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02/26/2024 City Council Regular Agenda PacketFebruary 26, 2024 | 6:00 PM Page 1 of 7 City Council Regular Meeting Agenda CITY COUNCIL REGULAR MEETING AGENDA CITY COUNCIL CHAMBERS, CITY HALL 7351 ROSANNA STREET, GILROY, CA 95020 MONDAY, FEBRUARY 26, 2024 | 6:00 PM MAYOR Marie Blankley COUNCIL MEMBERS Rebeca Armendariz Dion Bracco Tom Cline Zach Hilton Carol Marques Fred Tovar CITY COUNCIL PACKET MATERIALS ARE AVAILABLE ONLINE AT www.cityofgilroy.org AGENDA CLOSING TIME IS 5:00 P.M. THE TUESDAY PRIOR TO THE MEETING PUBLIC COMMENTS ON AGENDA ITEMS ARE TAKEN BEFORE THE CITY COUNCIL TAKES ACTION. Please keep your comments to 3 minutes. Time restrictions may vary based on the Mayor's discretion. Send written comments on any agenda item to publiccomments@cityofgilroy.org or City Hall, 7351 Rosanna Street, Gilroy, CA 95020. Comments received by 1 p.m. on the meeting day will be distributed to the City Council before the meeting. Comments are also available at bit.ly/3NuS1IN. In compliance with the Americans with Disabilities Act, the City will make reasonable arrangements to ensure accessibility to this meeting. If you need special assistance to participate in this meeting, please contact the City Clerk’s Office at least 72 hours prior to the meeting at (408) 846-0204 or cityclerk@cityofgilroy.org to help ensure that reasonable arrangements can be made. If you dispute any planning or land use decision from this meeting in court, you may only raise issues you or someone else presented at this meeting's public hearing or in written letters to the City Council before the hearing. Be aware that the time to seek a judicial review of any final decision made at this meeting is defined by Section 1094.6 of the California Code of Civil Procedure. During this meeting, a Closed Session may be called under Government Code Section 54956.9 (d)(2). This will happen if, in the City's legislative body's opinion (based on current facts, circumstances, and legal advice), there's a significant risk of a lawsuit against the City. Additional materials submitted after agenda distribution are available on www.cityofgilroy.org as soon as possible. KNOW YOUR RIGHTS UNDER THE GILROY OPEN GOVERNMENT ORDINANCE Government's duty is to serve the public, reaching its decisions in full view of the public. Commissions, task forces, councils and other agencies of the City exist to conduct the people's business. This ordinance assures that deliberations are conducted before the people and that City operations are open to the people's review. February 26, 2024 | 6:00 PM Page 2 of 7 City Council Regular Meeting Agenda FOR MORE INFORMATION ON YOUR RIGHTS UNDER THE OPEN GOVERNMENT ORDINANCE, TO RECEIVE A FREE COPY OF THE ORDINANCE OR TO REPORT A VIOLATION OF THE ORDINANCE, CONTACT THE OPEN GOVERNMENT COMMISSION STAFF AT (408) 846-0204. If you need translation assistance, contact the City Clerk 72 hours before the meeting at 408-846-0204 or cityclerk@cityofgilroy.org. Si necesita un intérprete durante la junta y gustaría dar un comentario público, comuníquese con el Secretario de la Ciudad un mínimo de 72 horas antes de la junta al 408-846-0204 o envíe un correo electrónico a la Oficina del Secretario de la Ciudad a cityclerk@cityofgilroy.org. To access written translation during the meeting, please scan the QR Code or click this link: Para acceder a la traducción durante la reunión, por favor escanee el código QR o haga clic en el enlace: bit.ly/3FBiGA0 Choose Language and Click Attend | Seleccione su lenguaje y haga clic en asistir Use a headset on your phone for audio or read the transcript on your device. Use sus auriculares para escuchar el audio o leer la transcripción en el dispositivo. The agenda for this meeting is outlined as follows: 1. OPENING 1.1. Call to Order 1.2. Pledge of Allegiance 1.3. Invocation 1.4. City Clerk's Report on Posting the Agenda 1.5. Roll Call 1.6. Orders of the Day 1.7. Employee Introductions 2. CEREMONIAL ITEMS - Proclamations and Awards 3. COUNCIL CORRESPONDENCE (Informational Only) 4. PRESENTATIONS TO THE COUNCIL 4.1. PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE AGENDA BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY COUNCIL February 26, 2024 | 6:00 PM Page 3 of 7 City Council Regular Meeting Agenda This part of the meeting allows public address on non-agenda topics within the Council's jurisdiction. To speak, complete a Speaker's Card from the entrances and give it to the City Clerk. Speaking time ranges from 1-3 minutes based on the Mayor's discretion. Extended discussions or actions on non-agenda items are restricted by law. For Council action, the topic may be listed on a future agenda. Email written comments on non-agenda topics to publiccomments@cityofgilroy.org or mail them to City Hall, 7351 Rosanna Street, Gilroy, CA 95020, by 1:00 p.m. on the meeting day. These comments, available at City Hall, will be shared with the Council and included in the meeting record. Late submissions will be shared as soon as possible. A 10-page limit applies to hard-copy materials, but electronic submissions are unlimited. 