Proceeds from Sale of Capital Assets 4,000 185,902 ———189,902 Acquisition and Construction of Capital Assets —(11,003,716)———(11,003,716) Net Cash (Used for) Capital and Related Financing Activities 4,000 (10,455,476)———(10,451,476) CASH FLOWS FROM NON-CAPITAL FINANCING ACTIVITIES: Borrowing (Payment to) Other Funds 8,000 1,565,557 ———1,573,557 Transfers In —749,249 3,459,024 ——4,208,273 Transfers Out (555,332)(958,004)(49,481)——(1,562,817) Net Cash Provided by (Used for) Non-Capital Financing Activities (547,332)1,356,802 3,409,543 ——4,219,013 CASH FLOWS FROM INVESTING ACTIVITIES: Interest and Dividends on Investments 97,062 57,386 46,735 280,717 —481,900 Net Cash Provided by Investing Activities 97,062 57,386 46,735 280,717 —481,900 Net Increase in Cash and Cash Equivalents 254,786 5,773,823 (1,251,084)1,849,346 —6,626,871 Cash and Cash Equivalents, Beginning of Year 8,426,793 28,550,875 11,502,390 23,479,548 —71,959,606 Cash and Cash Equivalents, End of Year $8,681,579 $34,324,698 $10,251,306 $25,328,894 $—$78,586,477 189 CITY OF FRESNO, CALIFORNIA Combining Statement of Cash Flows Internal Service Funds Year Ended June 30, 2018 (Continued) Billing and Collection General Services Risk Management Employees Healthcare Plan Retirees Healthcare Plan Total Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss)$1,187,942 $10,179,848 $(7,712,748)$1,198,543 $—$4,853,585 Adjustments to reconcile operating income to net cash provided by operating activities: Depreciation expense —5,576,812 ———5,576,812 Change in assets and liabilities: Decrease (increase) in accounts receivable 135,301 —(76,090)——59,211 Decrease (increase) in due from other funds —575,594 ———575,594 Decrease (increase) in material and supplies inventory —(339,465)———(339,465) Decrease (increase) in prepaid items (6,898)(22,600)(16,597)——(46,095) Decrease (increase) in net pension asset and deferred outflows pensions (687,245)(2,366,578)(5,936)——(3,059,759) (Decrease) increase in accounts payable (464,204)275,987 (77,257)70,086 —(195,388) (Decrease) increase in salaries payable 432,727 364,904 236,928 ——1,034,559 (Decrease) increase in due to other funds (2,029)—(173)——(2,202) (Decrease) increase in unearned revenue (2,361)328,448 ———326,087 (Decrease) increase in liability for self-insurance ——2,930,262 300,000 —3,230,262 (Decrease) increase in deposits 183,185 ————183,185 (Decrease) increase in Net OPEB liability (358,475)(590,898)(35,462)——(984,835) (Decrease) increase in deferred inflows of resources pensions 283,113 833,059 49,711 ——1,165,883 Net Cash Provided by Operating Activities $701,056 $14,815,111 $(4,707,362)$1,568,629 $—$12,377,434 Reconciliation of Cash and Cash Equivalents to the Statement of Net Position: Cash and Investments: Unrestricted $3,604,808 $34,324,699 $9,579,217 $25,328,894 $—$72,837,618 Restricted - Current and Noncurrent 5,076,771 —672,088 ——5,748,859 Cash and Cash Equivalents at End of Year on Statement of Cash Flows $8,681,579 $34,324,699 $10,251,305 $25,328,894 $—$78,586,477 Noncash Investing, Capital, and Financing Activities: Acquisition and construction of capital assets on accounts payable $—$128,132 $—$—$—$128,132 Borrowing under capital lease —5,644,512 ———5,644,512 Decrease (increase) in fair value of investments 128,077 265,107 (151,427)——241,757 190 This page intentionally left blank 191 This page intentionally left blank 192 CITY OF FRESNO, CALIFORNIA Combining Statement of Fiduciary Net Position Fiduciary Funds - Pension Trust Funds June 30, 2018 Pension Trust Funds Fire and Police Employees Retirement Retirement Total System System Assets Cash and Investments $2,206,598 $1,856,515 $4,063,113 Receivables: Receivables for Investments Sold 1,510,664 1,207,493 2,718,157 Interest and Dividends Receivable 4,004,206 3,368,358 7,372,564 Other Receivables 1,884,317 1,601,514 3,485,831 Total Receivables 7,399,187 6,177,365 13,576,552 Investments, at Fair Value: Short-Term Investments 33,310,870 28,021,268 61,332,138 Domestic Equity 598,042,858 503,076,591 1,101,119,449 Corporate Bonds 150,585,487 126,673,251 277,258,738 International Developed Market Equities 287,973,864 242,245,030 530,218,894 International Emerging Market Equities 55,558,303 46,735,917 102,294,220 Government Bonds 177,379,820 149,212,777 326,592,597 Direct Lending 63,716,750 53,598,843 117,315,593 Real Estate 234,106,238 197,413,403 431,519,641 Total Investments 1,600,674,190 1,346,977,080 2,947,651,270 Collateral Held for Securities Lent 98,293,865 82,685,282 180,979,147 Capital Assets, Net of Accumulated Depreciation 966,652 966,652 1,933,304 Prepaid Expense 37,808 37,808 75,616 Total Assets 1,709,578,300 1,438,700,702 3,148,279,002 Liabilities Accrued Liabilities 7,279,433 6,123,427 13,402,860 Collateral Held for Securities Lent 98,293,865 82,685,282 180,979,147 Other Liabilities 1,419,408 1,201,360 2,620,768 Total Liabilities 106,992,706 90,010,069 197,002,775 Net Position Net Position Restricted for Pension Benefits $1,602,585,594 $1,348,690,633 $2,951,276,227 193 CITY OF FRESNO, CALIFORNIA Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds - Pension Trust Funds Year Ended June 30, 2018 Pension Trust Funds Fire and Police Employees Retirement Retirement Total System System Additions Contributions: Employer $19,696,957 $14,608,659 $34,305,616 System Members 8,963,672 10,329,475 19,293,147 Total Contributions 28,660,629 24,938,134 53,598,763 Investment Income: Net (Depreciation) in Value of Investments 111,163,089 93,756,411 204,919,500 Interest 14,600,658 12,299,109 26,899,767 Dividends 12,886,994 10,855,518 23,742,512 Other Investment Related 55,900 54,745 110,645 Total Investment Income 138,706,641 116,965,783 255,672,424 Less Investment Expense (10,021,417)(8,452,047)(18,473,464) Total Net Investment Income 128,685,224 108,513,736 237,198,960 Securities Lending Income: Securities Lending Earnings 2,000,798 1,683,081 3,683,879 Less Securities Lending Expense (1,523,233)(1,281,351)(2,804,584) Net Securities Lending Income 477,565 401,730 879,295 Total Additions 157,823,418 133,853,600 291,677,018 Deductions Benefit Payments 62,510,828 56,241,911 118,752,739 Refund of Contributions 560,170 1,424,025 1,984,195 Administrative Expenses 1,709,614 1,618,767 3,328,381 Total Deductions 64,780,612 59,284,703 124,065,315 Change in Net Position 93,042,806 74,568,897 167,611,703 Net Position - Beginning 1,509,542,788 1,274,121,736 2,783,664,524 Net Position - Ending $1,602,585,594 $1,348,690,633 $2,951,276,227 194 CITY OF FRESNO, CALIFORNIA Combining Statement of Changes in Assets and Liabilities Agency Funds Year Ended June 30, 2018 CITY DEPARTMENTAL FUND Balance Balance July 1, 2017 Additions Deletions June 30, 2018 Assets Cash and Investments $7,438,712 $303,989,294 $302,129,864 $9,298,142 Interest Receivable 12,032 92,506 86,177 18,361 Due From Other Governments 9,982 9,670 9,982 9,670 Total Assets $7,460,726 $304,091,470 $302,226,023 $9,326,173 Liabilities Accrued Liabilities $411,593 $312,782,029 $310,781,227 $2,412,395 Due to Other Funds 1,054 921 1,054 921 Deposits Held for Others 7,048,079 8,681,858 8,817,080 6,912,857 Total Liabilities $7,460,726 $321,464,808 $319,599,361 $9,326,173 SPECIAL ASSESSMENTS DISTRICT FUND Balance Balance July 1, 2017 Additions Deletions June 30, 2018 Assets Cash and Investments $194,672 $439,462 $405,558 $228,576 Restricted Cash and Investments Held by Fiscal Agent 565,206 —6,542 558,664 Interest Receivable 329 877 658 548 Due from Other Governments 755,766 783,821 755,766 783,821 Total Assets $1,515,973 $1,224,160 $1,168,524 $1,571,609 Liabilities Deposits Held for Others $1,515,973 $1,223,655 $1,168,019 $1,571,609 Total Liabilities $1,515,973 $1,223,655 $1,168,019 $1,571,609 TOTAL AGENCY FUNDS Balance Balance July 1, 2016 Additions Deletions June 30, 2017 Assets Cash and Investments $7,633,384 $304,428,756 $302,535,422 $9,526,718 Restricted Cash and Investments Held by Fiscal Agent 565,206 —6,542 558,664 Interest Receivable 12,361 93,383 86,835 18,909 Due from Other Governments 765,748 793,491 765,748 793,491 Total Assets $8,976,699 $305,315,630 $302,628,799 $10,897,782 Liabilities Accrued Liabilities $411,593 $312,782,029 $310,781,227 $2,412,395 Due To Other Funds 1,054 921 1,054 921 Deposits Held for Others 8,564,052 9,905,513 9,985,099 8,484,466 Total Liabilities $8,976,699 $322,688,463 $320,767,380 $10,897,782 195 CITY OF FRESNO CULTURAL ARTS PROPERTIES CORPORATION FRESNO, CALIFORNIA Statement of Cash Flows in Liquidation Discretely Presented Component Unit August 29, 2017 (1) Cash Flows from Operating Activities Receipts from Customers $— Payments to Suppliers and Service Providers — Net Cash Provided by Operating Activities — Cash Flows from Capital and Related Financing Activities Payment of Liquidation of Debt (968,223) Refund Unearned Revenue (231,250) Net Cash (Used) by Capital and Related Financing Activities (1,199,473) Net Increase in Cash (1,199,473) Cash - Beginning 1,199,473 Cash - Ending $— Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities Operating Income (Loss)$— Adjustments to Reconcile Operating Income (Loss) to Net Cash Provided by Operating Activities Depreciation — Total Adjustments — Net Cash Provided by Operating Activities $— (1) Refer to Note 13 for details of the COFCAP Liquidation 196 This page intentionally left blank 197 This page intentionally left blank CITY OF FRESNO | COMPREHENSIVE ANNUAL FINANCIAL REPORT FISCAL YEAR ENDED JUNE 30, 2018 198 Statistical Section This section of the City's comprehensive annual 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 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. (Pages 199-203) Revenue Capacity These schedules contain information to help the reader assess the City's most significant local revenue source: The property tax. (Pages 204-207) 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. (Pages 208-216 ) 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. (Pages 217-218) Operating Information These schedules contain information about the City's operations 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. (Pages 219-223) Sources: Unless otherwise noted, the information in these schedules is derived from the comprehensive annual financial reports for the relevant year. 199 CITY OF FRESNO, CALIFORNIA Net Position By Component Last Ten Fiscal Years (dollars in thousands) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Governmental Activities Net Investment in Capital Assets $736,410 $781,253 $760,927 $742,533 $733,961 $744,074 $771,198 $795,884 $787,522 $796,242 Restricted 219,892 152,271 138,021 123,401 125,617 141,123 146,174 151,345 168,927 171,473 Unrestricted (Deficit)(267,498)(266,011)(230,447)(240,718)(235,759)(215,416)(86,424)(22,058)28,252 43,381 Total Governmental Activities $688,804 $667,513 $668,501 $625,216 $623,819 $669,781 $830,948 $925,171 $984,701 $1,011,096 Business-Type Activities Net Investment in Capital Assets $679,116 $760,272 $776,377 $853,405 $829,456 $835,290 $841,773 $896,818 $955,128 $958,169 Restricted 42,922 ————————— Unrestricted (Deficit)112,405 125,129 168,025 148,775 219,983 264,090 300,296 307,315 353,436 440,871 Total Business-Type Activities $834,443 $885,401 $944,402 $1,002,180 $1,049,439 $1,099,380 $1,142,069 $1,204,133 $1,308,564 $1,399,040 Primary Government Net Investment in Capital Assets $1,415,526 $1,541,524 $1,537,304 $1,595,938 $1,563,417 $1,579,364 $1,612,971 $1,692,702 $1,742,650 $1,754,411 Restricted 262,815 152,271 138,021 123,401 125,617 141,123 146,174 151,345 168,927 171,473 Unrestricted (Deficit)(155,093)(140,882)(62,422)(91,942)(15,776)48,674 213,872 285,257 381,688 484,252 Total Primary Government $1,523,248 $1,552,913 $1,612,903 $1,627,397 $1,673,258 $1,769,161 $1,973,017 $2,129,304 $2,293,265 $2,410,136 Source: City of Fresno, Finance Department 200 CITY OF FRESNO, CALIFORNIA Change in Net Position Last Ten Fiscal Years (dollars in thousands) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Expenses Governmental Activities: General Government $30,592 $50,381 $26,642 $23,820 $34,308 $26,997 $28,590 $32,207 $44,157 $31,319 Public Protection 204,013 211,586 192,993 208,649 190,050 192,124 177,829 187,733 196,006 206,163 Public Ways and Facilities 66,053 73,653 68,471 75,281 69,771 68,914 64,430 60,875 72,984 76,289 Culture and Recreation 27,497 22,806 21,797 16,294 16,704 17,895 20,036 20,223 23,500 19,771 Community Development 20,331 14,823 14,981 15,986 26,280 23,757 29,257 28,789 28,913 30,412 Redevelopment 12,079 7,084 4,821 8,308 —————— Interest on Long-term Debt 24,811 25,357 25,722 22,426 21,037 20,275 19,519 18,787 18,658 14,413 Total Governmental Activities 385,376 405,690 355,427 370,764 358,150 349,962 339,661 348,614 384,218 378,367 Business-Type Activities: Water System 52,370 58,013 64,134 67,577 60,749 63,375 62,205 64,454 63,753 73,677 Sewer System 49,867 47,476 47,568 60,003 63,736 65,145 66,148 63,980 64,124 65,991 Solid Waste Management 43,671 44,845 45,424 43,286 30,257 33,345 32,976 26,649 26,605 30,353 Transit 47,529 47,627 47,250 49,670 48,398 45,287 45,435 44,191 47,958 53,937 Airports 26,728 29,648 29,020 27,154 32,413 28,498 28,164 28,509 29,938 31,192 Fresno Convention Center 11,676 12,489 11,637 10,919 14,928 9,982 10,147 9,750 10,798 8,855 Community Sanitation 9,683 10,099 10,024 6,493 7,848 7,949 8,235 6,904 8,978 10,077 Parking 6,909 7,657 5,956 5,059 —————— Parks and Recreation 2,043 1,992 782 1,036 812 372 340 316 410 283 Development Services 13,543 10,886 11,408 9,741 —————— Stadium 3,977 3,627 3,607 3,544 3,463 3,336 3,266 3,191 3,539 2,710 Total Business-Type Activities 267,996 274,359 276,810 284,482 262,604 257,289 256,916 247,944 256,103 277,075 Total Primary Government Expenses $653,372 $680,049 $632,237 $655,246 $620,754 $607,251 $596,577 $596,558 $640,321 $655,442 Program Revenues Governmental Activities: Charges for Services: General Government $17,432 $17,286 $16,454 $16,545 $18,634 $17,038 $23,194 $22,580 $46,742 $17,171 Public Protection 19,628 19,014 18,321 19,720 20,924 18,898 31,872 44,037 22,382 32,275 Public Ways and Facilities 3,583 12,515 13,440 13,470 16,669 14,898 17,427 20,469 21,911 21,009 Culture and Recreation 1,837 2,389 2,432 809 3,021 4,680 4,577 4,949 3,645 3,935 Community Development 138 269 653 2,568 19,529 19,432 21,130 25,239 23,496 23,033 Operating Grants and Contributions 40,480 45,265 43,011 54,974 36,639 48,503 39,550 34,015 25,016 26,488 Capital Grants and Contributions 57,261 64,464 40,295 29,730 35,623 49,651 62,472 57,955 44,586 38,584 Total Governmental Activities Program Revenues 140,359 161,202 134,606 137,816 151,039 173,100 200,222 209,244 187,778 162,495 Business-Type Activities: Charges for Services: Water System 65,597 67,722 67,922 69,269 71,667 90,096 74,285 77,959 101,895 107,377 Sewer System 62,521 74,158 76,628 76,726 76,324 76,201 81,955 78,186 83,635 81,651 Solid Waste Management 49,849 51,364 51,753 38,271 29,797 29,404 31,208 31,975 31,170 30,100 Transit 10,280 9,588 9,486 10,769 11,054 10,914 13,089 12,479 11,452 10,746 Airports 19,768 19,367 21,701 21,563 23,329 24,991 25,670 27,646 27,835 29,634 Fresno Convention Center 3,130 3,038 2,929 2,667 2,594 2,626 2,960 3,634 3,752 3,318 Community Sanitation 10,075 10,182 10,209 8,918 9,108 8,956 9,746 9,733 9,613 9,422 Parking 7,129 6,756 5,997 5,270 —————— Parks and Recreation 490 635 742 781 736 329 329 325 340 323 Development Services 9,952 9,251 10,669 8,395 —————— Stadium 1,500 1,675 340 1,251 1,089 798 1,248 677 1,082 238 Operating Grants and Contributions 35,959 40,964 49,401 42,361 40,850 44,211 40,215 29,190 37,187 22,939 Capital Grants and Contributions 33,762 20,859 17,744 43,505 22,224 14,755 14,791 18,015 47,576 69,570 Total Business-Type Activities Program Revenues 310,012 315,559 325,521 329,746 288,772 303,281 295,496 289,819 355,537 365,318 Total Primary Government Program Revenues $450,371 $476,761 $460,127 $467,562 $439,811 $476,381 $495,718 $499,063 $543,315 $527,813 201 CITY OF FRESNO, CALIFORNIA Change in Net Position Last Ten Fiscal Years (Continued) (dollars in thousands) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Net (Expense)/Revenue Governmental Activities $(245,017)$(244,488)$(220,823)$(232,948)$(207,112)$(176,862)$(139,440)$(139,370)$(196,440)$(215,872) Business-Type Activities 42,016 41,200 48,711 45,265 26,169 45,991 38,580 41,874 99,434 88,243 Total Primary Government Net Expense $(203,001)$(203,288)$(172,112)$(187,683)$(180,943)$(130,871)$(100,860)$(97,496)$(97,006)$(127,629) General Revenues and Other Changes in Net Position Governmental Activities: Property Taxes $135,353 $126,345 $125,687 $100,961 $103,745 $107,635 $113,655 $117,048 $123,858 $130,109 Sales Taxes - Shared Revenues 50,332 46,999 49,251 53,354 56,473 59,328 61,571 74,010 86,128 85,512 In-Lieu Sales Tax 16,274 15,209 15,947 17,272 18,216 19,190 19,907 10,559 —— Franchise Taxes 7,376 7,059 7,917 11,720 12,503 12,751 13,469 13,722 14,335 14,811 Business Tax 14,611 14,893 14,249 16,267 16,470 18,868 17,780 16,879 19,101 20,982 Room Tax 9,927 8,548 8,450 9,088 9,560 10,019 11,006 12,045 13,128 13,936 Other Taxes 3,717 2,134 1,949 2,479 2,104 2,324 2,407 2,521 2,348 2,304 Revenues Restricted for Infrastructure Maintenance 295 ————————— Investment Earnings 8,476 6,000 4,435 2,053 1,889 795 879 1,652 1,215 1,349 Gain on Sale of Capital Assets 485 146 536 1,022 416 42 402 218 214 223 Special Item - Loss on Receivable/ Transfer of Assets (Note 13)—————————(8,152) Extraordinary (Loss): Redevelopment Agency Net Position Distributed to Successor Agency ———(18,561)—————— Transfers:(1,718)(4,135)(6,608)(5,991)(15,662)(5,699)(6,290)(15,061)(4,356)(4,820) Total Governmental Activities 245,128 223,198 221,813 189,664 205,714 225,253 234,786 233,593 255,971 256,254 Business-Type Activities: Investment Earnings 7,809 5,614 3,528 6,139 1,596 2,316 2,999 5,129 641 2,614 Debt Forgiveness ———1,744 —————— Gain on Sale of Capital Assets 52 9 153 2,719 3,832 1 38 ——37 Transfers:1,718 4,135 6,608 5,991 15,662 5,699 6,290 15,061 4,356 4,820 Total Business-Type Activities 9,579 9,758 10,289 16,593 21,090 8,016 9,327 20,190 4,997 7,471 Total Primary Government $254,707 $232,956 $232,102 $206,257 $226,804 $233,269 $244,113 $253,783 $260,968 $263,725 Change in Net Position Governmental Activities $111 $(21,291)$988 $(43,285)$(1,397)$48,391 $95,347 $94,223 $59,530 $40,381 Business-Type Activities 51,596 50,958 59,001 61,858 47,258 54,006 47,906 62,065 104,431 95,713 Total Primary Government $51,707 $29,667 $59,989 $18,573 $45,861 $102,397 $143,253 $156,288 $163,961 $136,094 Source: City of Fresno, Finance Department 202 CITY OF FRESNO, CALIFORNIA Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (dollars in thousands) Fiscal Year 2009 General Fund Reserved $28,296 Unreserved 474 Total General Fund $28,770 All other Governmental Funds Reserved $184,111 Unreserved, reported in: Special Revenue Funds (1,792) Debt Service Funds (24,183) Capital Projects Fund 19,333 Total all other governmental funds $177,469 Fiscal Year 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Fund Nonspendable $31,821 $16,829 $12,691 $12,691 $12,691 $12,691 $12,691 $18,417 $3,919 Restricted ———435 7 105 11 37 16 Committed 10,586 1,444 1,481 1,903 2,351 5,207 1,610 22,104 25,565 Assigned ——390 1,095 1,006 1,874 2,811 3,890 2,845 Unassigned (2,228)(64)483 (9,355)8,192 24,643 31,808 26,749 19,533 Total General Fund $40,179 $18,209 $15,045 $6,769 $24,247 $44,520 $48,931 $71,197 $51,878 All other Governmental Funds Restricted $165,679 $143,214 $125,275 $128,100 $145,763 $146,002 $151,726 $163,802 $166,207 Assigned 33,216 31,822 19,897 17,624 15,752 15,928 15,847 12,177 16,115 Unassigned (61,582)(14,272)(7,547)(5,196)(7,749)(9,670)(6,284)(788)(809) Total all other governmental funds $137,313 $160,764 $137,625 $140,528 $153,766 $152,260 $161,289 $175,191 $181,513 Source: City of Fresno, Finance Department Notes: The City implemented GASB Statement No. 54 in FY2011 and restated the presentation for FY2010. 203 CITY OF FRESNO, CALIFORNIA Changes in Fund Balances, Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) (dollars in thousands) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues Taxes $258,840 $233,399 $243,155 $239,845 $237,956 $263,471 $276,847 $266,521 $298,425 $289,140 Licenses and Permits 317 292 423 528 5,097 6,331 6,569 7,103 7,291 7,829 Intergovernmental 36,508 53,157 58,183 44,591 37,032 48,910 41,915 39,036 38,770 39,319 Charges for Services 25,901 22,646 20,535 36,184 49,995 46,277 44,692 46,398 49,538 51,294 Fines 3,250 3,372 3,171 1,926 4,193 3,746 3,391 4,271 3,487 3,872 Use of Money and Property 6,973 3,688 4,225 1,677 2,539 1,585 1,643 2,105 1,285 1,305 Contributions and Donations ———169 —————— Miscellaneous 14,938 14,953 14,607 5,560 6,146 5,612 8,800 8,156 36,448 4,504 Total Revenues 346,727 331,507 344,299 330,480 342,958 375,932 383,857 373,590 435,244 397,263 Expenditures General Government 16,774 30,693 12,818 8,273 13,039 11,742 13,841 17,490 26,257 21,285 Public Protection 187,075 183,168 184,740 191,499 187,189 185,911 188,050 201,657 212,828 221,043 Public Ways and Facilities 19,010 24,858 20,386 34,832 33,332 39,190 35,606 38,293 42,430 41,682 Culture and Recreation 23,596 20,400 16,223 11,833 13,177 14,247 15,433 17,735 16,928 18,257 Community Development 20,227 13,012 12,473 15,217 25,685 23,666 30,320 29,511 29,360 31,483 Capital Outlays 91,708 81,121 50,902 20,345 19,919 28,375 38,984 23,145 29,990 31,401 Debt Service: Principal 15,241 21,312 14,368 17,612 17,484 17,814 19,218 17,435 19,196 17,568 Interest 23,746 26,095 25,074 22,493 21,134 20,347 19,511 18,629 17,780 14,752 Total Expenditures 397,377 400,659 336,984 322,104 330,959 341,292 360,963 363,895 394,769 397,471 Excess (Deficiency) of Revenues Over (Under) Expenditures (50,650)(69,152)7,315 8,376 11,999 34,640 22,894 9,695 40,475 (208) Other Financing Sources (Uses) Transfers In 91,923 142,202 137,969 82,206 46,827 42,716 44,695 45,251 55,930 49,397 Transfers Out (91,505)(141,669)(145,587)(87,540)(66,633)(47,267)(50,573)(49,446)(59,055)(57,418) Discount on Debt Issued (870)———————835 — Issuance of Refunding Bonds —23,395 ——————108,903 — Refunded Bond Redeemed ————————(128,621)— Payment to Refund Bonds Escrow Agent —(23,287)———————— Long-Term Debt Issued 46,790 23,100 ———————— Premium on Debt Issued ————————11,528 — Proceeds for Note Obligation 600 ————————— Capital Lease Financing —————621 966 7,331 4,126 3,162 Proceeds for Capital Lease Obligations 392 —1,707 —1,088 ————— Sale of Capital Assets —16,661 77 679 1,346 8 785 609 2,046 223 Total Other Financing Sources (Uses)47,330 40,402 (5,834)(4,655)(17,372)(3,922)(4,127)3,745 (4,308)(4,636) Special Item Loss on Receivable (Note 13)—————————(8,152) Net Change in Fund Balances $(3,320)$(28,750)$1,481 $3,721 $(5,373)$30,718 $18,767 $13,440 $36,167 $(12,996) Debt Service as a Percentage of Non-capital Expenditures 11.22%14.75%12.88%13.10%12.35%12.45%11.94%11.00%10.29%9.11% Source: City of Fresno, Finance Department Notes: To properly calculate the ratio of total debt service expenditures to non-capital expenditures, only governmental fund expenditures for the acquisition and construction of assets that are classified as capital assets for reporting in the Government-Wide Financial Statements have been subtracted from the total governmental fund expenditures. These figures by fiscal year are as follows: (2009) $49,825,792; (2010) $79,262,273; (2011) $30,695,022; (2012) $15,973,001; (2013) $18,151,306; (2014) $34,893,624; (2015) $46,135,229; (2016) $35,295,704; (2017) $35,500,989; and (2018) $42,738,629. 204 CITY OF FRESNO, CALIFORNIA Gross Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years Fiscal Year Secured Estimated Actual Unsecured Estimated Actual Total Taxable Assessed Value Total Direct Tax Rate Assessed Value as a Percent of Estimated Actual Value 2009 $28,935,909,029 $1,314,490,825 $30,250,399,854 1.032438 100% 2010 26,857,338,571 1,695,509,992 28,552,848,563 1.032438 100% 2011 26,427,029,439 1,607,052,037 28,034,081,476 1.032438 100% 2012 25,850,359,825 1,476,938,743 27,327,298,568 1.032438 100% 2013 25,446,100,571 1,511,385,533 26,957,486,104 1.032438 100% 2014 26,754,005,601 1,449,421,705 28,203,427,306 1.032438 100% 2015 28,638,669,937 1,444,805,569 30,083,475,506 1.032438 100% 2016 30,026,361,027 1,500,061,596 31,526,422,623 1.032438 100% 2017 31,344,820,623 1,596,315,117 32,941,135,740 1.032438 100% 2018 32,837,504,668 1,616,397,886 34,453,902,554 1.032438 100% Source:County of Fresno Notes:Fresno County does not collect Actual Value (Market Value) information on taxable properties or on tax exempt properties. The estimated actual value of taxable property is the same as the gross assessed value. 205 CITY OF FRESNO, CALIFORNIA Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (Percentage per $100 of Assessed Value) Overlapping Rates City Direct Rate Schools Fiscal Year Property Tax Rate Fresno Pension Total Direct Tax Rate Fresno Unified School District State Center Community College District Total Direct and Overlapping Property Tax Rate 2009 1.0 0.032438 1.032438 0.105266 0.000594 1.138298 2010 1.0 0.032438 1.032438 0.010324 0.188864 1.231626 2011 1.0 0.032438 1.032438 0.188864 0.010050 1.231352 2012 1.0 0.032438 1.032438 0.188800 0.007070 1.228308 2013 1.0 0.032438 1.032438 0.188860 0.009358 1.230656 2014 1.0 0.032438 1.032438 0.188834 0.009602 1.230874 2015 1.0 0.032438 1.032438 0.188860 0.009308 1.230606 2016 1.0 0.032438 1.032438 0.188860 0.008064 1.229362 2017 1.0 0.032438 1.032438 0.188864 0.008480 1.229782 2018 1.0 0.032438 1.032438 0.188864 0.025934 1.247236 Source:County of Fresno Notes:On June 6, 1978, California voters approved a constitutional amendment to Article XIIIA of the California Constitution, commonly known as Proposition 13, which limits the taxing power of California public agencies. Legislation enacted by the California Legislature to implement Article XIIIA (Statutes of 1978, Chapter 292, as amended) provides that, notwithstanding any other law, local agencies may not levy any property tax except to pay debt service on indebtedness approved by voters prior to July 1, 1978, and that each county will levy the maximum tax permitted by Article XIIIA of $1.00 per $100.00 of full cash value. Assessed value is equal to full cash value, pursuant to Senate Bill 1656, Statutes of 1978. 206 CITY OF FRESNO, CALIFORNIA Principal Property Taxpayers Current Year and Nine Years Ago 2018 2009 Taxpayer Type of Business Taxable Assessed Value Rank % of Total County Assessed Value Taxable Assessed Value Rank % of Total County Assessed Value River Park Properties Retail and General Offices $183,673,041 1 .0470 $140,949,874 3 0.0407 Macerich Fresno Ltd. Partners Retail and General Offices 146,923,366 2 .0376 135,206,512 4 0.0390 Gallo E J Winery Winery 124,475,990 3 .0318 158,457,336 2 0.0458 RPI Fig Garden LP Retail 109,975,939 4 .0281 ——0.0000 Gap Inc.Distribution Center 102,347,700 5 .0262 172,415,550 1 0.0498 Community Hospitals of Central California Hospitals and related Facilities 89,955,005 6 .0230 ——0.0000 Comcast Cablevision Telecommunications 99,890,800 7 .0255 80,518,800 7 0.0232 Dewayne Zinkin Family Partners Commercial and Land 84,844,900 8 .0217 78,836,371 9 0.0228 IREIT Fresno El Paseo LLC Retail 71,400,000 9 .0183 ——0.0000 Skywest Airlines Inc. Ryan Inc.Unsecured Property 71,067,500 10 .0182 ——0.0000 Donahue Schriber Realty Group Retail ——.0000 124,177,181 5 0.0359 Capri Sun Inc.Light Industrial ——.0000 94,134,782 6 0.0272 Fresno Heart Hospital LLC Hospital ——.0000 78,951,341 8 0.0228 Hub Acquisition Trust General Office ——.0000 66,158,463 10 0.0191 Total $1,084,554,241 .2774 $1,129,806,210 0.3263 Source:MuniServices, LLC as compiled by Wildan Financial Services. Notes:FY2018 Taxable Assessed Valuation $3,910,852,903. FY2009 Taxable Assessed Valuation $3,463,512,447. 207 CITY OF FRESNO, CALIFORNIA Property Tax Levies and Collections Last Ten Fiscal Years Current Tax Collections Fiscal Year Total Net Tax Levy (Original Levy) Supplemental Assessments Redevelopment Return of Increment Total Adjusted Tax Levy Amount Collected Percentage of Net Tax Levy Delinquent Tax Collections Total Tax Collections Percent of Collection of Adjusted Tax Levy 2009 $96,222,918 $12,489,738 $—$108,712,656 $106,892,034 98.33%$1,820,622 $108,712,656 100.00% 2010 90,717,173 8,915,811 —99,632,984 95,393,395 95.74%3,846,403 99,239,798 99.61% 2011 88,944,564 10,281,793 —99,226,357 97,816,966 98.58%1,409,391 99,226,357 100.00% 2012 87,016,755 9,969,282 589,134 97,575,171 96,163,705 98.55%1,411,466 97,575,171 100.00% 2013 86,530,712 10,098,582 2,478,235 99,107,529 98,239,898 99.12%867,631 99,107,529 100.00% 2014 90,601,174 9,698,694 2,171,963 102,471,831 101,452,992 99.01%421,496 101,874,488 99.42% 2015 96,468,363 11,900,327 1,609,109 109,977,799 106,989,456 97.28%395,578 107,385,034 97.64% 2016 100,946,941 12,082,212 2,306,017 115,335,170 113,633,713 98.52%508,181 114,141,894 98.97% 2017 105,199,432 13,077,130 2,014,329 120,290,891 119,336,199 99.21%386,236 119,722,435 99.53% 2018 109,890,834 13,565,677 2,278,284 125,734,795 123,764,163 98.43%649,161 124,413,324 98.95% Average Collections 99.41 % Source:County of Fresno Notes: Supplemental Assessments include voter approved indebtedness for Fire and Police Pensions and supplemental assessments added whenever new construction is completed and whenever real property changes ownership under Chapter 3.5 of Part 0.5 of Division 1 of the California Revenue and Taxation Code. Beginning in FY2014, Delinquent Tax Collections do not include penalties and interest. Property tax collection for fiscal years prior to FY2014 have been adjusted so as not to exceed the levy. Beginning in FY2014, collections only reflect those dollars that are related to the fiscal period in which the tax was levied. 208 CITY OF FRESNO, CALIFORNIA Ratios of Outstanding Debt by Type Last Ten Fiscal Years (dollars in thousands, except per capita) Governmental Activities Business-Type Activities General Obligation Bonds Lease Revenue Bonds Tax Allocation Bonds Certificates of Participation Notes Payable Capital Leases Airport Revenue Bonds Solid Waste Revenue Bonds Sewer Revenue Bonds 2009 $182,324 $192,023 $10,794 $2,585 $10,876 $14,128 $60,122 $9,019 $253,866 2010 177,268 203,902 10,017 —10,264 10,981 59,280 7,692 245,343 2011 171,922 198,064 9,208 —9,492 10,671 58,393 7,474 236,256 2012 166,265 189,430 ——6,902 7,696 57,461 —229,397 2013 160,278 180,456 ——6,111 6,718 56,459 —222,109 2014 153,930 171,806 ——5,283 7,738 56,138 —215,611 2015 147,177 161,435 ——4,569 10,113 54,590 —207,280 2016 139,999 153,279 ——3,813 17,220 53,098 —198,436 2017 131,840 144,697 ——3,016 20,884 51,508 —189,134 2018 124,245 136,021 ——2,466 28,271 49,825 —179,351 Source:Debt Information - City of Fresno, Finance Department Population Information - State of California Department of Finance, Demographic Research Unit Notes:See the Schedule of Demographic and Economic Statistics for personal income and population data on page 217. Information pertaining to Personal Income is obtained from the Bureau of Economic Analysis (BEA). Personal income and Per Capita Personal Income figures for FY2018 are not currently available from the BEA. The City is not obligated in any manner for the Special Assessment debt, but is acting as an agent for property owners in collecting the assessments and forwarding the collections to the trustee or paying agent and initiating foreclosure proceedings, if appropriate. Beginning in FY2012, the Tax Allocation Bonds are no longer reported on this schedule, due to the dissolution of the Redevelopment Agency, effective February 1, 2012. The bonds are assumed by the Successor Agency. 209 CITY OF FRESNO, CALIFORNIA Ratios of Outstanding Debt by Type Last Ten Fiscal Years (Continued) (dollars in thousands, except per capita) Business-Type Activities Primary Government Water Revenue Bonds Lease Revenue Bonds Certificates of Participation Notes Payable Capital Leases Total Primary Government Percentage of Personal Income Net Debt per Capita $36,848 $100,830 $3,705 $2,034 $—$879,154 3.13%$1,773 169,705 96,584 —5,923 —996,959 3.41%1,985 165,338 92,174 —5,624 —964,616 3.08%1,929 160,886 91,989 —11,775 —921,801 2.82%1,825 156,274 87,675 —46,880 —922,960 2.77%1,815 152,785 84,106 —54,929 —902,326 2.57%1,750 147,569 79,908 —52,080 —864,721 2.31%1,662 142,148 75,465 —82,795 —866,253 2.20%1,664 136,569 69,492 —208,855 —955,995 2.33%1,818 130,774 61,242 —364,624 —1,076,819 Not Available Not Available 210 CITY OF FRESNO, CALIFORNIA Ratios of General Bonded Debt Outstanding Last Ten Fiscal Years General Bonded Debt Outstanding Fiscal Year General Bonded Debt Tax Allocation Bonds Total Percent of Actual Taxable Value of Property Population Net Debt per Capita 2009 $182,323,863 $10,793,933 $193,117,796 0.638%495,913 $389 2010 177,267,943 10,017,117 $187,285,060 0.656%502,303 373 2011 171,921,659 9,471,513 $181,393,172 0.647%500,121 363 2012 166,264,985 —$166,264,985 0.608%505,009 329 2013 160,277,894 —$160,277,894 0.595%508,453 315 2014 153,930,355 —$153,930,355 0.546%515,609 299 2015 147,177,000 —$147,177,000 0.489%520,159 283 2016 139,998,791 —$139,998,791 0.444%520,453 269 2017 131,840,000 —$131,840,000 0.400%525,832 251 2018 124,245,000 —$124,245,000 0.361%538,330 231 Source:General Bonded Debt Information - City of Fresno Department of Finance Population Information - State of California Department of Finance, Demographic Research Unit Notes:Details regarding the City's outstanding debt can be found in the notes to the basic financial statements. See Gross Assessed Value and Estimated Actual Value of Taxable Property schedule for property value information on page 204 . Beginning in FY2012, the Tax Allocation Bonds are no longer reported on this schedule, due to the dissolution of the Redevelopment Agency, effective February 1, 2012. The bonds were assumed by the Successor Agency. 211 CITY OF FRESNO, CALIFORNIA Direct and Overlapping Governmental Activities Debt As of February 1, 2018 2017-18 Gross Assessed Valuation:$34,453,902,554 Estimated Percent Applicable Debt Applicable Combined Direct Debt City of Fresno Pension Obligation 100.000%$124,245,000 Lease Revenue Bonds 100.000 136,021,180 Notes Payable 100.000 2,466,214 Capital Leases 100.000 28,271,395 Total Combined Direct Debt 291,003,789 Overlapping Tax, and Assessment Debt City of Fresno Community Facilities District No. 4 100.000%$1,150,000 City of Fresno Community Facilities District No. 5 100.000 890,000 City of Fresno Community Facilities District No. 7 100.000 1,425,000 State Center Community College District 42.441 68,379,317 Clovis Unified School District 48.865 189,385,639 Fresno Unified School District 83.526 389,834,171 Central Unified School District 81.169 95,519,359 Other School Districts Various 40,452,363 California Statewide Communities Development Authority Community Facilities District No. 2012-01 100.000 4,170,000 Total Overlapping Tax, and Assessment Debt 791,205,849 Overlapping General Fund Obligation Debt Fresno County Pension Obligations 46.132%$135,883,074 Fresno County General Fund Obligations 46.132 20,051,274 Clovis Unified School District Certificates of Participation 49.070 3,015,352 Fresno Unified School District Certificates of Participation 83.113 13,501,707 Central Unified School District Certificates of Participation 81.174 15,895,110 Other School District Certificates of Participation Various 11,485,186 Total Overlapping General Fund Debt 199,831,703 Overlapping Tax Increment Debt (Successor Agency) Fresno Redevelopment Mariposa Medical Project Area 100.000%$1,869,000 Fresno Redevelopment Merger No. 2 Project Area 100.000 535,000 Total Overlapping Tax Increment Debt 2,404,000 Total Overlapping Tax and Assessment, General Fund and Tax Increment Debt 993,441,552 Total Overlapping and Direct Debt $1,284,445,341 Ratios to 2017-18 Assessed Valuation: Combined Direct Debt 0.845% Overlapping Tax, and Assessment Debt 2.296% Combined Total Overlapping and Direct Debt 3.721% Overlapping Tax Increment Debt (Successor Agency)0.007% Notes: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 of Fresno. 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. The percentage of overlapping debt applicable to the City of Fresno is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of overlapping district's taxable assessed value that is within the boundaries of the City of Fresno divided by the District's total taxable assessed value. The Direct and Overlapping Governmental Activities Debt excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and tax allocation bonds and non-bonded capital lease obligations. Qualified Zone Academy Bonds are included based on principal due at maturity. The Overlapping Tax, Assessment Debt and General Fund Debt percentages and figures are provided by Cal Municipal Services, Inc. and are as of February 1, 2018. Direct Debt figures are provided by the Finance Department at the City of Fresno and are as of June 30, 2018. 212 CITY OF FRESNO, CALIFORNIA Debt Coverage Ratio - Airports Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues (1)$15,875,415 $17,276,414 $17,564,886 $18,804,163 $19,876,016 $21,215,550 $21,802,324 $22,976,398 $24,500,217 $25,891,109 Less Operating Expenses 13,800,587 13,444,745 13,339,598 14,199,920 14,321,512 14,261,785 14,428,056 14,933,842 16,116,963 17,354,855 Other Available Funds (2)————50,992 95,014 349,805 359,232 368,003 377,368 Net Revenues $2,074,828 $3,831,670 $4,225,288 $4,604,243 $5,605,496 $7,048,779 $7,724,073 $8,401,788 $8,751,257 $8,913,622 Adjusted Debt Service Series 2000 Bonds $2,872,002 $3,011,580 $3,012,614 $3,011,470 $3,012,060 $—$—$—$—$— Series 2013 Bonds —————3,288,321 2,805,144 2,807,944 2,803,143 2,801,344 Less Minimum PFC Contribution (3)(1,100,000)(1,100,000)(1,100,000)(1,100,000)(1,100,000)(1,600,000)(1,600,000)(1,600,000)(1,600,000)(1,600,000) Bond proceeds (338,300)——(70,077)—————— Additional PFC Contribution (869,400)(1,118,005)(796,600)(321,100)(500,000)(230,600)—(200,000)—— Net Series 2000/2013 Debt Service $564,302 $793,575 $1,116,014 $1,520,293 $1,412,060 $1,457,721 $1,205,144 $1,007,944 $1,203,143 $1,201,344 Series 2007 Bonds 640,013 1,283,260 1,283,260 1,298,260 1,332,385 1,369,469 1,399,219 1,436,928 1,472,012 1,509,471 Annual Adjusted Debt Service $1,204,315 $2,076,835 $2,399,274 $2,818,553 $2,744,445 $2,827,190 $2,604,363 $2,444,872 $2,675,155 $2,710,815 Annual Adjusted Debt Service Coverage 1.72 1.84 1.76 1.63 2.04 2.49 2.97 3.44 3.27 3.29 Notes: (1) State of California law requires the exclusion of Customer Facility Charge (CFC) Revenues from the calculation of Debt Service coverage in excess of annual Debt Service on the Series 2007 Bonds. (2) Per the indenture, unencumbered CFC funds equal to 25% of Adjusted Debt Service may be designated by the City as Other Available Funds prior to the beginning of any fiscal year, and be transferred to the Revenue Fund at the beginning of such fiscal year. Since fiscal year 2015, the City's policy has been to annually designate available CFC funds equal to 25 percent of debt service associated with 2007 Bonds as Other Available Funds. (3) Under the Supplemental Indenture that authorized the 2013 Bonds, the Minimum Passenger Facility Charge (PFC) Contribution is increased from $1.1 million to $1.6 million. 213 CITY OF FRESNO, CALIFORNIA Debt Coverage Ratio - Water System Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues Charges for Services $65,596,663 $67,721,598 $67,921,933 $69,268,830 $71,667,204 $90,095,940 $74,284,899 $77,959,326 $101,894,846 $107,377,135 Less: Connection Fee Charges for Services (2,230,192)(1,662,536)(1,218,217)(1,083,555)(1,330,539)(1,666,977)(1,495,691)(1,562,867)(1,917,371)(2,531,147) Net Charges for Services (1)63,366,471 66,059,062 66,703,716 68,185,275 70,336,665 88,428,963 72,789,208 76,396,459 99,977,475 104,845,988 Other Operating Revenues and Interest Income 1,409,468 773,820 1,450,861 1,533,394 720,443 328,907 573,475 1,146,779 16,508 — Total Revenues 64,775,939 66,832,882 68,154,577 69,718,669 71,057,108 88,757,870 73,362,683 77,543,238 99,993,983 104,845,988 Expenses Labor and Benefits 9,707,563 11,234,598 12,432,877 12,517,445 12,678,961 13,524,886 11,377,958 12,436,520 12,401,334 12,175,922 Pumping Power 9,114,867 8,890,968 8,849,543 8,986,181 9,112,975 9,292,005 8,500,975 8,149,532 9,064,479 9,549,662 Source of Supply 6,129,477 8,044,508 7,144,620 7,748,205 6,317,505 1,779,813 5,612,816 6,629,834 4,188,352 9,750,720 All Other Operating and Maintenance (2)16,776,763 15,613,196 17,999,120 18,385,535 16,820,809 18,151,285 17,473,391 17,165,711 21,546,637 17,691,811 Total Operating Expenses (3)41,728,670 43,783,270 46,426,160 47,637,366 44,930,250 42,747,989 42,965,140 44,381,597 47,200,802 49,168,115 Net Current Revenues $23,047,269 $23,049,612 $21,728,417 $22,081,303 $26,126,858 $46,009,881 $30,397,543 $33,161,641 $52,793,181 $55,677,873 2003A Senior Bond Debt Service 3,736,222 2,934,114 1,374,750 1,374,350 1,375,750 1,378,350 1,374,350 1,381,325 1,380,150 1,376,088 State Loans Debt Service (4)265,103 272,971 291,220 265,031 259,483 119,963 119,963 119,963 —— Total Senior Debt 4,001,325 3,207,085 1,665,970 1,639,381 1,635,233 1,498,313 1,494,313 1,501,288 1,380,150 1,376,088 Senior Coverage Ratio 5.76 7.19 13.04 13.47 15.98 30.71 20.34 22.09 38.25 40.46 Net Revenue Available for Parity Debt Service $19,045,944 $19,842,527 $20,062,447 $20,441,922 $24,491,625 $44,511,568 $28,903,230 $31,660,353 $51,413,031 $54,301,785 2010 Series A Bond Debt Service $—$3,235,943 $12,509,988 $12,515,238 $12,507,038 $12,508,838 $12,509,238 $12,531,238 $12,507,838 $12,508,838 State Loans Debt Service (4)$—$—$—$75,235 $265,998 $337,893 $2,770,285 $2,786,065 $3,533,258 $6,021,069 Total Parity Debt Service $—$3,235,943 $12,509,988 $12,590,473 $12,773,036 $12,846,731 $15,279,523 $15,317,303 $16,041,096 $18,529,907 Parity Coverage Ratio —6.13 1.60 1.62 1.92 3.46 1.89 2.07 3.21 2.93 Notes: (1) 1993 Indenture defines "Current Revenues" as all revenue from the operation of the Water System except for connection fees and charges. (2) All other operating and Maintenance includes Fleet Depreciation Charge (vehicle replacement fees paid to the Fleet Department). (3) 1993 Indenture defines "Maintenance and Operation Costs" as all expenditures incurred for maintaining and operating the Water System except for Debt Service, Depreciation and Amortization. (4) FY2013 State Loan Debt Service payments are actual amounts from the City of Fresno PeopleSoft financial system's expenditure reports. Paid off in FY2016. 214 CITY OF FRESNO, CALIFORNIA Debt Coverage Ratio - Sewer System Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Charges for Services (1)$62,521,061 $74,157,961 $76,628,147 $76,725,785 $76,324,086 $76,201,220 $81,954,830 $78,185,599 $83,634,711 $81,650,518 Interest Income 4,511,947 3,955,335 1,618,632 3,797,207 485,084 1,546,508 1,786,614 2,779,309 491,672 2,046,349 Less: Wastewater Facility Connection Fee (1,439,343)(2,336,689)(1,463,172)(1,133,247)(1,852,524)(1,981,327)(1,708,801)(1,843,957)(1,967,994)(1,996,486) Total Senior Lien Revenues 65,593,665 75,776,607 76,783,607 79,389,745 74,956,646 75,766,401 82,032,643 79,120,951 82,158,389 81,700,381 Operating Expenses (2)31,646,468 30,714,505 31,422,980 36,857,808 36,431,161 36,339,200 37,390,529 35,935,135 38,058,304 37,236,740 Net Income Before Debt Service $33,947,197 $45,062,102 $45,360,627 $42,531,937 $38,525,485 $39,427,201 $44,642,114 $43,185,816 $44,100,085 $44,463,641 Senior Lien Debt Service (3)13,391,850 13,530,713 10,754,019 10,736,988 10,724,331 10,714,175 10,359,173 10,387,403 10,711,900 10,701,025 Coverage Ratio (4)2.53 3.33 4.22 3.96 3.59 3.68 4.31 4.16 4.12 4.16 100% Coverage-Subordinate Lien: Net Current Revenue after Senior Lien Debt (before Connection Fees)$20,555,347 $31,531,389 $34,606,608 $31,794,949 $27,801,154 $28,713,026 $34,282,941 $32,798,413 $33,388,185 $33,762,616 Available from Senior Lien Revenues $20,555,347 $31,531,389 $34,606,608 $31,794,949 $27,801,154 $28,713,026 $34,282,941 $32,798,413 $33,388,185 $33,762,617 Subordinate Lien Debt Service (5)$7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 State Loan Debt Service (6)—————————1,279,885 Coverage Ratio 2.59 3.97 4.35 4.00 3.50 3.61 4.31 4.13 4.20 3.66 120% & 125% Coverage Subordinate Lien: Net Current Revenue (Excluding Connection Fees)$20,555,347 $31,531,389 $34,606,608 $31,794,949 $27,801,154 $28,713,026 $34,282,941 $32,798,413 $33,388,185 $33,762,617 Wastewater Facility Connection Fee 1,439,343 2,336,689 1,463,172 1,133,247 1,852,524 1,981,327 1,708,801 1,843,957 1,967,994 1,996,486 Transfers From Rate Stabilization Fund 16,200,000 ————————— Net Current Revenue (Including Connection Fees)$38,194,690 $33,868,078 $36,069,780 $32,928,196 $29,653,678 $30,694,353 $35,991,742 $34,642,370 $35,356,179 $35,759,103 Available From Senior Lien Revenues $38,194,690 $33,868,078 $36,069,780 $32,928,196 $29,653,678 $30,694,353 $35,991,742 $34,642,370 $35,356,179 $35,759,103 Subordinate Lien Debt Service (5)$7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 State Loan Debt Service (6)—————————1,279,885 Coverage Ratio 4.81 4.26 4.54 4.14 3.73 3.86 4.53 4.36 4.45 3.87 Net Income After Debt Service (7)$30,245,846 $25,919,234 $28,120,936 $24,979,352 $21,704,834 $22,745,509 $28,042,898 $26,693,526 $27,407,335 $26,530,374 Notes:(1) Includes revenue paid by the City of Clovis for Operations and Maintenance pursuant to the 1977 Fresno-Clovis Sewerage System Joint Powers Agreement. (2) The 1993 Indenture specifically excludes from Operating Expenses Debt Service, Amortization and Depreciation. (3) 1993 Sewer System Revenue Bonds, Series A. (4) Coverage Ratio is calculated by dividing Net Income before Debt Service by Senior Lien Debt Service. (5) 2008 Sewer System Revenue Refunding Bonds, Series A. (6) State Loan Debt Service (7) Net Income after Debt Service and before cash financed capital expenses and any other expenses for lawful purposes. 215 CITY OF FRESNO, CALIFORNIA Pledged Revenue Coverage Last Ten Fiscal Years Solid Waste Revenue Bonds Debt Service Fiscal Year Charges for Services Less: Operating Expenses Net Available Revenue Principal Interest Coverage 2009 $49,848,807 $41,805,444 $8,043,363 $1,265,000 $577,431 4.37 2010 51,363,783 40,957,109 10,406,674 1,330,000 514,181 5.64 2011 51,753,225 42,597,788 9,155,437 220,000 447,681 13.71 2012 38,270,882 40,085,400 (1,814,518)7,500,000 127,301 (0.24) 2013 —————— 2014 —————— 2015 —————— 2016 —————— 2017 —————— 2018 —————— Fresno Convention Center Revenue Bonds Debt Service Fiscal Year Charges for Services Less: Operating Expenses Net Available Revenue Principal Interest Coverage 2009 $3,130,426 $5,073,021 $(1,942,595)$10,302,095 $2,019,101 (0.16) 2010 3,037,604 5,312,425 (2,274,821)3,356,400 3,037,480 (0.36) 2011 2,929,106 4,506,211 (1,577,105)3,466,200 2,930,086 (0.25) 2012 2,667,354 3,842,241 (1,174,887)3,351,578 282,023 (0.32) 2013 2,594,417 3,835,929 (1,241,512)3,307,592 2,708,001 (0.21) 2014 2,625,668 3,710,225 (1,084,557)2,799,290 2,585,748 (0.20) 2015 2,959,703 3,843,811 (884,108)2,904,392 2,469,251 (0.16) 2016 3,633,536 3,877,393 (243,857)3,030,260 2,345,616 (0.05) 2017 3,752,007 4,929,430 (1,177,423)22,761,892 2,213,010 (0.05) 2018 3,317,795 3,969,465 (651,670)2,189,283 1,170,706 (0.19) Stadium Bonds Debt Service Fiscal Year Charges for Services Less: Operating Expenses Net Available Revenue Principal Interest Coverage 2009 $1,500,000 $301,893 $1,198,107 $905,000 $2,543,386 0.35 2010 1,675,220 1,114 1,674,106 950,000 2,496,923 0.49 2011 340,281 13,379 326,902 1,005,000 2,441,061 0.09 2012 1,251,303 11,843 1,239,460 1,065,000 2,381,286 0.36 2013 1,088,568 8,571 1,079,997 1,120,000 2,322,058 0.31 2014 798,204 29,811 768,393 1,185,000 2,259,678 0.22 2015 1,247,807 30,662 1,217,145 1,255,000 2,188,781 0.35 2016 677,352 30,679 646,673 1,335,000 2,113,666 0.19 2017 1,082,311 223,825 858,486 17,210,000 1,597,184 0.05 2018 237,967 89,729 148,238 1,355,000 1,713,645 0.05 Park Bonds Debt Service Fiscal Year Charges for Services Less: Operating Expenses Net Available Revenue Principal Interest Coverage 2009 $489,826 $1,855,534 $(1,365,708)$40,000 $90,663 (10.45) 2010 634,706 1,280,465 (645,759)45,000 111,409 (4.13) 2011 742,319 351,889 390,430 45,000 109,510 2.53 2012 780,945 614,078 166,867 50,000 107,300 1.06 2013 736,289 415,926 320,363 50,000 105,675 2.06 2014 328,798 81,537 247,261 50,000 104,050 1.61 2015 329,088 64,666 264,422 55,000 102,300 1.68 2016 325,106 34,256 290,850 55,000 100,375 1.87 2017 339,957 101,922 238,035 2,030,000 98,313 0.11 2018 323,496 37,932 285,564 60,000 73,009 2.15 Notes:Operating Expenses do not include interest, amortization or depreciation expenses. Solid Waste Management Enterprise Revenue Bond 2000A was paid off in Fiscal Year 2012. The City issued new lease-revenue bonds to refinance several existing lease-revenue bonds for economic savings on May 10, 2017. Any bonds that were callable and produced savings were included, even if it meant redeeming one project in part because there was a non-callable portion that could not be redeemed. 216 CITY OF FRESNO, CALIFORNIA Legal Debt Margin Information Last Ten Fiscal Years (Dollars in Thousands) Legal Debt Limit Calculation for Fiscal Year 2018 Assessed Value $34,453,903 Debt Limit (20% of assessed value, pursuant to City Charter)6,890,781 Debt applicable to the limit: General obligation bonds — Less amount set aside for repayment of general obligation debt — Total net debt applicable to limit — Legal debt margin $6,890,781 Fiscal Year Debt Limit Total Net Debt Applicable to Limit Legal Debt Margin Total Net Debt Applicable to the Limit as a Percentage of Debt Limit 2009 $6,050,080 $—$6,050,080 0.00% 2010 5,710,570 —5,710,570 0.00% 2011 5,606,816 —5,606,816 0.00% 2012 5,465,460 —5,465,460 0.00% 2013 5,391,497 —5,391,497 0.00% 2014 5,640,685 —5,640,685 0.00% 2015 6,016,695 —6,016,695 0.00% 2016 6,305,285 —6,305,285 0.00% 2017 6,588,227 —6,588,227 0.00% 2018 6,890,781 —6,890,781 0.00% Source:Assessed Valuation Information - County of Fresno, Tax Rate Book Notes:The City's Judgment and Pension obligation bonds were the result of legal judgments that were financed to be paid out over a period of time. Per Article XVI, Section 18 of the California Constitution "obligations imposed by law" are deemed exceptions to the debt limit. 217 CITY OF FRESNO, CALIFORNIA Demographic and Economic Statistics Last Ten Calendar Years Calendar Year Population Personal Income Per Capita Personal Income Unemployment Rate Area Square Miles 2009 495,913 $28,049,514,000 $30,646 14.690%111.78 2010 502,303 29,246,460,000 31,357 16.710%112.35 2011 500,121 31,353,987,000 33,321 16.530%112.29 2012 505,009 32,728,837,000 34,539 15.140%113.04 2013 508,453 33,354,677,000 34,886 13.250%113.13 2014 515,609 35,172,162,000 36,448 11.580%113.13 2015 520,159 37,359,815,000 38,323 10.200%114.20 2016 520,453 39,295,335,000 40,101 9.500%114.34 2017 525,832 41,024,000,000 41,470 8.800%114.67 2018 538,330 Not Available Not Available 7.400%115.21 Source:Population Information - State of California Department of Finance, Demographic Research Unit Unemployment Information - California Employment Development Department (EDD), Labor Market Information Division Per Capita Income and Personal Income - Bureau of Economic Analysis (BEA). Notes: Personal Income and Per Capita Personal Income information pertains to Fresno, CA, Metropolitan Statistical Area (MSA). Personal Income and Per Capita Personal Income for 2017 are estimates as of November 2018. Personal Income and Per Capita Personal Income data is not available from the BEA for 2018. The FY18 Unemployment Rate is the average of figures for the first 10 months of calendar year 2018 as provided by the EDD as of November 2018. The FY2018 Population is as of 1/1/2018. 218 CITY OF FRESNO, CALIFORNIA Principal Employers Current Year and Nine Years Ago 2018 2009 Employer Employees Rank Percent of Total City Employment Employees Rank Percent of Total City Employment Fresno Unified School District 10,552 1 2.51%7,240 2 1.96% County of Fresno 6,655 2 1.58%10,868 1 2.93% Community Regional Medical Center 5,863 3 1.39%6,000 3 1.62% Internal Revenue Service 4,040 4 0.96%——— City of Fresno 3,650 5 0.87%2,608 5 0.70% Saint Agnes Medical Center 2,800 6 0.67%1,688 8 0.46% California State University, Fresno 2,542 7 0.60%——— Amazon.com, Inc.2,500 8 0.59%——— Kaiser Permanente Medical Center 2,450 9 0.58%2,000 7 0.54% State Center Community College District 1,780 10 0.42%1,566 8 0.42% Fresno Community Hospital and Medical Center ———3,000 4 0.81% California Department of Motor Vehicles (DMV)———2,500 6 0.68% University Medical Center ———1,400 9 0.38% U.S. Postal Service ———1,400 10 0.38% Total 42,832 10.17%40,270 10.88% Fresno City Employment 420,800 370,300 Source:Employer Information - Fresno County Economic Development Corporation (EDD) City of Fresno Employment information - Employment Development Department (EDD) - Labor Market Information, State of California Notes:The FY2018 and FY2009 employer information was provided by the Fresno County Economic Development Corporation (EDD) and represents private and public sector full-time employees. The FY2018 employer information for the County of Fresno is estimated to be within the City of Fresno. The Employer Information for the Internal Revenue Service includes employees from all Fresno offices. The Employer Information for the State Center Community College District is located at Fresno Community College, Clovis Community College and the District Office. FY2018 Fresno City Employment figures are for June 2018 as currently available from the California EDD for Fresno (MSA). In FY2009, California State University, Fresno reported 800 employees and did not qualify for as a top 10 Employer. 219 CITY OF FRESNO, CALIFORNIA Full-Time Equivalent City Government Employees by Function/Program Last Ten Fiscal Years Fiscal Year General Government 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Management 104.00 103.00 88.80 78.80 78.80 79.50 79.50 79.50 85.25 96.84 Finance 130.65 130.65 101.00 54.68 56.00 56.00 56.00 56.00 60.75 54.75 General Services 139.00 139.00 104.00 ——————— Other 129.00 129.00 116.80 91.00 89.75 94.80 94.80 94.80 103.50 106.00 Enterprise Functions Transportation Airports Sworn 5.00 5.00 5.00 5.00 5.00 5.00 15.00 15.00 19.00 19.00 Civilian 78.00 78.00 78.00 72.00 72.30 77.40 72.00 72.00 77.35 80.05 FAX Department 420.80 420.80 342.00 409.00 407.00 407.00 422.00 435.50 492.25 508.00 Public Utilities 669.00 683.00 691.00 697.08 602.25 614.75 634.75 640.50 643.80 643.80 Economic Growth and Expansion Development and Resource Management Department ——156.03 169.94 163.10 166.60 174.60 184.60 204.80 218.70 Downtown & Community Revitalization Department 10.00 10.00 20.00 ——————— Planning and Development 203.03 194.39 ———————— Public Works 338.40 339.40 264.40 265.00 268.00 272.50 292.75 288.75 305.25 315.25 Culture and Recreation Parks, Recreation and Community Services 169.95 148.25 85.50 52.00 52.00 52.00 66.00 71.00 73.50 75.00 Public Protection Police Sworn 849.00 849.00 816.58 767.75 748.00 717.00 717.00 775.00 804.00 830.00 Civilian 470.40 431.40 210.08 200.00 202.00 238.00 278.80 244.56 274.65 270.34 Fire Sworn 383.00 383.00 340.35 317.65 309.00 304.00 310.00 314.00 334.00 334.00 Civilian 59.00 58.00 52.60 40.00 42.75 42.20 46.75 45.00 42.91 47.75 Total 4,158.23 4,101.89 3,472.14 3,219.90 3,095.95 3,126.75 3,259.95 3,316.21 3,521.01 3,599.48 Source:City of Fresno Budget Management & Studies Division - Adopted Budgets, Authorized Positions. Notes:Figures for Full-time Equivalents (FTE's) include Permanent and Permanent Part-Time employees only. Authorized Positions are established by resolution of the City Council and represent the total number of permanent, permanent part-time and permanent intermittent positions in which persons may be employed by the City during a Fiscal Year. Changes in the total number of positions can only be accomplished by resolution of the City Council. Total permanent positions for each fiscal year are represented as of the following dates: FY2009 as of May 2009; FY2010 as of June 2010; FY2011 as of May 2011; FY2012 as of May 2012; FY2013 as of September 2012; FY2014 as of June 2013; FY2015 as of September 2014; FY2016 as of September 2015; FY2017 as of June 2017; and FY2018 as of June 2018. In FY2009, the Economic Development Department was restructured and renamed the Downtown & Community Revitalization Department to reflect focus on strengthening the local economy through downtown revitalization, improving neighborhoods and supporting locally owned businesses. In FY2011, Planning and Development became the Development and Resource Management Department (DARM). In FY2012, the Downtown & Community Revitalization Department was consolidated into the DARM Department. In FY2012, the General Services Department (GSD) was dissolved and its operating divisions were merged into the Finance, Public Works and Transportation/FAX Departments. In FY2012, effective December 1, 2011, Commercial Solid Waste Operations were franchised. 109 authorized positions in the Public Utilities Department were deleted by City Council Resolution, effective July 3, 2012. In FY2017, the Transportation FAX Department added service, management and support staff positions for a variety of service additions such as Bus Rapid Transit (BRT), extended night and weekend service, and increased frequencies on four major avenues. In FY2017, positions were added to address reductions that occurred in recent years. Additions to the Police Department included Police Officer Recruits, Police Officer Cadets and a Police Sergeant. Additions to the Fire Department included Firefighters and an administrative position. In FY2018, the Budget and Management Studies Division was relocated from the Finance Department to the City Manager's Office. 220 CITY OF FRESNO, CALIFORNIA Operating Indicators by Function/Program Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 General Government Building Permits Issued Commercial 1,186 1,174 1,133 1,830 1,756 1,835 1,878 1,641 1,948 1,876 Residential 3,494 3,557 3,276 6,499 7,167 7,931 9,084 8,313 11,227 10,998 Police Physical Arrests 47,246 43,674 35,726 32,782 35,489 39,689 43,729 37,816 26,893 27,920 Traffic Violations (citations issued)95,354 Not Available 58,132 64,979 53,485 51,940 44,954 58,927 58,927 39,488 Calls Received for Police Service 775,629 771,742 864,005 876,820 945,989 957,532 950,099 1,026,458 950,099 1,013,411 Fire Emergency Medical Service Calls 22,143 22,758 19,671 19,216 18,129 19,413 20,191 19,174 21,773 21,430 Fire Incidents 12,063 12,220 12,109 13,800 14,518 15,953 16,326 18,257 16,702 16,830 Fire Inspections 11,210 14,962 12,151 10,985 12,414 11,187 9,780 12,581 13,292 12,679 Fire Hydrant Inspections 25,594 36,233 28,109 30,917 30,342 30,420 26,811 17,025 17,000 17,252 Wastewater Treatment Average Daily Sewage Treatment (million gallons per day)69.7 65.2 66.1 63.6 61.9 60.2 57.2 55.9 56.9 57.1 Wastewater Treatment Capacity (million gallons per day)80 80 80 80 80 80 80 80 80 80 Solid Waste Refuse Collected (tons per day)961 965 979 916 477 451 505 623 650 648 Recyclables Collected (tons per day)238 216 214 201 147 116 117 154 156 154 Green Waste Collected (tons per day)398 327 325 396 378 293 275 348 358 353 Other Public Works Street Resurfacing (miles)102.4 26.7 27.3 16.0 10.2 12.3 16.6 18.6 16.8 15.1 Parking Violations (citations issued)68,736 59,790 56,270 45,667 45,730 49,313 49,326 47,531 53,760 54,865 Parks and Recreation Athletic Field Permits Issued 1,614 1,639 2,662 3,710 3,281 4,317 5,921 6,949 8,332 5,392 Memorial Auditorium User Groups 28 30 34 33 20 26 16 27 18 13 Memorial Auditorium, Audience 22,490 31,395 33,136 33,600 15,500 21,600 21,000 45,900 18,900 16,500 Water Number On-Service Accounts 130,844 132,184 131,880 131,801 130,530 131,910 133,163 134,381 135,448 136,408 Main/Service Leaks Repaired 610 569 644 589 639 705 558 378 408 663 Average Daily Per Capita Consumption (gallons)298 275 260 246 241 231 208 183 198 208 Peak Daily Consumption (MGD - Million Gallons per Day)244 238 220.39 209.13 200.46 199.40 187.36 169.88 180.60 183.42 221 CITY OF FRESNO, CALIFORNIA Operating Indicators by Function/Program Last Ten Fiscal Years (Continued) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Transportation Airports Number of Commercial Airlines 8 8 9 9 10 10 9 8 8 8 Number of Cargo Carriers 4 4 3 3 3 3 3 3 3 3 Total Number Tenant Aircraft 354 378 401 405 405 408 408 320 303 277 Annual Fuel Consumption (gallons)10,152,820 9,905,916 5,787,043 9,467,094 9,613,371 10,454,758 9,548,919 10,541,916 10,592,430 8,698,431 Origin and Destination Passengers Domestic 1,116,410 1,133,605 1,163,568 1,155,991 1,249,960 1,283,770 1,252,962 1,292,784 1,328,929 1,423,248 International 63,344 63,473 45,465 130,047 124,453 147,094 153,244 182,225 208,947 212,075 Origin and Destination Mail (lbs.)45 1,397 91 20,880 6,661 183 0 316 17,818 9,362 Origin and Destination Freight (lbs.)17,188,695 17,204,154 20,630,316 22,591,445 23,621,976 24,393,421 25,843,389 24,546,856 19,873,695 20,965,016 Fresno Area Express (FAX) Actual Route Miles 4,690,193 4,610,108 4,563,016 4,175,640 4,151,476 4,218,412 4,157,174 4,175,783 4,208,890 4,337,684 Passengers 18,049,827 17,554,565 17,589,425 14,589,425 12,442,248 12,059,050 11,364,431 10,672,577 9,622,874 9,750,800 Mini-Buses - Purchased Transportation 48 45 46 45 44 48 50 58 63 69 Source:City of Fresno - Various Departments Notes: Building Permits Issued includes individual units and structures and is a composite of new construction, additions, alterations, repairs and relocations. Police department figures are based on calendar year and are as of January 1 of reported year. Information is combined for Fresno Yosemite International (FYI) and Chandler Executive Airport (FCH) for Number of Cargo Carriers, Number of Tenant Aircraft, Annual Fuel Consumption and Origin and Destination Freight. Fire inspection figures reflect only those performed in the City of Fresno and excludes service calls for neighboring fire districts. Traffic Violations statistics were not gathered in FY2010 due to administrative staff reductions attributed to budget reductions in the Police Department. In FY2011, reduction in citations were attributed to an 18% decrease in the number of motor officers issuing citations due to unfilled attrition vacancies attributed to department-wide budget reductions. Fire hydrant inspections decreased in FY2016 because of an inspection schedule change. Beginning in FY2016, fire hydrant inspections are scheduled for annual inspections instead of bi-annual inspections. In FY2016, the Mini bus figure includes 8 sedans as is consistent with National Transit Database (NTD) reporting. 222 CITY OF FRESNO, CALIFORNIA Capital Asset Statistics by Function/Program Last Ten Fiscal Years Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Police Department Stations 5 5 5 4 4 4 4 4 5 5 Patrol Bureaus 7 7 7 4 4 4 4 4 5 5 Vehicular Patrol Units 252 277 250 261 261 261 257 276 334 260 Plain Cars (No specialty vehicles)——178 197 197 175 175 173 198 197 Motorcycles ——80 80 70 71 85 72 70 74 Helicopters 2 2 2 2 2 2 2 2 2 2 Fixed Wing Aircraft 1 1 1 1 1 1 1 1 1 1 Fire Department Fire Stations 20 20 20 20 20 20 20 20 20 20 Engine Companies 20 16 16 16 16 16 18 18 17 17 Truck Companies 6 4 4 4 4 4 4 4 5 5 Public Works Streets (miles)1,700 1,666 1,692 1,548 1,497 1,490 1,672 1,500 1,511 1,692 Street Lights 39,000 40,000 41,100 41,000 41,556 41,500 42,051 42,207 42,405 43,318 Traffic Signals 441 437 442 450 468 466 489 467 468 481 Solid Waste Division Collection Trucks 129 129 126 83 83 83 84 89 81 85 Water Division Water Mains (miles)1,765 1,775 1,779 1,781 1,782 1,803 1,799 1,801 1,809 1,827 Wells 280 272 269 273 273 271 260 261 260 263 Fire Hydrants 12,769 12,878 12,914 12,954 13,001 13,139 13,170 13,218 13,332 13,484 Sewer Maintenance Division Sewer Mainlines (miles)1,494 1,497 1,503 1,507 1,521 1,529 1,533 1,536 1,539 1,613 Manholes 22,867 22,977 23,123 23,275 23,384 23,644 23,776 22,834 23,947 24,146 Lift Stations 14 15 15 15 15 15 15 15 15 15 Parks Metropolitan Parks (Regional)3 3 3 3 3 3 3 3 3 3 Neighborhood Parks 29 31 31 31 31 31 32 33 34 34 Pocket Parks 21 21 21 21 21 21 21 21 21 21 Zoo 1 1 1 1 1 1 1 1 1 1 Golf Courses 2 2 2 2 2 2 2 2 2 2 Community Parks 1 1 1 1 1 1 1 1 1 1 Skate Parks 5 5 6 6 6 6 6 8 8 8 Tennis Courts 40 40 40 40 40 40 40 42 42 42 Acres of Parks 1,523 1,535 1,535 1,535 1,535 1,535 1,384 1,392 1,393 1,393 Neighborhood Centers 12 12 12 12 12 12 12 12 12 12 Community Center 5 5 5 5 5 5 5 5 5 7 Swimming Pools 15 10 5 5 5 9 9 9 9 9 223 CITY OF FRESNO, CALIFORNIA Capital Asset Statistics by Function/Program Last Ten Fiscal Years (continued) Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Transportation Airports 2 2 2 2 2 2 2 2 2 2 Municipal Airport Total Acreage 1,899 1,900 1,900 1,900 1,875 1,875 1,875 1,875 1,875 2,050 Length of Longest Runway (surfaced) - Linear Feet 9,227 9,227 9,227 9,227 9,227 9,539 9,539 9,539 9,539 9,539 Number of Runways 3 3 3 3 3 3 3 3 3 3 Number of Terminals 2 2 2 2 2 2 2 2 2 2 Terminals (square footage)184,936 193,364 193,364 193,364 193,364 193,364 193,364 193,364 193,364 193,364 Number of Parking Spaces (surface lot)2,396 2,425 2,425 2,367 2,365 2,365 2,365 2,355 2,664 2,664 Air Cargo Ramp Spaces 9 9 9 9 9 9 9 8 8 9 Air Cargo Ramp (surface square footage)806,390 806,390 806,390 806,390 806,390 806,390 806,390 806,390 806,390 806,390 Number of Hangars 302 304 302 302 302 302 302 303 303 303 Buses - Directly Operated 125 125 122 123 110 111 105 105 129 138 Source:City of Fresno - Various Departments Notes:Police Department Plain Cars and Motorcycle information was not available in FY2009 and FY2010. Information was combined for Fresno Yosemite International (FYI) and Chandler Executive Airport (FCH) for all Airport statistics with the exception of Length of Longest Runway (surfaced) - Linear Feet, Number of Parking Spaces, Air Cargo Ramp Spaces and Air Cargo Ramp Surface Square Footage. The reduction for Street (miles) in FY2016 is due to the non-inclusion of secondary segments on the major divided roads and is not associated with any road removal. The number of Street Lights in FY2010 and FY2011 are estimated. FY2009 is supported by field survey per the department. Effective December 1, 2011, the collection and all commercial and multi-family solid waste services were franchised to two private haulers. The number of commercial solid waste trucks was reduced by 42 at that time. In FY2015, the Parks Regional Sports Complex reported acreage was reduced from 268 acres to 114. While part of the Complex footprint, 154 acres are presently not available for public access. Three acres were added due to the opening of the Martin Ray Reilly Park in FY2015. 8.3 acres were added in FY2016 due to the opening of Inspiration Park. 224 This page intentionally left blank CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 TABLE OF CONTENTS PAGE Overview ................................................................................................................................ Debt Management Program ........................................................................................... Debt Issued During FY2018 .............................................................................................. Debt Program Work Plan for FY2019 .............................................................................. Debt Administration ........................................................................................................ Debt Management Projects ............................................................................................ Debt Management Policies ............................................................................................. Citywide Debt Service ...................................................................................................... Rating Agency Overview/Actions .................................................................................... Debt Financing Team ....................................................................................................... Trustee Activity ................................................................................................................ Investment Activity .......................................................................................................... Debt Detail Report ................................................................................................................ Comparative Statistics Municipal Financial Ratio Analysis: Fresno vs. California Top 10 by Population ............ Peer Analysis to Largest 10 Cities .................................................................................... Debt Coverage Airport Enterprise ............................................................................................................ Water Enterprise .............................................................................................................. Wastewater Enterprise .................................................................................................... Appendix - Ratings History Lease Revenue Bonds .................................................................................................... Airport Revenue Bonds ................................................................................................. Water Revenue Bonds ................................................................................................... Wastewater (Sewer) Revenue Bonds ........................................................................... 1 1 1 2 2 5 6 8 9 10 10 12 19 19 20 21 22 23 23 23 24 CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 1 Overview This section of the report provides an overview of the Debt Management Program, Debt Management Policies, Rating Agency Relations and Credit Maintenance, Composition of the Debt Financing Team, and Trustee activity during the year. The City has a variety of financing tools at its disposal, with each one having its own benefits that may work best for a particular financing. Short-term debt options include Tax and Revenue Anticipation Notes, Commercial Paper, Bond Anticipation Notes and Lines of Credit. Long-term debt options included voter approved General Obligation Bonds, Revenue Bonds, Loans and Capital Leases. Each tool is discussed in detail in the City’s Debt Management Policies. The Annual Debt Report does not include discussions on City’s obligation for pension and other post-employment benefits. A. Debt Management Program Debt Management, a section within the Finance Department, is responsible for managing both the debt issuance process and subsequent debt administration for all City borrowings. This section of the report provides an overview of debt issuance in FY 2017, the debt program work plan in FY 2018, debt administration, debt management projects that have been completed, are currently underway, or are planned for FY 2019. 1. Debt Issued During FY2018 FY 2018 debt issuance totaled $171.3 million, composed of the following: • equipment lease purchases of $6.8 million for police and fire vehicles placed directly with Banc of America Public Capital Corp., • an equipment lease purchase of $5 million to replace the existing police microwave data and radio console network placed directly with Banc of America Public Capital Corp., • equipment lease purchases of $1 million for vehicles to support services of the Development and Resource Management Department and the Parks and Recreation and Community Services Department placed directly with Banc of America Public Capital Corp., • $150.2 million drawn down from the Drinking Water State Revolving Loan Fund for the various loans to the Water Division from the California State Water Resources Control Board and • $8.3 million drawn down from the Clean Water State Revolving Loan Fund for the two loans to the Sewer Division from the California State Water Resources Control Board. 2. Debt Program Work Plan for FY2019 New Bonds - Debt Management staff continues to look at existing debt to find opportunities to save interest expense. At the time of this publication, there is no plan to issue new bonds. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 2 New Loans - Debt Management staff continues to assist Water Division staff with a detailed review of the documentation relating to the loans that may be issued in FY2019. New Leases - The City has budgeted for new lease payments in Fiscal Year 2019 totaling $601,800 to fund an approximate $5.7 million in vehicles, $400,000 to fund an approximate $5 million for a network replacement and $10,100 to fund approximately $30,000 for computers. The City currently has two Master Leases with Dell Financial Corporation for computers and Banc of America Public Capital Corp. for all other equipment. Sewer 2008 Bond Defeasance - Debt Management staff continues to work with Wastewater Management staff on the defeasance of the 2008 Sewer Bonds. Notice was given to the Trustee on July 2, 2018 of the City's intent to redeem $132,540,000 of the bonds, leaving an outstanding balance of $27,305,000 after the September 1, 2018 redemption. This redemption will save the Wastewater Division of the Department of Public Utilities an average of $11 million per year between Fiscal Years 2019 and 2038. 3. Debt Administration After debt has been issued, Debt Management is responsible for administering the debt portfolio. Section I.E of this report, Debt Financing Team, provides a detailed discussion of debt administration tasks performed by Debt Management staff. New reporting requirements were established in FY2015 by the California Debt and Investment Advisory Commission (CDIAC) of the California State Department of the Treasury requiring any agency that is increasing debt to file a Report of Proposed Debt Issuance, followed up with a Report of Final Sale. These reporting requirements were codified on September 12, 2016 through California Senate Bill 1029 (SB 1029). In the past, issuers of the original debt instruments were required to file these reports, and borrowers of the debt from the issuer were not required to report. This change makes it imperative that Debt Management staff be involved in any and all loan transactions that the City is considering. 4. Debt Management Projects In addition to debt issuance and administration, Debt Management staff serves in a financial advisory role to other City departments and works on other projects as necessary. Various projects and administration efforts are described on the next pages: Master Equipment Lease Purchase Agreement (MELPA) - The City uses a single lender for all of its equipment financing needs. Early in Fiscal Year 2019, the City reached the maximum amount available to borrow under its Agreement with Banc of America Public Capital Corp. (BAPCC) nearly one year ahead of the expiration of the Agreement. Immediately upon this discovery, Debt Administration staff put out a Request for Proposals (RFP) for a new MELPA. Two lenders submitted proposals, and BAPCC was determined to be the best fit for the City due to their experience with the City, their financial strength, and their longevity in the industry. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 3 The new Agreement went to the City Council on December 6, 2018 and was approved unanimously. The term will be the earlier of (1) December 31, 2021, or (2) Maximum aggregate financed of $65 million. TEFRA Hearings for Conduit Financings - A Tax Equity and Financial Reform Act (TEFRA) hearing is mandated by the IRS to provide a reasonable opportunity for interested individuals to express their views, either orally or in writing, on the issuance of bonds and the nature of the improvements and projects for which bond funds will be allocated. The TEFRA hearing is held in the jurisdiction in which the facilities constructed by bond proceeds are located. A Notice of Public Hearing must be published in the daily newspaper of largest circulation in the project location at least 14 days prior to the hearing date. In addition, the TEFRA hearing must be held prior to approval by the agency issuing the bonds. The City of Fresno held three TEFRA hearings for conduit financing during FY 2018. The City does not issue debt for these projects, but assists other agencies that are formed for this specific type of financing by holding a public hearing to hear public comments regarding the project as required by the Act. United Health Centers of the San Joaquin Valley applied for an $18 million bond issuance with California Enterprise Development Authority (CEDA) for the purpose of financing the development, construction, installation, equipping and furnishing of a new headquarters and training facility at 3875 West Beechwood Avenue. This transaction will assist United Health Centers of the San Joaquin Valley in the continuance of quality health care to residents of Fresno and the surrounding service area. Millenium Housing Partners LP applied for a $24.5 million bond issuance with the Independent Cities Financing Authority (ICFA) for the purpose of financing the refinancing and improvements to Westlake Mobilehome Park located at 2706 West Ashlan Avenue, and the acquisition and renovation of Millbrook Mobilehome Park located at 3404 North Millbrook Avenue. This transaction will assist residents in the Fresno area with affordable housing. California Public Financing Authority (CalPFA) requested that the City of Fresno join their Authority in order for them to be able to issue on behalf of their client, Reliant - Valley, LP, $32 million for the acquisition, rehabilitation, improvement and equipping of Bigby Villa Apartments located at 1329 East Reverend Chester Riggins Road, and $18 million for the acquisition, rehabilitation, improvement and equipping of Westlake Gardens located at 830 East Belgravia Avenue. The City joined the Authority and then held the TEFRA Hearing for the purpose of assisting residents in the Fresno area with affordable housing. State Revolving Loan Activity On July 15, 2015, the City entered into a 30-year agreement to borrow $195,489,000 from the California State Water Resources Control Board for construction of a new surface water treatment facility in southeast Fresno. The interest rate is fixed at 1.663% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $153,560,173 in proceeds. The note will be CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 4 funded from revenues of the Water Enterprise. Once construction is completed, annual debt service is estimated to be $8,302,895. On September 14, 2015, the City entered into a 30-year agreement to borrow $52,475,049 from the California State Water Resources Control Board’s Clean Water State Revolving Fund for construction of a recycled water distribution system in the southwest quadrant of the City. The interest rate is fixed at 1.0% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $20,205,685 in proceeds. The note will be funded from revenues of the Wastewater Enterprise. Once construction is completed, annual debt service is estimated to be $2,028,979. On June 8, 2016, the City entered into a 30-year agreement to borrow $26,520,000 from the California State Water Resources Control Board for construction of a raw water pipeline to replace the Enterprise Canal as a primary conveyance system for the Northeast Surface Water Treatment Facility. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $19,522,048 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, annual debt service is estimated to be $1,116,533. On July 19, 2016, the City entered into a 30-year agreement to borrow $65,875,669 from the California State Water Resources Control Board for construction of a pipeline from Kings River to the Southeast Water Treatment Facility. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $46,768,662 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, annual debt service is estimated to be $2,773,546. On August 23, 2016, the City entered into a 30-year agreement to borrow $75,900,000 from the California State Water Resources Control Board for construction of a pipeline from Kings River to the Southeast Water Treatment Facility. The interest rate is fixed at 1.6% for the term of the loan. Principal and interest due in semiannual installments will begin once the project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount received by the City through the interest payment date. As of June 30, 2018, the City has received $48,611,671 in proceeds. The note will be funded from revenues of the Water Enterprise. Once construction is completed, annual debt service is estimated to be $3,195,506. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 5 B. Debt Management Policies The City Council adopted the Taxpayer Protection Act on December 3, 2009 in order to institute formal debt financial management policies. The Act was amended on February 25, 2010 and revised again on April 6, 2017; with the latest revision updating language and bring the policy into compliance with SB 1029. The Debt Management Policies (“Policies”) establish parameters for when and how the City may enter into debt obligations. The Policies permit sufficient flexibility to allow the City to take advantage of opportunities that may arise. Objectives of the Policy are: • Minimize debt service and issuance costs; • Provide a scheduling component (planning); • Maintain access to cost-efficient borrowing; • Achieve the highest practical credit rating; • Full and timely repayment of debt; • Balance use of pay-as-you-go and debt financing; • Maintain full and complete financial disclosure and reporting; and • Ensure compliance with applicable State and Federal laws. The primary goal of the Policies is to achieve the highest practical credit ratings and strive to elevate and maintain those ratings in order to sustain cost-effective access to capital markets. In order to fulfill this goal and these objectives, certain ratios have been identified to quantify the City’s performance relative to direct debt. These measurements are as follows: • Net Direct Debt (tax-supported General Fund debt, net of self-supporting and revenue anticipation debt) to Assessed Value shall not exceed 3%; • Percentage of Principal on Net Direct Debt Retired in ten years shall average 35%; and • Net Direct Debt as a percentage of General Fund Appropriation shall be less than 10%. The table on the next page is an update of the table in Section 6 of the Debt Policies. In addition to this table, an additional quantitative goal stated in the Debt Policies is that the average Percentage of principal on Net Direct Debt Retired in 15 years should be at least 40%. During FY 2018, this percentage was 52.1% on GF Backed Principal and 49.1% on GF Paid Principal. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 6 Key Debt Ratios Description/Trend City of Fresno FY 2018 Debt Ratios Net Direct Debt to Assessed Property Value % (Favorable Trend=Lower than 3%)0.06% % Of Principal Net Direct Debt Retired in Ten Years GF Backed (2017 - 2018)45.06% (Favorable Trend = Greater than 35%)GF Paid (2017 - 2018)46.77% Net Direct Debt Service as % of General Fund Appropriations (Favorable Trend = Less than 10%)5.72% C. Citywide Debt Service The graph below illustrates the size of the City’s debt portfolio and the dollar volume of debt issued in each of the last ten years. It should be noted that with the exception of the Utilities Department, the focus has been on paying down debt in the last few years, and not the issuance of new bond debt. Increases in New Issuances between FY 2015 and FY 2018 were due to Water and Sewer Divisions of the Department of Public Utilities borrowing funds from the California State Water Resources Control Board to meet conservation and recycling requirements imposed by the State. City Debt Portfolio and Debt Issuance History FY 2008-09 through FY 2017-18 General Governmental includes debt that is not Business-Type (paid out of the Water, Sewer and Airports enterprise funds), but is paid by either the General Fund or under special circumstances, Special Revenue Funds like the Gas Tax Fund specifically designated for the payment of debt service. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 7 The City of Fresno’s general obligation debt capacity is spelled out in the City charter, Article XII, Section 1213. The capacity is 20% of the assessed valuation of all property within the boundaries of the City of Fresno. The capacity for FY 2018 is calculated as follows: Assessed valuation as of 06/30/2018 $34.5 billion Debt limit X 20% City’s Debt Limit $ 6.9 billion The Debt Limit is specifically related to general obligation debt, which is debt that is issued as a result of an election (voter-approved debt). Debt Limit defines voter-approved debt that could legally be outstanding rather than what the City can afford to issue. The City of Fresno has no voter-approved debt. Additionally, as displayed in the chart above, the City has never had total debt outstanding of more than $1.1 billion. As of June 30, 2018, the City had one general obligation bond, several Lease Revenue Bonds (LRBs), capital loans and capital leases outstanding that are paid in whole or part by the General Fund. The chart below shows only General Fund debt service: FY 2018 General Fund Debt Service was reduced through normal debt service payments. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 8 The chart below shows all of the City’s debt and the source of funding that backs it: Payments in 2036 and 2046 through 2048 include new loan principal from the State Water Resources Control Board which have been drawn down in part, but cannot be amortized until after all loan proceeds have been drawn or the project has been deemed complete. In the chart above, they are reflected as due in full at the final maturity date. D. Rating Agency Overview/Actions The City’s debt is rated by the three primary rating agencies (Moody’s, Standard & Poor’s, and Fitch). Below is a scale of the ratings by each agency: MOODY’S FITCH/S&P Rating Rating Description Rating Rating Description Aaa Strongest AAA Highest Aa1, Aa2, Aa3 Very Strong AA+, AA, AA-Very High A1, A2, A3 Above Average A+, A, A-High Baa1, Baa2, Baa3 Average BBB+, BBB, BBB-Good Ba1, Ba2, Ba3 Below Average BB+, BB, BB-Speculative B1, B2, B3 Weak B+, B, B-Highly Speculative Caa1, Caa2, Caa3 Very Weak CCC+, CCC, CCC-High Default Risk CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 9 The ratings for the City’s General obligation, lease revenue, enterprise debt and the Agency’s tax allocation bonds are summarized in the Appendix. A brief overview of the City’s current general ratings (equivalent to a general obligation bond) is provided in the section below. YEAR MOODY’S S&P FITCH Rating Outlook Rating Outlook Rating Outlook 2018 A3 Stable A+Stable A Stable 2017 A3 Stable A+Stable A Stable 2016 A3 Stable BBB-Stable A Stable 2015 A3 Stable BBB-Stable BBB+Neg 2014 Baa1 Stable BBB-Stable BBB+Neg 2013 A3 Neg BBB-Stable BBB+Neg 2012 A3 Neg BBB Neg A-Stable Arrows indicate an increase () or decrease () from the prior rating. E. Debt Financing Team The City of Fresno uses several individuals/organizations with expertise in their specific function to manage and administer the debt. Day-to-day administration is completed in-house by City staff, including the Controller, Assistant Controller, a Principal Accountant in charge of debt administration and an Accountant/Auditor. The Debt Administration section of the Finance Department manages day-to-day activities; including addressing monthly, semi-annual and annual state and federal reporting requirements, reconciling trustee statements, monitoring arbitrage calculations and continuing disclosure, preparing debt sections of the Comprehensive Annual Financial Report, and budgeting for debt. The City contracts with various banks to provide trustee and paying agent services. Selection of the trustee is done through a Request for Qualifications at the time new debt is being considered. Currently, the City uses Bank of New York Mellon Corporate Trust, Wells Fargo Corporate Trust Services and Zions Bank. Annual reporting requirements such as arbitrage calculations and continuing disclosure requirements are completed by Willdan Financial Services in coordination with the Principal Accountant in charge of debt administration. The City has chosen to use outside entities for arbitrage calculation and continuing disclosure reporting in order to have an experienced third party ensure accuracy and integrity of the reports and calculations. The issuance of new debt can be very complex with many different areas of expertise needed. So, the City of Fresno has chosen to use financing teams consisting of in-house City staff with expertise relating to the projects which are to be funded, along with Finance Department and City Attorney’s Office staff with expertise in their respective fields. In addition to internal staff, the City engages KNN Public Finance as its expert financial adviser, Orrick Herrington & Sutcliff as its bond counsel, and Schiff Hardin as its disclosure counsel. Underwriters are CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 10 selected by putting together an underwriting pool through a Request for Qualifications process conducted by the financial adviser. A firm or the firms from that pool which are selected are determined by City staff (with input from the financial adviser) to have the best expertise in the projects that will be financed. F. Trustee Activity Trustees provide banking services for debt and act as a conduit between the City of Fresno and their client, the bondholders and/or investors. Debt documentation typically requires that a trustee be selected to hold funds on behalf of the investor in order to ensure that the debt is used for its intended purpose. Although selected and paid for by the City of Fresno, the trustee works for the investors. Below is a list of each trustee and the debt instruments for which they provide services: Trustee Debt Instrument Fees Paid to Trustee in FY2018 Interest/ Dividends Earned in FY2018 Bank of New York Mellon Corporate Trust Fresno JPFA 1998 Lease Revenue Bonds $37,816 $2,697,321 1999 Community Facilities District #4 Fresno JPFA 2001 TARB 2001 Community Facilities District #5 2002 Pension Obligation Bonds Fresno Redevelopment Agency 2003 TARB 2003 Community Facilities District #7 Fresno JPFA 2004 Lease Revenue Bonds Fresno JPFA 2008 Lease Revenue Bonds Fresno JPFA 2017 Lease Revenue Bonds All City of Fresno Airport Bonds All City of Fresno Sewer Bonds All City of Fresno Water Bonds Wells Fargo Corporate Trust Fresno JPFA 2001 Lease Revenue Bonds $2,400 $8,126 Fresno JPFA 2006 Lease Revenue Bonds State Water Resources Control Board Loans Zions Bank Fresno JPFA 2009 Lease Revenue Bonds $648 $6 JPFA = Fresno Joint Powers Financing Authority; TARB = Tax Allocation Revenue Bonds G. Investment Activity While bond funds are held in Trust, the City is encouraged to invest them in a manner that is consistent with the Permitted Investments of the bond transaction and yields a favorable rate of return to maximize proceeds available to the City. Prior to the economic downturn in 2008, Debt Management staff was able to invest in Guaranteed Investment Contracts with various banks that maximized returns at the arbitrage yield on the bonds. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 11 With the downturn in the economy, all of those Guaranteed Investment Contracts were terminated by the banks, and proceeds were invested in money market funds in anticipation of better investments once the economy rebounded. In February 2014, staff determined that rates were favorable to lock in for periods of one to three years under a ladder approach to investing, allowing for reinvestment in the short-term until rates begin to improve. Staff believes that investing in the long-term at this time would commit the City into low earnings instead of taking advantage of opportunities as rates begin to rise. In November 2014, staff expanded this approach to all previously liquid reserve funds. During fiscal year 2018, interest was earned from the following instruments: • Guaranteed Investment Contracts - $1,764,879 • Federal Agency Bonds - $704,514 • Money Market Funds - $236,060 Earnings on the Federal Agency Bonds increased from the earnings on those instruments in fiscal year 2017 due to reinvesting in these instruments all reserve funds with cash balances after the Lease Revenue Bond refinancing in April 2017. All earnings were used to pay a portion of the debt service on City bonds. 