5. REPORTS OF COUNCIL MEMBERS Council Member Bracco – Downtown Committee, Santa Clara County Library Joint Powers Authority, Santa Clara Valley Water Joint Water Resources Committee, SCRWA Council Member Armendariz – Downtown Committee, Santa Clara County Library Joint Powers Authority (alternate), Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, Silicon Valley Clean Energy Authority JPA Board (alternate) Council Member Marques – ABAG, Downtown Committee, Gilroy Gardens Board of Directors, Santa Clara Valley Habitat Agency Governing Board, Santa Clara Valley Habitat Agency Implementation Board, SCRWA (alternate) Council Member Hilton – CalTrain Policy Group (alternate), Silicon Valley Clean Energy Authority JPA Board, VTA Policy Advisory Committee Council Member Cline – Gilroy Economic Development Partnership (alternate), Gilroy Gardens Board of Directors (alternate), Gilroy Sister Cities Association, Gilroy Youth Task Force, Silicon Valley Regional Interoperability Authority Board, VTA Policy Advisory Committee (alternate), Visit Gilroy California Welcome Center Board, VTA Mobility Partnership Committee Council Member Tovar – Downtown Committee, Gilroy Youth Task Force (alternate), Santa Clara County Expressway Plan 2040 Advisory Board, Santa Clara Valley Water Commission, SCRWA, South County Youth Task Force Policy Team Mayor Blankley – ABAG (alternate), CalTrain Policy Group, Downtown Committee, Gilroy Economic Development Partnership, Gilroy Sister Cities Association (alternate), Gilroy Youth Task Force, Santa Clara Valley Water Joint Water Resources Committee, SCRWA, South County Youth Task Force Policy Team, VTA Board of Directors, VTA Mobility Partnership Committee 6. FUTURE COUNCIL INITIATED AGENDA ITEMS February 26, 2024 | 6:00 PM Page 4 of 7 City Council Regular Meeting Agenda 7. CONSENT CALENDAR Items under the Consent Calendar are deemed routine and approved with one motion. If a Council member or a member of the public wishes for a separate discussion on an item, it must be requested for removal before the Council's approval vote. If removed, the item will be discussed in its original order. 7.1. Approval of the Action Minutes of the February 5, 2024 City Council Regular Meeting 7.2. Accept and File Quarterly Cash and Investment Report as of December 31, 2023 7.3. Approval of Final Map and PIA Tract 10594 700 W. 6th Street Subdivision 7.4. Approval of Notice of Acceptance of Completion for Property Improvement Agreement No. 2017-06, Ballybunion Dr and Santa Teresa Blvd Roundabout 7.5. Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment for $20,813 for a County of Santa Clara Office of Emergency Management Training and Exercise Grant 7.6. Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment of $33,080.66 for a County of Santa Clara Health Care System Grant 8. BIDS AND PROPOSALS 8.1. Award a Contract in the amount of $408,134 to Blue Raster for Bicycle and Pedestrian Geographic Information Systems Consultant Services and Approve a Budget Amendment in the Measure B Fund 1. Staff Report: Bryce Atkins, Assistant to the City Administrator 2. Public Comment 3. Possible Action: Council: a. Award a contract to Blue Raster for $408,134 for bicycle and pedestrian geographic information systems consultant services, and authorize the City Administrator to execute the agreement and any non-financial amendments to the agreement. b. Adopt a resolution amending the FY24 adopted budget to increase appropriations in the Measure B Fund (Fund 212) by $408,134. 8.2. Award a Contract to Kimley-Horn and Associates, Inc. for the Design of Two Traffic Signals Project No. 24-RFP-PW-498 in the amount of $149,854, Approve a Project Contingency of $29,971, and Approve a Total Project Expenditure of $179,825 for Design Services 1. Staff Report: Heba El-Guindy, Public Works Director 2. Public Comment 3. Possible Action: February 26, 2024 | 6:00 PM Page 5 of 7 City Council Regular Meeting Agenda Award a contract to Kimley-Horn and Associates, Inc. in the amount of $149,854 and approve a project contingency of $29,971 for a total project expenditure of $179,825 for the Design of Two Traffic Signals Project No. 24- RFP-PW-498 and authorize the City Administrator to execute the contract and associated documents. 9. PUBLIC HEARINGS 10. UNFINISHED BUSINESS 11. INTRODUCTION OF NEW BUSINESS 11.1. Consideration of a Ceasefire Resolution 1. Staff Report: Bryce Atkins, Assistant to the City Administrator 2. Public Comment 3. Possible Action: Council discussion and direction. 11.2. Consent of the Appointment of Beth Minor as Interim City Clerk (Retired Annuitant) Effective February 27, 2024, and Adoption of a Resolution of the City Council of the City of Gilroy Approving the Appointment and Employment Agreement 1. Staff Report: LeeAnn McPhillips, Administrative Services and Human Resources Director / Risk Manager 2. Public Comment 3. Possible Action: a. Consent the City Administrator’s recommendation to appoint Beth Minor as Interim City Clerk (as a retired annuitant) effective February 27, 2024. b. Adopt a Resolution of the City Council of the City of Gilroy approving the appointment of Beth Minor as Interim City Clerk (Retired Annuitant) pursuant to California Government Code Section 21221(h) and authorizing the City Administrator to execute the employment agreement. 11.3. Receive Fiscal Year 2023-2024 (FY24) Mid-Year Budget Report and Adopt a Budget Amendment Resolution 1. Staff Report: Harjot Sangha, Finance Director 2. Public Comment 3. Possible Action: a. Receive Mid-Year Budget Report for FY24. b. Adopt a Resolution of the City Council of the City of Gilroy Amending the Appropriations for FY24 in Fund 293. February 26, 2024 | 6:00 PM Page 6 of 7 City Council Regular Meeting Agenda 11.4. FY24 and FY25 Departmental Workplan Updates 1. Staff Report: Bryce Atkins, Assistant to the City Administrator 2. Public Comment 3. Possible Action: Council receive the report. 11.5. Council-Initiated Agenda Item Policy 1. Staff Report: Bryce Atkins, Assistant to the City Administrator 2. Public Comment 3. Possible Action: Council provide direction regarding the draft policy. 11.6. Accept the Annual Comprehensive Financial Report for Fiscal Year-Ended June 30, 2023 1. Staff Report: Harjot Sangha, Finance Director 2. Public Comment 3. Possible Action: Accept and file the report. 12. CITY ADMINISTRATOR'S REPORTS 13. CITY ATTORNEY'S REPORTS 14. CLOSED SESSION 14.1. CONFERENCE WITH LABOR NEGOTIATORS - COLLECTIVE BARGAINING UNIT Pursuant to GC Section 54957.6 and GCC Section 17A.11 (4); Collective Bargaining Units: Local 2805, IAFF Fire Unit Representing Gilroy Fire Fighters City Negotiators: Jimmy Forbis, City Administrator, LeeAnn McPhillips, HR Director Anticipated Issues(s) Under Negotiation: Wages, Hours, Benefits, Working Conditions; Memorandums of Understanding: City of Gilroy and Gilroy Fire Fighters Local 2805. 14.2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to GC Sec. 54956.8 and GCC Sec.17A.8 (a) (2) Property: Gilroy Gardens Theme Park, 3050 Hecker Pass Highway, Gilroy, CA (APN’s: 810-17-024, 810-17-026, 810-17-029, 810-17-030, 810-17-031, 810-18-002, 810-18-013, 810-19-005, 810-19-007, 810-19-010, 810-19-011, 810-19-014) Negotiators: Jimmy Forbis, City Administrator Other Party to Negotiations: Gilroy Gardens Family Theme Park, LLC Under Negotiations: Price and terms of payment for sale or lease. February 26, 2024 | 6:00 PM Page 7 of 7 City Council Regular Meeting Agenda 15. ADJOURN TO OPEN SESSION Report of any action taken in Closed Session and vote or abstention of each Council Member if required by Government Code Section 54957.1 and GCC Section 17A.13 (a); Public Report of the vote to continue in closed session if required under GCC Section 17A.11 (e). 