12 Debt Detail Report Below is a schedule of debt that had activity in Fiscal Year 2018: Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Governmental Revenue and Other Bonds Taxable Pension Obligation Bonds 2002 $205,335,000 taxable Refund 2000 Taxable Pension Obligation Bonds 6.46% to 6.55% 02/21/2002 06/01/2029 Repayment of bonds not limited to any special source of City funds. Principal due annually, interest due semiannually. City uses funds throughout the City based on full-time employees assigned to funds. For the General Fund, the City uses dedicated Property Tax Override (PTO) revenue first, and then other General Fund revenues to make its portion of the bond payment. Other citywide revenues make up the difference between total debt service and the General Fund portion. During 2018 $12,234,039 of PTO revenue was used. In addition to PTO revenue, $1,426,870 of General Fund and $2,530,731 of Enterprise Fund/Internal Service Fund revenues were used to make the 2018 debt service payment of $16,191,640 $8,085,000 to $15,195,000 $124,245,000 $—$124,245,000 $178,090,500 $16,191,640 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A&B, No Neighborhood Left Behind (NNLB) A = $11,010,000 tax-exempt; B = $1,940,000 taxable Refinance No Neighborhood Left Behind Projects 2.34% to 5.00% 05/10/2017 04/01/2023 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $544,329 was equal to debt service in 2018. $2,365,000 to $2,830,000 14,002.546 (1,057.546)12,945,000 14,823,206 544,329 Fresno Joint Powers Financing Authority: Lease Revenue Bonds 2008 A, No Neighborhood Left Behind (NNLB) A = $38,210,000 tax-exempt Refund 2005A Lease Revenue Bonds (No Neighborhood Left Behind Project) N/A 04/29/2008 04/01/2018 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $2,768,075 was equal to debt service in 2018. N/A ————2,768,075 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds (Chiller) 2017 A, City Hall Chiller A = $2,710,000 tax-exempt Refinance City Hall Chiller 5.00%05/10/2017 04/01/2024 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $120,821 was equal to debt service in 2018. $610,000 to $2,100,000 3,126,160 (416,160)2,710,000 3,492,500 120,821 Fresno Joint Powers Financing Authority: Lease Financing Refunding 2017 A&B, City Hall, Garage #7, Bee Bldg & Granite Park A = $10,125,000 tax-exempt; B = $21,980,000 taxable Refinance City Hall, Parking Garage #7, Fresno Bee Building and Granite Park 2.34% to 5.00% 05/10/2017 04/01/2031 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $4,241,820 was equal to debt service in 2018. $1,645,000 to $3,565,000 29,505,363 (485,363)29,020,000 36,451,581 4,241,820 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Various Capital Projects A = $12,435,000 tax-exempt Refinance Various Capital Improvement Projects 5.000%05/10/2017 04/01/2035 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $554,334 was equal to debt service in 2018. $40,000 to $1,785,000 14,167,855 (1,732,855)12,435,000 19,496,000 554,394 Fresno Joint Powers Financing Authority: Lease Revenue Bonds 2004 A,B,C, Various Capital Projects A = $15,810,000 tax-exempt; B = $8,100,000 tax-exempt; C = $28,870,000 taxable Calcot Project, Fire Department Projects, Downtown Parking Projects, Santa Fe Depot Project, Roeding Business Park Project Area, other capital projects 5.900%04/28/2004 10/01/2034 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $1,541,943 was equal to debt service in 2018. $790,000 to $1,400,000 13,150,626 (15,626)13,135,000 18,284,373 1,541,943 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds (Parks Projects) 2017 A, Parks Impact Fee Projects A = $22,965,000 tax-exempt Refinance Improvements to Various Park Facilities 5.000%05/10/2017 04/01/2038 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $1,004,295 was equal to debt service in 2018. $695,000 to $1,755,000 26,051,472 (3,086,472)22,965,000 36,415,750 1,004,295 13 Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Fresno Joint Powers Financing Authority: Lease Revenue Bonds (Parks Projects) 2008 C & D, Parks Impact Fee Projects C = $33,675,000 tax-exempt; D = $1,530,000 taxable Improvements to various park facilities N/A 06/12/2008 04/01/2018 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $894,400 was equal to debt service in 2018. N/A $—$—$—$—$894,400 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Police and Fire/ Public Safety A = $32,065,000 tax-exempt Refinance Public Safety Capital Improvement Projects (Police & Fire) 5.000%05/10/2017 04/01/2039 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $1,379,185 was equal to debt service in 2018. $1,015,000 to $2,300,000 36,017,158 (3,952,158)32,065,000 50,982,500 1,379,185 Revenue and Other Bonds Total $260,266,180 $(10,746,180)$249,520,000 $358,036,410 $29,240,902 Notes Payable HUD: Regional Medical Center (RMC) $3,000,000 Loaned Section 108 Notes to be used for improvements to Regional Medical Center N/A 10/28/1997 08/01/2017 Annual principal payments, semiannual interest payments. N/A $—$—$—$—$273,929 HUD: Fresno/Madera Area Agency on Aging (FMAAA) $1,500,000 Loaned Section 108 Notes to be used to acquire and improve FMAAA facilities 3.120% to 3.300% 06/14/2000 08/01/2019 Annual principal payments, semiannual interest payments. $120,000 to $135,000 255,000 —255,000 263,555 119,800 HUD: Neighborhood Streets/ Parks $1,500,000 Loaned Section 108 Note to be used for improvements to various neighborhood streets & parks 5.850% to 6.120% 08/08/2002 08/01/2022 Annual principal payments, semiannual interest payments. $100,000 to $130,000 572,000 —572,000 663,051 131,048 Roeding Business Park $2,441,000 Loaned Loaned from the California Infrastructure and Economic Development Bank to be used to complete the Roeding Business Park 3.530%03/18/2004 08/01/2033 Secured by Facility Lease on City Hall Annex. Annual principal payments, semiannual interest payments. $77,979 to $131,212 1,639,214 —1,639,214 2,144,567 134,514 Notes Payable Total $2,466,214 $—$2,466,214 $3,071,173 $659,291 Governmental Total $262,732,394 $(10,746,180)$251,986,214 $361,107,583 $29,900,193 Business-type Water System Revenue Refunding Bonds 2003 A A = $16,155,000 tax-exempt Refund 1993 Water Bonds & finance improvements to the Water System 5.250%04/23/2003 06/01/2020 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged senior to the pledges securing the 2010 Bonds and State loans for Water. Principal paid annually, interest semiannually. $1,245,000 to $1,310,000 $2,575,385 $(20,385)$2,555,000 $2,757,913 $1,376,088 Water System Revenue Bonds (Non-Taxable) 2010 A-1, Water A-1 = $66,810,000 tax-exempt Current Refund 1998 Water Bonds & improvements to the Water System 4.00% to 5.00% 02/03/2010 06/01/2024 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 2003 Bonds and in parity with the pledges securing State loans for Water. Principal payable annually, interest semiannually. $4,485,000 to $7,455,000 38,221,969 (1,391,969)36,830,000 44,256,025 6,411,575 14 Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Water System Revenue Bonds (Taxable Build America Bonds) 2010 A-2, Water A-2 = $91,340,000 taxable Improvements to the Water System 6.50% to 6.75% 02/03/2010 06/01/2040 Repayment of bonds solely from revenues derived from the operation of the City Water System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 2003 Bonds and in parity with the pledges securing State loans for Water. Principal payable annually, interest semiannually. During Fiscal Year 2018, a federal Build America Bonds subsidy of $1,992,110 was received. $4,090,000 to $7,715,000 $89,976,732 $1,363,268 $91,340,000 $185,601,813 $6,097,263 Sewer System Revenue Bonds 1993 A A = $196,280,000 tax-exempt Rehabilitation and expansion of the City's Wastewater Treatment Facility 4.50% to 5.25% 10/06/1993 09/01/2023 Repayment of bonds solely from revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged senior to the pledges of the 2008 Sewer Bonds and State loans for Sewer. Principal payable annually, interest semiannually. $45,000 to $10,090,000 17,064,578 5,422 17,070,000 18,236,056 10,701,025 Sewer System Revenue Bonds 2008 A, Sewer A = $159,845,000 tax-exempt Refund 1995 & 2000 Sewer Bonds; Improvements to the City's Wastewater Reclamation Facility 4.625% to 5.00% 07/24/2008 09/01/2037 Repayment of bonds solely from revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 1993 Bonds and in parity with the pledges of State loans for Sewer. Principal payable annually, interest semiannually. $5,410,000 to $13,090,000 162,286,422 (2,441,422)159,845,000 257,551,697 7,948,844 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 - Convention Center A = $4,260,000 tax-exempt Refinance Convention Center Improvement Projects (Phase I) 5.000%05/10/2017 04/01/2027 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $414,925 was equal to debt service in 2018. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make these future payments, which the Authority will then use to make the debt service payment. $365,000 to $540,000 4,583,218 (548,218)4,035,000 5,108,750 414,925 Fresno Joint Powers Financing Authority: Lease Revenue Bonds (Conv. Ctr.) 2008 - Convention Center F = $21,410,000 taxable Refund a portion of 2006 Convention Center Bonds & finance various Convention Center improvements 6.700%08/14/2008 04/01/2023 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2017, the City chose to make these lease payments from the General Fund in the amount of $2,408,985, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $1,370,000 to $2,175,000 9,257,490 22,510 9,280,000 11,106,755 2,408,985 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Exhibit Hall Expansion Project Refunding A = $11,665,000 tax-exempt Refinance Exhibit Hall Expansion Project 5.000%05/10/2017 04/01/2029 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. Lease revenue of $520,064 was equal to debt service in 2018. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make these future payments, which the Authority will then use to make the debt service payment. $830,000 to $1,330,000 13,352,065 (1,687,065)11,665,000 15,440,750 520,064 15 Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Fresno Joint Powers Financing Authority: Lease Revenue Bonds 1998, Exhibit Hall Expansion Project $32,609,535 tax-exempt Construction of an exhibit hall. N/A 09/01/1998 09/01/2028 Current Interest Serial Bonds ($25,395,000) and Capital Appreciation Serial Bonds ($7,214,535). Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to a Facilities Lease. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $750,000, which was equal to the debt service payment. All remaining bonds are Capital Appreciation Bonds, so interest is accreted. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $162,405 to $275,078 $2,248,397 $103,558 $2,351,955 $8,250,000 $750,000 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds 2017 A, Stadium Project A = $13,510,000 tax-exempt Refinance MultiPurpose Stadium Project 5.000%05/10/2017 04/01/2031 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $1,252,321, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $735,000 to $1,300,000 14,773,795 (1,913,795)12,860,000 17,786,500 1,252,321 Fresno Joint Powers Financing Authority: Lease Revenue Bonds 2001 A & B, Stadium Project A = $23,615,000 tax-exempt; B = $22,235,000 taxable Acquire and construct a multipurpose outdoor stadium 6.93% to 7.03% 06/12/2001 06/01/2031 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to a Facilities Lease. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $1,816,324, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $755,000 to $1,700,000 15,195,322 (20,322)15,175,000 23,626,238 1,816,324 Fresno Joint Powers Financing Authority: Lease Revenue Refunding Bonds (Riverside Golf Course) 2017 A, Riverside Golf Course A = $1,615,000 tax-exempt Refinance Improvements to Riverside Golf Course 5.000%05/10/2017 04/01/2038 Repayment payable solely by revenues pledged under Master Facilities Sublease agreement, primarily Base Rental Payments. Principal due annually, interest due semiannually. During 2018, the City chose to make these lease payments from the General Fund in the amount of $70,609, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. $50,000 to $125,000 1,832,054 (217,054)1,615,000 2,555,500 70,609 Fresno Joint Powers Financing Authority: Lease Revenue Bonds (Riverside Golf Course) 2008 C & D, Riverside Golf Course C = $2,375,000 tax-exempt; D = $105,000 taxable Improvements to Riverside Golf Course N/A 06/12/2008 04/01/2018 Repayment payable solely by revenues pledged in trust agreement, primarily Base Rental Payments pursuant to the Facilities Sublease. Principal due annually, interest due semiannually. . During 2018, the City chose to make these lease payments from the General Fund in the amount of $62,400, which was equal to the debt service payment. While the City has the right to use any unencumbered funding source it wishes to use for future lease payments, it is anticipated that General Fund revenues will be used to make future lease payments, which the Authority will then use to make the debt service payment. N/A ————62,400 16 Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Airport Revenue Refunding Bonds 2013, Concourse Expansion A = $10,810,000 Non-AMT; B = $22,820,000 AMT (Subject to Alternative Minimum Tax) Refund 2000 Airport Revenue Bonds 4.00% to 5.125% 08/06/2013 07/01/2030 Repayment of bonds solely from operation of the City Airport System. Bond Indenture requires a minimum $1,600,000 of PFC Contribution toward annual debt service from Passenger Facility Charges (PFC). During Fiscal Year 2018 $1,600,000 of PFC and $1,174,744 of eligible Airports operation revenues were used to make the debt service payment. $1,475,000 to $5,335,000 $28,489,821 $(369,821)$28,120,000 $38,567,947 $2,774,744 Airport Revenue Bonds 2007, Consolidated Rental Car Facility $22,000,000 taxable Construction of a consolidated rental car facility and related improvements 5.833%06/14/2007 07/01/2037 Repayment of bonds solely from operation of the City Airport System. While not required under the Bond Indenture, Airports uses Customer Facility Charge (CFC) revenues first to meet the debt payment, and then uses other permitted revenues to cover any difference between CFC's and the debt payment. Principal due annually, interest due semiannually. During Fiscal Year 2018 $ 1,465,741 of CFC revenues was used to fully cover the debt service payment. $265,000 to $2,265,000 21,335,000 —21,335,000 37,783,914 1,465,741 Revenue and Other Bonds Total $421,192,248 $(7,115,293)$414,076,955 $668,629,858 $44,070,908 Notes Payable Water: Safe-Drinking Water Program $51,405,432 Loaned Contract between the State Water Resources Control Board and the City for installation of water meters throughout the City of Fresno 0.000%04/10/2012 10/01/2022 No interest loan. Repayment of the loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the Water 2003 Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal due in semiannual installments of $1,285,136. $1,285,136 to $2,570,272 $41,124,345 —$41,124,345 $41,124,346 $2,570,272 Water: Safe Drinking Water Program $1,946,686 Loaned Contract between the State Water Resources Control Board and the City to protect the City's drinking water supplies from possible contaminating activities (PCA's) 2.292%07/01/2009 07/01/2031 Repayment of loan is funded from revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $61,014. $90,222 to $119,962 1,409,976 —1,409,976 1,647,377 122,028 Water: Safe Drinking Water Program $1,245,485 Loaned Contract between the State Water Resources Control Board and the City for improvements on the Enterprise and Jefferson Canals 2.292%07/01/2009 01/01/2032 Repayment of loan is funded from revenues of the Water Fund Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments of $38,993. $57,659 to $76,666 901,096 —901,096 1,052,817 77,986 Water: Drinking Water State Revolving Fund Project 1010007-029C $26,520,000 Loaned Contract between the State Water Resources Control Board and the City for construction of a Southeast Surface Water Treatment Facility 1.600%04/05/2016 07/01/2048 Repayment of loan is funded from the revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. 19,522,048 —19,522,048 19,522,048 267,892 Water: Drinking Water State Revolving Fund Project 1010007-028C $195,489,000 Loaned Contract between the State Water Resources Control Board and the City for construction of a Southeast Surface Water Treatment Facility 1.663%07/15/2015 01/01/2049 Repayment of loan is funded from the revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. 153,560,172 —153,560,172 153,560,172 1,924,233 17 Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Water: Drinking Water State Revolving Fund Project 1010007-030C $75,900,000 Loaned Contract between the State Water Resources Control Board and the City for construction of the Friant-Kern Canal Raw Water Pipeline 1.600%08/23/2016 01/01/2049 Repayment of loan is funded from the revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. $48,611,671 $—$48,611,671 $48,611,671 $577,879 Water: Drinking Water State Revolving Fund Project 1010007-031C $65,875,669 Loaned Contract between the State Water Resources Control Board and the City for construction of a Kings River Pipeline 1.600%04/05/2016 07/01/2048 Repayment of loan is funded from the revenues of the Water Fund. Pledged subordinate to the pledge securing the 2003 Water Bonds and in parity with the pledges securing the 2010 Bonds and other State loans for Water. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. 46,768,662 —46,768,662 46,768,662 480,779 Sewer: Clean Water State Revolving Fund Project $33,212,590 Loaned Contract between the State Water Resources Control Board and the City for construction of a tertiary treatment facility 1.000%10/17/2015 07/12/2046 Repayment of loan solely from all revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 1993 Bonds, and in parity with the pledge securing the 2008 Bonds and State loans for Sewer. Principal and interest due in semiannual installments of $1,279,885. Payment for FY2018 was made in FY2017. $963,854 to $1,282,163 32,249,924 —32,249,924 37,312,878 0 Sewer: Clean Water State Revolving Fund Project No. 8061-110 $52,475,049 Loaned Contract between the State Water Resources Control Board and the City for construction of a recycled water distribution system in the southwest quadrant of the City 1.000%07/01/2016 05/30/2047 Repayment of loan solely from all revenues derived from the operation of the City Sewer System, except connection fees and charges, refundable deposits and capital contributions. Pledged subordinate to the pledge securing the 1993 Bonds, and in parity with the pledge securing the 2008 Bonds and State loans for Sewer. Principal and interest due in semiannual installments to begin once project is completed and continue for 30 years. Until completion, interest is due semiannually on the amount drawn down through the interest payment date. No amortiza- tion schedule available until project is complete. 20,205.685 —20,205.685 20,205.685 — Convention Center: Management Agreement $781,000 Loaned Management Agreement between the City of Fresno and SMG to settle a conflict with employee benefits costs incurred by SMG 3.423%01/01/2009 12/31/2018 Principal and interest due in monthly installments of $4,167 through 12/31/2018 with an additional payment of $250,000 to be paid no later than 12/31/2018. Repayment of the note is funded from revenues of the Convention Center operating fund. $270,516 270,516 —270,516 275,000 50,004 Notes Payable Total $364,624,095 $—$364,624,095 $370,080,656 $6,071,073 Business-Type Total $785,816,343 $(7,115,293)$778,701,050 $1,038,710,514 $50,141,981 18 Debt Issue Series Purpose Rate Range Issue Date Maturity Date Note Annual Principal Outstanding Principal Issuance Disc/(Prem) Accreted Int Net Principal Due Payments to Maturity FY2018 Debt Service Payment Fiduciary Fresno Joint Powers Financing Authority: Tax Allocation Revenue Bonds 2001, Redevelopment Agency Merger 2 $10,000,000 tax-exempt Redevelopment purposes within the Agency's Merger No. 2 Project Area N/A 02/01/2012 08/01/2018 Principal is due in annual installments, interest is due semiannually. Repayment of bonds is payable solely from tax increment revenues allocated by the Successor Agency to the City of Fresno Redevelopment Agency's Merger No. 2 Project area. All such revenues are pledged. Tax increment in Merger Area No. 2 of $480,217 plus $915,483 from the Debt Service Reserve Fund was used to pay the bonds off one year early. N/A $—$—$—$—$1,395,700 Tax Allocation Refunding Bonds 2003, Mariposa Project Area $5,005,000 tax-exempt Refund the Agency's 1993 Tax Allocation Bonds (Mariposa Project Area) 5.500% to 5.625% 02/01/2012 02/01/2023 Principal is due in annual installments, interest is due semiannually. Repayment of bonds is payable solely from tax increment revenues allocated by the Successor Agency to the City of Fresno Redevelopment Agency's Mariposa Project area. All such revenues are pledged. Tax increment in Mariposa Project Area of $434,100 was equal to debt service in 2018. $331,000 to $418,000 1,864,181 4,819 1,869,000 2,195,360 434,100 Tax Allocation Bonds Total $1,864,181 $4,819 $1,869,000 $2,195,360 $1,829,800 Notes Payable RDA: Roeding Business Park $2,118,000 Loaned Loaned from the California Infrastructure and Economic Development Bank to be used to complete the Roeding Business Park 3.530%03/18/2004 08/01/2033 Principal and interest due in annual installments. Secured by Tax Increment revenue received into the Roeding Business Park Project area. $67,658 to $113,845 $1,422,251 $—$1,422,251 $1,860,716 $116,710 Notes Payable $1,422,251 $—$1,422,251 $1,860,716 $116,710 Fiduciary Total $3,286,432 $4,819 $3,291,251 $4,056,076 $1,946,510 Grand Total $1,051,835,169 $(17,856,654)$1,033,978,515 $1,403,874,173 $81,988,684 CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 19 Comparative Statistics Municipal Financial Ratio Analysis: Fresno vs. California Top 10 by Population Group Medians (Most Recent Available) Moody’s Ratings Selected Medians Aa – CA 10 A3–Fresno General Fund Net Position as % of Revenues 29.21 22.42 Direct Net Debt as % of Assessed Value 0.76 0.88 Total Assessed Value (in thousands)$150,880,157 $32,941,136 Assessed Value Per Capita $142,465 $62,646 Population Estimates 1,059,066 525,832 Per Capital Income (Estimated)$68,677 $41,470 All California Top 10 in Population cities except for the City of Fresno are in the Aa range. Peer Analysis to Largest 10 Cities Metric Median City of Fresno Ranking General Fund Net Position % of Revenues 29.1%22.4%8th Unassigned General Fund Net Position % of Revenues 8.3%8.4%6th Direct Net Debt $1,055,621 $288,340 9th Direct Net Debt Per Capita $1,050 $548 9th Debt Burden 73.1%90.8%5th Per Capital Income $65,956 $41,470 9th Assessed Value Per Capita $138,292 $62,646 10th Ranking: 1st is the highest and 10th is the lowest of the largest 10 cities in California ( Good , Average , Not Good ). Glossary of Terms Direct Net Debt: Total Debt less any Pension Bonds Outstanding. Assessed Value: Total Assessed Valuation within the boundaries of the City. Debt Burden: Net Direct Debt as a percentage of Revenues. 20 Debt Coverage Airport Enterprise 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Operating Revenues (1)$15,875,415 $17,276,414 $17,564,886 $18,804,163 $19,876,016 $21,215,550 $21,802,324 $22,976,398 $24,500,217 $25,891,109 Less Operating Expenses 13,800,587 13,444,745 13,339,598 14,199,920 14,321,512 14,261,785 14,428,056 14,933,842 16,116,963 17,354,855 Other Available Funds (2)————50,992 95,014 349,805 359,232 368,003 377,368 Net Revenues $2,074,828 $3,831,669 $4,225,288 $4,604,243 $5,605,496 $7,048,779 $7,724,073 $8,401,788 $8,751,257 $8,913,622 Series 2000 Bonds $2,872,002 $3,011,580 $3,012,614 $3,011,470 $3,012,060 $0 $—$—$—$— Series 2013 Bonds —————3,288,321 2,805,144 2,807,944 2,803,143 2,801,344 Less Minimum PFC Contribution(3)(1,100,000)(1,100,000)(1,100,000)(1,100,000)(1,100,000)(1,600,000)(1,600,000)(1,600,000)(1,600,000)(1,600,000) Bond proceeds (338,300)0 —(70,077)0 ————— Additional PFC Contribution (869,400)(1,118,005)(796,600)(321,100)(500,000)(230,600)0 (200,000)—0 Net Series 2000/2013 Debt Service $564,302 $793,575 $1,116,014 $1,520,293 $1,412,060 $1,457,721 $1,205,144 $1,007,944 $1,203,143 $1,201,344 Series 2007 Bonds 640,013 1,283,260 1,283,260 1,298,260 1,332,385 1,369,469 1,399,219 1,436,928 1,472,012 1,509,471 Annual Adjusted Debt Service $1,204,315 $2,076,835 $2,399,274 $2,818,553 $2,744,445 $2,827,190 $2,604,363 $2,444,872 $2,675,155 $2,710,815 Annual Adjusted Debt Service Coverage (4)1.72 1.84 1.76 1.63 2.04 2.49 2.97 3.44 3.27 3.29 Notes: (1)State of California law requires the exclusion of Customer Facility Charge (CFC) Revenues from the calculation of Debt Service coverage in excess of annual Debt Service on the Series 2007 bonds (2)Per the indenture, unencumbered CFC funds equal to 25% of Adjusted Debt Service may be designated by the City as Other Available Funds prior to the beginning of any fiscal year, and be transferred to the Revenue Fund at the beginning of such fiscal year. Since fiscal year 2015, the City's policy has been to annually designate available CFC funds equal to 25 percent of debt service associated with 2007 Bonds as Other Available Funds. (3)Under the Supplemental Indenture, the Minimum Passenger Facility Charge (PFC) Contribution is increased from $1.1 million to $1.6 million. 21 Water Enterprise Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Revenues Charges for Services $65,596,663 $67,721,598 $67,921,933 $69,268,830 $71,667,204 $90,095,940 $74,284,899 $77,959,326 $101,894,84 6 $107,377,135 Less: Connection Fee Charges for Services (2,230,192)(1,662,536)(1,218,217)(1,083,555)(1,330,539)(1,666,977)(1,495,691)(1,562,867)(1,917,371)(2,531,147) Net Charges for Services (1)63,366,471 66,059,062 66,703,716 68,185,275 70,336,665 88,428,963 72,789,208 76,396,459 99,977,475 104,845,988 Other Operating Revenues and Interest Income 1,409,468 773,820 1,450,861 1,533,394 720,443 328,907 573,475 1,146,779 16,508 0 Total Revenues $64,775,939 $66,832,882 $68,154,577 $69,718,669 $71,057,108 $88,757,870 $73,362,683 $77,543,238 $99,993,983 $104,845,988 Expenses Labor and Benefits $9,707,563 $11,234,598 $12,432,877 $12,517,445 $12,678,961 $13,524,886 $11,377,958 $12,436,520 $12,401,334 $12,175,922 Pumping Power 9,114,867 8,890,968 8,849,543 8,986,181 9,112,975 9,292,005 8,500,975 8,149,532 9,064,479 9,549,662 Source of Supply 6,129,477 8,044,508 7,144,620 7,748,205 6,317,505 1,779,813 5,612,816 6,629,834 4,188,352 9,750,720 All Other Operating and Maintenance 16,776,763 15,613,196 17,999,120 18,385,535 16,820,809 18,151,285 17,473,391 17,165,711 21,546,637 17,691,811 Total Operating Expenses (2)$41,728,670 $43,783,270 $46,426,160 $47,637,366 $44,930,250 $42,747,989 $42,965,140 $44,381,597 $47,200,802 $49,168,115 Net Current Revenues $23,047.269 $23,049.612 $21,728.417 $22,081.303 $26,126.858 $46,009.881 $30,397.543 $33,161.641 $52,793.181 $55,677.873 2003A Senior Bond Debt Service $3,736,222 $2,934,114 $1,374,750 $1,374,350 $1,375,750 $1,378,350 $1,374,350 $1,381,325 $1,380,150 $1,376,088 State Loans Debt Service 265,103 272,971 291,220 265,131 259,483 119,963 119,963 119,963 0 0 Total Senior Debt $4,001.325 $3,207.085 $1,665.97 $1,639.481 $1,635.233 $1,498.313 $1,494.313 $1,501.288 $1,380.15 $1,376,088 Senior Coverage Ratio 5.76 7.19 13.04 13.47 15.98 30.71 20.34 22.09 38.25 40.46 Net Revenue Available for Parity Debt Service $19,045,944 $19,842,527 $20,062,447 $20,441,822 $24,491,625 $44,511,568 $28,903,230 $31,660,353 $51,413,031 $54,301,785 2010 Series A Bond Debt Service $—$3,235,943 $12,509,988 $12,515,238 $12,507,038 $12,508,838 $12,509,238 $12,531,238 $12,507,838 $12,508,838 State Loans Debt Service $—$—$—$75,235 $265,998 $337,893 $2,770,285 $2,786,065 $3,533,258 $6,021,069 Total Parity Debt Service $—$3,235,943 $12,509,988 $12,590,473 $12,773,036 $12,846,731 $15,279,523 $15,317,303 $16,041,096 $18,529,907 Parity Coverage Ratio —6.13 1.60 1.62 1.92 3.46 1.89 2.07 3.21 2.93 Notes: (1)1993 Indenture defines "Current Revenues" as all revenue from the operation of the Water System except for connection fees and charges. (2)1993 Indenture defines "Maintenance and Operation Costs" as all expenses incurred for maintaining and operating the Water System except for Debt Service, Depreciation, and Amortization 22 Wastewater Enterprise Fiscal Year 2009 2010 2011 2012 2013 2014 2015 2016 2017 2018 Charges for Services(1) $62,521,061 $74,157,961 $76,628,147 $76,725,785 $76,324,086 $76,201,230 $81,954,830 $78,185,599 $83,634,711 $81,650,518 Interest Income 4,511,947 3,955,335 1,618,632 3,797,207 485,084 1,546,508 1,786,614 2,779,309 491,672 2,046,349 Less: Wastewater Facility Connection Fee (1,439,343)(2,336,689)(1,463,172)(1,133,247)(1,852,524)(1,981,327)(1,708,801)(1,843,957)(1,967,994)(1,996,486) Total Senior Lien Revenues $65,593,665 $75,776,607 $76,783,607 $79,389,745 $74,956,646 $75,766,411 $82,032,643 $79,120,951 $82,158,389 $81,700,381 Operating Expenses(2)31,646,468 30,714,505 31,422,980 36,857,808 36,431,161 36,339,200 37,390,529 35,935,135 38,058,304 37,236,740 Net Income Before Debt Service $33,947.197 $45,062.102 $45,360.627 $42,531.937 $38,525.485 $39,427.211 $44,642.114 $43,185.816 $44,100.085 $44,463.641 Senior Lien Debt Service(3)$13,391,850 $13,530,713 $10,754,019 $10,736,988 $10,724,331 $10,714,175 $10,694,956 $10,723,231 $10,711,900 $10,701,025 Coverage Ratio(4)2.53 3.33 4.22 3.96 3.59 3.68 4.17 4.03 4.12 4.16 100% Coverage-Subordinate Lien: Net Current Revenue after Senior Lien Debt (before Connection Fees)$20,555,347 $31,531,389 $34,606,608 $31,794,949 $27,801,154 $28,713,036 $33,947,158 $32,462,585 $33,388,185 $33,762,616 Available from Senior Lien Revenues $20,555,347 $31,531,389 $34,606,608 $31,794,949 $27,801,154 $28,713,036 $33,947,158 $32,462,585 $33,388,185 $33,762,616 Subordinate Lien Debt Service(5) $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $9,228,729 Coverage Ratio 2.59 3.97 4.35 4.00 3.50 3.61 4.27 4.08 4.20 3.66 120% & 125% Coverage Subordinate Lien: Net Current Revenue (Excluding Connection Fees) $20,555,347 $31,531,389 $34,606,608 $31,794,949 $27,801,154 $28,713,036 $33,947,158 $32,462,585 $33,388,185 $33,762,616 Wastewater Facility Connection Fee 1,439,343 2,336,689 1,463,172 1,133,247 1,852,524 1,981,327 1,708,801 1,843,957 1,967,994 1,996,486 Transfers From/To Rate Stabilization Fund 16,200,000 ————————— Net Current Revenue (Including Connection Fees)$38,194.69 $33,868.078 $36,069.78 $32,928.196 $29,653.678 $30,694.363 $35,655.959 $34,306.542 $35,356.179 $35,759.102 Portion Pledged to Senior Lien Coverage(6) Available From Senior Lien Revenues $38,194,690 $33,868,078 $36,069,780 $32,928,196 $29,653,678 $30,694,363 $35,655,959 $34,306,543 $35,356,179 $35,759,102 Subordinate Lien Debt Service(5) $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $7,948,844 $9,228,729 Coverage Ratio 4.81 4.26 4.54 4.14 3.73 3.86 4.49 4.32 4.45 3.87 Net Income After Debt Service(7)$30,245,846 $25,919,234 $28,120,936 $24,979,352 $21,704,834 $22,745,519 $27,707,115 $26,357,699 $27,407,335 $26,530,373 Notes: (1)Includes revenue paid by the City of Clovis for Operations and Maintenance pursuant to the 1977 Fresno-Clovis Sewerage System Joint Powers Agreement. (2)The 1993 Indenture specifically excludes from Operating Expenses Debt Service, Amortization and Depreciation. (3)1993 Sewer System Revenue Bonds, Series A. (4)Coverage Ratio is calculated by dividing Net Income before Debt Service by Senior Lien Debt Service. (5)2008 Sewer System Revenue Refunding Bonds, Series A & Clean Water Loan for Tertiary Treatment Facility. (6)The 1991 Sewer System Revenue Bonds (1991 Series A) matured in August 2003; Repayment of the bonds were funded from revenues of the Sewer System. (7)Net Income after Debt Service and before cash financed capital expenses and any other expenses for lawful purposes. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 23 Appendix - Ratings History Lease Revenue Bonds Year Moody’s S&P Fitch Rating Outlook Rating Outlook Rating Outlook 2018 Baa2/Baa3 Pos A Stable A-Stable 2017 Baa2/Baa3 Pos A Stable A-Stable 2016 Baa2/Baa3 Pos BB+Stable A-Stable 2015 Ba1/Ba2 Stable BB+Stable BBB-Stable 2014 Ba2/Ba3 Pos BB+Stable BBB-Stable 2013 Ba1/Ba2 Neg BB+Stable BBB-Neg 2012 Ba1/Ba2 Neg BBB-Neg BBB/BBB-Neg Airport Revenue Bonds Year Moody’s S&P Fitch Rating Outlook Rating Outlook Rating Outlook 2018 Baa1 Pos A Stable BBB+Stable 2017 Baa1 Pos BBB+Stable BBB Pos 2016 Baa1 Pos BBB Pos BBB Pos 2015 Baa1 Stable BBB Pos BBB Stable 2014 Baa1 Stable BBB Stable BBB Stable 2013 Baa1 Stable BBB Stable BBB Stable 2012 Baa1 Stable BBB Stable BBB Stable Water Revenue Bonds Year Moody’s S&P Fitch Rating Outlook Rating Outlook Rating Outlook 2018 A3 Pos AA-Stable AA/A+Stable 2017 A3 Pos AA-Stable AA/A+Stable 2016 A3 Pos AA-Stable AA/A+Stable 2015 A3 Pos A+/A Stable AA/A+Stable 2014 A3 Stable A+/A Stable AA/A+Stable 2013 A3 A+/A Stable AA/A+Neg 2012 A3 Neg A+/A Neg AA/AA-Neg Arrows indicate an increase (?) or decrease (?) from the prior rating. CITY OF FRESNO | COMPREHENSIVE ANNUAL DEBT REPORT FISCAL YEAR ENDED JUNE 30, 2018 24 Wastewater (Sewer) Revenue Bonds Year Moody’s S&P Fitch Rating Outlook Rating Outlook Rating Outlook 2018 A1 Pos AA+/AA Stable AA/AA-Stable 2017 A1 Pos AA+/AA Stable AA/AA-Stable 2016 A1 Pos AA+/AA Stable AA/AA-Stable 2015 A1 Pos AA+/AA Stable AA/AA-Neg 2014 A1 Stable AA+/AA Stable AA/AA-Neg 2013 A1 Neg AA+/AA-Stable AA/AA-Neg 2012 A1 AA+/AA Neg AA/AA-Neg Arrows indicate an increase () or decrease () from the prior rating. City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0120 Agenda Date:1/17/2019 Agenda #:3-C REPORT TO THE CITY COUNCIL January 17, 2019 FROM:JEFF CARDELL, Director Personnel Services Department BY:JENNIFER MISNER, HR Manager Personnel Services Department SUBJECT Approve the amended City of Fresno Retiree Health Reimbursement Arrangement (HRA)Plan Document RECOMMENDATION It is recommended that the City Council approve the amended the City of Fresno Retiree Health Reimbursement Arrangement (HRA) Plan Document as attached, effective January 17, 2019. EXECUTIVE SUMMARY Since March 2006,the City has maintained an HRA Plan to reimburse eligible participants for their post-retirement health insurance premiums.Upon a review of the Plan Document it was determined that amendment of the plan was appropriate in order to provide clarity for the benefit of the participants and to acknowledge that the eligibility requirements are set forth in the applicable Memorandum of Understanding (MOU) or the Salary Resolution. BACKGROUND On March 1,2006,the City Council approved and adopted the HRA Plan Document.The Plan was established in 2006 to provide a means for reimbursing plan participants for their post-retirement health insurance premiums.In order to become an eligible participant the employee must be employed in a classification set forth in the Salary Resolution and they must meet the respective eligibility requirements set forth in the applicable MOU or the Salary Resolution for employees in Unit 2. As a matter of due diligence,the plan document was reviewed to ensure that it remained compliant with the applicable Internal Revenue Service Regulations.Upon review it was determined that City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0120 Agenda Date:1/17/2019 Agenda #:3-C amendment of the plan is appropriate. More specifically the attached plan is being modified to: 1.Clarify that the eligibility requirements are set forth in the applicable MOU or the Salary Resolution; 2.Update the Unused Account section to be clear about what happens to the HRA when a person ceases to be a participant and has no eligible dependents; 3.Remove language from the Appointive Service and Temporary Employees section that is not applicable since temporary employees are not eligible; 4.Add a section regarding Health Insurance Portability and Accountability Act (HIPAA) Security; 5.Eliminates Appendix A since the eligibility requirements as set forth in the applicable MOU or the Salary Resolution; and 6.Correct misspellings and correct formatting. The amended plan document has been reviewed by the City Attorney’s Office and the bargaining units have been provided with notice of the amendments to the plan document. ENVIRONMENTAL FINDINGS N/A LOCAL PREFERENCE N/A FISCAL IMPACT Amendment of the HRA Plan Document does not result in any increased expenses. Attachment: City Of Fresno Retiree Health Reimbursement Arrangement (Plan) - Final City Of Fresno Retiree Health Reimbursement Arrangement (Plan) - Redline City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ 005827.00032 20301075.1 Amended: 2018 Effective: March 1, 2006 CITY OF FRESNO RETIREE HEALTH REIMBURSEMENT ARRANGEMENT City of Fresno Retiree HRA Page 1 of 31 Contents ARTICLE 1. GENERAL PROVISIONS .................................................................................. 3 1.1. Name. .......................................................................................................................... 3 1.2. Effective Date.............................................................................................................. 3 1.3. Purpose....................................................................................................................... 3 1.4. Legally Enforceable. .................................................................................................... 4 1.5. Administrator. ............................................................................................................. 4 1.6. Discretionary Authority. ............................................................................................... 4 1.7. Exclusive Benefit. ........................................................................................................ 4 1.8. Income Tax Status. ..................................................................................................... 4 ARTICLE 2. GENERAL DEFINITIONS..................................................................................... 5 Administrator. ........................................................................................................... 5 City. .......................................................................................................................... 5 COBRA. ................................................................................................................... 5 Code. ....................................................................................................................... 5 Contracts. ................................................................................................................. 5 Conversion Rate ....................................................................................................... 6 Credited Hours. ........................................................................................................ 6 Dependent. ............................................................................................................... 6 Disability Retirement. ............................................................................................... 6 Domestic Partner. .................................................................................................... 6 Employee. ................................................................................................................ 6 Health Reimbursement Account. ............................................................................... 6 HIPAA. ..................................................................................................................... 6 Hourly Base Rate Of Pay ......................................................................................... 7 Maximum Used Hours. ............................................................................................. 7 Minimum Credited Hours. ......................................................................................... 7 Participant. ............................................................................................................... 7 Plan. ......................................................................................................................... 7 Plan Year. ................................................................................................................ 8 Retiree. .................................................................................................................... 8 Retiree Health Care Account .................................................................................... 8 Service Retirement. ................................................................................................. 8 Spouse. .................................................................................................................... 8 Termination Of Employment ..................................................................................... 8 ARTICLE 3. ELIGIBILITY AND PARTICIPATION ..................................................................... 8 3.1. Eligibility Requirements. ........................................................................................ 8 3.2. Notification To Participant. ..................................................................................... 9 3.3. Commencement Of Participati .............................................................................. 9 3.4. Termination Of Participation .................................................................................. 9 3.5. Benefits Upon Death Of The Retiree ....................................................................10 ARTICLE 4. RETIREE HEALTH CARE ACCOUNTS ............................................................10 4.1. Establishment Of Retiree Health Care Accounts. .............................................10 4.2. Crediting Of Retiree Health Care Accounts. ......................................................11 4.3. Reductions To Retiree Health Care Accounts ..................................................11 4.4. Unused Amounts. ............................................................................................11 ARTICLE 5. PLAN BENEFITS ...............................................................................................12 5.1. Benefits In General. ......................................................................................12 City of Fresno Retiree HRA Page 2 of 31 5.2. Source Of Benefits. ........................................................................................12 5.3. Health Insurance Premium Benefits. ..............................................................12 5.4. Working Retirees. .........................................................................................13 5.5. Repayment Of Overpaid Benefits. .................................................................14 ARTICLE 6. PLAN ADMINISTRATION ..................................................................................15 6.1. Administrator's Duties. ................................................................................15 6.2. Appointment And Responsibility Of Representatives. .................................15 6.3. Powers And Duties .....................................................................................15 6.4. Records. .....................................................................................................17 6.5. Reports. .....................................................................................................17 6.6. Facility Of Payment ....................................................................................17 6.7. Administrator's Discretion ..........................................................................18 6.8. Rules And Decisions. ................................................................................18 6.9. Reasonable Care. .....................................................................................18 6.10. Replacement Of Administrator ....................................................................18 6.11. HIPAA Privacy. ..........................................................................................18 6.12. HIPAA Security ..........................................................................................21 6.13. COBRA. .....................................................................................................22 ARTICLE 7. CLAIMS PROCEDURES ...................................................................................22 7.1. Claims For Benefits. ................................................................................22 7.2. Filing Claims. ...........................................................................................22 7.3. Initial Determination Of Claim. .................................................................23 7.4. Claims Appeals. ......................................................................................24 7.5. Legal Actions. .........................................................................................25 7.6. Administration Pending Resolution Of .....................................................26 7.7. Time. .......................................................................................................26 ARTICLE 8. AMENDMENTS AND TERMINATION ...............................................................26 8.1. Amendments .......................................................................................26 8.2. Right To Terminate. .............................................................................26 8.3. Enactment Of Legislation. ....................................................................27 ARTICLE 9. MISCELLANEOUS .............................................................................................27 City of Fresno Retiree HRA Page 3 of 31 CITY OF FRESNO RETIREE HEALTH REIMBURSEMENT ARRANGEMENT This City Of Fresno Retiree Health Reimbursement Arrangement (Plan) is adopted by City Of Fresno (City), on the date set forth on the signature page hereof, for the exclusive benefit of its eligible Employees and their Dependents. RECITALS Whereas: A. The City provides various employee welfare benefits to its eligible Employees pursuant to the provisions of the Internal Revenue Code (Code) of 1986, as amended. B. The City wishes to provide to certain of its Employees an employee welfare benefit plan that reimburses the eligible Employees who retire from the Employer for their post-retirement health insurance premiums. OPERATIVE PROVISIONS Now, therefore, the City hereby adopts the City Of Fresno Retiree Health Reimbursement Arrangement upon the following terms and conditions: ARTICLE 1. GENERAL PROVISIONS 1.1. Name. The name of this Plan is the "City Of Fresno Retiree Health Reimbursement Arrangement." 1.2. Effective Date. The effective date of the Plan is March 1, 2006 and amended January 1, 2019. 1.3. Purpose. The City wishes to reward certain Retirees for their long service with the City and to encourage full and complete health care for such Retirees and certain of their family members, through an accident or health plan under Code sections 105 and 106 covering health expenses through the reimbursement of Retiree health insurance premiums. The intention of the City is that the Plan shall also qualify as a "health reimbursement arrangement" within the meaning of Internal Revenue Service Notice 2002-45 and Rev. Rul 2002-41 and any subsequent guidance published by the Internal Revenue Service dealing with health reimbursement arrangements. City of Fresno Retiree HRA Page 4 of 31 1.4. Legally Enforceable. The City intends that the provisions of this Plan, including, without limitation, relating to coverage and benefits, be legally enforceable by the City's eligible Employees. Notwithstanding the preceding sentence, the City has reserved the right in other provisions of this Plan to terminate the Plan, to amend the Plan, and to exercise discretion with respect to the administration of the Plan in accordance with objective, ascertainable criteria and procedures, including, without limitation, the right to determine whether objective conditions for coverage or benefits under the Plan have been satisfied, the right to condition coverage or benefits on a qualified medical opinion of a physician, the inclusion of a managed care program, and the right to limit benefits to those that constitute the prevailing or reasonable and customary charge for the claim. 1.5. Administrator. The person(s), individual(s) or administrative committee appointed by the City Manager or designee shall be the "Administrator" of the Plan. The Administrator may engage the services of one or more third parties to assist the Administrator with the administration of the Plan. If the City does not appoint an Administrator, the-City Manager or designee shall be the Administrator. 1.6. Discretionary Authority. The Administrator shall have the discretionary authority to interpret and construe the provisions of this Plan and to decide any disputes and resolve any ambiguities which may arise relative to the rights of the Employees, past and present, and their Dependents, under the terms of the Plan; provided, however, that whenever, in the administration of the Plan, any discretionary action by the Administrator is required, the Administrator shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment. 1.7. Exclusive Benefit. The Plan is established for the exclusive benefit of the City's eligible Employees and their covered Dependents. In addition, if the City elects in writing to cover individuals who may be treated as the City's Employees under the applicable provisions of the Code and the Treasury regulations promulgated thereunder, then such individuals shall be treated as Employees for purposes of this Exclusive Benefit paragraph. 