16. ADJOURNMENT FUTURE MEETING DATES March 2024 4 Regular Meeting - 6:00 p.m 18 Regular Meeting - 6:00 p.m April 2024 8 Regular Meeting - 6:00 p.m 15 Regular Meeting - 6:00 p.m May 2024 6 Regular Meeting - 6:00 p.m 20 Regular Meeting - 6:00 p.m Meetings are live streamed on the City of Gilroy’s website at gilroy.city/meetings and on YouTube at https://bit.ly/45jor03. Access the 2024 City Council Meeting Calendar at https://bit.ly/3LLzY1n. CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. From:Joseph P Thompson To:Gilroy Dispatch Editor; Brad Kava; All Council Members; chamber of commerce Gilroy California; Tammy Brownlow; jane@gilroy.org; Mayor Marie Blankley; Thai Pham; SBC Board of Supervisors; supervisorkosmicki@cosb.us; Supervisors; Angela Curro; supervisorsotelo@cosb.us; Sanbenitocog Info; RTDillon; rwells@edcsanbenito.org; Roxy Montana Subject:EXTERNAL - CAHSRA"S LATEST "BUSINESS PLAN" UP FOR REVIEW, PUBLIC COMMENT: WILL OUR ELECTED LEADERS DEFEND THE TAXPAYERS? OR BETRAY US? Date:Sunday, February 11, 2024 10:20:22 AM GUEST EDITORIAL: LETTER TO EDITOR, DISPATCH, FREELANCE, MORGAN HILL TIMES--- PUBLIC COMMENT: NEXT MEETING; REAL OR VIRTUAL; REGULAR OR SPECIAL; PUBLIC WORKSHOP OR PRIVATE RETREAT--- Ah Mon Amis, CAHSRA's new "business plan," which is up for review and public comment, is not a "business" plan, it's a bankruptcy plan, an insolvency plan. Like VTA, they would take about 1% of the total costs from passengers, and require taxpayers thru gas taxes to pay the balance 99% to make it go. Like COG, and all the other transit agencies. If truth be told, it is a plan funded on taxpayer subsidies, for the most part, and a very small percentage by fares paid by riders. It is a roadmap to a trainwreck, a financial disaster like VTA, Caltrain, Amtrak, ACE Train, SMART Train, BART, Metroliner and Lite Rail boondoggles. Conceived insolvent, born bankrupt, and kept running by ever-increasing taxpayers' dollars; hemorrhaging losses, berserk bloated wages, salaries, benefits and pensions for the public sector union members all the while motorists must pay higher gas taxes and vehicle fees to reward the fraud, waste and abuse at another public sector monstrosity, a Supermassive Black Hole. Alternative private sector options exist, but the turf protectors at CAHSRA will never even discuss them. In 2008 Californians voted for self-sufficient high speed rail, not a bigger Amtrak. If CAHSRA adopts the new proposed "business plan," then they ought to next plan their Ch. 9 Bankruptcy because they will be insolvent, bankrupt, from the start. Better yet, a Ch. 7 liquidation bankruptcy would be called for since their method of crucifying taxpayers to make public sector transit work deserves to be put out of existence. If it was a horse, we'd do the humane thing. Instead, they propose taxing motorists higher gas taxes, a Road to Serfdom like Lenin's ideas. Joe Thompson Past-Chair, Legislation Committee Transportation Lawyers Assn. Past-President, 1999-2001, 2006, Gilroy-Morgan Hill Bar Assn. 4.1 p. 8 of 478 4.1 p. 9 of 478 4.1 p. 10 of 478 4.1 p. 11 of 478 4.1 p. 12 of 478 1 Beth Minor From:Chris fowler <fowler1969@hotmail.com> Sent:Monday, February 12, 2024 12:27 PM To:All Council Members Subject:EXTERNAL - You've set a precedent For Walmart's Drugging, Vandalism with Assault & Battery to include sexual abuse. I don't care you have, I suspect it has something to do with employment or favors from those types. Creepy but your Gilroy and it shows blatantly. I don't appreciate your silence but none of Walmart s intended victims do. Mr.Fowler Get Outlook for Android CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #4.1 4.1 p. 13 of 478 1 Beth Minor From:Chris fowler <fowler1969@hotmail.com> Sent:Wednesday, February 21, 2024 8:15 AM To:All Council Members Subject:EXTERNAL - Walmart Drugging attacks. I'm purchasing a gun to defend myself from future Walmart Druggings and sexual battery as well police cover ups of these attacks. You have failed to protect your community from police abuses as well Walmarts drugging raped. Please don't blame for them causing their own murders as mines only for defense not some Walmart revenge. I feel so sorry for your community having people like you protecting them. Get Outlook for Android CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #4.1 4.1 p. 14 of 478 Page 1 of 9 City of Gilroy City Council Regular Meeting Minutes Monday, February 5, 2024 | 6:00 PM 1. OPENING 1.1. Call to Order The meeting was called to order by Mayor Blankley at 6:00 PM. 1.2. Pledge of Allegiance Council Member Tovar led the Pledge of Allegiance. 1.3. Invocation There was none. 1.4. City Clerk's Report on Posting the Agenda City Clerk Pham reported on the Posting of the Agenda. 1.5. Roll Call Attendance Attendee Name Present Rebeca Armendariz, Council Member Dion Bracco, Council Member Tom Cline, Council Member Zach Hilton, Council Member Carol Marques, Mayor Pro Tempore Fred Tovar, Council Member Marie Blankley, Mayor Absent None 1.6. Orders of the Day There were none. 1.7. Employee Introductions Finance Director Sangha introduced Jeanette Cid, Accounting Assistant I. 2. CEREMONIAL ITEMS - Proclamations and Awards There were none. 3. PRESENTATIONS TO THE COUNCIL 3.1. PUBLIC COMMENT BY MEMBERS OF THE PUBLIC ON ITEMS NOT ON THE AGENDA BUT WITHIN THE SUBJECT MATTER JURISDICTION OF THE CITY COUNCIL Mayor Blankley opened Public Comment. The following speakers spoke on items that were not on the agenda. Ann Marie McCauley criticized the inadequacy of short-term services for the unhoused, stressing the need for long-term housing solutions to address homelessness effectively. DRAFT7.1 p. 15 of 478 February 5, 2024 | 6:00 PM Page 2 of 9 City Council Regular Meeting Minutes Ron Kirkish criticized Plan Bay Area 2050 for its costly and progressive approach to societal issues, promising to detail its provisions in future council meetings. Ana Mendoza requested the City Council review an ordinance related to mobile parks in Gilroy, indicating future discussions with tenants, and advocated for a resolution to support Palestinian community members, emphasizing the need to address hate and protect residents. Robert Zepeda raised concerns about the COVID-19 vaccine, citing a specific obituary to argue that negative outcomes and deaths related to the vaccine are not being adequately communicated to the public. The following members urged the City Council to adopt a ceasefire resolution for Israel and Palestine: Noshaba Afzal Reyna Deniz Sal Akhter Aisha Wahdani Zain Yahya Amina Kemici Handy Abbass There being no further speakers, Mayor Blankley closed Public Comment. 4.REPORTS OF COUNCIL MEMBERS Council Member Bracco reported on Santa Clara County Library Joint Powers Authority. He also expressed gratitude towards St. Mary’s Catholic School children for sending letters and portraits. Council Member Armendariz had no report. Council Member Marques had no report. Council Member Hilton on Silicon Valley Clean Energy Authority JPA Board Council Member Cline had no report. Council Member Tovar thanked Gilroy Foundation Executive Director Jaclyn Muro for discussing collaboration opportunities with the City, focusing on downtown input, working with Gavilan College, and developing scholarships for Gilroy students pursuing advanced degrees. He also expressed gratitude for a card received from Saint Mary's Catholic School Mayor Blankley reported on VTA Board of Directors. She also shared her appreciation for personalized gestures from Saint Mary’s Catholic School for Catholic Schools Week. 5.COUNCIL CORRESPONDENCE 5.1. City Administrator Response to Request from the Local Agency Formation Commission (LAFCO) Board to Provide Implementation Plans for the 2023 Countywide Fire Service Review Recommendations Council acknowledged the item. 6.FUTURE COUNCIL INITIATED AGENDA ITEMS Council Member Tovar requested the Council to introduce a resolution on ceasefire inDRAFT7.1 p. 16 of 478 February 5, 2024 | 6:00 PM Page 3 of 9 City Council Regular Meeting Minutes Palestine and Israel. The item received majority support. 7. CONSENT CALENDAR Council Member Cline requested that Item 7.3 be pulled from the Consent Calendar. Mayor Blankley opened Public Comment. Jeff Orth reported on Item 7.4 feedback from Fifth Street business owners on parklets, noting all are fine with its presence but suggest making it less obtrusive by cleaning up trash, removing the roof, lowering walls, and angling corners to reduce its size and visual impact. There being no further speakers, Mayor Blankley closed Public Comment. Motion: Approve the Consent Calendar with the exclusion of Item 7.3. RESULT: Pass MOVER: Rebeca Armendariz, Council Member SECONDER: Fred Tovar, Council Member AYES: Council Member Armendariz, Council Member Bracco, Council Member Cline, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None ABSTAIN: None 7.1. Approval of the Action Minutes of the January 22, 2024 City Council Regular Meeting A motion was made to approve the minutes. 7.2. Approve the Third Amendment to the Agreement with Swimming Swan LLC to Extend the Agreement by One Year for $250,348 A motion was made to approve the third amendment to the agreement with Swimming Swan LLC. 7.3. Tentative Map Time Extension Request No. 2, Without Any Changes to Project Approval, to Subdivide 8.36 Acres, Creating 14 Single-Family Residential Lots, Two Common Parcels, and One Public Park Parcel, Located at the Northerly End of Greenfield Drive, APN 808-20-008 (TM 16- 02) The item was pulled out of the Consent Calendar for further discussion. 