1.8. Income Tax Status. It is the intention of the City that the benefits payable under this Plan shall be City of Fresno Retiree HRA Page 5 of 31 eligible for exclusion from the gross income of the Employees and their Dependents to the extent permitted by the Code, and that this Plan and all of the benefits provided under this Plan shall qualify as nondiscriminatory under the Code if nondiscrimination is a requirement to such favorable income tax treatment. ARTICLE 2. GENERAL DEFINITIONS For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings: Account Credit. "Account Credit" means the amount credited to a Participant's Retiree Health Care Account for each Year Of Credited Service pursuant to Article 4, Section 2, Crediting Of Retiree Health Care. Administrator. "Administrator" means the person(s), individual(s) or committee appointed by the City Manager or designee with authority and responsibility to manage and direct the operation and administration of the Plan. City. "City" means City Of Fresno. COBRA. "COBRA" means the health care continuation provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272), as amended, and the regulations issued thereunder. Code. "Code" means the Internal Revenue Code of 1986, as it may be amended from time to time. Reference to any provision of the Code includes reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such provision. Contracts. "Contract" or "Contracts" means any insurance contract, HMO contract, health care service plan document or other service provider agreement, and any other document through which a Retiree or a Retiree's Dependents are provided with insured health benefits and for which the City reimburses the Retiree for the City of Fresno Retiree HRA Page 6 of 31 Retiree's share of the premiums for such insurance coverage under this Plan. Conversion Rate. "Conversion Rate" means the rate at which an eligible Retiree's Credited Hours in excess of the Minimum Credited Hours are converted to Account Credits pursuant subsection A of Article 4, Section 2, Initial Credit Amount, as more specifically set forth in the appendix attached to this Plan that applies to the Employee. Credited Hours. "Credited Hours" means the hours of accrued and unused sick leave, vacation leave, or other hours with respect to an Employee for purposes of this Plan as more specifically set forth in the appendix attached to this Plan that applies to the Employee. Dependent. "Dependent" means any of the Participant's Spouse and each of the Participant's dependents as defined in Code section 152, unless otherwise defined in an applicable Contract. Disability Retirement. "Disability Retirement" means the Employee is eligible for "disability retirement" under the provisions of the City’s retirement system that apply to the Employee, if the Employee is otherwise eligible for Service Retirement, all as set forth in the Fresno Municipal Code as in effect from time to time. Domestic Partner. "Domestic Partner" means one of two adults who are in a registered domestic partnership pursuant to section 297 of the California Family Code. Employee. "Employee" means an individual who is employed by the City, and with respect to whom any portion of their income from the City is subject to income tax. Health Reimbursement Account. "Health Reimbursement Account" means the account from which medical reimbursements are paid to eligible Employees in accordance with the Participant Health Reimbursements paragraph, below. HIPAA. City of Fresno Retiree HRA Page 7 of 31 "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 enacted August 21, 1996, as it may be amended from time to time, and including the regulations issued thereunder. Hourly Base Rate Of Pay. "Hourly Base Rate Of Pay" means an amount equal to an Employee's base monthly salary multiplied by twelve (12) months divided by the number of hours shown on the appendix to this Plan for the Employee as determined as of the Employee's date of Termination Of Employment. Maximum Used Hours. "Maximum Used Hours" means the maximum number of Credited Hours that may have been used by an Employee as of the Employee's Termination of Employment for purposes of the Eligibility Requirements paragraph, below, as more specifically set forth in the appendix attached to this Plan that applies to the Employee. Minimum Credited Hours. "Minimum Credited Hours" means the minimum number of Credited Hours that must be accumulated by an Employee as of the Employee's Termination of Employment for purposes of the Eligibility Requirements paragraph, below, as more specifically set forth in the appendix attached to this Plan that applies to the Employee. Participant. "Participant" means any Retiree who has (i) met the Plan's eligibility requirements, (ii) properly completed and returned the applications and agreements required under, and in accordance with, the Application For Participation paragraph, below, (iii) commenced participation in the Plan pursuant to the Commencement Of Participation paragraph, below, and (iv) is or may become eligible to receive a benefit under the Plan. To the extent required by the context, Participant shall also mean the Dependents of a deceased Participant for whom a Retiree Health Care Account is still maintained for the payment of Plan benefits, pursuant to the Benefits Upon Death Of The Participant paragraph, below, and which has not been exhausted. Plan. "Plan" means the City Of Fresno Retiree Health Reimbursement Arrangement as set forth herein and any amendments hereto. City of Fresno Retiree HRA Page 8 of 31 Plan Year. "Plan Year" means the twelve (12) consecutive monthly period commencing on July 1 and ending on June 30 each year. The first Plan Year shall be the period from the effective date set forth in the Effective Date paragraph, above, to June 30, 2006. Retiree. "Retiree" means a former Employee of the City who retired from the City as set forth in the Eligibility Requirements paragraph, below. Retiree Health Care Account. "Retiree Health Care Account" means the account set up on the books or records of the City, as described in the Plan Benefits article of the Plan for the Participant and his or her Dependents. Service Retirement. "Service Retirement" means the Employee is eligible for "service retirement" under the provisions of the City's retirement system that apply to the Employee, all as set forth in the Fresno Municipal Code as in effect from time to time. Spouse. "Spouse" means the person who is legally married to the Employee under the laws of the State in which they reside; provided, however, that a Spouse shall not include any such person who is legally separated from the Employee. "Spouse" shall include a Domestic Partner. Termination Of Employment. "Termination Of Employment" means no longer being an Employee for any reason other than death. ARTICLE 3. ELIGIBILITY AND PARTICIPATION 3.1. Eligibility Requirements. In order to become an eligible Retiree and to be eligible to become a Participant in this Plan, all of the following eligibility requirements must be satisfied by the Employee: A. The Employee must be employed in a classification that is set forth in City of Fresno Retiree HRA Page 9 of 31 the City of Fresno Salary Resolution at the time of the Employee's Termination Of Employment; B. The Employee must have a Termination Of Employment on or after the effective date of this Plan when the Employee is eligible for either a Service Retirement or a Disability Retirement; C. The Employee must have used no more than the Maximum Used Hours during the period of time preceding the time of the Employee's Termination Of Employment as more specifically set forth in either the City of Fresno Salary Resolution or the Memoranda of Understanding by and between the City of Fresno and each employee organization that applies to the Employee; and D. The Employee must have more than the Minimum Credited Hours at the time of the Employee's Termination Of Employment as more specifically set forth in either the City of Fresno Salary Resolution or the Memoranda of Understanding by and between the City of Fresno and each employee organizationthat applies to the Employee. 3.2. Notification To Participant. The City shall determine which Employees are eligible to participate in this Plan and shall notify each such Employee of the Employee's eligibility to participate in the Plan. 3.3. Commencement Of Participation. Each eligible Retiree, who meets the eligibility requirements and is not otherwise excluded from participation in the Plan shall become a Participant in this Plan on the day following the Retiree's Termination Of Employment. 3.4. Termination Of Participation. A. Except as otherwise provided below or elsewhere in this Plan, a Participant will automatically cease to be a Participant on the earliest of the following dates: 1. The date of the death of the Participant; 2. The date of the termination of the Plan in accordance with the Amendments And Termination article; or 3. The date when the Participant's Retiree Health Care Account has been reduced to zero dollars ($0). City of Fresno Retiree HRA Page 10 of 31 B. Termination of participation shall not affect the Participant's or the Participant's Dependents' right to claim benefits for expenses incurred prior to such termination. However, no additional expenses incurred after such termination shall be covered by the Plan. For purposes of this Plan, an expense with respect to the reimbursement of insurance premiums shall be "incurred" when the insurance premiums for the month of coverage are due. 3.5. Benefits Upon Death Of The Retiree. A. In the event that a Participant dies prior to the date when the Participant's Retiree Health Care Account has been reduced to zero dollars ($0), the amount remaining in the Participant's Retiree Health Care Account may be used by the Participant's Dependents to continue to provide the benefits covered by the Plan for the Participant's Dependents until the earlier of: 1. The date when such Retiree Health Care Account has been reduced to zero dollars ($0); or 2. The date when: a. With respect to the Participant's Spouse, the earlier of the date of the Spouse's death or (ii) the date of the Spouse's remarriage; or b. With respect to a Participant's Dependent other than the Participant's Spouse, the date when the Dependent would have ceased to qualify as a Dependent if the Participant had not died. B. In the event that an Employee dies before becoming a Participant under the Commencement Of Participation paragraph, above, no benefits shall be provided under this Plan with respect to the deceased Employee to any individual. ARTICLE 4. RETIREE HEALTH CARE ACCOUNTS 4.1. Establishment Of Retiree Health Care Accounts. At the time each eligible Retiree becomes a Participant in this Plan pursuant to the Commencement Of Participation paragraph, above, the Administrator shall establish a Retiree Health Care Account for the Participant. The account shall be credited with Account Credits in accordance with the Crediting Of Retiree Health Care Accounts paragraph and debited in accordance with the Reductions To Retiree Health Care Accounts paragraph. City of Fresno Retiree HRA Page 11 of 31 4.2. Crediting Of Retiree Health Care Accounts. A. Initial Credit Amount. At the time each eligible Retiree becomes a Participant in this Plan pursuant to the Commencement Of Participation paragraph, above, the Participant's Retiree Health Care Account shall be credited by the City with Account Credits in an amount equal to the product of the Retiree's Credited Hours at the time of the Retiree's Termination Of Employment in excess of the Minimum Credited Hours applicable to the Retiree multiplied by the Conversion Rate applicable to the Retiree multiplie, d by the Retiree's Hourly Base Rate Of Pay at the Retiree's Termination Of Employment. B. Interest. A Participant’s Retiree Health Care Account shall be credited with interest on a monthly basis using a rate of interest that is equal to the yield on the City's investment portfolio for the month; provided, however, that a Retiree's Health Care Account shall not be reduced for a month if the yield on the City's investment portfolio for the month is less than zero percent (0%). 4.3. Reductions To Retiree Health Care Accounts. All amounts paid by the Plan under the Plan Benefits article with respect to the Participant shall be charged to and used to reduce the amount credited to a Participant's Retiree Health Care Account. In no event will the amount charged to a Participant's Retiree Health Care Account and paid pursuant to the Plan Benefits article with respect to the Participant exceed the amount credited to such account at the time the claim for such benefits is paid. 4.4. Unused Amounts. A Participant's Retiree Health Care Account shall be used to provide the benefits available under the Plan Benefits article until the amount credited to the Participant's Retiree Health Care Account has been reduced to zero dollars ($0) unless the Participant sooner ceases to be a Participant in the Plan and no Dependents of the Participant are eligible to receive benefits under the term of this Plan. Once a Participant's Retiree Health Care Account has been reduced to zero dollars ($0), no further benefits shall be payable under the Plan with respect to the Participant. Any amount remaining in a Participant's Retiree Health Care Account following (i) the deaths of the Participant and the Participant's Spouse (if any), (ii) the Participant's Dependents other than the Participant's Spouse (if any) ceasing to be Dependents, and (iii) after the City of Fresno Retiree HRA Page 12 of 31 payment of all benefits due under this Plan shall remain the property of the City and no amount shall be payable to any other person. ARTICLE 5. PLAN BENEFITS 5.1. Benefits In General. Subject to the limitations of this Plan Benefits article and the Retiree Health Care Accounts article, above, the benefits provided under this Plan for a Participant shall consist of reimbursements in accordance with the Health Insurance Premium Benefits paragraph, below. 5.2. Source Of Benefits. The benefits payable under this Plan, other than any benefits from a welfare benefit plan trust, shall be paid from the general assets of the City. 5.3. Health Insurance Premium Benefits. A. The Plan will reimburse the Participant at least bi-monthly for the Participant's premiums that have been paid to the health insurance company(ies) or other appropriate billing entity by the Participant based upon appropriate proof of prior payment of such premiums by the Participant for the Participant's insured health care benefits (including medical, prescription drug, dental and vision coverage), including COBRA premiums. B. Such costs shall include those costs incurred with respect to the Participant and the Participant's Dependents who are covered by such health insurance during the Participant's participation in this Plan. There shall be no reimbursement to or payment on behalf of a Participant under this paragraph to the extent there is other reimbursement to or payment on behalf of the Participant. C. The reimbursement of premiums shall be subject to receipt of such proof, forms and materials as the Administrator shall require from time to time. The Plan will reimburse a Participant for the Participant's health insurance premiums only if the Participant provides written verification from either (i) an independent third party or (ii) in the case of a Participant who is covered by insurance coverage through an employer, that employer, demonstrating that the cost has been incurred and the amount of such expense and the Participant provides such written statement as the Administrator shall require that the cost has not been reimbursed or is not reimbursable under, any other health plan. Thus, for example, the Plan will not make advance reimbursements of future or projected costs, nor will the Plan reimburse premiums or portions of premiums not paid for by the Participant. City of Fresno Retiree HRA Page 13 of 31 D. Unless agreed otherwise, the Administrator shall issue a reimbursement of premiums to a Participant when the minimum amount of health insurance costs to be reimbursed with respect to the Participant reaches two hundred dollars ($200.00). E. In no event will the amount of the reimbursement of premiums under this paragraph with respect to a Participant exceed the amount then remaining in the Participant's Retiree Health Care Account. If the amount in the Participant's Retiree Health Care Account has been reduced to zero dollars ($0), no further benefits of any kind shall be provided under this Plan with respect to the Participant. F. No reimbursement shall be made under the Plan for amounts of health expenses which are attributable to (and not in excess of) deductions allowed under Code section 213 for any taxable year. The expenses that are covered under this Health Insurance Premium Benefits paragraph shall be limited to expenses incurred by the Participant or the Participant's Dependents who are covered by the Plan for medical care as defined in Code section 213(d). G. The benefit provided under this paragraph is intended to comply with the provisions of Code sections 105 and 106 and with the guidance provided by Revenue Ruling 61-146. This paragraph, therefore, will be deemed to be automatically amended to comply with all legislative changes to, and valid regulations promulgated under, these Code sections, as of the effective date of such legislation or regulations and any subsequent guidance modifying, clarifying or superseding Revenue Ruling 61-146. H. The Plan may, in the Administrator's sole and absolute discretion, pay the premiums directly to the appropriate third party payee in lieu of making reimbursement to the Participant. In such event, the Plan and the City shall be relieved of all further responsibility with respect to any such premiums. Upon written authorization from the Participant, the Plan shall automatically pay the premiums of the City of Fresno Health and Welfare Trust in lieu of making reimbursement to the Participant. 5.4. Working Retirees. A. Reinstated Employees. If a Participant is reemployed as an Employee by the City in a position that results in the cancellation of the Participant's retirement allowance under the City's Retirement System as set forth in the City's Municipal Code as in effect from time to time, then: City of Fresno Retiree HRA Page 14 of 31 1. There shall be no reimbursement of any health insurance premiums with respect to the Participant and the Participant's Dependents who are covered by such health insurance that are incurred during the reemployment by the City; and 2. If, upon the subsequent Termination Of Employment by such a Participant, the Participant meets the requirements of the Eligibility Requirements paragraph, above, for the Participant's then applicable job classification and that job classification is set forth on an appendix attached to this Plan at the time of the Employee's - Termination Of Employment, then the Participant's Retiree Health Care Account shall be credited with additional Account Credits under the Initial Credit Amount subparagraph, above, in accordance with that appendix; provided, however, that the Credited Hours that were taken into account under the Eligibility Requirements paragraph, above, at the time of the Participant's previous Termination Of Employment shall not be taken into account again. B. Appointive Service And Temporary Employees. If a Participant is reemployed as an Employee by the City in a position that does not result in the cancellation of the Participant's retirement allowance under the City's Retirement System as set forth in the City's Municipal Code as in effect from time to time, then: 1. The reimbursement of health insurance premiums with respect to the Participant and the Participant's Dependents who are covered by such health insurance shall not be suspended as set forth in the Reinstated Employees subparagraph, above; and 2. Upon the subsequent Termination Of Employment by such a Participant, the Participant's Retiree Health Care Account shall not be credited with additional Account Credits under the Initial Credit Amount subparagraph, above, regardless of whether the Participant once again meets the requirements of the Eligibility Requirements paragraph, above. 5.5. Repayment Of Overpaid Benefits. By accepting the payment of benefits under this Plan, the Participant and the Participant's Dependents receiving the payment agrees that, in the event of overpayment, the recipient will promptly repay the amount of overpayment without interest; provided that, if the recipient has not repaid the overpayment within thirty (30) days after notice, the recipient will also pay an amount equal to simple interest at the rate of ten percent (10%) per annum (or the highest rate allowable by applicable law, if less) on the unpaid amount from the date of City of Fresno Retiree HRA Page 15 of 31 overpayment to the date of repayment, and in addition will pay all legal fees, court costs and the reasonable time value of the Administrator or the City, or any of their employees or agents, related to the collection of such overpayment. ARTICLE 6. PLAN ADMINISTRATION 6.1. Administrator's Duties. It shall be a principal duty of the Administrator to see that the Plan is carried out, in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan without discrimination among them. 6.2. Appointment And Responsibility Of Representatives. The Administrator has the power to appoint one or more representatives, accountants, counsel, specialists, and other advisory and clerical persons as it deems necessary or desirable to assist the Administrator in the administration of the Plan. All usual and reasonable expenses of such representatives, accountants, counsel, specialists, and other advisory and clerical persons may be paid in whole by the City; however, the expenses may be paid in part by the City and in part by the Plan upon completion of applicable meet and confer obligations. The Administrator may designate any person as its agent for any purpose. The designated representative of the Administrator shall be responsible only for those specific powers, duties, responsibilities and obligations specifically given to it by the Administrator. The Administrator, the City and any person to whom the Administrator may delegate any duty or power in connection with the Plan's administration may rely upon all tables, valuations, certificates, reports and opinions furnished by any duly appointed actuary, accountant (including employees who are actuaries or accountants), legal counsel, or other specialist, and they shall be fully protected whenever they take action based in good faith in reliance thereon. All actions taken in good faith reliance on advice from the advisors are conclusive upon all persons. Any benefits not paid by the City shall not be the responsibility of the designated representatives. 6.3. Powers And Duties. Subject to the limitations of the Plan, the Administrator may establish rules for the administration of the Plan and the transaction of its business. The Administrator has the exclusive right (except as to matters reserved by the City or by the Plan) to interpret the Plan and to decide all matters arising under the Plan, including the right to remedy possible ambiguities, inconsistencies, or omissions. Without limiting the generality of the foregoing but in amplification thereof, the Administrator shall have the power to: City of Fresno Retiree HRA Page 16 of 31 A. Provide such rules and regulations as deemed necessary or appropriate for the proper and efficient administration of the Plan, and, from time to time, to amend or supplement such rules and regulations; B. Interpret and construe the provisions of the Plan, which interpretation and construction shall be final, conclusive and binding on persons claiming benefits under the Plan; C. Correct any defect, supply any omission or reconcile any inconsistency in the Plan, in such a manner and to such extent as it shall deem necessary or expedient to carry the Plan into effect; D. Determine answers to, or appropriate handling of, all questions that may arise under the Plan including questions submitted by Participants; E. Decide all questions concerning the Plan and the eligibility of any individual to participate in the Plan, in accordance with the provisions of the Plan, and resolve any and all disputes that may arise involving Participants, former Participants or Dependents which resolution shall be final and binding; F. Require any person to furnish-such information as the Administrator may request for the purpose of the proper administration of the Plan as a condition to receiving any benefits under the Plan; G. Determine the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan, inform the City of the amount of such benefits, and provide a full and fair review to any claim for benefits which has been denied in whole or in part; H. Designate other person(s) to carry out any duty or power which would otherwise be a fiduciary responsibility of the Administrator under the terms of the Plan including but not limited to delegating certain claims administration duties to a claims administrator, provided that any such delegation or allocation of responsibilities shall be set out in a written instrument executed by the Administrator and the designated party; I. Make such administrative or technical amendments to the Plan as may be necessary or appropriate to carry out the intent of the City, including such amendments as may be required to satisfy the requirements of the Code and any similar provisions or subsequent revenue or other laws, or the rules and regulations from time to time in effect under any such laws or to conform with other governmental regulations or policies; and· J. Notify Plan Participants and Dependents of any substantive amendment or termination of the Plan or change of benefits available under the Plan. City of Fresno Retiree HRA Page 17 of 31 6.4. Records. The Administrator shall maintain (or cause to be maintained) such records and may make such rules, computations, interpretations, and decisions as may be necessary or desirable for the proper administration of the Plan. The Administrator shall also maintain, for Participants' inspection at the office of the Administrator, copies of the Plan, the latest annual report, summary annual report, and summary plan description and any amendments or changes in any of these documents. On written request, Participants may obtain from the Administrator a copy of such records or documents under the Plan as pertain to the Participant. Such records shall be available for examination at reasonable times and may be copied at a reasonable cost established by the Administrator. 6.5. Reports. The City, the Administrator, or both shall file (or cause to be filed), in a timely manner, such reports as may be legally required by the Code, the Internal Revenue Service, the Department of Labor, or any other government agency. 6.6. Facility Of Payment. Whenever, in the Administrator's opinion, a person who is entitled to receive any payment of benefits hereunder is unable to manage his or her personal financial affairs by reason of minority, death, illness or infirmity, mental incapacity or incompetency of any kind, the Administrator may in its discretion: A. Make payments to the persons or institutions that are .providing for the care and maintenance of the Participant and continue to make such payments to them until a duly appointed legal representative makes a claim for the payment; B. Apply the payment for the benefit as such Participant or Dependent in such manner as the Administrator considers advisable; C. Make payments to the legally appointed guardian of such person; D. Make payments as directed by a court of competent jurisdiction; or E. Deposit any amount due to a minor to their credit in any savings or commercial bank of the Administrator's choice. Any payment of a benefit or installment thereof in accordance with the provisions of this Plan shall be a complete discharge of any liability of the City, the Administrator, the Administrator's designated representative, or any other person for the making of such payment under the provisions of the Plan. City of Fresno Retiree HRA Page 18 of 31 6.7. Administrator's Discretion. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and to determine all questions arising in connection with the administration, interpretation and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any such procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to satisfy applicable provisions of the Code and the lawful regulations issued pursuant thereto and so that all persons similarly situated will receive substantially the same treatment. 6.8. Rules And Decisions. Except as otherwise specifically provided in the Plan, the Administrator may adopt such rules and procedures as the Administrator deems necessary, desirable or appropriate for the proper administration of the Plan. All rules and decisions of the Administrator shall be uniformly and consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Administrator shall be entitled to rely upon information furnished by a Participant. 6.9. Reasonable Care. The Administrator shall use reasonable care and diligence in the exercise of its powers and the performance of its duties hereunder. 6.10. Replacement Of Administrator. The Administrator may be replaced at any time, without cause, by the City. The City shall then designate by an instrument in writing some other person as the Administrator. 6.11. HIPAA Privacy. Inasmuch as certain members of the City's workforce have access to protected health information (“PHI”), as defined in HIPAA and its implementing regulations (HIPAA Privacy Rules), for administrative functions of the Plan, and in order for a group health plan's sponsor to have access to PHI from the group health plan, HIPAA and the HIPAA Privacy Rules require that the group health City of Fresno Retiree HRA Page 19 of 31 plan be amended to incorporate the provisions required by the HIPAA Privacy Rules and that the group health plan sponsor has agreed to such provisions, the following provisions shall govern the use and disclosure of PHI to the City by a group health plan benefit provided under the Plan: A. Permitted Disclosure Of Enrollment/Disenrollment Information. The Plan (or a health insurance issuer or HMO with respect to the Plan) may disclose to the City information on whether the individual is participating in the Plan, or is enrolled in or has disenrolled from a health insurance issuer or HMO offered by the Plan. B. Permitted Uses And Disclosure Of Summary Health Information. The Plan (or a health insurance issuer or HMO with respect to the Plan) may disclose summary health information, as defined in the HIPAA Privacy Rules, to the City, provided the City requests the summary health information for the purpose of obtaining premium bids from health plans for providing health insurance coverage under the Plan or modifying, amending, or terminating the Plan. C. Uses And Disclosure For Plan Administrative Purposes. Unless otherwise permitted by law, and subject to the conditions of disclosure described in Article 6, Section 11, subsection D, Conditions Of Disclosure For Plan Administration Purposes, and obtaining written certification pursuant to Article 6, Section 11, subsection F, Certification Of City, the Plan (or a health insurance issuer or HMO on behalf of the Plan) may disclose PHI to the City; provided, however, that the City may use or disclose such PHI for Plan administration purposes only. 1. "Plan administration purposes" means administration functions performed by the City on behalf of the Plan, such as quality assurance, claims processing, auditing, and monitoring. 2. Plan administration functions do not include functions performed by the City in connection with any other benefit or benefit plan of the City, and they do not include any employment-related functions. Notwithstanding the provisions of this Plan to the contrary, in no event shall the City be permitted to use or disclose PHI in a manner that is inconsistent with section 164.504(f) of the HIPAA Privacy Rules. City of Fresno Retiree HRA Page 20 of 31 D. Conditions Of Disclosure For Plan Administration Purposes . The City agrees that, with respect to any PHI (other than enrollment/disenrollment information and summary health information, that are not subject to these restrictions) disclosed to it by the Plan (or a health insurance issuer or HMO on behalf of the Plan), the City shall: 1. Not use or further disclose the PHI other than as permitted or required by the Plan or as required by law; 2. Ensure that any agent, including a subcontractor, to whom it provides PHI received from the Plan agrees to the same restrictions and conditions that apply to the City with respect to PHI; 3. Not use or disclose the PHI for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the City; 4. Report to the Plan any use or disclosure of the information that is inconsistent with the uses or disclosures provided for of which it becomes aware; 5. Make available PHI to comply with HIPAA's right to access in accordance with section 164.524 of the HIPAA Privacy Rules; 6. Make available PHI for amendment and incorporate any amendments to PHI in accordance with section 164.526 of the HIPAA Privacy Rules; 7. Make available the information required to provide an accounting of disclosures in accordance with section 164.528 of the HIPAA Privacy Rules; 8. Make its internal practices, books and records relating to the use and disclosure of PHI received from the Plan available to the Secretary of Health and Human Services for purposes of determining compliance by the Plan with HIPAA's privacy requirements; 9. If feasible, return or destroy all PHI received from the Plan that the City still maintains in any form and retain no copies of such information when no longer needed for the purpose for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible; and City of Fresno Retiree HRA Page 21 of 31 10. Ensure that the adequate separation between the Plan and the City (i.e., the "firewall") required by section 164.504(f)(2)(iii) of the HIPAA Privacy Rules is satisfied. E. Adequate Separation Between The Plan And The City. The City shall allow only those employees of the City who are responsible for the Plan's administration functions to have access to the PHI. No other employees of the City shall have access to PHI. These employees shall have access to and use PHI only to the extent necessary to perform the plan administration functions that the City performs for the Plan. In the event that any of these specified employees do not comply with the provisions of this provision, such employee(s) shall be subject to disciplinary action by the City for noncompliance pursuant to the City's employee discipline and termination of employment procedures. F. Certification Of The City. The Plan (or a health insurance issuer or HMO with respect to the Plan) shall disclose PHI to the City only upon the receipt of a certification by the City that the Plan has been amended to incorporate the provisions required by section 164.504(f)(2)(ii) of the HIPAA Privacy Rules and that the City agrees to the conditions of disclosure set forth in the Conditions Of Disclosure For Plan Administration Purposes paragraph, above. 6.12. HIPAA Security In addition to the HIPAA Privacy Rules, the City (as Plan Sponsor) and the Plan will comply with the HIPAA Security Rule (45 CFR Part 160 and Subparts A and C of Part 164), as both such Rules are amended by the Health Information Technology for Economic and Clinical Health Act (HITECH). For this purpose, the Plan Sponsor will: A. Implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of electronic PHI (ePHI) that it creates, receives, maintains, or transmits on behalf of this Plan; B. Ensure that the adequate separation described in Section 6.11, subsection E. is supported by reasonable and appropriate security measures; C. Ensure that any agent, including a subcontractor, to whom it provides City of Fresno Retiree HRA Page 22 of 31 ePHI agrees to implement reasonable and appropriate security measures to protect such ePHI; and D. Report to the Plan any security incident of which it becomes aware concerning PHI. The Plan will notify affected individuals if a breach of unsecured PHI occurs and provide any other required notifications, in accordance with the requirements set forth under the HIPAA Breach Notification Rule (45 CFR §§164.400-.414). In addition to the HIPAA Privacy Rules related to PHI, the Plan shall comply with the laws of the State of California with respect to the protection, disclosure, and accounting of personal data, to the extent applicable. 6.13. COBRA. Notwithstanding any provision of this Plan to the contrary, to the extent required by COBRA (as defined in Section 2.04), any Participant in this Plan (or other qualifying beneficiary) whose coverage terminates under the Plan because of a COBRA qualifying event, shall be given the opportunity to continue on a self-pay basis the same coverage that he or she had under the Plan the day before the qualifying event for the periods described in COBRA, subject to all conditions and limitations under COBRA. ARTICLE 7. CLAIMS PROCEDURES 7.1. Claims For Benefits. In order to receive benefits under this Plan, the Participant must submit satisfactory proof of entitlement to such a benefit as set forth in this Claims Procedures article. Participants shall provide the Administrator with such information and evidence, and shall sign such documents, as may reasonably be requested from time to time for the purpose of administration of the Plan. 7.2. Filing Claims. A. Any Participant, Dependent, or duly authorized representative of a Participant or Dependent (Claimant) may file a claim for benefits to which such Claimant believes he or she is entitled. Claims must be made in writing and shall be delivered to the Administrator or a service provider designated by the Administrator. B. Claimants shall provide the Administrator with such information and evidence, and shall sign such documents, as may reasonably be requested from time to time for the purpose of administration of the Plan, City of Fresno Retiree HRA Page 23 of 31 including, but not limited to a demonstration that (i) the expense was for insurance for medical care as defined in Code section 213(d), (ii) the expense was incurred during the period when the person was covered _by this Plan, and (iii) the expense was covered under the Plan. C. Unless otherwise announced by the Administrator, a claim for benefits must be made no later than October 15 after the end of thePlan Year in which the expense was incurred. Any delinquent claims will not be paid. 7.3. Initial Determination Of Claim. A. The Administrator shall have full discretion to grant or deny a claim in whole or in part. B. Within thirty (30) days after receipt of such claim, the Administrator will notify the Claimant, in writing, of the granting or denying, in whole or in part, of such claim unless special circumstances require an extension of time for processing the claim due to matters beyond the control of the Administrator. In no event may the extension exceed fifteen (15) days from the end of the initial thirty (30) day period. C. If an extension of time is necessary, the Claimant must be given a written notice to this effect prior to the expiration of the initial thirty (30) day period and the notice must indicate the date by which a decision will be made. If such an extension is necessary due to a failure of the Claimant to submit the information necessary to decide the claim, the notice shall specifically describe the required information and the Claimant shall submit the specified information no later than thirty (30) days from receipt of the notice by the Claimant. D. If a claim is denied in whole or in part, the Administrator's notice denying such claim shall set forth, in a manner calculated to be understood by the Claimant, the following: 1. The specific reason.or reasons for the denial; 2. Specific reference to pertinent Plan provisions on which the denial is based; 3. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material information is necessary; and 4. An explanation of the Plan's claim review procedures. E. If notice of the granting or denying of a claim is not furnished in City of Fresno Retiree HRA Page 24 of 31 accordance with the preceding provisions, the claim shall be deemed denied and the Claimant shall be permitted to exercise the Claimant's right to review pursuant to the Claims Appeals paragraph, below. 7.4. Claims Appeals. If a claim for benefits under the Plan is fully or partially denied, the following appeal procedures shall apply: A. If a Claimant wishes to appeal a denial of a claim, the Claimant or the Claimant's duly authorized representative: 1. May request a review upon written application to the Administrator; 2. May submit written comments, documents, records, and other information relating to the claim; and 3. May obtain, upon request and free of charge reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits. B. The written request for review must be received by the Administrator within fifteen (15) days after the date of mailing of the notice to the Claimant that the Claimant's claim for Plan benefits has been denied. C. The decision on the review shall be made by a Review Committee whose decision shall be final. 1. The Review Committee shall be comprised of three (3) members: one selected by the Claimant, one selected by the City (other than the Administrator), and a mutually agreed upon third party. The City and the Claimant shall select a mutually agreed upon third party within fourteen (14) calendar days after receipt of written request for review by the Administrator from the Claimant. 2. Fees and expenses, if any, incurred by the Review Committee shall be paid half by the City and half by the Claimant. 3. The Review Committee shall set a date to convene that is not later than sixty (60) days after the Administrator's receipt of the request for a review, provided it meets the criteria for requesting review and time limits set forth above. If an extension of time for the Review Committee to convene is necessary, the Claimant must be given written notice to this effect prior to the expiration of the initial sixty (60) day period and the notice must indicate the date City of Fresno Retiree HRA Page 25 of 31 by which a decision will be made. 4. If the adverse benefit determination that is the subject of the review was based in whole or in part on a medical judgment, the Review Committee shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment, and who shall not be the individual who was consulted in conjunction with the adverse benefit determination that is the subject of review, nor the subordinate of such individual, 5. Any medical or vocational experts whose advice was obtained on behalf of the Plan in connection with a Claimant's adverse benefit determination shall be identified without regard to whether the advice was relied upon in making the benefit determination. 6. The Review Committee shall contact and consult a health care professional as set forth in number 4 above, and consider all relevant documents prior to submitting its final conclusions. 7. The Review Committee shall render its decision on review, in writing, within thirty (30) calendar days of its last meeting with respect to the Claimant's appeal. 8. The decision on review must be written in a manner calculated to be understood by the Claimant. In the case of an adverse benefit determination, the notification to the Claimant shall set forth, in a manner calculated to be understood by the Claimant, the following: a. The specific reason or reasons for the denial; b. Specific reference to pertinent Plan provisions on which the denial is based; and c. A statement that the claimant is entitled to receive, upon request and free of charge reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits. 9. All time limits under this subparagraph C may be extended by mutual agreement of the Claimant and the Administrator or Review Committee. 7.5. Legal Actions. A Claimant must submit a written claim and exhaust the preceding claims City of Fresno Retiree HRA Page 26 of 31 procedures before legal recourse of any type is sought. Except as explicitly permitted by statute, the City, the Administrator, and any service provider designated by the Administrator are the only necessary parties to any action or proceeding that involves the Plan or the administration of the Plan. No Employees or former Employees or their Dependents or any person having or claiming to have an interest under the Plan is entitled to notice of process. Any final judgment that is not appealable for any reason (including the passage of time) and that is entered in an action or proceeding involving the Plan is binding and conclusive on the parties to this Plan and all persons having or claiming to have any interest under the Plan. 7.6. Administration Pending Resolution Of Disputes. If a dispute arises with respect to any matter under this Plan, the Administrator may refrain from taking any other or further action in connection with the matter involved in the controversy until the dispute has been resolved under the Plan. 7.7. Time. The filing of claims or receipt of notices of rulings and any event starting a time period shall be deemed to commence with personal delivery signed for by the Claimant or by affidavit of personal service, or the date of actual receipts for certified or registered mail or date returned if delivery is refused (or a Claimant has moved without giving the Administrator a forwarding address). ARTICLE 8. AMENDMENTS AND TERMINATION 8.1. Amendments. The City reserves the right to amend this Plan at any time without the consent of any Participant or Dependent, by action of the City Council, subject to applicable meet and confer obligations; provided, however, that, except in accordance with the provisions of this Plan, or as otherwise specifically permitted by law, no such amendment shall affect any right to benefits which arose prior to such amendments and no such amendment shall affect the nontaxable benefits of any Participant until the first day of the Plan Year coincident with or next following the adoption date of the amendment. The City may make any amendment that it determines to be necessary or desirable, with or without retroactive effect, to comply with the law. 8.2. Right To Terminate. A. Although the City intends this Plan to be maintained for an indefinite period of time, the Plan shall be subject to termination at any time hereafter by the City Council, subject to applicable meet and confer obligations. City of Fresno Retiree HRA Page 27 of 31 B. Upon the termination of the Plan; the rights of all Participants affected thereby shall become payable as other benefits for Participants the Administrator may direct, subject to applicable meet and confer obligations. The termination of the Plan shall not affect any affected Participant's right to claim reimbursement of benefits incurred prior to such termination. 8.3. Enactment Of Legislation. If the federal government, any State or other jurisdiction enacts a law which prohibits the continuance of this Plan, or the Code or other existing laws are interpreted so as to prohibit the continuance of this Plan, the Plan shall terminate automatically coincident with the effective date of such law or interpretation. ARTICLE 9. MISCELLANEOUS 9.1. Nonalienation Of Benefits. A. No assets or benefits under this Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a Spouse or former Spouse, or for any other relative of the Participant, prior to actually being received by the person entitled to the benefit under the terms of the Plan. Any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish, execute or levy shall be void. Nor shall any such benefits in any manner be liable for, or subject to, the debts, contracts, liabilities, or torts of any person entitled to such benefits. B. The prohibitions contained in this Nonalienation Of Benefits paragraph shall not apply to the extent a Participant or Dependent is indebted to the Plan, for any reason, under any provision of this Plan. At the time a distribution is to be made to or for a Participant's or Dependent's benefit, such proportion of the amount distributed as shall equal such indebtedness shall be retained by the Plan to apply against or discharge such indebtedness. Prior to such application, however, the Administrator must give written notice to the Participant or Dependent that such indebtedness is to be so paid in whole or part from the Participant's benefit. If the Participant or Dependent does not agree that the indebtedness is a valid claim against the Participant's benefit, the Participant or Dependent shall be entitled to a review of the validity of the claim in accordance with procedures provided in the Claims Procedures article. City of Fresno Retiree HRA Page 28 of 31 9.2. Divestment Of Benefits. Subject only to the specific provisions of this Plan, nothing shall be deemed to divest a Participant of a right to the benefit to which the Participant becomes entitled in accordance with the provisions of this Plan. 9.3. Nondiversion. Irrespective of anything contained in the Plan, as now expressed or hereafter amended, it shall be impossible for any part of the Participant's benefits under the Plan to be used for, or diverted to, any purpose not for the exclusive benefit of Participants or their Dependents at any time prior to the satisfaction of all rights and liabilities, fixed and contingent, with respect to Participants or their Dependents hereunder, either by the operation, amendment, revocation or termination of the Plan. No part of the Participant's benefits under the Plan shall be paid, distributed or made available to the City at any time, except as expressly provided by the Plan. 9.4. Nonguarantee Of Employment. Nothing contained in this Plan shall be construed as a contract of employment between the City and any Employee, or as a right of any Employee to be continued in the employment of the City, or as creating or modifying the terms of an Employee's employment, or as a limitation on the right of the City to discharge any Employee, with or without cause. Unless the law or this Plan explicitly provides otherwise, rights under any other employee benefit plan maintained by the City (for example, benefits upon an Employee's death, retirement, or other termination) do not create any rights under this Plan to benefits or continued participation. The fact that an individual is eligible to receive benefits under this Plan does not create any rights under any other employee benefit plan maintained by the City, unless that plan or the law explicitly provides otherwise. 9.5. Rights To The City's Assets. No Employee, Participant or Dependent shall have any right to, or interest in, any assets of the City upon Termination Of Employment or otherwise, except as provided from time to time under this Plan; and then only to the extent of the benefits payable under the Plan to such Employee, Participant or Dependent. All payments of benefits as provided for in this Plan shall be made solely out of the general assets of the City and neither the Administrator nor its designated representative shall be liable in any manner for such payments. 9.6. Limitation Of Rights Of Participants And Others. City of Fresno Retiree HRA Page 29 of 31 Neither the establishment of this Plan, nor any amendment hereof, nor the payment of any benefits, will be construed as giving to any Participant or any other person any legal or equitable right against the City, Administrator, or its designated representative, except as expressly provided herein. The creation, continuation, or change of the Plan does not give any person a nonstatutory legal or equitable right against the City, any officer, agent or other Employee of the City, any insurer or other service provider providing benefits under any Contract, or the Administrator. 9.7. Taxation. The City believes this Plan to be in compliance with all applicable sections of the Code. However, this Plan has not been submitted to the Internal Revenue Service for approval and there is no assurance that the intended tax benefits under this Plan will be available. Neither the City, nor the Administrator, nor its designated representative makes any commitment or guarantee that any amounts elected or paid for the benefit of a Participant will be excludable from the Participant's gross income for federal or State income tax purposes, or that any other federal or State tax treatment will apply to, or be available to, any Participant. It shall be the obligation of each Participant to determine whether each payment is excludable from the Participant's gross income for federal and State income tax purposes, and to notify the Administrator if the Participant has reason to believe that any such payment is not so excludable. Each Participant, by accepting a benefit under this Plan, agrees to be liable for any taxes, tax penalties and interest that may be imposed by the Internal Revenue Service, or any other governmental agency, with respect to these benefits. 9.8. Insurer Not A Party. No insurer or service provider under a Contract shall be considered a party to this Plan, nor to any future amendment to this Plan. The rights and obligations of any insurer or service provider are those specified in the Contract and no provisions of any portion of this Plan shall be deem_ed to alter or change the terms of such Contract. 9.9. Construction. A. This Plan shall be construed in accordance with the Code and other pertinent federal laws, and the laws of the State of California. If any provision is susceptible of more than one interpretation, such interpretation shall be given thereto as is consistent with the Plan or benefit being in conformity with the Code. B. No provision of this Plan shall be construed to conflict with any valid Treasury Department, Department of Labor or Internal Revenue Service regulation, ruling, release or proposed regulation or other order which affects, or could affect, the terms of this Plan. City of Fresno Retiree HRA Page 30 of 31 9.10. Headings. The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. 9.11. Uniformity. All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. 9.12. Number. Wherever appropriate, any reference in this document in the singular shall include the plural and any reference in the plural shall include the singular. 9.13. Controlling Law. Unless otherwise provided in this Plan, the Plan shall be construed and enforced according to the laws of the United States of America to the extent applicable, otherwise by the laws of California including California's choice-of- law rules, except to the extent those laws would require application of a State other than California. 9.14. Severability. In the event that any provisions of this document shall be held illegal or invalid for any reason by operation of law or a court of competent jurisdiction, said illegality or invalidity shall not affect the remaining legal and valid provisions of this document. This document shall continue as if said illegal or invalid provisions had not been included herein either initially, or beyond the date it is first held to be illegal or invalid; provided the basic purposes hereof can be effected through the remaining valid and legal provisions. 9.15. Waiver. Failure to insist upon strict compliance with any provision of this Plan shall not be deemed to be a waiver of such provision or any other provision; waiver of breach of any provision of this Plan shall not be deemed to be a waiver of any other provision or subsequent breach of such provision. No term, condition, or provision of the Plan shall be deemed waived unless the purported waiver is in a writing signed by the party to be charged. No written waiver shall be deemed a continuing waiver unless so specifically stated in the writing, and such waiver shall operate only as to the specific term, condition, or provision waived. City of Fresno Retiree HRA Page 31 of 31 9.16. Entire Document. This document, including any appendices or supplements hereto, shall constitute the entire document and shall govern the rights, liabilities and obligations of the parties under the Plan, except as it may be modified. Executed this day of 2018 CITY OF FRESNO By: Title: 005827.00032 20301075.1 CITY OF FRESNO RETIREE HEALTH REIMBURSEMENT ARRANGEMENT 005827.00032 20301075.1 CITY OF FRESNO RETIREE HEALTH REIMBURSEMENT ARRANGEMENT Table Of Contents ARTICLE 1. 1.01. 1.02. 1.03. 1.04. 1.05. 1.06. 1.07. 1.08. ARTICLE 2. 2.01. 2.02. 2.03. 2.04. 2.05. 2.06. 2.07. 2.08. 2.09. 2.10. 2.11. 2.12. 2.13. 2.14. 2.15. 2.16. 2.17. 2.18. 2.19. 2.20. 2.21. 2.22. 2.23. 2.24 2.25. ARTICLE 3. 3.01. 3.02. Page GENERAL PROVISIONS ............................................................ 1 Name ........................................................................................... 1 Effective Date .............................................................................. 1 Purpose ....................................................................................... 1 Legally Enforceable ..................................................................... 2 Administrator ............................................................................... 2 Discretionary Authority .................................................................... 2 Exclusive Benefit. ............................................................................ 2 Income Tax Status........................................................................... 3 GENERAL DEFINITIONS ............................................................... 3 Account Credit. ................................................................................ 3 Administrator .................................................................................... 3 City .............................................................................................. 3 COBRA ........................................................................................ 3 Code ................................................................................................ 3 Contracts ..................................................................................... 4 Conversion Rate .............................................................................. 4 Credited Hours ................................................................................ 4 Dependent. .................................................................................. 4 Disability Retirement. ................................................................... 4 Domestic Partner ............................................................................. 5 Employee ......................................................................................... 5 Health Reimbursement Account...................................................... 5 HIPAA. ................................· .............................................................. 5 Hourly Base Rate Of Pay ................................................................ 5 Maximum Used Hours ..................................................................... 5 Minimum Credited Hours ............................................................. 5 Participant. ................................................................................... 6 Plan .................................................................................................. 6 Plan Year ......................................................................................... 6 Retiree ......................................................................................... 6 Retiree Health Care Account. ...................................................... 6 Service Retirement. ..................................................................... 6 Spouse ........................................................................................ 7 Termination Of Employment ............................................................ 7 ELIGIBILITY AND PARTICIPATION ............................................ 7 Eligibility Requirements ................................................................ 7 Notification To Participant. ............................................................... 8 CHANG RUTHENBERG & LONG Pc - j - FR018 ,01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 3.03. 3.04. 3.05. ARTICLE 4. 4.01. 4.02. 4.03. 4.04. ARTICLE 5. 5.01. 5.02. 5.03. 5.04. 5.05. ARTICLE 6. 6,01. 6.02. 6.03. 6.04. 6.05. 6.06. 6.07. 6.08. 6.09. 6.10. 6.11. 6.12 ARTICLE 7. 7.01. 7.02 7.03. 7.04. 7.05. 7.06. 7.07. ARTICLE 8. 8.01. 8.02. 8.03. ARTICLE 9. 9.01. 9.02. 9.03. 9.04. 9.05. 9.06. Commencement Of Participation ................................................... 8 Termination Of Participation ........................................................... 8 Benefits Upon Death Of The Retiree ............................................. 8 RETIREE HEALTH CARE ACCOUNTS......................................... 9 Establishment Of Retiree Health Care Accounts ........................... 9 Crediting Of Retiree Health Care Accounts ................................... 9 Reductions To Retiree Health Care Accounts ............................. 10 Unused Amounts .......................................................................... 10 PLAN BENEFITS ......................................................................... 10 Benefits In General. ................................................................... 10 Source Of Benefits ....................................................................... 11 Health Insurance Premium Benefits ............................................. 11 Working Retirees....................................................................... 12 Repayment Of Overpaid Benefits ................................................ 13 PLAN ADMINISTRATION ............................................................ 14 Administrator's Duties ............................................................... 14 Appointment And Responsibility Of Representatives ................. 14 Powers And Duties .................................................................... 14 Records ........................................................................................ 16 Reports ......................................................................................... 16 Facility Of Payment. .................................................................. 16 Administrator's Discretion .......................................................... 17 Rules And Decisions ................................................................. 17 Reasonable Care ...................................................................... 18 Replacement Of Administrator .................................................. 18 HIPAA Privacy ...............................................................................18 HIPAA Security ..............................................................................19 CLAIMS PROCEDURES .............................................................. 21 Claims For Benefits ................................................................... 21 Filing Claims.................................................................................. 21 Initial Determination Of Claim .................................................... 22 Claims Appeals. ..................·....................................· ........................ 23 Legal Actions ................................................................................. 25 Administration Pending Resolution Of Disputes ........................... 25 Time .............................................................................................. 25 AMENDMENTS AND TERMINATION .......................................... 25 Amendments ................................................................................. 25 Right To Terminate .................................................................... 26 Enactment Of Legislation .......................................................... 26 MISCELLANEOUS ........................................................................ 26 Nonalienation Of Benefits ............................................................. 26 Divestment Of Benefits.............................................................. 27 Nondiversion ................................................................................. 27 Nonguarantee Of Employment. .................................................... 27 Rights To The City's Assets ...................................................... 28 Limitation Of Rights Of Participants And Others ........................... 28 CHANG RUTHENBERG & LONG PC - ii FR018.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 9.07. Taxation ..................................................................................... 28 9:08. Insurer Not A Party .................................................................... 29 9.9. Construction ............................................................................... 29 9.10. Headings .................................................................................... 29 9.11. Uniformity ................................................................................... 29 9.12. Gender And Number .................................................................. 29 9.13. Controlling Law .......................................................................... 30 9.14. Severabil•ty 30 9.14. Severabilty ................................................................................. 30 9.15. Waiver. .., .............................................................................................. 30 9.16. Entire Document ........................................................................ 30 CHANG RUTHENBERG & LONG PC - iii - FR01B.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 005827.00032 20301075.1 CITY OF FRESNO RETIREE HEALTH REIMBURSEMENT ARRANGEMENT This City Of Fresno Retiree Health Reimbursement Arrangement (Plan) is adopted by City Of Fresno (City), on the date set forth on the signature page hereof, for the exclusive benefit of its eligible Employees and their Dependents. RECITALS Whereas: A. The City provides various employee welfare benefits to its eligible Employees pursuant to the provisions of the Internal Revenue Code of 1986, as amended (Code). B. The City wishes to provide to certain of its Employees an employee welfare benefit plan that reimburses the eligible Employees who retire from the Employer for their post-retirement health insurance premiums. OPERATIVE PROVISIONS Now, therefore, the City hereby adopts the City Of Fresno Retiree Health Reimbursement Arrangement upon the following terms and conditions: ARTICLE 1. GENERAL PROVISIONS 1.1. Name. The name of this Plan is the "City Of Fresno Retiree Health Reimbursement Arrangement." 1.2. Effective Date. The effective date of the Plan is March 1, 2006 and amended _________. 1.3. Purpose. The City wishes to reward certain Retirees for their long service with the City and to encourage full and complete health care for such Retirees and certain of their family members, through an accident or health plan under Code sections 105 and 106 covering health expenses through the reimbursement of Retiree health insurance premiums. The intention of the City is that the Plan shall also qualify as a "health reimbursement arrangement" within the meaning of Internal Revenue Service CHANG RUTHENBERG & LONG PC - 1 - FR018.01 Fresno-HRA-Plan-Final /1/06 005827.00032 20301075.1 Notice 2002-45 and Rev. RuL Rul 2002-41 and any subsequent guidance published by the Internal Revenue Service dealing with health reimbursement arrangements. 1.4. Legally Enforceable. The City intends that the prov1s1ons provisions of this Plan, including, without limitation, the provisions relating to coverage and benefits, be legally enforceable by the City's eligible Employees. Notwithstanding the preceding sentence, the City has reserved the right in other provisions of this Plan to terminate the Plan, to amend the Plan, and to exercise discretion with respect to the administration of the Plan in accordance with objective, ascertainable criteria and procedures, including, without limitation, the right to determine whether objective conditions for coverage or benefits under the Plan have been satisfied, the right to condition coverage or benefits on a qualified medical opinion of a physician, the inclusion of a managed care program, and the right to limit benefits to those that constitute the prevailing or reasonable and customary charge for the claim. 1.5. Administrator. The person(s), individual(s) or administrative committee appointed by the City Manager shall be the "Administrator" of the Plan. The Administrator may engage the services of one or more third parties to assist the Administrator with the administration of the Plan. If the City does not appoint an Administrator, the-City Manager shall be the Administrator. 1.6. Discretionary Authority. The Administrator shall have the discretionary authority to interpret and construe the provisions of this Plan and to decide any disputes and resolve any ambiguities which may arise relative to the rights of the Employees, past and present, and their Dependents, under the terms of the Plan; provided, however, that whenever, in the administration of the Plan, any discretionary action by the Administrator is required, the Administrator shall exercise its authority in a nondiscriminatory manner so that all persons similarly situated will receive substantially the same treatment. 1.7. Exclusive Benefit. The Plan is established for the exclusive benefit of the City's eligible Employees and their covered Dependents. In addition, if the City elects in writing to cover individuals who may be treated as the City's Employees CHANG RUTHENBERG & LONG Pc - 2 - FR018 '.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 under the applicable provisions of the Code and the Treasury regulations promulgated thereunder, then such individuals shall be treated as Employees for purposes of this Exclusive Benefit paragraph. 1.8. Income Tax Status. It is the intention of the City that the benefits payable under this Plan shall be eligible for exclusion from the gross income of the Employees and their Dependents to the extent permitted by the Code, and that this Plan and all of the benefits provided under this Plan shall qualify as nondiscriminatory under the Code if nondiscrimination is a requirement to such favorable income tax treatment. ARTICLE 2. GENERAL DEFINITIONS For purposes of this Plan, unless otherwise clearly apparent from the context, the following phrases or terms shall have the following indicated meanings: 2.1. Account Credit. "Account Credit" means the amount credited to a Participant's Retiree Health Care Account for each Year Of Credited Service pursuant to the Crediting Of Retiree Health Care Accounts paragraph, below. 2.2. Administrator. "Administrator" means the person(s), individual(s) or committee appointed by the City Manager with authority and responsibility to manage and direct the operation and administration of the Plan. 2.3. City. "City" means City Of Fresno. 2.4. COBRA. "COBRA" means the health care continuation provIsIons provisions of the Consolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272), as amended, and the regulations issued thereunder. 2.5. Code. "Code" means the Internal Revenue Code of 1986, as it may be amended from time to time. Reference to any provision of the Code includes CHANG RUTHENBERG & LONG ec - 3 - FR018.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 reference to any comparable or succeeding provisions of any legislation that amends, supplements or replaces such provision. 2.6. Contracts. "Contract" or "Contracts" means any insurance contract, HMO contract, health care service plan document or other service provider agreement, and any other document through which a Retiree or a Retiree's Dependents are provided with insured health benefits and for which the City reimburses the Retiree for the Retiree's share of the premiums for such insurance coverage under this Plan. 2.7. Conversion Rate. "Conversion Rate" means the rate at which an eligible Retiree's Credited Hours in excess of the Minimum Credited Hours are converted to Account Credits under the Initial Credit Amount subparagraph, below, as more specifically set forth in the appendix attached to this Plan that applies to the Employee. 2.8. Credited Hours. "Credited Hours" means the hours of accrued and unused sick leave, vacation leave, or other hours with respect to an Employee for purposes of this Plan as more specifically set forth in the appendix attached to this Plan that applies to the Employee. 2.9. Dependent. "Dependent" means any of the Participant's Spouse and each of the Participant's dependents as defined in Code section 152, unless otherwise defined in an applicable Contract. 2.10. Disability Retirement. "Disability Retirement" means the Employee is eligible for "disability retirement" under the provisions of the City’s retirement system that apply to the Employee, if the Employee is otherwise eligible for Service Retirement, all as set forth in the City's Municipal Code as in effect from time to time. CHANG RUTHENBERG & LONG ec - 4 - FR018.01 Fresno-HRA-P!an-Final 4/1/06 005827.00032 20301075.1 2.11. Domestic Partner. "Domestic Partner" means one of two adults who is are in a registered domestic partnership pursuant to section 297 of the California Family Code. 2.12. Employee. "Employee" means an individual who is employed by the City, and with respect to whom any portion of whose his/her income from the City is subject to income tax, as well as any other individual qualifying as a common law employee of the City. 2.13. Health Reimbursement Account. "Health Reimbursement Account" means the account from which medical reimbursements are paid to eligible Employees in accordance with the Participant Health Reimbursements paragraph, below. 2.14. HIPAA. "HIPAA" means the Health Insurance Portability and Accountability Act of 1996, Public Law 104-191 enacted August 21, 1996, as it may be amended from time to time, and including the regulations issued thereunder. 2.15. Hourly Base Rate Of Pay. "Hourly Base Rate Of Pay" means an amount equal to an Employee's base monthly salary multiplied by twelve (12) months divided by the number of hours shown on the appendix to this Plan for the Employee as determined as of the Employee's date of Termination Of Employment. 2.16. Maximum Used Hours. "Maximum Used Hours" means the maximum number of Credited Hours that may have been used by an Employee as of the Employee's Termination Of Employment for purposes of the Eligibility Requirements paragraph, below, as more specifically set forth in the appendix attached to this Plan that applies to the Employee. 2.17. Minimum Credited Hours. "Minimum Credited Hours" means the minimum number of Credited Hours that must be accumulated by an Employee as of the Employee's Termination Of Employment for purposes of the Eligibility Requirements CHANG RUTHENBERG & LONG PC - 5 - FR018. 01 Fresno-HRA-Plan-Final 411/06 005827.00032 20301075.1 paragraph, below, as more specifically set forth in the appendix attached to this Plan that applies to the Employee. 2.18. Participant. "Participant" means any Retiree who has (i) met the Plan's eligibility requirements, (ii) properly completed and returned the applications and agreements required under, and in accordance with, the Application For Participation paragraph, below, (iii) commenced participation in the Plan pursuant to the Commencement Of Participation paragraph, below, and (iv) is or may become eligible to receive a benefit under the Plan. To the extent required by the context, Participant shall also mean the Dependents of a deceased Participant for whom a Retiree Health Care Account is still maintained for the payment of Plan benefits, pursuant to the Benefits Upon Death Of The Participant paragraph, below, and which has not been exhausted. 2.19. Plan. "Plan" means the City Of Fresno Retiree Health Reimbursement Arrangement as set forth herein and any amendments hereto. 2.20. Plan Year. "Plan Year" means the twelve (12) consecutive monthly period commencing on July 1 and ending on June 30 each year. The first Plan Year shall be the period from the effective date set forth in the Effective Date paragraph, above, to June 30, 2006. 2.21. Retiree. "Retiree" means a former Employee of the City who retired from the City as set forth in the Eligibility Requirements paragraph , below. 2.22. Retiree Health Care Account. "Retiree Health Care Account" means the account set up on the books or records of the City, as described in the Plan Benefits article of the Plan for the Participant and his or her Dependents. 2.23. Service Retirement. "Service Retirement" means the Employee is eligible for "service retirement" under the provisions of the City's retirement system that CHANG RUTHENBERG & LONG ec - 6 - FR018,01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 apply to the Employee, all as set forth in the City's Municipql Municipal Code as in effect from time to time. 2.24 Spouse. "Spouse" means the person who is legally married to the Employee under the laws of the State in which they reside; provided, however, that a Spouse shall not include any such person who is legally separated from the Employee, nor any such person who is on active duty with the Armed Forces. "Spouse" shall include a Domestic Partner. 2.25. Termination Of Employment. "Termination Of Employment" means no longer being an Employee for any reason other than death. ARTICLE 3. ELIGIBILITY AND PARTICIPATION 3.1. Eligibility Requirements. In order to become an eligible Retiree and to be eligible to become a Participant in this Plan, all of the following eligibility requirements must be satisfied by the Employee: A. The Employee must be employed in a classification that is set forth in the City of Fresno Salary Resolution at the time of the Employee's Termination Of Employment; B. The Employee must have a Termination Of Employment on or after the effective date of this Plan when the Employee is eligible for either a Service Retirement or a Disability Retirement; C. The Employee must have used no more than the Maximum Used Hours during the period of time preceding the time of the Employee's Termination Of Employment as more specifically set forth in either the City of Fresno Salary Resolution or the Memoranda of Understanding by and between the City of Fresno and each employee organization that applies to the Employee; and D. The Employee must have more than the Minimum Credited Hours at the time of the Employee's Termination Of Employment as more specifically set forth in either the City of Fresno Salary Resolution or the Memoranda of Understanding by and between the City of Fresno and each employee organizationthat applies to the Employee. CHANG RUTHENBERG & LONG PC - 7 - FR01B ,01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 3.2. Notification To Participant. The City shall determine which Employees are eligible to participate in this Plan and shall notify each such Employee of the Employee's eligibility to participate in the Plan. 3.3. Commencement Of Participation. Each eligible Retiree, who meets the eligibility requirements and is not otherwise excluded from participation in the Plan shall become a Participant in this Plan on the day following the Retiree's Termination Of Employment. 3.4. Termination Of Participation. A. Except as otherwise provided below or elsewhere in this Plan, a Participant will automatically cease to be a Participant on the earliest of the following dates: 1. The date of the death of the Participant; 2. The date of the termination of the Plan in accordance with the Amendments And Termination article; or 3. The date when the Participant's Retiree Health Care Account has been reduced to zero dollars ($0). B. Termination of participation shall not affect the Participant's or the Participant's Dependents' right to claim benefits for expenses incurred prior to such termination. However, no additional expenses incurred after such termination shall be covered by the Plan. For purposes of this Plan, an expense with respect to the reimbursement of insurance premiums shall be "incurred" when the insurance premiums for the month of coverage are due. 3.5. Benefits Upon Death Of The Retiree. A. In the event that a Participant dies prior to the date when the Participant's Retiree Health Care Account has been reduced to zero dollars ($0), the amount remaining in the Participant's Retiree Health Care Account may be used by the Participant's Dependents to continue to provide the benefits covered by the Plan for the Participant's Dep ndents Dependents until the earlier of: 1. The date when such Retiree Health Care Account has been reduced to zero dollars ($0); or CHANG RUTHENBERG & LONG PC - 8 - FR01B. 0 1 Fresno-HRA-Plan-Final 411106 005827.00032 20301075.1 2. The date when: a. With respect to the Participant's Spouse, the earlier of (i) the date of the Spouse's death or (ii) the date of the Spouse's remarriage; or b. With respect to a Participant's Dependent other than the Participant's Spouse, the date when the Dependent would have ceased to qualify as a Dependent if the Participant had not died. B. In the event that an Employee dies before becoming a Participant under the Commencement Of Participation paragraph, above, no benefits shall be provided under this Plan with respect to the deceased Employee to any individual. ARTICLE 4. RETIREE HEALTH CARE ACCOUNTS 4.1. Establishment Of Retiree Health Care Accounts. At the time each eligible Retiree becomes a Participant in this Plan pursuant to the Commencement Of Participation paragraph, above, the Administrator shall establish a Retiree Health Care Account for the Participant. The account shall be credited with Account Credits in accordance with the Crediting Of Retiree Health Care Accounts paragraph and debited in accordance with the Reductions To Retiree Health Care Accounts paragraph. 4.2. Crediting Of Retiree Health Care Accounts. A. Initial Credit Amount. At the time each eligible Retiree becomes a Participant in this Plan pursuant to the Commencement Of Participation paragraph, above, the Participant's Retiree Health Care Account shall be credited by the City with Account Credits in an amount equal to the product of the Retiree's Credited Hours at the time of the Retiree's Termination Of Employment in excess of the Minimum Credited Hours applicable to the Retiree multiplied by the Conversion Rate applicable to the Retiree multiplie, d by the Retiree's Hourly Base Rate Of Pay at the Retiree's Termination Of Employment. CHANG RUTHENBERG & LONG PC - 9 - FR018 01 fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 B. Interest. A Retiree's Participant’s Retiree Health Care Account shall be credited with interest on a monthly basis using a rate of interest that is equal to the yield on the City's investment portfolio for the month; provided, however, that a Retiree's Health Care Account shall not be reduced for a month if the yield on the City's investment portfolio for the month is less than zero percent (0%)1. 4.3. Reductions To Retiree Health Care Accounts. All amounts paid by the Plan under the Plan Benefits article with respect to the Participant shall be charged to and used to reduce the amount credited to a Participant's Retiree Health Care Account. In no event will the amount charged to a Participant's Retiree Health Care Account and paid pursuant to the Plan Benefits article with respect to the Participant exceed the amount credited to such account at the time the claim for such benefits is paid. 4.4. Unused Amounts. A Participant's Retiree Health Care Account shall be used to provide the benefits available under the Plan Benefits article until the amount credited to the Participant's Retiree Health Care Account has been reduced to zero dollars ($0), unless the Participant sooner ceases to be a Participant in the Plan and no Dependents of the Participant are eligible to receive benefits under the terms of this Plan. Once a Participant's Retiree Health Care Account has been reduced to zero dollars ($0), no further benefits shall be payable under the Plan with respect to the Participant. Any amount remaining in a Participant's Retiree Health Care Account following (i) the deaths of the Participant and the Participant's Spouse (if any), (ii) the Participant's · Dependents other than the Participant's Spouse (if any) ceasing to be Dependents, and (iii) after the payment of all benefits due under this Plan shall remain the property of the City and no amount shall be payable to any other person. ARTICLE 5. PLAN BENEFITS 5.1. Benefits In General. ! Subject to the limitations of this Plan Benefits article and the Retiree Health Care Accounts article, above, the benefits provided under this Plan for a Participant shall consist of reimbursements in accordance with the Health Insurance Premium Benefits paragraph, below. 005827.00032 20301075.1 CHANG RUTHENBERG & LONG Pc - 10 - FR018.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 5.2. Source Of Benefits. The benefits payable under this Plan, other than any benefits from a welfare benefit plan trust, shall be paid from the general assets of the City. 5.3. Health Insurance Premium Benefits. A. The Plan will reimburse the Participant at least bi-monthly for the Participant's premiums that have been paid to the health insurance company(ies) or other appropriate billing entity by the Participant based upon appropriate proof of prior payment of such premiums by the Participant for the Participant's insured health care benefits (including medical, prescription drug, dental and vision coverage), including COBRA premiums. B. Such costs shall include those costs incurred with respect to the Participant and the Participant's Dependents who are covered by such health insurance during the Participant's participation in this Plan. There shall be no reimbursement to or payment on behalf of a Participant under this paragraph to the extent there is other reimbursement to or payment on behalf of the Participant. C. The reimbursement of premiums shall be subject to receipt of such proof, forms and materials as the Administrator shall require from time to time. The Plan will reimburse a Participant for the Participant's health insurance premiums only if the Participant provides written verification from either (i) an independent third party or (ii) in the case of a Participant who is covered by insurance coverage through an employer, that employer, demonstrating that the cost has been incurred and the amount of such expense and the Participant provides such written statement as the Administrator shall require that the cost has not been reimbursed or is not reimbursable under, any other health plan. Thus, for example, the Plan will not make advance reimbursements of future or projected costs, nor will the Plan reimburse premiums or portions of premiums not paid for by the Participant. D. Unless agreed otherwise, the Administrator shall issue a reimbursement of premiums to a Participant when the minimum amount of health insurance costs to be reimbursed with respect to the Participant reaches two hundred dollars ($200.00). E. In no event will the amount of the reimbursement of premiums under this paragraph with respect to a Participant exceed the amount then remaining in the Participant's Retiree Health Care CHANG RUTHENBERG & LONG PC - 11 - FR018 01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 Account. If the amount in the Participant's Retiree ..Health Care Account has been reduced to zero dollars ($0), no further benefits of any kind shall be provided under this Plan with respect to the Participant. F. No reimbursement shall be made under the Plan for amounts of health expenses which are attributable to (and not in excess of) deductions allowed under Code section 213 for any taxable year. The expenses that are covered under this Health Insurance Prem ium Benefits paragraph shall be limited to expenses incurred by the Participant or the Participant's Dependents who are covered by the Plan for medical care as defined in Code section 213(d). G. The benefit provided under this paragraph is intended to comply with the provisions of Code sections 105 and 106 and with the guidance provided by Revenue Ruling 61-146. This paragraph, therefore, will be deemed to be automatically amended to comply with all legislative changes to, and valid regulations promulgated under, these Code sections, as of the effective date of such legislation or regulations and any subsequent guidance modifying, clarifying or superseding Revenue Ruling 61-146. H. The Plan may, in the Administrator's sole and absolute discretion, pay the premiums directly to the appropriate third party payee in lieu of making reimbursement to the Participant. In such event, the Plan and the City shall be relieved of all further responsibility with respect to any such premiums. Upon written authorization from the Participant, the Plan shall automatically pay the premiums of the City of Fresno Health and Welfare Trust in lieu of making reimbursement to the Participant. 5.4. Working Retirees. A. Reinstated Employees. If a Participant is reemployed as an Employee by the City in a position that results in the cancellation of the Participant's retirement allowance under the City's Retirement System as set forth in the City's Municipal Code as in effect from time to time, then: 1. There shall be no reimbursement of any health insurance premiums wit h respect to the Participant and th_ethe_ Participant's Dependents who are covered by such health CHANG RUTHENBERG & LONG PC - 12 - FR018.01 Fresno-HRA-Plan-Final 4/1106 005827.00032 20301075.1 insurance that are incurred during the .P articipant's Participant's reemployment by the City; and 2. If, upon the subsequent Termination Of Employment by such a Participant, the Participant meets the requirements of the Eligibility Requirements paragraph, above, for the Participant's then applicable job classification and that job classification is set forth on an appendix attached to this Plan at the time of the Employee's - Termination Of Employment, then the Participant's Retiree Health Care Account shall be credited with additional Account Credits under the Initial Credit Amount subparagraph, above, in accordance with that appendix; provided, however, that the Credited Hours that were taken into account under the Eligibility Requirements paragraph, above, at the time of the Participant's previous Termination Of Employment shall not be taken into account again. B. Appointive Service And Temporary Employees. If a Participant is reemployed as an Employee by the City in a position that does not result in the cancellation of the Participant's retirement allowance under the City's Retirement System as set forth in the City's Municipal Code as in effect from time to time, then: 1. The reimbursement of health insurance premiums with respect to the Participant and the Participant's Dependents who are covered by such health insurance shall not be suspended as set forth in the Reinstated Employees subparagraph,-above; and 3. Upon the subsequent Termination Of Employment by such a Participant, the Participant's Retiree Health Care Account shall not be credited with additional Account Credits under the Initial Credit Amount subparagraph, above, regardless of whether the Participant once again meets the requirements of the Eligibility Requirements paragraph, above. 5.5. Repayment Of Overpaid Benefits. By accepting the payment of benefits under this Plan, the Participant and the Participant's Dependents receiving the payment agrees that, in the event of overpayment, the recipient will promptly repay the amount of overpayment without interest; provided that, if the recipient has not repaid CHANG. RUTHENBERG & LONG PC - 13 - FR018 01 Fresno-HRA-Plan-Final 411106 005827.00032 20301075.1 the overpayment within thirty (30) days after notice, the recipient will also pay an amount equal to simple interest at the rate of ten percent (10%) per annum (or the highest rate allowable by applicable law, if less) on the unpaid amount from the date of overpayment to the date of repayment, and in addition will pay all legal fees, court costs and the reasonable time value of the Administrator or the City, or any of their emplc:>yees employees or agents, related to the collection of such overpayment. ARTICLE 6. PLAN ADMINISTRATION 6.1. Administrator's Duties. It shall be a principal duty of the Administrator to see that the Plan is carried out, in accordance with its terms, for the exclusive benefit of persons entitled to participate in the Plan without discrimination among them. 6.2. Appointment And Responsibility Of Representatives. The Administrator has the power to appoint one or more representatives, accountants, counsel, specialists, and other advisory and clerical persons as it deems necessary or desirable to assist the Administrator in the administration of the Plan. All usual and reasonable expenses of such representatives, accountants, counsel, specialists, and other advisory and clerical persons may be paid in whole by the City; however, the expenses may be paid in part by the City and in part by the Plan upon completion of applicable meet and confer obligations. The Administrator may designate any person as its agent for any purpose. The designated representative of the Administrator shall be responsible only for those specific powers, duties, responsibilities and obligations specifically given to it by the Administrator. The Administrator, the City and any person to whom the Administrator may delegate any duty or power in connection with the Plan's administration may rely upon all tables, valuations, certificates, reports and opinions furnished by any duly appointed actuary, accountant (including employees who are actuaries or accountants), legal counsel, or other specialist, and they shall be fully protected whenever they take action based in good faith in reliance thereon. All actions taken in good faith reliance on advice from the advisors are conclusive upon all persons. Any benefits not paid by the City shall not be the responsibility of the designated representatives. 6.3. Powers And Duties. Subject to the limitations of the Plan, the Administrator may establish rules for the administration of the Plan and the transaction of its business. The CHANG RUTHENBERG & LOMG ec - 14 - FR018.01 Fresno-HRA-Plan-Final 411106 005827.00032 20301075.1 Administrator has the exclusive right (except as to matters reserved by the City or by the Plan) to interpret the Plan and to decide all matters arising under the Plan, including the right to remedy possible ambiguities, inconsistencies, or omissions. Without limiting the generality of the foregoing but in amplification thereof, the Administrator shall have the power to: A. Provide such rules and regulations as deemed necessary or appropriate for the proper and efficient administration of the Plan, and, from time to time, to amend or supplement such rules and regulations; B. Interpret and construe the provisions of the Plan, which interpretation and construction shall be final, conclusive and binding on persons claiming benefits under the Plan; C. Correct any defect, supply any omission or reconcile any inconsistency in the Plan, in such a manner and to such extent as it shall deem necessary or expedient to carry the Plan into effect; D. Determine answers to, or appropriate handling of, all questions that may arise under the Plan including questions submitted by Participants; E. Decide all questions concerning the Plan and the eligibility of any individual to participate in the Plan, in accordance with the provisions of the Plan, and resolve any and all disputes that may arise involving Participants, former Participants or Dependents which resolution shall be final and binding; F. Require any person to furnish-such information as the Administrator may request for the purpose of the proper administration of the Plan as a condition to receiving any benefits under the Plan; G. Determine the amount of benefits which shall be payable to any person in accordance with the provisions of the Plan, inform the City of the amount of such benefits, and provide a full and fair review to any claim for benefits which has been denied in whole or in part; H. Designate other person(s) to carry out any duty or power which would otherwise be a fiduciary responsibility of the Administrator under the terms of the Plan including but not limited to delegating certain claims administration duties to a claims administrator, provided that any such delegation or allocation of responsibilities CHANG RUTHENBERG & LONG PC - 15 - FR01B.