7.4. Extension and Maintenance of Existing Parklet Permits Until Adoption and Implementation of a Formal Downtown Parklet Program A motion was made to approve the extension and maintenance of existing parklet permits until adoption and implementation of a formal downtown parklet program. DRAFT7.1 p. 17 of 478 February 5, 2024 | 6:00 PM Page 4 of 9 City Council Regular Meeting Minutes 7.5. Adopt a Resolution of the City Council of the City of Gilroy Authorizing Execution of Administering Agency-State Master Agreements for State and Federal-Aid Funded Projects A motion was made to adopt the Resolution. Enactment No.: Resolution No. 2024-05 7.6. Resolution of the City Council of the City of Gilroy Declaring Weeds a Nuisance A motion was made to adopt the resolution. Enactment No.: Resolution No. 2024-06 7.3. Tentative Map Time Extension Request No. 2, Without Any Changes to Project Approval, to Subdivide 8.36 Acres, Creating 14 Single-Family Residential Lots, Two Common Parcels, and One Public Park Parcel, Located at the Northerly End of Greenfield Drive, APN 808-20-008 (TM 16- 02) Council Member Cline recused himself from the item due to a conflict of interest. Motion: Adopt a resolution approving a 12-month time extension of Tentative Map TM 16-02, without any changes to project approval, to subdivide 8.36 acres, creating 14 single-family residential lots, two common parcels, and one public park parcel located at the northerly end of Greenfield Drive, APN 808-20-008 (TM 16-02). RESULT: Pass MOVER: Fred Tovar, Council Member SECONDER: Dion Bracco, Council Member AYES: Council Member Armendariz, Council Member Bracco, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None RECUSED: Council Member Cline Enactment No.: Resolution No. 2024-04 8. BIDS AND PROPOSALS 8.1. Award a Contract to ASG Builders for the FY24 Annual CDBG Sidewalk/Curb Ramp Project No. 24-PW-285 in the amount of $97,290, Approve a Project Contingency of $19,458, and Approve a Total Project Expenditure of $116,748 for Construction Interim Public Works Director Bjarke provided staff presentation and responded to Council Member questions. Mayor Blankley opened Public Comment. There being no speakers, Mayor Blankley closed Public Comment. DRAFT7.1 p. 18 of 478 February 5, 2024 | 6:00 PM Page 5 of 9 City Council Regular Meeting Minutes Motion: Award a contract to ASG Builders in the amount of $97,290 and approve a project contingency of $19,458 for the FY24 Annual CDBG Sidewalk/Curb Ramp Project (No. 24-PW-285) and authorize the City Administrator to execute the contract and associated documents. RESULT: Pass MOVER: Dion Bracco, Council Member SECONDER: Rebeca Armendariz, Council Member AYES: Council Member Armendariz, Council Member Bracco, Council Member Cline, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None ABSTAIN: None 8.2. Award a Contract to Hexagon Transportation Consultants, Inc. for the First Street (SR152)/Kern Avenue Traffic Signal Design Project No. 24-RFP-PW- 494 in the amount of $264,685, Approve a Project Contingency of $39,703, and Approve a Total Project Expenditure of $304,388 for Design Services Interim Public Works Director Bjarke provided staff presentation and responded to Council Member questions. Mayor Blankley opened Public Comment. There being no speakers, Mayor Blankley closed Public Comment. Motion: Adopt a resolution of the City Council of the City of Gilroy amending the Fiscal Year 2023-2024 budget and appropriating an additional $121,821 from the Traffic Impact Fund (425) and award a contract to Hexagon Transportation Consultants, Inc. in the amount of $264,685 and approve a project contingency of $39,703 for a total project expenditure of $304,388 for the design and preparation of bid documents for the First Street (SR152)/Kern Avenue Traffic Signal Design Project No. 24-RFP-PW-494 and authorize the City Administrator to execute the contract and associated documents. RESULT: Pass MOVER: Tom Cline, Council Member SECONDER: Rebeca Armendariz, Council Member AYES: Council Member Armendariz, Council Member Bracco, Council Member Cline, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None ABSTAIN: None Enactment No.: Resolution No. 2024-07 DRAFT7.1 p. 19 of 478 February 5, 2024 | 6:00 PM Page 6 of 9 City Council Regular Meeting Minutes 8.3. Award a Contract to HydroScience Engineers, Inc. for the Design of Water Utility Improvements Project No. 24-RFP-PW-497 in the amount of $842,790, Approve a Project Contingency of $126,419, and Approve a Total Project Expenditure of $969,209 