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 shall be set out in a written instrument executed by the Administrator and the designated party; I. Make such administrative or technical amendments to the Plan as may be necessary or appropriate to carry out the intent of the City, including such amendments as may be required to satisfy the requirements of the Code and any similar provisions or subsequent revenue or other laws, or the rules and regulations from time to time in effect under any such laws or to conform with other governmental regulations or policies; and· J. Notify Plan Participants and Dependents of any substantive amendment or termination of the Plan or change of benefits available under the Plan. 6.4. Records . The Administrator shall maintain (or cause to be maintained) such records and may make such rules, computations, interpretations, and decisions as may be necessary or desirable for the proper administration of the Plan. The Administrator shall also maintain, for Participants' inspection at the office of the Administrator, copies of the Plan, the latest annual report, summary annual report, and summary plan description and any amendments or changes in any of these documents. On written request, Participants may obtain from the Administrator a copy of such records or documents under the Plan as pertain to the Participant. Such records shall be available for examination at reasonable times and may be copied at a reasonable cost established by the Administrator. 6.5. Reports. The City, the Administrator, or both shall file (or cause to be filed), in a timely manner, such reports as may be legally required by the Code, the Internal Revenue Service, the Department of Labor, or any other government agency. 6.6. Facility Of Payment. Whenever, in the Administrator's opinion, a person who is entitled to receive any payment of benefits hereunder is unable to manage his or her personal financial affairs by reason of minority, death, illness or infirmity, mental incapacity or incompetency of any kind, the Administrator may in its discretion: CHANG RUTHENBERG & LONG Pc - 16 - FR018.01 Fresno-HRA-Plan-Final 4/1/D6 005827.00032 20301075.1 A. Make payments to the persons or institutions that are .providing for the care and maintenance of the Participant and continue to make such payments to them until a duly appointed legal representative makes a claim for the payment; 8. Apply the payment for the benefit as such Participant or Dependent in such manner as the Administrator considers advisable; C. Make payments to the legally appointed guardian of such person; D. Make payments as directed by a court of competent jurisdiction; or E. Deposit any amount due to a minor to his credit in any savings or commercial bank of the Administrator's choice. Any payment of a benefit or installment thereof in accordance with the provisions of this Plan shall be a complete discharge of any liability of the City, the Administrator, the Administrator's designated representative, or any other person for the making of such payment under the provisions of the Plan. 6.7. Administrator's Discretion. The Administrator shall administer the Plan in accordance with its terms and shall have the power and discretion to construe the terms of the Plan and to determine all questions arising in connection with the administration, interpretation and application of the Plan. Any such determination by the Administrator shall be conclusive and binding upon all persons. The Administrator may establish procedures, correct any defect, supply any information, or reconcile any inconsistency in such manner and to such extent as shall be deemed necessary or advisable to carry out the purpose of the Plan; provided, however, that any such procedure, discretionary act, interpretation or construction shall be done in a nondiscriminatory manner based upon uniform principles consistently applied and shall be consistent with the intent that the Plan shall continue to satisfy applicable provisions of the Code and the lawful regulations issued pursuant thereto and so that all persons similarly situated will receive substantially the same treatment. 6.8. Rules And Decisions. Except as otherwise specifically provided in the Plan, the Administrator may adopt such rules and procedures as the Administrator deems necessary, desirable or appropriate for the proper administration of the Plan. All rules and decisions of the Administrator shall be uniformly and CHANG RUTHENBERG & LONG PC - 17 - FR01B,01 Fresno-HRA-Plan-Final /1/06 005827.00032 20301075.1 consistently applied to all Participants in similar circumstances. When making a determination or calculation, the Administrator shall be entitled to rely upon information furnished by a Participant. 6.9. Reasonable Care. The Administrator shall use reasonable care and diligence in the exercise of its powers and the performance of its duties hereunder. 6.10. Replacement Of Administrator. The Administrator may be replaced at any time, without cause, by the City. The City shall then designate by an instrument in writing some other person as the Administrator. 6.11. HIPAA Privacy. Inasmuch as certain members of the City's workforce have access to protected health information (PHI), as defined in HIPAA and its implementing regulations (HIPAA Privacy Rules), for administrative functions of the Plan, and in order for a group health plan's sponsor to have access to PHI from the group health plan, HIPAA and the HIPAA Privacy Rules require that the group health plan be amended to incorporate the provisions required by the HIPAA Privacy Rules and that the group health plan sponsor has agreed to such provisions, the following provisions shall govern the use and disclosure of PHI to the City by a group health plan benefit provided under the Plan: A. Permitted Disclosure Of Enrollment/Disenrollment Information. The Plan (or a health insurance issuer or HMO with respect to the Plan) may disclose to the City information on whether the individual is participating in the Plan, or is enrolled in or has disenrolled from a health insurance issuer or HMO offered by the Plan. B. Permitted Uses And Disclosure Of Summary Health Information. The Plan (or a health insurance issuer or HMO with respect to the Plan) may disclose summary health information, as defined in the HIPAA Privacy Rules, to the City, provided the City requests the summary health information for the purpose of obtaining premium bids from health plans for providing health insurance coverage under the Plan or modifying, amending, or terminating the Plan. CHANG RUTHENBERG & LONG PC - 18 - FR018.01 Fresno-HRA-Plan°Final 4/1106 005827.00032 20301075.1 C. Uses And Disclosure For Plan Administrative Purposes. Unless otherwise permitted by law, and subject to the conditions of disclosure described in the Conditions Of Disclosure For Plan Administration Purposes paragraph, below, and obtaining written certification pursuant to the Certification Of City paragraph, below, the Plan (or a health insurance issuer or HMO on behalf of the Plan) may disclose PHI to the City; provided, however, that the City may use or disclose such PHI for Plan administration purposes only. 1. "Plan administration purposes" means administration functions performed by the City on behalf of the Plan, such as quality assurance, claims processing, auditing, and monitoring. 2. Plan administration functions do not include functions performed by the City in connection with any other benefit or benefit plan of the City, and they do not include any employment-related functions. Notwithstanding the provisions of this Plan to the contrary, in no event shall the City be permitted to use or disclose PHI in a manner that is inconsistent with section 164.504(f) of the HIPAA Privacy Rules. D. Conditions Of Disclosure For Plan Administration Purposes . The City agrees that, with respect to any PHI (other than enrollment/disenrollment information and summary health information, that are not subject to these restrictions) disclosed to it by the Plan (or a health insurance issuer or HMO on behalf of the Plan), the City shall: 1. Not use or further disclose the PHI other than as permitted or required by the Plan or as required by law; 2. Ensure that any agent, including a subcontractor, to whom it provides PHI received from the Plan agrees to the same restrictions and conditions that apply to the City with respect to PHI; 3. Not use or disclose the PHI for employment-related actions and decisions or in connection with any other benefit or employee benefit plan of the City; CHANG RUTHENBERG & LONG PC - 19 - FR018.01 Fresno-HRA-Plan-Final /1/06 005827.00032 20301075.1 4. Report to the Plan any use or disclosure of the information that is inconsistent with the uses or disclosures provided for of which it becomes aware; 5. Make available PHI to comply with HIPAA's right to access in accordance with section 164.524 of the HIPAA Privacy Rules; 6. Make available PHI for amendment and incorporate any amendments to PHI in accordance with section 164.526 of the HIPAA Privacy Rules; 7. Make available the information required to provide an accounting of disclosures in accordance with section 164.528 of the HIPAA Privacy Rules; 8. Make its internal practices, books and records relating to the use and disclosure of PHI received from the Plan available to the Secretary of Health and Human Services for purposes of determining compliance by the Plan with HIPAA's privacy requirements; 9. If feasible, return or destroy all PHI received from the Plan that the City still maintains in any form and retain no copies of such information when no longer needed for the purpose for which disclosure was made, except that, if such return or destruction is not feasible, limit further uses and disclosures to those purposes that make the return or destruction of the information infeasible; and 10. Ensure that the adequate separation between the Plan and the City (i.e., the "firewall") required by section 164.504(f)(2)(iii) of the HIPAA Privacy Rules is satisfied. E. Adequate Separation Between The Plan And The City. The City shall allow only those employees of the City who are responsible for the Plan's administration functions to have access to the PHI. No other employees of the City shall have access to PHI. These employees shall have access to and use PHI only to the extent necessary to perform the plan administration functions that the City performs for the Plan. In the event that any of these specified employees do not comply with the provisions of this CHANG RUTHENBERG & LONG PC - 20 - FR018_01 Fresno-HRA-Plan-Final 411106 005827.00032 20301075.1 provision, such employee(s) shall be subject to disciplinary action by the City for noncompliance pursuant to the City's employee discipline and termination of employment procedures. F. Certification Of The City. The Plan (or a health insurance issuer or HMO with respect to the Plan) shall disclose PHI to the City only upon the receipt of a certification by the City that the Plan has been amended to incorporate the provisions required by section 164.504(f)(2)(ii) of the HIPAA Privacy Rules and that the City agrees to the conditions of disclosure set forth in the Conditions Of Disclosure For Plan Administration Purposes paragraph, above. 6.12. HIPAA Security In addition to the HIPAA Privacy Rules, the City (as Plan Sponsor) and the Plan will comply with the HIPAA Security Rule (45 CFR Part 160 and Subparts A and C of Part 164), as both such Rules are amended by the Health Information Technology for Economic and Clinical Health Act (HITECH). For this purpose, the Plan Sponsor will: A. Implement administrative, physical, and technical safeguards that reasonably and appropriately protect the confidentiality, integrity, and availability of electronic PHI (ePHI) that it creates, receives, maintains, or transmits on behalf of this Plan; B. Ensure that the adequate separation described in Section 6.11, subsection E. is supported by reasonable and appropriate security measures; C. Ensure that any agent, including a subcontractor, to whom it provides ePHI agrees to implement reasonable and appropriate security measures to protect such ePHI; and D. Report to the Plan any security incident of which it becomes aware concerning PHI. The Plan will notify affected individuals if a breach of unsecured PHI occurs and provide any other required notifications, in accordance with the requirements set forth under the HIPAA Breach Notification Rule (45 CFR §§164.400-.414). In addition to the HIPAA Privacy Rules related to PHI, the Plan shall comply with the laws of the State of California with respect to the protection, disclosure, and accounting of personal data, to the extent applicable. ARTICLE 7. CLAIMS PROCEDURES 7.01. Claims For Benefits. In order to receive benefits under this Plan, the Participant must submit satisfactory proof of entitlement to such a benefit as set forth in this Claims 005827.00032 20301075.1 Procedures article. Participants shall provide the Administrator with such information and evidence, and shall sign such documents, as may reasonably be requested from time to time for the purpose of administration of the Plan. 7.2 Filing Claims. A. · Any Participant, Dependent, or duly authorized representative of a Participant or Dependent (Claimant) may file a claim for benefits to which such Claimant believes he or she is entitled. Claims must be made in writing and shall be delivered to the Administrator or a service provider designated by the Administrator. B. Claimants shall provide the Administrator with such information and evidence, and shall sign such documents, as may reasonably be requested from time to time for the purpose of administration of the Plan, including, but not limited to a demonstration that (i) the expense was for insurance for medical care as defined in Code section 213(d), (ii) the expense was incurred during the period when the person was covered _by this Plan, and (iii) the expense was covered under the Plan. C. Unless otherwise announced by the Administrator, a claim for benefits must be made no later than October 15 after the end of the CHANG RUTHENBERG & LONG PC - 21 - FR018 01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 Plan Year in which the expense was incurred. Any delinquent claims will not be paid. 7.3. Initial Determination Of Claim. A. The Administrator shall have full discretion to grant or deny a claim in whole or in part. B. Within thirty (30) days after receipt of such claim, the Administrator will notify the Claimant, in writing, of the granting or denying, in whole or in part, of such claim unless special circumstances require an extension of time for processing the claim due to matters beyond the control of the Administrator. In no event may the extension exceed fifteen (15) days from the end of the initial thirty (30) day period. C. If an extension of time is necessary, the Claimant must be given a written notice to this effect prior to the expiration of the initial thirty (30) day period and the notice must indicate the date by which a decision will be made. If such an extension is necessary due to a failure of the Claimant to submit the information necessary to decide the claim, the notice shall specifically describe the required information and the Claimant shall submit the specified information no later than thirty (30) days from receipt of the notice by the Claimant. D. If a claim is denied in whole or in part, the Administrator's notice denying such claim shall set forth, in a manner calculated to be understood by the Claimant, the following: 1. The specific reason.or reasons for the denial; 2. Specific reference to pertinent Plan provisions on which the denial is based; 3. A description of any additional material or information necessary for the Claimant to perfect the claim and an explanation of why such material information is necessary; and 4. An explanation of the Plan's claim review procedures. E. If notice of the granting or denying of a claim is not furnished in accordance with the preceding provisions, the claim shall be deemed denied and the Claimant shall be permitted to exercise the CHANG RUTHENBERG & LONG PC - 22 - FR018.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 Claimant's right to review pursuant to the Claims Appeals paragraph, below. 7.4. Claims Appeals. If a claim for benefits under the Plan is fully or partially denied, the following appeal procedures shall apply: A. If a Claimant wishes to appeal a denial of a claim, the Claimant or the Claimant's duly authorized representative: 1. May request a review upon written application to the Administrator; 2. May submit written comments, documents, records, and other information relating to the claim; and 3. May obtain, upon request and free of charge reasonable access to, and copies of, all documents, records, and other information relevant to the Claimant's claim for benefits. B. The written request for review must be received by the Administrator within fifteen (15) days after the date of mailing of the notice to the Claimant that the Claimant's claim for Plan benefits has been denied. C. The decision on the review shall be made by a review committee (Review Committee) whose decision shall be final. 1. The Review Committee shall be comprised of three (3) members: one selected by the Claimant, one selected by the City (other than the Administrator), and a mutually agreed upon third party. The City and the Claimant shall select a mutually agreed upon third party within fourteen (14) calendar days after receipt of written request for review by the Administrator from the Claimant. 2. Fees and expenses, if any, incurred by the Review Committee shall be paid half by the City and half by the Claimant. 3. The Review Committee shall set a date to convene that is not later than sixty (60) days after the Administrator's receipt of the request for a review, provided it meets the criteria for requesting review and time limits set forth above. If an CHANG RUTHENBERG & LONG PC - 23 - FR018.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 extension of time for the Review Committee to convene is necessary, the Claimant must be given written notice to this effect prior to the expiration of the initial sixty (60) day period and the notice must indicate the date by which a decision will b be made. 4. If the adverse benefit determination that is the subject of the review was based in whole or in part on a medical judgment, the Review Committee shall consult with a health care professional who has appropriate training and experience in the field of medicine involved in the medical judgment, and who shall not be the individual who was consulted in conjunction with the adverse benefit determination that is the subject of review, nor the subordinate of such individual, 5. Any medical or vocational experts whose advice was obtained on behalf of the P!an in connection with a Claimant's adverse benefit determination shall be identified without regard to whether the advice was relied upon in making the benefit determination. 6. The Review Committee shall contact and consult a health care professional as set forth in number 4 above, and consider all relevant documents prior to submitting its final conclusions. 7. The Review Committee shall render its decision on review, in writing, within thirty (30) calendar days of its last meeting with respect to the Claimant's appeal. 8. The decision on review must be written in a manner calculated to be understood by the Claimant. In the case of an adverse benefit determination, the notification to the Claimant shall set forth, in a manner calculated to be understood by the Claimant, the following: a. The specific reason or reasons for the denial; b. Specific reference to pertinent Plan provisions on which the denial is based; and c. A statement that the claimant is entitled to receive, upon request and free of charge reasonable access to, and copies of, all documents, records, and other CHANG RUTHENBERG & LONG PC - 24 - FR018.01 Fresno-HRA-Plan-Final 4i1i06 005827.00032 20301075.1 information relevant to the Claimant's claim for benefits. 9. All time limits under this subparagraph C may be extended by mutual agreement of the Claimant and the Administrator or Review Committee. 7.5. Legal Actions. A Claimant must submit a written claim and exhaust the preceding claims procedures before legal recourse of any type is sought. Except as explicitly permitted by statute, the City, the Administrator, and any service provider designated by the Administrator are the only necessary parties to any action or proceeding that involves the Plan or the administration of the Plan. No Employees or former Employees or their Dependents or any person having or claiming to have an interest under the Plan is entitled to notice of process. Any final judgment that is not appealable for any reason (including the passage of time) and that is entered in an action or proceeding involving the Plan is binding and conclusive on the parties to this Plan and all persons having or claiming to have any interest under the Plan. · 7.6. Administra tio n Administration Pending Resolution Of Disputes. If a dispute arises with respect to any matter under this Plan, the Administrator may refrain from taking any other or further action in connection with the matter involved in the controversy until the dispute has been resolved under the Plan. 7.7. Time. The filing of claims or receipt of notices of rulings and any event starting a time period shall be deemed to commence with personal delivery signed for by the Claimant or by affidavit of personal service, or the date of actual receipts for certified or registered mail or date returned if delivery is refused (or a Claimant has moved without giving the Administrator a forwarding address). ARTICLE 8. AMENDMENTS AND TERMINATION 8.1. Amendments. The City reserves the right to amend this Plan at any time without the consent of any Participant or Dependent, by action of the City Council, subject to applicable meet and confer obligations; provided, however, that, CHANG RUTHENBERG & LONG PC - 25 - FR018,01 Fresno-HRA-Plan-Final 411106 005827.00032 20301075.1 except in accordance with the provisions of this Plan, or as otherwise specifically permitted by law, no such amendment shall affect any right to benefits which arose prior to such amendments and no such amendment shall affect the nontaxable benefits of any Participant until the first day of the Plan Year coincident with or next following the adoption date of the amendment. The City may make any amendment that it determines to be necessary or desirable, with or without retroactive effect, to comply with the law. 8.2. Right To Terminate. A. Although the City intends this Plan to be maintained for an indefinite period of time, the Plan shall be subject to termination at any time hereafter by the City Council, subject to applicable meet and confer obligations. B. Upon the termination of the Plan; the rights of all Participants affected thereby shall become payable as other benefits for Participants the Administrator may direct, subject to applicable meet and confer obligations. The termination of the Plan shall not affect any affected Participant's right to claim reimbursement of benefits incurred prior to such termination. 8.3. Enactment Of Legislation. If the federal government, any State or other jurisdiction enacts a law which prohibits the continuance of this Plan, or the Code or other existing laws are interpreted so as to prohibit the continuance of this Plan, the Plan shall terminate automatically coincident with the effective date of such law or interpretation. ARTICLE 9. MISCELLANEOUS 9.1. Nonalienation Of Benefits. A. A No assets or benefits under this Plan shall be subject in any manner to anticipation, alienation, sale, transfer, assignment, pledge, encumbrance, charge, garnishment, execution or levy of any kind, either voluntary or involuntary, including any such liability which is for alimony or other payments for the support of a Spouse or former Spouse, or for any other relative of the Participant, prior to actually being received by the person entitled to the benefit under the terms of the Plan. Any attempt to so anticipate, alienate, sell, transfer, assign, pledge, encumber, charge, garnish, execute or levy shall be void. Nor shall any such benefits in any manner be CHANG RUTHENBERG & LONG PC - 26 - FR018.01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 liable for, or subject to, the debts, contracts, liabilities, or torts of any person entitled to such benefits. B. The prohibitions contained in this Nonalienation Of Benefits paragraph shall not apply to the extent a Participant or Dependent is indebted to the Plan, for any reason, under any provision of this Plan. At the time a distribution is to be made to or for a Participant's or Dependent's benefit, such proportion of the amount distributed as shall equal such indebtedness shall be retained by the Plan to apply against or discharge such indebtedness. Prior to such application, however, the Administrator must give written notice to the Participant or Dependent that such indebtedness is to be so paid in whole or part from the Participant's benefit. If the Participant or Dependent does not agree that the indebtedness is a valid claim against the Participant's benefit, the Participant or Dependent shall be entitled to a review of the validity of the claim in accordance with procedures provided in the Claims Procedures article. 9.2. Divestment Of Benefits. Subject only to the specific provisions of this Plan, nothing shall be deemed to divest a Participant of a right to the benefit to which the Participant becomes entitled in accordance with the provisions of this Plan. 9.3. Nondiversion. Irrespective of anything contained in the Plan, as now expressed or hereafter amended, it shall be impossible for any part of the Participant's benefits under the Plan to be used for, or diverted to, any purpose not for the exclusive benefit of Participants or their Dependents at any time prior to the satisfaction of all rights and liabilities, fixed and contingent, with respect to Participants or their Dependents hereunder, either by the operation, amendment, revocation or termination of the Plan. No part of the Participant's benefits under the Plan shall be paid, distributed or made available to the City at any time, except as expressly provided by the Plan. 9.4. Nonguarantee Of Employment. Nothing contained in this Plan shall be construed as a contract of employment between the City and any Employee, or as a right of any Employee to be continued in the employment of the City, or as creating or modifying the terms of an Employee's employment, or as a limitation on the right of the City to discharge any Employee, with or without cause. CHANG RUTHENBERG & LONG PC - 27 - FR01B.01 Fresno-HRA·Plan-Final 4/1/06 005827.00032 20301075.1 Unless the law or this Plan explicitly provides otherwise, rights under any other employee benefit plan maintained by the City (for example, benefits upon an Employee's death, retirement, or other termination) do not create any rights under this Plan to benefits or continued participation. The fact that an individual is eligible to receive benefits under this Plan does not create any rights under any other employee benefit plan maintained by the City, unless that plan or the law explicitly provides otherwise. 9.5. Rights To The City's Assets. No Employee, Participant or Dependent shall have any right to, or interest in, any assets of the City upon Termination Of Employment or otherwise, except as provided from time to time under this Plan; and then only to the extent of the benefits payable under the Plan to such Employee, Participant or Dependent. All payments of benefits as provided for in this Plan shall be made solely out of the general assets of the City and neither the Administrator nor its designated representative shall be liable in any manner for such payments. 9.6. Limitation Of Rights Of Participants And Others. Neither the establishment of this Plan, nor any amendment hereof, nor the payment of any benefits, will be construed as giving to any Participant or any other person any legal or equitable right against the City, Administrator, or its designated representative, except as expressly provided herein. The creation, continuation, or change of the Plan does not give any person a nonstatutory legal or equitable right against the City, any officer, agent or other Employee of the City, any insurer or other service provider providing benefits under any Contract, or the Administrator. 9.7. Taxation. The City believes this Plan to be in compliance with all applicable sections of the Code. However, this Plan has not been submitted to the Internal Revenue Service for approval and there is no assurance that the intended tax benefits under this Plan will be available. Neither the City, nor the Administrator, nor its designated representative makes any commitment or guarantee that any amounts elected or paid for the benefit of a Participant will be excludable from the Participant's gross income for federal or State income tax purposes, or that any other federal or State tax treatment will apply to, or be available to, any Participant. It shall be the obligation of each Participant to determine whether each payment is excludable from the Participant's gross income for federal and State income tax purposes, and to notify the 'Administrator if the Participant has reason to believe that CHANG RUTHENBERG & LONG PC - 28 - FR01B 01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 any such payment is not so excludable. Each Participant, by accepting a benefit under this Plan, agrees to be liable for any taxes, tax penalties and interest that may be imposed by the Internal Revenue Service, or any other governmental agency, with respect to these benefits. 9.8. Insurer Not A Party. No insurer or service provider under a Contract shall be considered a party to this Plan, nor to any future amendment to this Plan. The rights and obligations of any insurer or service provider are those specified in the Contract and no provisions of any portion of this Plan shall be deem_ed to alter or change the terms of such Contract. 9.9. Construction. A This Plan shall be construed in accordance with the Code and other pertinent federal laws, and the laws of the State of California. If any provision is susceptible of more than one interpretation, such interpretation shall be given thereto as is consistent with the Plan or benefit being in conformity with the Code. B. No provision of this Plan shall be construed to conflict with any valid Treasury Department, Department of Labor or Internal Revenue Service regulation, ruling, release or proposed regulation or other order which affects, or could affect, the terms of this Plan. 9.10. Headings. The headings and subheadings of this Plan have been inserted for convenience of reference and are to be ignored in any construction of the provisions hereof. 9.11. Uniformity. All provisions of this Plan shall be interpreted and applied in a uniform, nondiscriminatory manner. 9.12. Gender And Number. Any reference in the masculin·e masculine gender herein shall be deemed to also include the feminine gender, unless expressly provided otherwise. Wherever appropriate, any reference in this document in the singular shall include the plural and any reference in the plural shall include the singular. CHANG RUTHENBERG & LONG PC - 29 - FR01S.01 Fresno-HRA-Plan-Final 4/1/00 005827.00032 20301075.1 9.13. Controlling Law. Unless otherwise provided in this Plan, the Plan shall be construed and enforced according to the laws of the United States of America to the extent applicable, otherwise by the laws of California including California's choice-of-law rules, except to the extent those laws would require application of a State other than California. 9.14. Severability. In the event that any provisions of this document shall be held illegal or invalid for any reason by operation of law or a court of competent jurisdiction, said illegality or invalidity shall not affect the remaining legal and valid provisions of this document. This document shall continue as if said illegal or invalid provisions had not been included herein either initially, or beyond the date it is first held to be illegal or invalid; provided the basic purposes hereof can be effected through the remaining valid and legal provisions. 9.15. Waiver. Failure to insist upon strict compliance with any provision of this Plan shall not be deemed to be a waiver of such provision or any other provision; waiver of breach of any provision of this Plan shall not be deemed to be a waiver of any other provision or subsequent breach of such provision. No term, condition, or provision of the Plan shall be deemed waived unless the purported waiver is in a writing signed by the party to be charged. No written waiver shall be deemed a continuing waiver unless so specifically stated in the writing, and such waiver shall operate only as to the specific term, condition, or provision waived. 9.16. Entire Document. This document, including any appendices or supplements hereto, shall constitute the entire document and shall govern the rights, liabilities and obligations of the parties under the Plan, except as it may be modified. Executed this day of 20062018 CITY OF FRESNO By: Title: CHANG RUTHENBERG & LOMG PC - 30 - FR018,01 Fresno-HRA-Plan-Final 4/1/06 005827.00032 20301075.1 005827.00032 20301075.1 CHANG RUTHENBERG & LONG PC - Fire Management - FR018.01 Fresno-HRA-Plan-'Final 4/1/06 2 - Comparison Details Title pdfDocs compareDocs Comparison Results Date & Time 5/24/2018 1:38:06 PM Comparison Time 1.87 seconds compareDocs version v3.4.15.4 Sources Original Document [#19444397] [v1] HRA Plan Document - word version from client 3/9/18.docxDMS Information Modified Document [#19444397] [v2] HRA Plan Document - revised.docxDMS information Comparison Statistics Insertions 9 Deletions 5 Changes 16 Moves 0 TOTAL CHANGES 30 compareDocs Settings Used Category Option Selected Open Comparison Report after Saving General Always Report Type Word Formatting Character Level Word False Include Headers / Footers Word True Include Footnotes / Endnotes Word True Include List Numbers Word True Include Tables Word True Include Field Codes Word True Include Moves Word True Show Track Changes Toolbar Word True Show Reviewing Pane Word True Update Automatic Links at Open Word False Summary Report Word End Include Change Detail Report Word Separate Document View Word Print Remove Personal Information Word False Word Rendering Set Markup Options Name Change Bars Insertions Deletions Moves / Moves Inserted cells Deleted cells Merged cells Formatting Color only. Changed lines Mark left border. Comments color ByAuthorcolor options] Balloons False Comparison Details Title pdfDocs compareDocs Comparison Results Date & Time 5/24/2018 1:38:06 PM Comparison Time 1.35 seconds compareDocs version v3.4.15.4 Sources Original Document [#19444397] [v1] HRA Plan Document - word version from client 3/9/18.docxDMS Information Modified Document [#19444397] [v2] HRA Plan Document - revised.docxDMS information Comparison Statistics Insertions 9 Deletions 5 Changes 16 Moves 0 TOTAL CHANGES 30 compareDocs Settings Used Category Option Selected Open Comparison Report after Saving General Always Report Type Word Formatting Character Level Word False Include Headers / Footers Word True Include Footnotes / Endnotes Word True Include List Numbers Word True Include Tables Word True Include Field Codes Word True Include Moves Word True Show Track Changes Toolbar Word True Show Reviewing Pane Word True Update Automatic Links at Open Word False Summary Report Word End Include Change Detail Report Word Separate Document View Word Print Remove Personal Information Word False Word Rendering Set Markup Options Name Change Bars Insertions Deletions Moves / Moves Inserted cells Deleted cells Merged cells Formatting Color only. Changed lines Mark left border. Comments color ByAuthorcolor options] Balloons False City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0121 Agenda Date:1/31/2019 Agenda #:3-E REPORT TO THE CITY COUNCIL January 17, 2019 FROM:JEFF CARDELL, Director of Personnel Services Personnel Services Department BY:KEN PHILLIPS, Labor Relations Manager Personnel Services Department SUBJECT BILL -(For introduction)-Amending Section 3-422 of the Fresno Municipal Code relating to the redeposit by members of the Fire and Police Retirement System of contributions withdrawn by former spouses RECOMMENDATION It is recommended that Council approve the introduction of the ordinance amending Section 3-422 of the Fresno Municipal Code (“FMC”)relating to the redeposit by members of the second tier of the Fire and Police Retirement System of contributions withdrawn by former spouses. EXECUTIVE SUMMARY The FMC does not currently allow for members of the Police and Fire Retirement System to redeposit any accumulated contributions withdrawn by an ex-spouse or terminated registered domestic partnership.The attached ordinance will amend Section 3-422 of the FMC,“Dissolution or Legal Separation or Termination Prior to a Member’s Retirement,”to allow the redeposit by members of the Fire and Police Retirement System of contributions withdrawn by former spouses. BACKGROUND The FMC does not currently allow for members of the Police and Fire Retirement System to redeposit any accumulated contributions withdrawn by an ex-spouse or terminated registered domestic partnership.At the request of the Fresno Police Officers Association (FPOA),the City and FPOA explored the possibility of allowing members of the Fire and Police Retirement System to “buy back”a portion of a member’s retirement benefit that was awarded to an ex-spouse or a terminated registered domestic partnership.An actuarial study was conducted to determine the impact of amending provisions of the FMC relating to “Dissolution or Legal Separation or Termination Prior to a Member’s Retirement,”with the understanding that there would be no cost to the City and no City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0121 Agenda Date:1/31/2019 Agenda #:3-E Member’s Retirement,”with the understanding that there would be no cost to the City and no negative impact to the Retirement System.In order to meet the requirements of no new cost and no negative impact,an employee in the Fire and Police Retirement System would be required to pay for an actuarial study to determine the appropriate amount to be refunded to the Retirement System and then to refund the amount determined by the study. In order to allow members to re-deposit a portion of their retirement contributions withdrawn by a former spouse or terminated domestic partnership,Section 3-422 of the Fresno Municipal Code (FMC) needs to be amended. The City has met with all affected and represented bargaining groups in the City of Fresno Fire and Police Retirement System.There is a consensus to move forward with amending the FMC to allow an employee to buy back a withdrawal made pursuant to FMC Section 3-421. The Retirement Board has considered and approved the proposed change to the FMC.The City attorney’s office has approved the ordinance to amend the FMC as to form. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378 this item does not qualify as a “project”and is therefore exempt from the California Environmental Quality Act requirements. LOCAL PREFERENCE Local preference is not implicated because this item does not involve public contracting or bidding with the City of Fresno. FISCAL IMPACT There is no fiscal impact.All costs are borne by an employee who elects to redeposit funds.The payback would be cost neutral to the Fire and Police Retirement System. Attachment:Ordinance Amending Section 3-422 City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0136 Agenda Date:1/17/2019 Agenda #:3-E REPORT TO THE CITY COUNCIL January 17, 2019 FROM:MICHAEL CARBAJAL, Director Department of Public Utilities THROUGH:BUD TICKEL, Assistant Director Department of Public Utilities, Water Division BY:RUSSELL B. GUILLIAMS, Chief of Water Operations Department of Public Utilities, Water Division SUBJECT Award a Requirements Contract to Chemtrade Chemicals,US,LLC.,of Parsippany,New Jersey in the amount of $1,204,500 for Bulk Aluminum Sulfate,for a term of one-year with the possibility of two one-year extensions. Bid File 9478 (Citywide) RECOMMENDATION Staff recommends that Council award a one-year requirements contract with provisions for two one- year extensions to Chemtrade Chemicals,US,LLC.,of Parsippany,New Jersey,in the amount of $1,204,500 to provide for bulk aluminum sulfate,the primary coagulant chemical at the Surface Water Treatment Facilities (SWTFs),and authorize the City Manager,or designee,to sign agreement on behalf of the City. EXECUTIVE SUMMARY The Department of Public Utilities,Water Division,routinely uses bulk aluminum sulfate for water treatment at the SWTFs,including the Northeast Water Treatment Facility,the Southeast Water Treatment Facility,and T-3 Water Storage and Package Surface Water Treatment Facility.The execution of a requirements contract with one supplier establishes a firm price,secured through competitive bidding,for a specified time and allows the City to make purchases as needed.Staff recommends award of a one-year requirements contract with provisions for two one-year extensions to Chemtrade Chemicals,US,LLC.,in the amount of $1,204,500.Funding for this contract is included in the FY19 budget. BACKGROUND City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0136 Agenda Date:1/17/2019 Agenda #:3-E Aluminum Sulfate is used as a coagulating agent at the three surface water treatment facilities as the first step in the purification of raw water in order to meet the State of California’s drinking water requirements.When added to water,it causes suspended microscopic impurities to clump together into larger particles.These clumps of impurities will then settle to the bottom of the basin to be filtered out more easily. A Notice Inviting Bids was published on October 5,2018,per the City of Fresno Charter Section 1208.Ten Building Exchanges were faxed Notice Inviting Bids,and eight specifications were distributed to proposed bidders.The bid opening was October 23,2018,and two bids were received ranging from $1,204,500 to $1,277,500. Chemtrade Chemicals,US,LLC.,of Parsippany,New Jersey,submitted the lowest bid price in the amount of $1,204,500 and is considered the lowest responsive and responsible bidder.City Attorney has reviewed and approved to form. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act Guidelines Section 15378,the award of this requirements contract does not qualify as a “project”. LOCAL PREFERENCE Local preference was not applied because none of the bidders were local businesses. FISCAL IMPACT The General Fund is not impacted by this citywide expenditure,as the appropriations for the purchase of Bulk Aluminum Sulfate are included in FY2019 Water Enterprise Fund operating budget. Attachments: Bid Evaluation and Fiscal Impact Statement (Attachment 1) Sample Contract (Attachment 2) City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0150 Agenda Date:1/17/2019 Agenda #:3-F REPORT TO THE CITY COUNCIL January 17, 2019 FROM:MICHAEL CARBAJAL, Director Department of Public Utilities THROUGH:DEJAN PAVIC, Supervising Professional Engineer Department of Public Utilities - Utilities Planning & Engineering BY:MATTHEW BULLIS, Professional Engineer Department of Public Utilities - Utilities Planning & Engineering SUBJECT Approve a Consultant Services Agreement with Carollo Engineers,Inc.,for an amount not to exceed $906,350 for preparation of engineering design of a new Waste Gas Flare unit for the Fresno/Clovis Regional Wastewater Reclamation Facility (Citywide) RECOMMENDATION Staff recommends that City Council approve a Consultant Services Agreement with Carollo Engineers,Inc.(Carollo),for an amount of $906,350 for the design of a new Waste Gas Flare unit for the Fresno/Clovis Regional Wastewater Reclamation Facility (RWRF)and authorize the Director of Public Utilities, or designee, to sign the contract on behalf of the City of Fresno (City). EXECUTIVE SUMMARY The Department of Public Utilities (DPU),Wastewater Management Division,is seeking approval of a Professional Consultant Services Agreement with Carollo Engineers,Inc.,to prepare project plans for design of a new Waste Gas Flare unit for the RWRF.The RWRF currently uses a 1,100 Standard Cubic Feet Per Minute (SCFM)flare to burn excess waste gas generated from the digester units. However,since 2017 gas volume has exceeded the flare’s burn capacity.To comply with air pollution permit requirements and to meet RWRF plant operational needs a temporary rental gas flare has been placed in service.Use of both units allows the plant to comply with San Joaquin Valley Air Pollution Control District (Air District)permit requirements;however,a permanent solution is needed. Carollo would provide the City with new flare design under this agreement. BACKGROUND City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0150 Agenda Date:1/17/2019 Agenda #:3-F Federal regulations of air pollution vest authority in the local Air District to set conditions on air pollution generators.The City’s continued population growth has resulted in a steady increase of waste gas production at the RWRF,which in turn increases the need for larger capacity flare units to burn excess gas.While the RWRF utilizes an existing 1,100 SCFM flare,an additional 3,200 SCFM flare is needed to meet current demand.Use of both flare units will increase overall flare capacity, improve system redundancy and meet Air District permit requirements.The new flare will be sized to accommodate future waste gas flow increases through year 2030 and will have the ability to operate separately or in tandem with the existing flare. On June 20,2017,a Request for Proposal (RFP)was distributed to solicit outside consultants to provide for design-build services for a new waste gas flare unit at the RWRF.Under the design-build scenario the engineering firms and contractors combine resources to design and build the flare as a package contract.No bids were received for this work.Responses from vendors indicated that the project was complex and contained sufficient risk that the design-build teams elected to not bid the work.The contractors indicated they would prefer to bid on standard construction contracts only, separating the design work from the construction activities.Upon conclusion of that RFP,staff was instructed to proceed with a separate RFP to secure an engineering firm to provide the requisite flare design. On October 20,2017,a Request for Qualification (RFQ)for the design of the new Waste Gas Flare was posted on the City’s Planet Bids website and an advertisement was placed in the local Business Journal.Statements of Qualifications (SOQ)were received from one consultant,Carollo Engineers, Inc.This project was not budgeted in Fiscal Year 2018;therefore the RFQ was cancelled until Fiscal Year 2019. On July 23,2018,to generate project interest,an advance noticing was conducted.This included placing a notice on the City’s Planet Bids website and emails were sent to 45 engineering firms who are on an engineering list maintained by the Department of Public Utilities. On August 8,2018,an RFQ advertisement was posted on the City’s Planet Bids website,placed in the local Business Journal,and notices were again sent to 45 engineering firms.An SOQ was received from one consultant,Carollo Engineers,Inc.Upon evaluation of the SOQ documentation, Carollo Engineers,Inc.,was determined to be qualified to perform the work and was selected to provide the requested services.Staff negotiated a professional services fee of $906,350 for the listed scope of work.Upon approval by the City Council,the agreement will be executed by the Director of Public Utilities, or designee, who has been delegated this authority by the City Manager. ENVIRONMENTAL FINDINGS By the definition provided in the California Environmental Quality Act (CEQA)Guidelines Section 15378 the award of this contract does not qualify as a “project” for the purpose of CEQA. LOCAL PREFERENCE Local preference was not applied as only one bid was submitted. FISCAL IMPACT City of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0150 Agenda Date:1/17/2019 Agenda #:3-F There is no impact the General Fund.This project is identified in the five-year Capital Improvement Plan.Funds for this project are budgeted in the Fiscal Year 2019 Wastewater Enterprise Fund No. 53302. Attachment: Consultant Services Agreement City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-1597 Agenda Date:1/17/2019 Agenda #:3-G REPORT TO THE CITY COUNCIL January 17, 2019 FROM:MICHAEL CARBAJAL, Director Department of Public Utilities BRIAN S. SPINDOR, Assistant Director Department of Public Utilities - Wastewater Management Division THROUGH:RICK STAGGS, Wastewater Manager Department of Public Utilities - Wastewater Management Division BY:RAY ARTHUR, Project Manager Department of Public Utilities - Wastewater Management Division SUBJECT Actions pertaining to the removal,processing,and beneficial reuse or other environmental friendly alternative disposal of Biosolids (Bid File No. 9460) (Citywide) 1.Approve a three year contract with two one-year optional terms with Synagro Technologies, Inc., in the amount of $10,155,000; 2.Approve a three year contract with two one-year optional terms with Holloway Environmental, LLC., in the amount of $6,372,000 RECOMMENDATION Staff recommends Council approval of three-year contracts with two one-year optional terms between City of Fresno and Synagro Technologies, Inc., for $10,155,000 and Holloway Environmental, LLC., for $6,372,000 to provide for Biosolids reuse and disposal services and, authorize the Director of the Public Utilities Department, or designee, to execute the contract on behalf of the City of Fresno. EXECUTIVE SUMMARY The Department of Public Utilities (DPU),Wastewater Management Division is seeking to award Biosolids contracts for removal,processing,and beneficial reuse or other friendly alternative disposal of Biosolids.City of Fresno’s Regional Wastewater Reclamation Facility (RWRF)generates Biosolids as a byproduct of wastewater treatment.The proposed contracts would allow for Biosolids City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-1597 Agenda Date:1/17/2019 Agenda #:3-G as a byproduct of wastewater treatment.The proposed contracts would allow for Biosolids management to be performed by Synagro Technologies and Holloway Environmental.The Fresno Biosolids project involves transporting Biosolids to Synagro to be used for composting,and to Holloway Environmental to be used for mine reclamation and soil amendment. BACKGROUND A Request for Proposal (RFP), No. 9460, was prepared for this project. A Notice Inviting Bids was published on September 26, 2018, posted on PlanetBids and advertised in the Business Journal. The specifications were distributed to four prospective bidders. Three sealed bid proposals were received and publicly opened on October 16, 2018. Total bid proposals ranged in price from $14,805,000 to $19,375,000. The RFP was structured so that proposers would bid on three quantities: 25,000 to 50,000 tons 50,001 to 75,000 tons, and, 75,001 to 100,000 tons This format allowed each proposer to customize their bids to each of the three volumes levels.Staff determination is that by awarding the contract to the two bidders,the City is best served in ensuring uninterrupted service and best meeting the goals of beneficial use of the Biosolids.Synagro was determined to be best suited to achieve the City’s goals of removal,transport,processing,and beneficial reuse of Biosolids in the 50,001 to 75,000 ton quantity,and Holloway will handle the remaining 25,000 to 50,000 tons.The specific amount that each vendor will receive will be determined by the daily amount of Biosolids produced and the availability of both vendors to remove and transport the product. ENVIRONMENTAL FINDINGS An initial study and EIR (SCH No.2007011077)was prepared for this project and adopted on June 26,2007.This approval is to implement a portion the project.An analysis has been performed pursuant to CEQA Guidelines Section 15162 to determine whether subsequent environmental review is required for this project.Based upon this analysis the following findings are made to support the determination that no subsequent environmental review is required: 1.No substantial changes are proposed in the project which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects because the project is being implemented as planned. 2.No substantial changes occurred with respect to the circumstances under which the project was undertaken which will require major revisions to the EIR due to the involvement of new significant environmental effects or a substantial increase in the severity of previously identified significant effects.The project will not have any significant effects not discussed in the EIR,and there are no mitigation measures or alternatives previously found not to be feasible that are now feasible. 3.There is no new information,which was not known and could not have been known atCity of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-1597 Agenda Date:1/17/2019 Agenda #:3-G 3.There is no new information,which was not known and could not have been known at the time of the EIR that was not discussed in the EIR. Based upon these findings,it has been determined that no further environmental documentation is required for this project. LOCAL PREFERENCE The Local Preference component is not applicable because staff believes the number of local businesses is less than three. FISCAL IMPACT Funds in the amount of $2,704,800 were budgeted for biosolids removal and reuse in the FY 2019 Sewer Enterprise Fund No.40501(Citywide),with the estimated cost for biosolids reuse for FY19 of approximately $2,649,800 based on the new contracts taking effect February 1,2019.Funds for future years will be estimated annually based on each current year’s production,and included in each year’s Sewer Enterprise Fund.Biosolids disposal is estimated annually and the appropriation for biosolids disposal expense will be included in the annual budget for future fiscal years within the Sewer Enterprise Fund. These are three (3) year contracts with two additional one year options. Attachments: Evaluation Committee Report - Attachment 1 Sample Contract - Attachment 2 City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ REPORT FROM EVALUATION COMMITTEE REQUEST FOR PROPOSAL FOR REMOVAL, PROCESSING, AND BENEFICIAL REUSE OR OTHER ENVIRONMENTALLY FRIENDLY ALTERNATIVE DISPOSAL OF BIOSOLIDS RFP NO. 9468 COMMITTEE MEMBERS: Mike Brown, Buyer/Facilitator, City of Fresno, Finance Dept. – Purchasing Eric Casares, Associate Vice President, Carollo Engineers Dan Cravens, Operations Supervisor, City of Fresno - Wastewater Management Division Rick Staggs, Wastewater Manager, City of Fresno – Wastewater Management Division BAC KGROUND: The goal of this Request for Proposal (RFP) was to solicit proposals for the removal, processing, and beneficial reuse or other environmental friendly alternative disposal of a portion of the biosolids produced at the Fresno/Clovis Regional Wastewater Reclamation Facilities (RWRF). The RWRF produces up to 100,000 wet tons (250 to 300 wet tons per day) of biosolids per year. This quantity may vary contingent upon seasonal fluctuation of incoming loads, or application of new or different processing technologies. The primary goal in this RFP was to develop one or more programs for the beneficial reuse of this portion of the biosolids produced at the RWRF. EVALUATION BY COMMITTEE: Synagro Technologies, Inc. Synagro is a California leader in cost-effective solution systems, processes, technologies and facilities that transform natural waste and wastewater challenges into safe, beneficially reusable options that are environmentally and people-safe, sustainable and beneficial to the environment. The committee was in agreement that Synagro had the ability to meet all requirements of the RFP and in fact has been doing business with the City of Fresno, Wastewater Management Division for over a decade. Synagro’s past performance has been acceptable and without problems or concerns. Their proposal was competitive and the most cost effective. Holloway Environmental Solutions, LLC Holloway has been in the landfill/reclamation business for 22 years. Holloway performs open pit mining operations. And to refill these open areas back to their natural state, Holloway has a defined fill plan that allows biosolids and fly-ash to be comingled EVALUATION COMMITTEE REPORT – RFP No. 9468 December 2018 Page 2 of 2 together in order to kill any residual parthenogens and to reduce additional moisture within the biosolids. Holloway will then cap the remaining 3 feet with natural soil, this bring the area back to its natural state and will allow Holloway to perform agricultural operations and add future composting facilities (currently in the permitting process) on top of the reclaimed mine area. The committee agreed that this is new, innovative use of Biosolids is both valuable and beneficial. Holloway’s history of performance was acceptable and their proposal was competitive and the most cost effective. New Earth, USA New Earth has been in the Biosolids management business for decades, with additional; experience in Compost Facility development. While the committee finds acceptability in New Earth’s proposal, relative to their history of performance and fiscal competitiveness, Biosolids land application is the least effective in achieving the RWRF goal of beneficial reuse. RECOMMENDATION: The committee recommends that Synagro be awarded a portion of the contract, for the volume quantity of 50,001 to 75,000 tons, for the removal, processing, and beneficial reuse or other environmentally friendly alternative disposal of Biosolids. and, Holloway Environmental Solutions be awarded a portion of the contract, for the volume quantity of 25,000 to 50,000 tons, for the removal, processing, and beneficial reuse or other environmentally friendly alternative disposal of Biosolids. For the following reasons: 1. Both proposals are cost competitive. 2. Both proposers represented and confirmed their ability to provide high quality and dependable Biosolids Removal services to the COF Wastewater Management Division. 3. Both Synagro and Holloway Environmental meet or surpass the RWRF requirement of beneficial reuse or other environmentally friendly alternative disposal of Biosolids. Additionally, the committee believes that awarding portions of the contract to two of the qualified bidders ensures uninterrupted service should any unforeseen circumstances occur. City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0149 Agenda Date:1/17/2019 Agenda #:3-H REPORT TO THE CITY COUNCIL January 17, 2019 FROM:MICHAEL CARBAJAL, Director Department of Public Utilities THROUGH:DEJAN PAVIC, Supervising Professional Engineer Department of Public Utilities - Utilities Planning & Engineering BY:MATTHEW L. BULLIS, Professional Engineer Department of Public Utilities - Utilities Planning & Engineering SUBJECT Actions pertaining to accepting a Groundwater Sustainability Grant from the State of California for removal of Perchloroethylene from Groundwater at Pump Stations PS 117 and PS 284 (Citywide): 1.Adopt findings of Class 1,Class 3,and Class 32 Categorical Exemptions pursuant to Sections 15301, 15303, and 15332 of the California Environmental Quality Act Guidelines 2.***RESOLUTION -Authorizing entering into a Funding Agreement with the State Water Resources Control Board and Authorizing and Designating a Representative for the Groundwater Sustainability Grant Program for Funding Related to Perchloroethylene (PCE) groundwater cleanup project for water well Pump Stations PS 117 and PS 284 in the City of Fresno and authorizing the execution of documents (Subject to Mayor’s Veto) 3.Approve a Third Amendment to Agreement for supplemental engineering services with Provost & Pritchard Engineering Group, Inc., in the amount of $28,500 RECOMMENDATIONS Staff recommends that City Council adopt findings of Class 1,Class 3,and Class 32 Categorical Exemptions pursuant to Sections 15301,15303,and 15332 of the California Environmental Quality Act (CEQA)Guidelines for removal of Perchloroethylene (PCE)from groundwater at water wells Pump Station (PS)117 and PS 284 (Project);adopt a Resolution authorizing entering into a Funding Agreement with the State Water Resources Control Board (SWRCB)for a Groundwater Sustainability Grant (Grant)in the amount of $2,254,040;and approve a Third Amendment to Agreement with Provost &Pritchard Engineering Group,Inc.(Provost &Pritchard),in the amount of $28,500 for supplemental engineering services related to Project design,feasibility studies,and general contract documents for PS 117 and PS 284 Wellhead Treatment Improvements,and authorize the Director of Public Utilities, or designee, to sign all documents on behalf of the City. City of Fresno Printed on 3/22/2023Page 1 of 3 powered by Legistar™ File #:ID19-0149 Agenda Date:1/17/2019 Agenda #:3-H EXECUTIVE SUMMARY The City has been awarded a Groundwater Sustainability Grant in the amount of $2,254,040 by the SWRCB to fund a PCE Groundwater Feasibility Study (to provide engineering design)and construction of groundwater treatment system for PS 117 and PS 284 and associated interconnecting pipeline.The Project is needed to assess the feasibility of remediation of PCE impacted groundwater,to provide engineering plans for the removal of PCE from groundwater,and to provide for construction funding.The proposed Third Amendment to Agreement with Provost & Pritchard would direct $28,500 of the awarded Grant funds to complete PCE related groundwater studies as requested by the State.The remaining Grant funds will subsequently be used to construct the well head treatment facility with a completion date of March 2021. BACKGROUND The Water Division maintains a network of approximately 260 municipal water supply wells that provide potable water to the community.Two City wells,PS 117 and PS 284 have elevated levels of PCE that exceed the State’s drinking water standard.PCE is a colorless liquid solvent widely used for dry cleaning operations in the 1950’s and 1960’s and due to poor disposal practices has migrated to groundwater.This Project will procure feasibility studies from Provost &Pritchard,and then construct a common well head treatment facility at PS 117 to treat water from both PS 117 and PS 284 by constructing a connection pipeline between well sites. On June 7,2016,the City hired Provost &Pritchard to provide design of plans and general construction documents for PS 117 and PS 284 Wellhead Treatment Improvements for a total fee of $262,473.Project plans are complete and ready for construction.On July 21,2017,the City and Provost &Pritchard entered into a First Amendment to Agreement to increase various engineering design activities for an additional fee of $65,946.On December 8,2017,the City and Provost & Pritchard entered into a Second Amendment to Agreement to extend the Agreement to October 31, 2018, to complete the Project. On May 18,2017,the City submitted an application to the SWRCB for a Groundwater Sustainability Grant which provides funding for programs associated with groundwater treatment.This program makes $86 million available to develop and implement sustainable groundwater planning projects of which groundwater impacted with PCE qualifies for Grant funds. On May 31,2018,the City was approved by the SWRCB to receive a Groundwater Sustainability Grant in the amount of $2,254,040.The SWRCB also determined that the City maintains a Disadvantaged Community status,which qualifies the City for the minimum 10%match obligation of $250,450,and which may be credited for funds previously spent on this Project.Grant funding has been structured to offset selected costs the City incurred in development of the initial engineering design,to fund a PCE groundwater feasibility study,and to fund construction activities.The Funding Agreement for this Project has been approved as to form by the City Attorney’s Office.Adoption of this resolution approving the Funding Agreement and identifying an individual authorized to execute agreements is necessary to proceed. Provost &Pritchard was selected as the most qualified firm to provide the design engineering services for this Project.The proposed Third Amendment will utilize up to $28,500 of the Grant funding to provide for groundwater Feasibility Study as requested and funded by the SWRCB throughCity of Fresno Printed on 3/22/2023Page 2 of 3 powered by Legistar™ File #:ID19-0149 Agenda Date:1/17/2019 Agenda #:3-H funding to provide for groundwater Feasibility Study as requested and funded by the SWRCB through this Grant,for a total Provost &Pritchard contract value of $356,919.All work related to the Third Amendment to Agreement will be completed within the work schedule established in the Grant. ENVIRONMENTAL FINDINGS Staff has performed a preliminary environmental assessment of this Project and has determined it falls within the Categorical Exemption for existing facilities set forth in section 15301 of the CEQA Guidelines because this Project will result in adding a wellhead treatment facility and pipeline between existing wells,which entails a negligible expansion of existing uses.It also falls within the Categorical Exemption set forth in section 15303 of the CEQA Guidelines for new construction or conversion of small structures because the footprint of the wellhead treatment facility is approximately 2400 square feet.Finally,the Project falls within the Categorical Exemption for infill development set forth in section 15332 of the CEQA Guidelines because this Project will result in a small structure within an existing urban setting in conformance with the adopted General Plan. Furthermore,none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines, section 15300.2 apply to this Project. FISCAL IMPACT Acceptance of the Groundwater Sustainability Grant will not impact the General Fund.The majority of work activities will occur in the Fiscal Year 2020 budget cycle.Therefore,the Grant proceeds will be accounted for in next year’s budget.Matching funds required for this Project will be appropriated from retained earnings within the Water Enterprise Fund (40101).The Grant eligible start date is May 31, 2018, which allows for reimbursement of costs that have occurred since this listed date. Attachments: Resolution - Proposition 1 Groundwater Grant (Attachment 1) Prop 1 Groundwater Sustainability Grant (Attachment 2) 3rd Amendment to Agreement with Provost & Pritchard Engineering Group, Inc. (Attachment 3) City of Fresno Printed on 3/22/2023Page 3 of 3 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0139 Agenda Date:1/17/2019 Agenda #:3-I REPORT TO THE CITY COUNCIL January 17, 2019 FROM:GREGORY A. BARFIELD, Interim Director Department of Transportation BY:BRIAN BARR, Assistant Director Department of Transportation TIM OLDAY, Fleet Manager Department of Transportation/Public Safety Fleet Division SUBJECT Approve the award of a purchase contract to Stommel Inc., dba Lehr Automotive, a California-based company, in the amount of $899,509.13 for the purchase of 66 sets of police vehicle hardware RECOMMENDATION Staff recommends Council approve the award of a purchase contract to Stommel Inc.,dba Lehr Automotive,a California-based company,for the purchase of 66 sets of police vehicle hardware in the amount of $899,509.13. EXECUTIVE SUMMARY In FY17 Council approved a three-year requirements contract to purchase police patrol SUVs for the Police Department.As approved in the FY19 City budget,the Department of Transportation,Public Safety Division is ordering 66 units.These units will replace 50 vehicles that have reached the end of their useful life and add 16 school resource officer (SRO)vehicles.The Public Safety Fleet Division seeks to use a cooperative purchase contract awarded by Placer County Sherriff to Stommel Inc., dba Lehr Automotive for this equipment. BACKGROUND The Public Safety Fleet Division needs 66 hardware packages to up-fit the police patrol SUVs for the Police Department.The hardware packages consist of a rear seat,prisoner partition,window barriers,communication consoles,emergency lighting,and all other equipment necessary to carryout law enforcement duties.Fifty sets of hardware will be used to complete replacement patrol vehicles. Sixteen sets of hardware will be used to complete vehicles for the SROs.This hardware is standard City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0139 Agenda Date:1/17/2019 Agenda #:3-I Sixteen sets of hardware will be used to complete vehicles for the SROs.This hardware is standard equipment for patrol vehicles. In an effort to place the 16 new additional SRO police vehicles in service as soon as possible,the Public Safety Fleet Division is requesting approval of a cooperative purchase.The balance of the hardware is needed to maintain the annual replacement cycle of patrol units that have reached or surpassed their economic lifecycle. The police vehicle hardware will be purchased on a piggyback contract from Placer County Sherriff to Lehr Automotive. The City of Fresno Purchasing Division has approved this contract. ENVIRONMENTAL FINDING By the definition provided in the California Environmental Quality Act (CEQA)Guidelines Section 15378, the award of this contract does not qualify as a “project,” as defined by CEQA. LOCAL PREFERENCE Local preference was not implemented because this is a purchase using another government entity’s agreement. FISCAL IMPACT The City of Fresno has completed a Master Equipment Lease Purchase Agreement (MELPA)that will be used to finance these hardware packages for the police patrol SUVs.The MELPA allows the City to expedite financing of certain equipment that is approved for purchase and financing where competitive procurement,budgeting,and appropriation requirements are completed.The appropriations for FY 2019 lease payments on this equipment have been approved in the FY 2019 budget. Future payments will be included in the appropriate fiscal year’s Police Department budget. Attachments: Placer County Contract Amendment Lehr Sales Quote City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ 4/12/13 COUNTY OF PLACER ADMINISTRATIVE SERVICES DEPARTMENT Procurement Services Division 2964 Richardson Drive, Auburn, CA 95603 INVITATION FOR BIDS OR PRICE QUOTES GENERAL TERMS AND CONDITIONS The following provisions are hereby made a part of this bid or price quote by reference and attachment to the Invitation for Bids or Request for Price Quotes document. Any contract award made as the result of this bid shall be governed by these General Terms and Conditions. By submission of a bid, bidder does agree if the bid is accepted within 90 calendar days from the date of opening, to furnish to furnish the product(s) and/or service(s) pursuant to these conditions. In the event of a contract award pursuant to this bid, performance by the successful bidder of any or all of the services, or delivery of any or all of the products defined herein, shall constitute acceptance of all terms, conditions and requirements of the resulting agreement. WARNING: It is the bidder’s responsibility to monitor the County’s website for possible addenda to this bid to inform him/herself of the most current specifications, terms, and conditions (see also Section 4 below), and to submit his/her bid in accordance with the original bid requirements and all addenda. All available bids and related addenda can be found at: http://www.placer.ca.gov/admin/procurement/openbids. Failure of bidder to obtain this information shall not relieve him/her of the requirements contained therein. Additionally, failure of bidder to respond to any addenda, when required, may be cause for rejection of his/her bid. 1. GENERAL. These provisions are standard for all County contracts. The County may delete or modify any of these standard provisions for a particular contract by indicating a change in the special instructions to bidders or in the bid. Any bidder accepting a contract award as the result of this bid agrees that the provisions included within this Invitation for Bid shall prevail over any conflicting provision within any standard form contract of the bidder. 2. SUBMISSION OF BIDS. Bids shall be submitted to the Procurement Services Division either online, by using the Placer County EBid System, or in hard-copy form (see below for instructions). All bids must be submitted prior to the date and time specified in this solicitation. Bids shall be submitted by an employee who is authorized to commit his/her firm or organization to the provisions of the bid. Any exceptions to the specifications, terms, or conditions of this solicitation shall be clearly indicated by bidder. SUBMISSION OF HARD-COPY BIDS. Bidders who wish to submit bids in hard-copy form in lieu of using the Placer County EBid System shall submit their bids to the Procurement Services Division, 2964 Richardson Drive, Auburn, California, 95603, between the hours of 8:00 am and 5:00 PM (Pacific), Monday through Friday (excluding County holidays). Hard-copy bids shall be submitted in a sealed envelope which clearly identifies the bid number, commodity, and closing date and time. Bids shall be submitted on the bid forms provided by the County, which may be downloaded from the EBid System or obtained from Procurement Services. Hard-copy bids must be signed by an authorized employee of the firm. The County shall not be responsible for bids delivered to a person/location other than that specified herein. Bids shall be in ink or typewritten and all changes and/or erasures shall be initialed and dated in ink. Any exceptions to the specifications, terms, or conditions of this solicitation shall be clearly indicated by bidder, without obliterating the original text or images contained herein. WARNING: Late bids or unsigned bids shall not be accepted under any circumstances. Facsimile or telephone bids shall not be accepted. 3. AMENDMENTS TO THE BID. Any amendment to this bid is valid only if in writing and issued by the Placer County Procurement Services Division. REQUESTS FOR CLARIFICATION/INFORMATION. Bidders are instructed to contact the Placer County Buyer/Contact Person(s) specifically identified in this bid for further clarification or information related to the specifications, terms, conditions, or evaluation of this bid. Information provided by other than the named contact person may be invalid, and responses which are submitted in accordance with such information may be declared non-responsive. Additionally, contacts made with other County staff in an attempt to circumvent or interfere with the County’s standard bidding and evaluation practices may be grounds for disqualification of the bidder. 4. NON-COLLUSION. The bidder certifies that his bid is made without any previous understanding, agreement or connection with any person, firm or corporation making a bid for the same project and is in all respects fair, without outside control, collusion, fraud or otherwise illegal action. 5. CONFLICT OF INTEREST. Bidder states that no County officer or employee, nor any business entity in which they have an interest, has an interest in the bid awarded or has been employed or retained to solicit or aid in the procuring of the resulting contract, nor will any such person be employed in the performance of such contract. 4/12/13 6. AWARD. The contract may be awarded to the lowest responsible and responsive bidder complying with the provisions of the Invitation for Bid. In determining whether a bid is lowest and responsive, and the bidder responsible, the following may be considered by the County: a) Ability to perform the service required within the specified time; b) Reputation, judgment and experience; c) The quality of performance in previous contracts; d) Previous compliance with laws, as well as employment practices; e) Financial ability to perform the contract; f) The quality, availability and adaptability of the supplies or the contractual services to the particular use required; g) Ability to provide maintenance and service; h) Whether the bidder is in arrears to the County, in debt on contract, is a defaulter on surety to the County or whether the bidder’s taxes or assessments are delinquent; i) The resale value and life cycle costs of the items; j) Such other information as identified in the Purchasing Policy Manual having bearing on the decision to make the award. The award analysis will also include consideration for Local Vendor Preference (per Section 18 below) and any prompt pay discounts offered by the bidder (per Section 19 below). The County reserves the right to reject any and all bids and to waive any informality in bids received whenever such rejection or waiver is in the interest of the County. The County also reserves the right to reject the bid of a bidder who has previously failed to perform properly. The County may award bids by line item, category, or on an all-or-none basis. 7. MERCHANTABILITY. There shall be an implied warranty of merchantability and fitness for an intended use. Any bid submittals taking exception to this requirement may, at the County’s option, be considered non-responsive. 8. SAMPLES. Samples of items, when required, must be furnished free of expense to Placer County and if not destroyed by tests will, upon request, be returned at bidder’s expense. Samples of selected items may be retained for comparison. 9. MANUFACTURER’S NAME AND APPROVED EQUIVALENTS. Unless otherwise specified, manufacturer’s names, trade names, brand names, information and/or catalog numbers listed in a specification are intended only to identify the quality level desired. They are not intended to limit competition. The bidder may offer any equivalent product, which meets or exceeds the specifications. If bids are based on equivalent products, the bids must: 1) Indicate on the bid form the alternate manufacturer’s name and catalog number; 2) Include complete descriptive literature and/or specifications; 3) Include proof that the proposed equivalent shall meet the specifications. The County reserves the right to be the sole judge of what is equal and acceptable. If bidder fails to name a substitute, goods identical to the bid standard must be furnished. 10. INDEMNIFICATION. Unless indemnification requirements are stated otherwise in this solicitation, said requirements shall be as follows: The Contractor hereby agrees to protect, defend, indemnify, and hold Placer County free and harmless from any and all losses, claims, liens, demands, and causes of action of every kind and character including, but not limited to the amounts of judgments, penalties, interest, court costs, legal fees, and all other expenses incurred by Placer County arising in favor of any party, including claims, liens, debts, personal injuries, death, or damages to property (including employees or property of the County) and without limitation by enumeration, all other claims or demands of every character occurring or any way incident to, in connection with or arising directly or indirectly out of, the contract or agreement. The Contractor agrees to investigate, handle, respond to, provide defense for, and defend any such claims, demand, or suit at the sole expense of the Contractor. Contractor also agrees to bear all other costs and expenses related thereto, even if the claim or claims alleged are groundless, false, or fraudulent. This provision is not intended to create any cause of action in favor of any third party against Contractor or the County or to enlarge in any way the Contractor’s liability but is intended solely to provide for indemnification of Placer County from liability for damages or injuries to third persons or property arising from Contractor’s performance pursuant to the resulting contract or agreement. 11. FORCE MAJEURE. If an emergency or natural disaster causes delay or interferes with the use or delivery of the products/services described in this bid, deliveries may be suspended as long as needed to remove the cause or repair the damage. An emergency or natural disaster includes fire, flood, blizzard, strike, accident, consequences of foreign or domestic war, or any other cause beyond the control of the parties. The County reserves the right to acquire from other sources any products/services during any suspension of delivery. 12. TAXES. Placer County is exempt from Federal Excise Tax; an exemption certificate will be furnished upon request. Placer County is not exempt from California State sales/use taxes. All applicable State sales/use taxes will be added to the purchase order. 13. DELIVERY. All prices bid must be FOB Destination, unloaded inside and assembled unless otherwise indicated. 14. FIXED CONTRACT QUANTITIES. Purchase order(s) for full quantities will be issued to successful bidder(s) after notification of award and receipt of all required documents. 15. OPEN-END CONTRACT (BLANKET PURCHASE ORDER). No guarantee is expressed or implied as to the total quantity of commodities/services to be purchased under any open-end contract. Estimated quantities/bid ratio or discounts from manufacturer’s list price may be used for bid comparison. The County reserves the right to: issue purchase orders as and when required; or issue a blanket purchase order for individual agencies or multiple County agencies; or any combination of the preceding. No delivery shall be made without a written order by the County, unless otherwise specifically provided for in the contract. If in a subsequent year the vendor offers to supply his goods and service for the same bid price, or in the event the supplier is willing to negotiate to the satisfaction of Placer County any justifiable price increase prior to the succeeding year’s contract renewal and if the service provided by the supplier was to the satisfaction of the County, the County of Placer reserves the right to extend the period of the resulting contract on a year-to-year basis. Alternatively, the bid solicitation may set forth specific renewal terms. Bidder certifies that prices charged to the County for non-listed commodities or no-fixed price items are equal to or less than those charged the bidder’s most favored customer for comparable quantities under similar terms and conditions. 4/12/13 16. NON-APPROPRIATION. In the event that sufficient funds are not appropriated and budgeted for the payment of goods or services described herein, the agreement shall immediately terminate on the last day of the fiscal period for which appropriations were received or other amounts were available to pay the amounts due under the agreement, without penalty or expense to the County of any kind whatsoever, except that the County will be liable for payment of any unpaid invoices for goods or services which were delivered prior to the end of the last fiscal period for which appropriations were made. 17. RIGHTS AND REMEDIES OF COUNTY FOR DEFAULT. If any item or service furnished by the vendor fails to conform to bid specifications, or to the sample submitted by the vendor with his bid (if any), or if the vendor fails to deliver the items or perform any services required by the contract in the time and manner prescribed, the County may reject the products and/or services provided. Upon rejection, the vendor must promptly reclaim and remove any rejected items without expense to the County, and shall immediately replace all such rejected items with others conforming to such specifications or samples, and/or correct the service deficiency. If the vendor fails to do so, the County has the right to purchase in the open market a corresponding quantity of the rejected items, or have another firm provide the required service, and to deduct from any monies due the vendor the difference between the price named in the contract or purchase order and the actual cost to the County. If the vendor breaches the contract or purchase order, any loss or damage sustained by the County in procuring items which the vendor therein agreed to supply shall be borne and paid for by the vendor. The rights and remedies of the County identified above are in addition to any other rights and remedies provided by law or under the contract. In any legal proceeding brought to enforce the terms of the herein agreement, the prevailing party shall be entitled to an award of reasonable attorney’s fees and costs incurred as a result of enforcing the terms of this agreement. 18. LOCAL VENDOR PREFERENCE. A local preference credit of 5.0% for Placer County businesses will be permitted when evaluating bids for supplies, equipment, materials and services that are not part of a public project. Bidders claiming local vendor preference must submit an Affidavit of Eligibility with their bid, unless an authorized affidavit is already on file. Preference criteria and affidavit forms are available on our website at: http://www.placer.ca.gov/Departments/Admin/Procurement/LocalVendorPref.aspx 19. INVOICES AND PAYMENT TERMS. Invoices are to be mailed to the County department specified on the resulting purchase order, blanket purchase order or contract. All invoices must include the purchase order number, blanket purchase order number, or contract number. Failure to comply will result in delayed payments. The County will make payment on a Net 30- day basis unless a cash discount is allowed for payment within the time period specified by vendor. The payment term shall begin on the date the merchandise is inspected, delivered and accepted by the County, or on the date a correct invoice is received in the office specified in the order, whichever is later. Prompt payment discounts shall be considered earned if payment is postmarked or personally delivered within the prescribed term. For the purposes of this section, the beginning date described above shall be considered day zero for the purposes of counting days in the prescribed term. For the purposes of bid evaluation, the County will only consider discount periods of ten (10) days or more. 20. LEGAL REQUIREMENTS. Federal, State, County and local ordinances, rules and regulations, and policies shall govern development, submittal and evaluation of bids and disputes about bids. Lack of knowledge by any bidder about applicable law is not a defense. 21. ASSIGNMENT. Any contract awarded shall not be assignable by the vendor without the express written approval of the County, and shall not become an asset in any bankruptcy, receivership or guardianship proceedings. 22. OTHER AGENCIES. The successful vendor shall agree to extend Placer County contract prices and terms to other governmental agencies. Any contract resulting from this requirement shall be executed by the successful vendor and the other agency. Placer County will not be a party to “other agency” contracts. 23. PROTEST AND APPEAL PROCESS. Any actual or prospective bidder or contractor who is aggrieved in connection with the solicitation or award of a contract may protest to the Director of Administrative Services in the manner prescribed by Section 10.0 of the Placer County Purchasing Policy. The protest shall be submitted in writing to the Director of Administrative Services within seven (7) calendar days after such aggrieved person or company knows or should have known of the facts giving rise thereto. 24. RECYCLED PRODUCT PREFERENCE. A preference of 10% will be given to bids for products meeting the definition of recycled product cited in Public Contract Code Sections 22150 - 22154. 25. PATENT INFRINGEMENT. Supplier shall indemnify and hold harmless County, its agents and employees, against and from any and all actions, suits, liabilities, prosecutions, penalties, settlements, losses, damages, costs, charges, attorney’s fees, and all other expenses which may arise directly or indirectly from any claim that any of the products supplied by supplier infringes any patent, copyright, trade secret, or other property right. 4/12/13 26. VENDOR FINANCIAL STABILITY. If a vendor is currently involved in an ongoing bankruptcy as a debtor, or in a reorganization, liquidation, or dissolution proceeding, or if a trustee or receiver has been appointed over all or a substantial portion of the property of the vendor under federal bankruptcy law or any state insolvency law, the vendor must provide the County with that information as part of its bid/proposal. In accordance with Section 3.12(g) of the Placer County Purchasing Policy Manual and paragraph 8.e. of this document, the County may use information regarding a bidder’s financial responsibility when making an award determination. The County reserves the right to take any action available if it discovers a failure to provide such information to the County, including but not limited to, a determination that the vendor should be declared non-responsible and/or non-responsive, and suspension or debarment of the vendor, in accordance with the processes defined in the Placer County Purchasing Policy Manual. By submitting a bid/proposal in response to this solicitation, the vendor agrees that if, during the term of any contract it has with the County, it becomes involved as a debtor in a bankruptcy proceeding, or becomes involved in a reorganization, liquidation, or dissolution proceeding, or if a trustee or receiver has been appointed over all or a substantial portion of the property of the vendor under federal bankruptcy law or any state insolvency law, the vendor will immediately provide the County with a written notice to that effect and that it will provide the County any relevant information requested in order for the County to determine whether the vendor has the financial ability to meet its obligations to the County. - - End of General Terms and Conditions - - Placer County Tabulation Report IFB #10385 - Patrol Vehicle Equipment, Supplies, and Installation Services Vendor: Lehr Auto Electric Page of 1 1 Code Name Requested Brand Alternative Brand Item Vendor Reference #Unit Price Qty.Unit Total Price Notes Attachments Line 1 Total Bid Amount $78,607.75 1 TOTAL $78,607.75 General Comments:General Attachments:LEHR 10385 Attachment D - Bid Pricing Worksheets.xls Attachment A Bid No. 10385 Page 1 of 4 COUNTY OF PLACER PATROL VEHICLE EQUIPMENT AND INSTALLATION SERVICES SUPPLEMENTAL TERMS AND CONDITIONS 1. REQUIRED DOCUMENTS Bidders shall complete all yellow fields in the documents listed below, which are documents that need to be downloaded, completed (offline), and then uploaded as part of your electronic response, or follow the instructions in Section 2 below, to be considered for award. Bids which are missing the required response attachments may be rejected as non-responsive. Attachment A – Supplemental Terms and Conditions (informational only) Attachment B – Scope of Work (informational only) Attachment C – Insurance Requirements (informational only) Attachment D – Bid Pricing Worksheets Attachment E – Lightbar Configuration (informational only) 2. HARD COPY BID RESPONSES Bidders wishing to submit a hard copy bid will need to complete the attachment titled “Hard Copy Bid Cover Sheet”, and submit it along with the other required documents listed in Section 1 above. Bidders shall submit their hard copy bid response in a sealed envelope that clearly identifies the bid number, title, and closing date and time to the Procurement Services Division, 2964 Richardson Drive, Auburn, CA, 95603, between the hours of 8:00 am and 5:00 pm (Pacific), Monday through Friday (excluding County holidays), prior to the close date and time specified in this bid solicitation. 3. OVERVIEW Placer County intends to award one or more blanket purchase orders for the purchase of patrol vehicle equipment and supplies as well as equipment installation services on an as-needed basis for the County’s fleet of law enforcement vehicles and equipment on behalf of the Placer County Sheriff’s Office. The items, quantities, sample jobs, services, and occurrences listed in this bid represent the County’s estimated annual requirements and will be utilized for evaluation purposes only. The County does not guarantee any minimum or maximum quantities that will be purchased or minimum or maximum dollar amounts to be spent throughout the term of the resulting agreement(s). Please note that the County requires NEW PRODUCT ONLY – No refurbished, demo, or restored products will be accepted unless specifically authorized by County staff. 4. NON-MANDATORY VEHICLE INSPECTIONS Interested bidders who wish to view a County vehicle in-person and get a better understanding of what services are required to complete the work described herein shall contact Matt Burgans for a viewing appointment at (530) 889-7865. This pre-bid visit is not mandatory, although interested bidders are highly encouraged to schedule a viewing appointment to better understand the nature of the work required in this bid. Failure to schedule and attend a viewing of a County vehicle shall not relieve any bidder from their responsibility to successfully perform the work described herein. Attachment A Bid No. 10385 Page 2 of 4 5. PRICING Responding bidders shall indicate their hourly shop rate for the services described herein as well as provide firm, fixed prices and discounts off list prices for the patrol vehicle equipment and supplies listed in this bid for the initial contract period of approximately one year from the date this bid is awarded. Pricing offered in the bid line items herein shall be for services provided during the successful firm’s normal business hours. Overtime will not be required. The bidder’s shop labor rate per hour offered herein shall apply to all vehicle and equipment makes, models, and types. All bidders shall complete and return Attachment D – Bid Pricing Worksheet. The prices offered by bidders shall be exclusive of sales tax (applicable sales tax shall be added to the County’s invoices). The discounts offered by bidders for the brands listed in Attachment D shall be calculated and billed in addition to any invoice terms that are offered. All rates shall be billed in accordance with the bidders offered pricing. The County will not accept or pay any premiums, administrative surcharge costs, or any other surcharges that are not identified in the bidder’s response. Charges imposed by the State of California or Federal Government after the bid has been awarded will be honored. 6. AWARD 6.1. This bid shall be evaluated and awarded by category or on an all-or-none basis, whichever is in the County’s best interest. The bid evaluation will consider the total cost to install the patrol vehicle equipment into a typical Chevrolet Tahoe 4x2 and 4x4 patrol vehicle for evaluation purposes. This cost will be determined by multiplying the firm’s shop labor rate by the total estimated time to install the equipment, as determined by the County. The estimated installation time will be 18 hours of labor for evaluation purposes only. Local Vendor Preference (if applicable), prompt payment discounts, optional pick up/delivery rates, travel time, travel time rate, turnaround time, and adherence to all conditions and requirements of this bid will also be considered. Bidders are not required to bid on all categories to be considered for award however Placer County reserves the right to award the bid based on pricing offered for the most categories. 