for Design Services Interim Public Works Director Bjarke provided staff presentation and responded to Council Member questions. Mayor Blankley opened Public Comment. There being no speakers, Mayor Blankley closed Public Comment. Motion: Adopt a resolution of the City Council of the City of Gilroy to increase the Fiscal Year 2023-2024 (FY24) and decrease the 2024-2025 (FY25) budget by $605,038 in the Water Fund (Fund 705) and award a contract to HydroScience Engineers, Inc. in the amount of $842,790 and approve a project contingency of $126,419 for a total project expenditure of $969,209 for the design and preparation of bid documents for Water Utility Improvements Project No. 24-RFP-PW-497 and authorize the City Administrator to execute the contract and associated documents. RESULT: Pass MOVER: Dion Bracco, Council Member SECONDER: Fred Tovar, Council Member AYES: Council Member Armendariz, Council Member Bracco, Council Member Cline, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None ABSTAIN: None Enactment No.: Resolution No. 2024-08 8.4. Award a Contract to Villalobos & Associates for the FY24 Annual Citywide Curb Ramp Project No. 24-PW-286 in the amount of $104,130, Approve a Project Contingency of $10,413, and Approve a Total Project Expenditure of $114,543 for Construction Interim Public Works Director Bjarke provided staff presentation and responded to Council Member questions. Mayor Blankley opened Public Comment. There being no speakers, Mayor Blankley closed Public Comment. DRAFT7.1 p. 20 of 478 February 5, 2024 | 6:00 PM Page 7 of 9 City Council Regular Meeting Minutes Motion: Award a contract to Villalobos & Associates in the amount of $104,130, approve a project contingency of $10,413, approve a total project expenditure of $114,543 for the construction of the Fiscal Year 2024 (FY24) Annual Citywide Curb Ramp Project (No. 24-PW-286), and authorize the City Administrator to execute the contract and associated documents. RESULT: Pass MOVER: Fred Tovar, Council Member SECONDER: Rebeca Armendariz, Council Member AYES: Council Member Armendariz, Council Member Bracco, Council Member Cline, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None ABSTAIN: None 9. PUBLIC HEARINGS There were none. 10. UNFINISHED BUSINESS There were none. 11. INTRODUCTION OF NEW BUSINESS 11.1. Approval to Enter into an Exclusive Negotiating Agreement with BayEcotarium for Potential Uses of the (Hecker Pass) Recreation Gateway Area Economic Development Manager Valencia provided staff presentation and responded to Council Member questions. Mayor Blankley opened Public Comment. Ron Kirkish shared local concerns about selling Gilroy Gardens, stressing its value for tourism, economy, and youth employment, and urged the council to scrutinize the intentions of any potential buyers. Jane Howard offered the Gilroy Garden’s board's support in negotiations with BayEcotarium and recommended Council Member Marques for the negotiating team due to her knowledge of the Gardens. There being no further speakers, Mayor Blankley closed Public Comment. DRAFT7.1 p. 21 of 478 February 5, 2024 | 6:00 PM Page 8 of 9 City Council Regular Meeting Minutes Motion: Approve an Exclusive Negotiating Rights Agreement between the City of Gilroy and Bay.org (BayEcotarium) and authorize the City Administrator to execute all related documents. RESULT: Pass MOVER: Fred Tovar, Council Member SECONDER: Marie Blankley, Mayor AYES: Council Member Armendariz, Council Member Bracco, Council Member Cline, Council Member Hilton, Mayor Pro Tempore Marques, Council Member Tovar, Mayor Blankley NOES: None ABSENT: None ABSTAIN: None Motion: Establish an ad hoc committee with Mayor Blankley and Council Members Bracco and Cline, along with the City Administrator, to form the City's negotiation team. RESULT: Pass MOVER: Marie Blankley, Mayor SECONDER: Dion Bracco, Council Member AYES: Council Member Bracco, Council Member Cline, Mayor Pro Tempore Marques, Mayor Blankley NAYS: Council Member Armendariz, Council Member Hilton, Council Member Tovar ABSENT: None ABSTAIN: None 12. CITY ADMINISTRATOR'S REPORTS City Administrator Forbis provided his report. 