6.2. An example of a typical Chevrolet Tahoe patrol vehicle installation includes the following equipment (manufacturer or supplier is shown in parenthesis – no substitutions):  Light Bar System (Whelen/Cencom)  Headlight Flasher (Soundoff)  Siren Speaker and Bracket (Whelen)  Maplight (Little Lite)  Radio Mounting Console (Lehr)  Cage (Setina)  Gun Locks – 2 per vehicle (Santa Cruz)  Push Bumper (Setina) All emergency equipment, dome light, and spotlight are required to be wired to an auxiliary power source in the rear of the vehicle. All power should be timed and disconnected as to protect the vehicle from a dead battery. Attachment A Bid No. 10385 Page 3 of 4 6.3. Other public agencies may elect to “piggyback” on the County’s resulting agreement(s). It will be the responsibility of the other agencies to execute separate contracts with the successful bidder(s) at the same bid pricing (refer to this Bid’s General Terms and Conditions, Section 22) through the end of the initial contract period. Any subsequent renewal pricing and terms successfully negotiated between Placer County and the successful bidder(s) would be made available to those other agencies. 7. DELIVERY REQUIREMENTS 7.1. Bidder’s pricing for equipment and supplies shall be FOB Destination, freight prepaid and assumed by the successful bidder, inside delivery to the following address: Placer County Sheriff’s Office 2929 Richardson Drive, Ste. A Auburn, CA 95603 7.2. The successful bidder shall deliver regular orders within five (5) business days of order placement for the complete order (no partial deliveries will be allowed unless specifically approved by County staff at the time the order is placed). There will also be occasions where the County will need to place an emergency order, which shall be defined as items which are so urgently needed that they must be delivered within forty-eight (48) hours of placing the order or items that are not available from the vendor’s normal inventory. In these instances actual freight charges will be allowed with written approval from the County employee placing the order. All freight charges shall be prepaid by the vendor and added to the resulting invoice. Freight collect charges will not be allowed. The vendor shall clearly advise County personnel of such emergency order circumstances for authorization at the time the order is placed with the vendor. 7.3. If the County’s orders are not delivered within the delivery times specified herein, the County reserves the right to cancel the order and obtain the products from another source. In the event that the County must make such open market purchases, the County reserves the right to exercise the provisions of Section 17 of this bid’s General Terms and Conditions. Continued non-compliance with the stated delivery times may be cause for cancellation of the resulting agreement. 8. PRICE LISTS Placer County requests that the successful bidder provide price lists upon award of the resulting agreement for each of the manufacturer discounts offered in the successful bidder’s completed Attachment D – Bid Pricing Worksheet. The County will accept electronic versions of the price lists if hard copies are not available (e.g. CD’s, flash drives, etc.). These lists will be used to verify the discount pricing on the resulting invoices. All price lists shall be provided free of charge to the County. The County also prefers that the successful bidder(s) state the manufacturer’s list price, the bidder’s offered discount off list price, and the net price for each part purchased on the resulting invoices. The successful bidder shall be responsible for notifying the Placer County Sheriff’s Office primary contact as well as the Procurement Services Division of any changes or updates to the bidder’s/manufacturer’s published catalog/list prices that occur during the contract period. Attachment A Bid No. 10385 Page 4 of 4 9. INSURANCE REQUIREMENTS The successful bidder(s) shall furnish evidence of insurance, including required endorsements, to Placer County Procurement Services demonstrating proof of coverage in the amounts as specified in Attachment C, Placer County Insurance Requirements, within ten (10) calendar days following receipt of a Notice of Intent to Award. THE PROOF OF INSURANCE SHALL INCLUDE A SEPARATE ENDORSEMENT FORM(S) CONTAINING THE EXACT ENDORSEMENT LANGUAGE SPECIFIED IN SECTION 5.0 OF THE ATTACHED INSURANCE REQUIREMENTS, AND SHALL INCLUDE THE GENERAL LIABILITY POLICY NUMBER. BLANKET ENDORSEMENT FORMS MAY BE REJECTED. Failure to comply with the County's insurance and endorsement requirements will result in the disqualification of your bid. All costs of complying with the insurance AND endorsement requirements shall be included in your bid pricing. Bidders are strongly advised to read Attachment C, Placer County Insurance Requirements, prior to submitting a bid. Bidders are NOT required to submit proof of insurance with their bid responses. 10. SUBCONTRACTING The successful bidder shall not subcontract any portion of the work to be performed under the resulting agreement. 11. EQUIVALENT/ALTERNATE OFFERS Due to the standardization of the County’s patrol vehicle equipment including the County’s inventory of repair/replacement parts as well as officer training issues, bids will only be accepted for the brand and model patrol vehicle equipment and supplies specified in Bid Attachment D. 12. SERVICE STANDARDS The successful bidder shall provide all necessary personnel, tools, parts, materials, and equipment to perform the services described herein. The successful bidder shall perform all work in such a manner as to meet all accepted standards for safe practices for patrol vehicle equipment installation services and to safely maintain stored equipment or other hazards consequential or related to the work. The successful bidder agrees to accept the sole responsibility for complying with all local, County, State or other legal requirements at all times including, but not limited to, O.S.H.A. and CAL. O.S.H.A. Safety Orders. The successful bidder must meet all EPA standards as well as all Federal, State, and Local laws, standards, and regulatory and permitting requirements while performing services on behalf of Placer County. 13. WORKMANSHIP All services shall be performed in accordance with the highest standards prevailing in the trades. All of the successful bidder’s employees shall be especially skilled and appropriately trained and certified for the kind of work for which they are employed. Should the successful bidder’s Manager and/or Placer County staff deem anyone employed by the successful bidder incapable of completing the work required, the successful bidder shall immediately dismiss the employee from performing services on behalf of the County. Such removal shall not be considered a basis for employee’s claim for compensation or damages against the County, or any of its officers or agents. Attachment B Bid No. 10385 Page 1 of 2 COUNTY OF PLACER PATROL VEHICLE EQUIPMENT AND INSTALLATION SERVICES SCOPE OF WORK 1.0 The successful bidder shall be regularly established in the business of routine emergency vehicle lighting and equipment installation services on a variety of patrol vehicles and equipment. Responding firms shall have staff experienced in the installation of law enforcement radios, “Code 3” emergency equipment, prisoner partitions, mounting consoles, trunk racks, cages and gun locks at a minimum. 2.0 The successful bidder shall be qualified and capable of performing equipment installation services on various types of patrol vehicles and equipment including, but not limited to, law enforcement sedans, sport utility vehicles, trucks, undercover vehicles, trailers, off-highway vehicles, and boats. 3.0 Time is of the essence in returning County vehicles to service. The successful bidder agrees that work performed under the resulting agreement shall receive top priority over other work in the successful bidder’s shop. If the County determines that the workload of the successful bidder is such that timeliness is not possible in a given situation, the County reserves the right to assign the job to another vendor. 4.0 In the event that the successful bidder is unable to respond or complete the requested services within the bidder’s stated turnaround time, the successful bidder shall notify the County designated contact person immediately prior to commencing work. The County at its sole discretion may elect to utilize the services of another vendor in such instances and will notify the successful bidder if such intention is to be exercised. 5.0 The successful bidder agrees that the County has the right to view any work performed on a County vehicle at the successful bidder’s facility at any time, whether or not services have been completed. The successful bidder agrees that the County has the right to audit any work performed by the successful bidder. 6.0 The successful bidder warrants the goods furnished to be of the highest quality, complying with the specifications and free from all defects whatsoever in workmanship and materials, for a minimum period of one year from the date of delivery. Replacements and repairs under this warranty are to be made by the successful bidder at no cost and to the satisfaction of the County. Equipment installations shall be guaranteed for as long as the County owns/possesses the vehicle. 7.0 The successful bidder agrees that the County has the right to make the final determination as to whether services have been satisfactorily completed. Should any portion of the work to be done which, due to any cause, is not in accordance with the specifications or is not satisfactorily completed, it will be rejected and the successful bidder shall immediately make a satisfactory arrangement with the County before proceeding with other work. The successful bidder shall promptly correct all work rejected by the County as faulty, defective, or failing to conform to the product specifications or scope of work defined herein, whether observed before or after substantial completion of the work and whether or not inspected, tested, repaired, fabricated, installed, or completed. The successful bidder shall bear all costs of Attachment B Bid No. 10385 Page 2 of 2 correcting such rejected work. This provision applies during the contract term and any resulting renewal periods. 8.0 The successful bidder shall be held responsible for any breakage or loss of the County’s vehicles or equipment while performing service on the County’s vehicles. The successful bidder shall be responsible for restoring or replacing any equipment, vehicle, etc. so damaged to the satisfaction of the County and at the sole expense of the successful bidder. The successful bidder shall immediately report to the County any damages to the vehicle or equipment resulting from services performed under the resulting agreement. Attachment C Bid No. 10385 Page 1 of 5 Form 2A Revised 11/17/11 PLACER COUNTY INSURANCE REQUIREMENTS 1. HOLD HARMLESS AND INDEMNIFICATION AGREEMENT: The CONTRACTOR shall save, keep, hold harmless, defend, and indemnify PLACER COUNTY from all damages, costs, or expenses in law or equity that may at any time arise or be set up because of damages to property or personal injury received by reason of or in the course of performing work which may be occasioned by any willful or negligent act or omissions of the CONTRACTOR, any of the CONTRACTOR'S employees, or any subcontractors. The CONTRACTOR shall be responsible for any liability imposed by law and for death, injury, or damage to property of any person including, but not limited to, workmen, subcontractors, and the public, resulting from any cause whatsoever during the progress of the work or at any time before its completion and final acceptance. If any judgment is rendered against PLACER COUNTY for any injury, death, or damage caused by CONTRACTOR as a result of work performed or completed, pursuant to this agreement, CONTRACTOR shall, at its own expense, satisfy and discharge any judgment. As used above, the term PLACER COUNTY means PLACER COUNTY, its officers, agents, employees, and volunteers. 2. INSURANCE: CONTRACTOR shall file with the PLACER COUNTY concurrently herewith a Certificate of Insurance, in companies acceptable to PLACER COUNTY, with a Best's Rating of no less than A-:VII showing. 3. WORKERS’ COMPENSATION AND EMPLOYERS LIABILITY INSURANCE: Workers’ Compensation Insurance shall be provided as required by any applicable law or regulation. Employer's liability insurance shall be provided in amounts not less than one million dollars ($1,000,000) each accident for bodily injury by accident, one million dollars ($1,000,000) policy limit for bodily injury by disease, and one million dollars ($1,000,000) each employee for bodily injury by disease. If there is an exposure of injury to CONTRACTOR'S employees under the U.S. Longshoremen's and Harbor Worker's Compensation Act, the Jones Act, or under laws, regulations, or statutes applicable to maritime employees, coverage shall be included for such injuries or claims. Each Workers’ Compensation policy shall be endorsed with the following specific language: Cancellation Notice - “This policy shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to the County of Placer.” Attachment C Bid No. 10385 Page 2 of 5 Form 2A Revised 11/17/11 Waiver of Subrogation - The workers’ compensation policy shall be endorsed to state that the workers’ compensation carrier waives its right of subrogation against PLACER COUNTY, its officers, directors, officials, employees, agents or volunteers, which might arise by reason of payment under such policy in connection with performance under this agreement by the CONTRACTOR. CONTRACTOR shall require all subcontractors to maintain adequate Workers' Compensation insurance. Certificates of Workers' Compensation shall be filed forthwith with the County upon demand. If the CONTRACTOR has no employees and is exempt from carrying Worker’s Compensation Insurance, the following language shall apply: “CONTRACTOR represents they have no employees and, therefore, is not required to have Workers Compensation coverage. CONTRACTOR agrees they have no rights, entitlements or claim against PLACER COUNTY for any type of employment benefits or workers’ compensation or other programs afforded to PLACER COUNTY employees.” 4. GENERAL LIABILITY INSURANCE: A. Comprehensive General Liability or Commercial General Liability insurance covering all operations by or on behalf of CONTRACTOR, providing insurance for bodily injury liability and property damage liability for the limits of liability indicated below and including coverage for: (1) Products and completed operations; (2) Contractual liability insuring the obligations assumed by CONTRACTOR in this Agreement; and (3) Broad form property damage (including completed operations) Except with respect to bodily injury and property damage included within the products and completed operations hazards, the aggregate limits, where applicable, shall apply separately to CONTRACTOR'S work under the Contract. B. One of the following forms is required: (1) Comprehensive General Liability; (2) Commercial General Liability (Occurrence); or (3) Commercial General Liability (Claims Made). C. If CONTRACTOR carries a Comprehensive General Liability policy, the limits of liability shall not be less than a Combined Single Limit for bodily injury, property damage, and Personal Injury Liability of: One million dollars ($1,000,000) each occurrence Two million dollars ($2,000,000) aggregate Attachment C Bid No. 10385 Page 3 of 5 Form 2A Revised 11/17/11 D. If CONTRACTOR carries a Commercial General Liability (Occurrence) policy: (1) The limits of liability shall not be less than: One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage) One million dollars ($1,000,000) for Products Completed Operations Two million dollars ($2,000,000) General Aggregate (2) If the policy does not have an endorsement providing that the General Aggregate Limit applies separately, or if defense costs are included in the aggregate limits, then the required aggregate limits shall be two million dollars ($2,000,000). E. Special Claims Made Policy Form Provisions: CONTRACTOR shall not provide a Commercial General Liability (Claims Made) policy without the express prior written consent of PLACER COUNTY, which consent, if given, shall be subject to the following conditions: (1) The limits of liability shall not be less than: One million dollars ($1,000,000) each occurrence (combined single limit for bodily injury and property damage) One million dollars ($1,000,000) aggregate for Products Completed Operations Two million dollars ($2,000,000) General Aggregate (2) The insurance coverage provided by CONTRACTOR shall contain language providing coverage up to one (1) year following the completion of the contract in order to provide insurance coverage for the hold harmless provisions herein if the policy is a claims-made policy. Conformity of Coverages - If more than one policy is used to meet the required coverages, such as a separate umbrella policy, such policies shall be consistent with all other applicable policies used to meet these minimum requirements. For example, all policies shall be Occurrence Liability policies or all shall be Claims Made Liability policies, if approved by PLACER COUNTY as noted above. In no cases shall the types of policies be different. 5. ENDORSEMENTS: Each Comprehensive or Commercial General Liability policy shall be endorsed with the following specific language: Attachment C Bid No. 10385 Page 4 of 5 Form 2A Revised 11/17/11 A. "The County of Placer, its officers, agents, employees, and volunteers are to be covered as insured for all liability arising out of the operations by or on behalf of the named insured in the performance of this Agreement." B. “The insurance provided by the Contractor, including any excess liability or umbrella form coverage, is primary coverage to the County of Placer with respect to any insurance or self-insurance programs maintained by the County of Placer and no insurance held or owned by the County of Placer shall be called upon to contribute to a loss.” C. “This policy shall not be changed without first giving thirty (30) days prior written notice and ten (10) days prior written notice of cancellation for non-payment of premium to the County of Placer.” 6. AUTOMOBILE LIABILITY INSURANCE: Automobile Liability insurance covering bodily injury and property damage in an amount no less than one million dollars ($1,000,000) combined single limit for each occurrence. Covered vehicles shall include owned, non-owned, and hired automobiles/trucks. 7. ADDITIONAL REQUIREMENTS: Premium Payments - The insurance companies shall have no recourse against PLACER COUNTY and funding agencies, its officers and employees or any of them for payment of any premiums or assessments under any policy issued by a mutual insurance company. Policy Deductibles - The CONTRACTOR shall be responsible for all deductibles in all of the CONTRACTOR’s insurance policies. The maximum amount of allowable deductible for insurance coverage required herein shall be $25,000. CONTRACTOR’s Obligations - CONTRACTOR’s indemnity and other obligations shall not be limited by the foregoing insurance requirements and shall survive the expiration of this agreement. Verification of Coverage - CONTRACTOR shall furnish PLACER COUNTY with original certificates and amendatory endorsements or copies of the applicable policy language effecting coverage required by this clause. All certificates and endorsements are to be received and approved by PLACER COUNTY before work commences. However, failure to obtain the required documents prior to the work beginning shall not waive the CONTRACTOR’s obligation to provide them. PLACER COUNTY reserves the right to require complete, certified copies of all required insurance policies, including endorsements required by these specifications, at any time. Material Breach - Failure of the CONTRACTOR to maintain the insurance required by this agreement, or to comply with any of the requirements of this section, shall constitute a material breach of the entire agreement. Attachment C Bid No. 10385 Page 5 of 5 Form 2A Revised 11/17/11 Certificate Holder Information - Placer County subscribes to a service that monitors insurance certificates for compliance with the above requirements. The Certificate Holder on the insurance certificates and related documents shall read as follows: County of Placer c/o Ebix RCS PO Box 257 Portland, MI 48875-0257 Upon initial award of a contract to your firm, you may be instructed to send the actual documents to a County contact person for preliminary compliance review. The County will forward those documents to Ebix RCS on your behalf. Attachment E Bid No. 10385 Page 1 of 1 Item No.Description Category Quantity Unit Price Total Price 2019 Ford Utility Parts IB8DEDE-FRESNO LIGHTBAR PKG WHELENLB 66 1,895.00 125,070.00 5045B BLUE SEA'S BLUE SEA 66 21.00 1,386.00 IJ500ST TDS&STROBE TUBE WHELEN 66 204.75 13,513.50 BK2019ITU16 PB450L4 IONS SETINALTP 66 743.00 49,038.00 5028B FUSE BLOCK 6ATO BLUE SEA 66 25.21 1,663.86 933-0092A SUB-FRAME D&R ELEC 66 389.00 25,674.00 WH3 Large Wire Harness OTHER 66 450.00 29,700.00 NUS-2X CABLE SEALS MNSTAR 66 12.50 825.00 ROOF-FT-NITI ROOF MOUNT ANTE 6" and 18"STI-CO 132 72.00 9,504.00 C-VS-1308-INUT CON, VS, 21TMS,HAVIS 66 319.70227 21,100.35 C-CUP2-I CON,ACSY,CUPHLD HAVIS 66 33.61076 2,218.31 C-ARM-103 TOP MOUNT ARMREST LARGE FLIP UP PAD HAVIS 66 94.47576 6,235.40 C-LP2-PS1-USB 2" FACE PLATE HAVIS 66 90.96818 6,003.90 C-FP-15 PLT,1.5MS,HAVIS 66 C-FP-3 PLT,3MS,HAVIS 66 C-FP-4 PLT,4MS,HAVIS 66 C-EB40-CCS-1P FACE PLATE 1 PC HAVIS 66 C-SM-SA FXDADP,OPT,BRKT HAVIS 66 35.21667 2,324.30 C-MD-119 11" SLIDE ARM HAVIS 66 252.00697 16,632.46 QK0634ITU12 FULL REPLACEMENT TRANSPORT SEAT CENTER PULL BELTS SETINA 66 635.75 41,959.50 1K0574ITU12FSRNHP #6VS SPT COATED POLY PARTITION 12-19 INTERCEPTOR U SETINA 66 794.25 52,420.50 WK0595ITU12 POLY WINDOW BAR SETINA 66 186.75 12,325.50 PK0316ITU122ND 12VS COATED POLYCARBONATE REAR PARTITION SETINA 66 351.75 23,215.50 WK0040ITU12 REAR WINDOW SET SETINA 66 269.25 17,770.50 GK10301S1U DUAL WEAPON MT SETINA 66 321.07 21,190.62 TK0841ITU12 CARGO BOX DSE-DRAWER/SLD/EL LK BSN- BASE/SLD/NO LK SETINA 66 1,184.25 78,160.50 DK0100ITU12 DOOR PANELS VS TPO PLASTIC INSTALLS OVER OEM PANEL SETINA 66 194.25 12,820.50 DS-DELL-404-3 DELL DOCK HAVIS 66 890.64 58,782.24 C-EB30-KCH-1P 3" KCH-20R FP HAVIS 66 Page: Document Date: Quote Number: Sales Quote To: Ship SalesPerson Customer ID Terms: Ship Via To: Sell 12841 Steve Adair 15970 Phone: Municipal Service Center 2101 G St Bldg F Tim Olday City of Fresno - Fleet Management Net 30 Ship from Warehouse Phone: Municipal Service Center 2101 G St Bldg F Tim Olday City of Fresno - Fleet Management C i Phone: 916-646-6626 Fax: 916-646-6656 4707 Northgate Blvd Sacramento, CA 95834 7/11/2018 1 Location:Lehr - Sacramento Vehicle Information: 2020 FORD UTILITY, Mileage: 58 Payment Method: Blanket PO: Item No.Description Category Quantity Unit Price Total Price MMSU-1 MAGNETIC MIC KIT MAGMIC 132 34.95 4,613.40 090-0100-0 100AMP BREAKER KUSSMAUL 132 36.48 4,815.36 F Shipping Charges OTHER 1 5,775.00 5,775.00 I INSTALLATION CHARGES LABOR 66 2,860.00 188,760.00 $899,509.13 $66,010.93 $833,498.20 Total: Total Sales Tax: Subtotal: 5,775.00 827723.20 Amount Exempt from Sales Tax Amount Subject to Sales Tax Page: Document Date: Quote Number: Sales Quote To: Ship SalesPerson Customer ID Terms: Ship Via To: Sell 12841 Steve Adair 15970 Phone: Municipal Service Center 2101 G St Bldg F Tim Olday City of Fresno - Fleet Management Net 30 Ship from Warehouse Phone: Municipal Service Center 2101 G St Bldg F Tim Olday City of Fresno - Fleet Management C i Phone: 916-646-6626 Fax: 916-646-6656 4707 Northgate Blvd Sacramento, CA 95834 7/11/2018 2 Location:Lehr - Sacramento Vehicle Information: 2020 FORD UTILITY, Mileage: 58 Payment Method: Blanket PO: City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-01101 Agenda Date:1/17/2019 Agenda #:3-J REPORT TO THE CITY COUNCIL January 17, 2019 FROM:PARVIN NELOMS, JR., Director Parks, After School, Recreation and Community Services Department BY:KRISTINA CHAMBERLIN, Assistant Director Parks, After School, Recreation and Community Services Department SUBJECT WORKSHOP - Proposed PARCS Priority Projects Attachment: Proposed Park Improvements PowerPoint City of Fresno Printed on 3/22/2023Page 1 of 1 powered by Legistar™ WORKSHOP: ProposedPark ImprovementProjects $1,000,000 One-time General Fund Allocation January 17, 2019 SummaryofProposedProjects AL RADKA Soccer Field Lighting $ 300,000 CARY PARK Irrigation Replacement $ 250,000 Athletic Field Lighting*$ 100,000 EINSTEIN Install Security Lighting $ 25,000 GRANNY’S PARK Install Security Lighting $ 75,000 MARY ELLA BROWN BMX Track*$ 50,000 PILIBOS Irrigation Upgrade $ 40,000 Tot Lot Replacement $ 160,000 $1,000,000 *Augmented Funding for Project in Progress AlRadka $300,000 Athletic Field Lighting Project AlRadka–SiteCharacteristics •Council District #5 •5897 E. Belmont •15-acre •2 Baseball Fields •2 Soccer Fields •2 Playgrounds •Community Garden •Designated Picnic Area AlRadka–LightingProject $300,000 Project Scope: Installation of Athletic Field Lighting (1 Soccer Field) Upgrade Electrical Service Install Lighting Management System Impact to Park Accessibility: Minimal PMP: TIER 2-Strategic Improve Expand CaryPark $250,000 Irrigation Replacement Project $100,000 Augmented Funding – Athletic Field Lighting Project CaryPark–SiteCharacteristics •Council District #4 •4750 Fresno Street •9-acre •4 Ballfields •1 Roller Hockey Rink •1 Skatepark •2 Basketball Courts •1 Restroom/Concession •1 Playground •Designated Picnic Area CaryPark–IrrigationProject $250,000 Project Scope: Replacement of Irrigation System Impact to Park Accessibility: Moderate PMP: TIER 1-Critical Lifecycle Replacement CaryPark–LightingProject $100,000* Project Scope: Expansion of Electrical Service Installation of Athletic Field Lighting (1 Softball and 2 Baseball Fields) Install Lighting Management System Impact to Park Accessibility: Minimal PMP: TIER 2-Strategic Improve Expand *Augmentation of Project in Progress EinsteinPark $25,000 Upgrade Security Lighting Project Einstein–SiteCharacteristics •Council District #7 •3566 Dakota Avenue •15-acre •1 Recreation Center •2 Ballfields •2 Tennis Courts •1 Volleyball Court •1 Learner Pool •1 Restroom •1 Playground •Designated Picnic Area Einstein–LightingProject $25,000 Project Scope: Install LED Security Lighting around Recreation Center Impact to Park Accessibility: Minimal PMP: TIER 2-Strategic Safety Granny’sPark $75,000 Upgrade Electrical Service/Install Security Lighting Granny’s–SiteCharacteristics •Council District #7 •2060 E. Pontiac Way •1.1-acre •1 Recreation Modular •1 Playground •1 Basketball Court Granny’s–LightingProject $75,000 Project Scope: Install Security Lighting Upgrade Electrical Service Impact to Park Accessibility: Minimal PMP: TIER 2-Strategic Safety MaryEllaBrown $50,000 Augmented Funding – BMX Track Project MEB–BMXProject $50,000* Project Scope: Construct NEW BMX Track Impact to Park Accessibility: Moderate PMP: TIER 3-Visionary New *Funding Augmentation of Project in Progress MaryElla–SiteCharacteristics •Council District #3 •1350 E. Annadale •4.5-acre •2 Recreation Center •2 Basketball Courts •1 Learner Pool •1 Wading Pool •1 Playground •1 Restroom PilibosPark $200,000 Irrigation System Upgrade/Replace Tot Lot Pilibos–SiteCharacteristics •Council District #5 •4945 E. Lane •13.3-acre •4 Soccer Fields •2 Playgrounds •1 Restroom •Designated Picnic Areas Pilibos–Irrigation/TotLot $200,000 Project Scope: Replace Tot Lot Upgrade Irrigation System Impact to Park Accessibility: Moderate PMP: TIER 1-Critical Lifecycle Replacement City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0198 Agenda Date:1/17/2019 Agenda #:3-K REPORT TO THE CITY COUNCIL January 17, 2019 FROM:PARVIN NELOMS, JR., Director Parks, After School, Recreation and Community Services Department BY:KRISTINA CHAMBERLIN, Assistant Director Parks, After School, Recreation and Community Services Department SUBJECT Approve the expenditures of $1,000,000 of General Fund appropriations identified in FY2019 budget deliberations for PARCS recommended priority projects RECOMMENDATION Staff recommends approval of expenditures of $1,000,000 of General Fund appropriations identified in FY2019 budget deliberations for PARCS recommended priority projects as outlined in this staff report. EXECUTIVE SUMMARY Council has appropriated one-million dollars ($1,000,000) in Fiscal Year 2019 to fund one-time improvement projects in non-regional parks. Based upon priorities outlined in the Fresno Parks Master Plan, staff has prepared a list of proposed projects for consideration. Upon direction of Council, staff will proceed with executing the approved projects. BACKGROUND In January 2018, The City Council adopted the Fresno Parks Master Plan (PMP). Several key findings emerged that characterize the challenges and opportunities for Fresno’s park system. Unfortunately, the PMP identifies over $112 million in deferred investment needed to adequately fund critical lifecycle replacement costs. Of that, nearly $48 million is attributed to antiquated irrigation systems throughout the park system. The PMP process included assessment and analysis of the individual parks as well as a series of public workshops, surveys, and various other public engagement. The results of the formal assessments confirmed that Fresno’s park system is dominated by parks in poor condition. The poor conditions are attributed to lack of adequate resources for maintenance, lifecycle replacement, and City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0198 Agenda Date:1/17/2019 Agenda #:3-K general improvements. A predominant narrative heard throughout the public engagement was the need to address public safety concerns due to inappropriate activities, lighting and security of parks. A second theme of the PMP was the need to address aging/insufficient irrigation infrastructure. The PMP also indicated high market potential for soccer and baseball sports activities. As part of the Fiscal Year 2019 budget hearings, City Council directed $1,000,000 from General Fund for the purpose of funding one-time park improvement projects in non-regional parks. Specific projects were not identified at that time. Based upon PMP priorities, the PARCS subsequently provided a list of recommended projects to Council for consideration The focus of many of the identified projects relate to improving irrigations systems and security lighting. Recommended projects and preliminary estimates are listed below. ·Al Radka Park - Soccer Field Lighting (augmenting other funds)$300,000 ·Cary Park - Irrigation Replacement $250,000 ·Einstein Park - Install additional Security Lighting, $25,000 ·Granny’s Park - Install additional Security Lighting $75,000 ·Pilibos Soccer Park Upgrade Irrigation System/Replace Tot Lot $200,000 $850,000 Staff recommends utilizing a portion of these funds to address funding shortfalls in two projects already in progress. The proposed projects include: ·Cary Park - Athletic Field Lighting Project $100,000 ·Mary Ella Brown - Construction of New BMX Track $50,000 $150,000 Staff recommends approval to move forward with the execution of the above listed projects. Upon approval, staff will commence work and bring forth design consulting agreements, construction awards as appropriate. ENVIRONMENTAL FINDINGS N/A LOCAL PREFERENCE N/A FISCAL IMPACT $1,000,000 in General Fund appropriations was appropriated during the FY2019 Budget process. City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0135 Agenda Date:1/17/2019 Agenda #:3-L REPORT TO THE CITY COUNCIL January 17, 2019 FROM:SCOTT L. MOZIER, PE, Director Public Works Department BY:ROBERT N. ANDERSEN, PE, Assistant Director Public Works Department, Facilities Management Division DEBBIE BERNARD, Supervising Engineering Technician Public Works Department, Facilities Management Division SUBJECT Actions pertaining to the Installation of Field Lighting at Cary Park located at 4750 N.Fresno Street south of Shaw Avenue - Project Bid File No. 3603 (Council District 4) 1.Adopt a finding of Categorical Exemption pursuant to Class 1 Section 15301(c)(existing facilities)of the California Environmental Quality Act (CEQA)Guidelines for the Installation of Field Lighting at Cary Park 2.Award a construction contract to Cable Links Construction of Fresno,California,in the amount of $764,487 for the Installation of Field Lighting at Cary Park RECOMMENDATIONS Staff recommends that the City Council adopt a finding of Class 1 Categorical Exemption,pursuant to Section 15301(c)of the CEQA Guidelines and award a construction contract in the amount of $764,487 to Cable Links Construction of Fresno,California,as the lowest responsive and responsible bidder for the installation of field lighting at Cary Park located at 4750 N.Fresno Street and authorize the Public Works Director or designee to sign the contract on the City’s behalf. EXECUTIVE SUMMARY The existing baseball fields and softball field at Cary Park currently do not have field lighting to enable night time games.The proposed project will expand the existing electrical panel and install field lighting for two (2) baseball fields and one (1) softball field at Cary Park. BACKGROUND Cary Park,located at 4750 N.Fresno Street,serves a large population base in North Central Fresno. Currently,the Park has baseball fields,a softball field,lighted skating area and lighted tennis courts. City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0135 Agenda Date:1/17/2019 Agenda #:3-L Currently,the Park has baseball fields,a softball field,lighted skating area and lighted tennis courts. The baseball and softball fields are not lighted and therefore are only available for use in the daytime hours.Staff recommends that the City install field lighting for two (2)baseball fields and one (1) softball field at Cary Park, consistent with the project scope from the adopted City budget. Public Works Facilities staff had plans and specifications prepared and put the project out for a competitive bid.A Notice Inviting Bids (NIB)was posted on the City’s website on October 19,2018, advertised in the Business Journal and was faxed to eleven (11) building exchanges. Plans and Specifications were distributed to eleven (11)prospective bidders.The Bids were opened on November 20,2018,and the City received six (6)sealed bids.The bids ranged from $764,487 to $948,500 for the Base Bid and Add Alternate 1.Cable Links Construction of Fresno was deemed the lowest responsive and responsible bidder.The bids will expire 64 days after the bid opening on January 23, 2019. Staff recommends that the Council award a construction contract in the amount of $764,487 to Cable Links Construction of Fresno,CA and authorize the Public Works Director or designee to sign the contract on the City’s behalf. ENVIRONMENTAL FINDINGS Staff has performed a preliminary environmental assessment of this project and has determined that it falls within the Class 1 Categorical Exemption set forth in CEQA Guidelines,section 15301(c)as this contract is for the installation of field lighting at existing baseball and softball fields at Cary Park, which will not result in the expansion of capacity of the Park.Furthermore,none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines,section 15300.2 apply to this project.Staff recommends that the Council,based upon its own independent judgment,adopt a finding of Categorical Exemption per Staff determination for the Cary Park Field Lighting project. LOCAL PREFERENCE Local preference was not implemented because the lowest responsive and responsible bidder is a local business. FISCAL IMPACT The project will utilize $400,000 in Community Development Block Grant (CDBG)Funds,$265,000 in Citywide Park Facilities Impact Fees and $193,400 in General Fund dollars. Attachments: Bid Evaluation Standard Contract City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ DPW HUD DIV I.pdf 1.27 rev. 10-14 CONTRACT CITY OF FRESNO, CALIFORNIA PUBLIC WORK OF IMPROVEMENT THIS CONTRACT is made and entered into by and between CITY OF FRESNO, a California municipal corporation (hereinafter referred to as “City”), and ., a Corporation (hereinafter referred to as “Contractor”) as follows: 1. Contract Documents. The "Notice Inviting Bids," "Instructions to Bidders," "Bid Proposal," and the "Specifications" including "General Conditions," "Special Conditions," and "Technical Specifications" for the following: [Title] (Bid File No. [Bid File No.]) [Alternates (if any)] copies of which are annexed hereto, together with all the dr awings, plans, and documents specifically referred to in said annexed documents, including Performance and Payment Bonds, if required, and are hereby incorporated into and made a part of this Contract, and shall be known as the Contract Documents. 2. Price and Work. For the monetary consideration of [Written Dollar Amount] dollars and [Written Cents Amount] cents ($[Amount]), as set forth in the Bid Proposal, Contractor promises and agrees to perform or cause to be performed, in a good and workmanlike manner , under the direction and to the satisfaction of the City’s “Engineer,” and in strict accordance with the Specifications, all of the work as set forth in the Contract Documents. 3. Payment. City accepts Contractor’s Bid Proposal as stated and agrees to pay the consideration stated, at the times, in the amounts, and under the conditions specified in the Contract Documents. 4. Indemnification. To the furthest extent allowed by law including California Civil Code Section 2782, Contractor shall indemnify, hold harmless and defend City and each of its officers, officials, employees, agents and volunteers from any and all loss, liability, fines, penalties, forfeitures, costs and damages (whether in contract, tort or strict liability, including, but not limited to personal injury, death at any time and property damage) incurred by City, Contractor or any other person, and from any and all claims, demands and actions in law or equity (including attorney’s fees and litigation expenses), arising or alleged to have a risen directly or indirectly out of performance of this Contract. Contractor ’s obligations under the preceding sentence shall apply regardless of whether City or any of its officers, officials, employees, agents or volunteers are passively negligent, but shall not apply to any loss, liability, fines, penalties, forfeitures, costs or damages caused by the active or sole negligence, or willful misconduct, of City or any of its officers, officials, employees, agents or volunteers. If Contractor should subcontract all or any portion of the work to be performed under this Contract, Contractor shall require each subcontractor to indemnify, hold harmless and defend City and each of its officers, officials, employees, agents and volunteers in accordance with the terms of the preceding paragraph. This section shall survive termination or expiration of this Contract. 5. Trench Shoring Detailed Plan. Contractor acknowledges the provisions of Section 6705 of the California Labor Code and, if said provisions are a pplicable to this Contract, agrees to comply therewith. 6. Worker’s Compensation Certification. In compliance with the provisions of Section 1861 of the California Labor Code, Contractor hereby certifies as follows: I am aware of the provisions of Section 3700 of the California Labor Code which require every employer to be insured against liability for worker ’s compensation or to undertake self-insurance in accordance with the provisions of that Code, and I will comply with such provisions before commencing the performance of work of this Contract and will make my subcontractors aware of this provision. DPW HUD DIV I.pdf 1.28 rev. 10-14 IN WITNESS WHEREOF, the parties have executed this Contract on the day and year here below written, of which the date of execution by City shall be subs equent to that of Contractor’s, and this Contract shall be binding and effective upon execution by both parties. [Contractor Name], [Legal Identity] By: Name: (Type or print written signature.) Title: Dated: By: Name: (Type or print written signature.) Title: Dated: CITY OF FRESNO, a California municipal corporation By: [Name], [Title] Department of Public Works Dated: ATTEST: YVONNE SPENCE, CMC City Clerk By: Deputy APPROVED AS TO FORM: City Attorney’s Office By: [Name] Date Senior Deputy/Deputy City Attorney II City address: City of Fresno Attention: [Name], [Title] [Street Address] Fresno, CA [Zip] City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0197 Agenda Date:1/17/2019 Agenda #:4-A REPORT TO THE CITY COUNCIL January 17, 2019 FROM:NELSON ESPARZA, Councilmember for District 7 City Council Offices SUBJECT Actions related to repairs at Romain Neighborhood Center: 1. Adopt a finding of Categorical Exemption pursuant to Class 1/Section 15301(c) of the California Environmental Quality Act (CEQA) Guidelines for repair of damage to Romain Neighborhood Center. 2.***RESOLUTION - Directing the prompt repair of Romain Neighborhood Center. (Subject to Mayor’s veto) Sponsor: Councilmember Esparza RECOMMENDATION It is recommended the Council approve this resolution due to the urgent community need for repairs to Romain Neighborhood Center. EXECUTIVE SUMMARY Romain Park and its Recreation Center are an integral part of Central Fresno’s community.Local families hold soccer practices at the park,gather on holidays,and use the recreation center for community events.Youth services offered such as the Romain Neighborhood Park pool,the skate park,and the Police Activities League Boxing Program are all an example of the local community’s need for this crucial park. This resolution will direct the City Manager’s office to expedite the repairs to the damaged recreational center with a monthly status report to City Council.This is needed because of the community’s concern over safety with the burned down recreational center.The prompt repairs will diminish some of the grave concerns over safety and lack of continued programs and scarce green space for Central Fresno. More on the recent reports concerning this unfortunate incident are available here <https://abc30.com/arson-case-causes-parents-to-worry-for-parks-safety/5007473/> BACKGROUND The proposed amendment will direct the City Manager’s office to expedite repairs to the damages recreational center at Romain Park due to a fire incident on New Year’s day. City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0197 Agenda Date:1/17/2019 Agenda #:4-A ENVIRONMENTAL FINDINGS This project falls within the Categorical Exemption set forth in CEQA Guidelines Section 15301/Class 1 because there is no change or expansion of the existing use of Romain Neighborhood Center. Further,none of the exceptions to Categorical Exemptions set forth in the CEQA Guidelines,Section 15300.2, apply to this project. LOCAL PREFERENCE Local preference is not applicable because this item does not involve a bid or award of a contract. FISCAL IMPACT The cost will be paid by either property damage insurance proceeds or general funds earmarked for parks’ repair. Attachment:Resolution City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™ 1 of 2 Date Adopted: Date Approved: Effective Date: City Attorney Approval: ______ Resolution No. ____________ RESOLUTION NO. ____________ A RESOLUTION OF THE COUNCIL OF THE CITY OF FRESNO, CALIFORNIA, DIRECTING THE PROMPT REPAIR OF ROMAIN NEIGHBORHOOD CENTER WHEREAS, an arson fire at Romain Neighborhood Center on New Year’s Day caused major damage; and WHEREAS, Romain Neighborhood Center offers a variety of programs and activities to the public, and is one of the most heavily used community centers in the City; and WHEREAS, hundreds of families use Romain Park every week, and its closure significantly impacts the community; and WHEREAS, the facility cannot reopen and programming cannot commence until repairs are completed, and it may take months to resolve an insurance claim; and WHEREAS, the Council deems it urgent and necessary to proceed now with repairs to return the Neighborhood Center to service as soon as possible. NOW, THEREFORE, BE IT RESOLVED by the Council of the City of Fresno as follows: 1. The Council directs the City to take immediate action to commence repairs of Romain Neighborhood Center to ensure the Center reopens to the public as soon as possible. 2. The Council directs the City Manager to report on the status of repairs every 30 days until repairs are completed. 3. This resolution shall be effective immediately. 2 of 2 * * * * * * * * * * * * * * STATE OF CALIFORNIA ) COUNTY OF FRESNO ) ss. CITY OF FRESNO ) I, YVONNE SPENCE, City Clerk of the City of Fresno, certify that the foregoing resolution was adopted by the Council of the City of Fresno, at a regular meeting held on the day of , 2019. AYES : NOES : ABSENT : ABSTAIN : Mayor Approval: , 2019 Mayor Approval/No Return: , 2019 Mayor Veto: , 2019 Council Override Vote: , 2019 YVONNE SPENCE, MMC City Clerk By: Deputy APPROVED AS TO FORM: DOUGLAS T. SLOAN City Attorney By:_____________________________ Katie Doerr [Date] Chief Assistant City of Fresno Staff Report 2600 Fresno Street Fresno, CA 93721 www.fresno.gov File #:ID19-0173 Agenda Date:1/17/2019 Agenda #:4-B REPORT TO THE CITY COUNCIL January 17, 2019 FROM:STEVE BRANDAU, Council President City Council Offices SUBJECT Council Boards and Commissions Communications,Reports,Assignments and/or Appointments, Reappointments, Removals to/from City and non-City Boards and Commissions: 1.Council of Governments -Mayor Brand-Ex-Officio (Olivier-Alternate) 2.Finance and Audit Committee -Bredefeld, Esparza- Vice Chair, Brandau 3.Fresno Area Workforce Investment Corporation -Soria 4.Fresno County Transportation Authority (FCTA) -Mayor Brand-Ex-Officio, (Caprioglio) 5.Fresno Regional Workforce Development Board -Soria 6.Fresno County Zoo Authority -Mayor Brand-Ex-Officio, (Arias-Alternate) 7.Fresno Madera Area Agency on Aging Board -Olivier 8.Joint Powers Financing Authority -Mayor Brand,President Soria,Councilmember Caprioglio 9.San Joaquin River Conservancy Board -Mayor Brand-Ex-Officio, (Brandau-Alternate) 10.Association for the Beautification of Highway 99 -Baines 11.Upper Kings Basin Integrated Regional Water Management JPA -Brandau (Olivier,Michael Carbajal and Vacant - Alternates) 12.Economic Development Corporation Serving Fresno County -Caprioglio-Ex-Officio,City Manager Wilma Quan-Schecter and (Chavez - Alternate) 13.League of California Cities (Annual Meeting)-Council President Soria,(Vice President Brandau, Councilmember Caprioglio - Alternate) 14.Litigation Exposure Reduction Ad Hoc Committee -Brandau, Caprioglio 15.Sub- Committee on Transportation - Baines, Caprioglio, Soria 16.Code Enforcement Sub-Committee - Baines, Caprioglio, Soria 17.Enterprise and Construction Management Oversight Board -Councilmember Chavez, Bredefeld-Alternate 18.School Liaison Sub-Committee -Soria - Chair, Olivier, Baines 19.North Kings Groundwater Sustainability Agency (GSA) Joint Powers Authority -Mayor Brand (Michael Carbajal, Tim Orman - Alternates) City of Fresno Printed on 3/22/2023Page 1 of 2 powered by Legistar™ File #:ID19-0173 Agenda Date:1/17/2019 Agenda #:4-B City of Fresno Printed on 3/22/2023Page 2 of 2 powered by Legistar™