13. CITY ATTORNEY'S REPORTS There were none. 14. CLOSED SESSION Mayor Blankley opened Public Comment. There being no speakers, Mayor Blankley closed Public Comment. Mayor Blankley recessed the Regular Meeting at 7:22 PM. The City Council convened into Closed Session at 7:29 PM. A motion was made to stay in Closed Session. The vote was unanimous. DRAFT7.1 p. 22 of 478 February 5, 2024 | 6:00 PM Page 9 of 9 City Council Regular Meeting Minutes 14.1. CONFERENCE WITH LABOR NEGOTIATORS – COLLECTIVE BARGAINING UNIT Pursuant to GC Section 54957.6 and GCC Section 17A.11 (4); Collective Bargaining Units: Local 2805, IAFF Fire Unit Representing Gilroy Fire Fighters City Negotiators: Jimmy Forbis, City Administrator, LeeAnn McPhillips, HR Director Anticipated Issues(s) Under Negotiation: Wages, Hours, Benefits, Working Conditions; Memorandums of Understanding: City of Gilroy and Gilroy Fire Fighters Local 2805. No reportable action. 14.2. CONFERENCE WITH REAL PROPERTY NEGOTIATORS Pursuant to GC Sec. 54956.8 and GCC Sec. 17A.8(a)(2); Properties: 10th Street Bridge: APNs 808-19-007, 799-30-006, 799-30-007, 808-19-020, 808-50-999, Thomas Luchessa Bridge: APNs 808-21-025, 808- 21-023, 808-21-021, 808-21-018, New Fire Station: APNs 808-18-003, 808-19- 029 Negotiators: Jimmy Forbis, City Administrator; Other Party to Negotiations: Glen Loma Corporation, John M. Filice, Jr.; Negotiating Price and terms of payment regarding purchase, sale. No reportable action. 15. ADJOURN TO OPEN SESSION Mayor Blankley reported out of Closed Session, as shown above. 16. ADJOURNMENT Mayor Blankley adjourned the meeting at 7:56 PM. I HEREBY CERTIFY that the foregoing minutes were duly and regularly adopted at a regular meeting of the City Council of the City of Gilroy. /s/Thai Nam Pham, MMC, CPMC City Clerk DRAFT7.1 p. 23 of 478 Page 1 of 2 City of Gilroy STAFF REPORT Agenda Item Title:Accept and File Quarterly Cash and Investment Report as of December 31, 2023 Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Finance Submitted By:Harjot Sangha, Finance Director Prepared By:Harjot Sangha, Finance Director STRATEGIC PLAN GOALS Develop a Financially Resilient Organization RECOMMENDATION Accept and file the quarterly cash and investment report as of December 31, 2023. BACKGROUND The quarterly investment reports are prepared pursuant to the City’s investment policy to keep the City Council apprised of the City’s investment activities. ANALYSIS As of December 31, 2023, the City’s cash and investments totaled $179.3 million, of which $69.2 million is invested with the Local Agency Investment Fund (LAIF), and $103.0 million is invested in US Treasury securities. The fiscal year-to-date interest earnings are $3.6 million, which includes accrued interest as well as amortization of the discount on the US Treasury securities. In addition, approximately $24.0 million is held by Fiscal Agents in the Trustee capacity for various bond issues such as bond proceeds, debt service reserves, bond payments, and post-employment benefits related to pension. The majority of this balance ($19.9 million) consists of the City of Gilroy’s share of the Acquisition and Construction Funds for the SCRWA Plant Expansion Project. 7.2 p. 24 of 478 Accept and File Quarterly Cash and Investment Report as of December 31, 2023 City of Gilroy City Council Page 2 of 2 February 26, 2024 FISCAL IMPACT/FUNDING SOURCE There are no direct fiscal impacts to receiving and filing the quarterly cash and investment report. This is an activity included in the Finance Department’s annual workplan. Attachments: Cash and Investment Report as of December 31, 2023 7.2 p. 25 of 478 City of Gilroy investment report DeCember 2023 7.2 p. 26 of 478 TABLE OF CONTENTS 1. 2. 3 PORTFOLIO SUMMARY REPORT..........................................................................................1 - 3 INVESTMENTS BY ISSUER REPORT................................................................................... 4 - 5 INVESTMENT ACTIVITY…………………………………………………………………………….. 6 - 7 QUARTERLY MOVEMENT OVER THE LAST TWELVE MONTHS........................................ 8 MOVEMENT OVER THE LAST TWO YEARS - GRAPHICAL PRESENTATION.................... 9 INVESTMENT PORTFOLIO - GRAPHICAL PRESENTATION................................................ 10 - 11 INTEREST EARNINGS: FISCAL YEARS 2014 - 2024............................................................ 12 MONIES HELD BY FISCAL AGENTS REPORT………….……............................................... 13 4. 5. 6. 7. 8. 7.2 p. 27 of 478 City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 (408)846-0294 City of Gilroy Portfolio Management Portfolio Summary December 31, 2023 Par Value 69,150,574.70 Market Value 69,150,574.70 87,107,237.72 15,118,396.95 Book Value 69,150,574.70 87,926,764.41 15,118,396.95 % of Poꢁolio 40.16 Days to Maturity ꢂM 360 Equiv. ꢃM 365 Equiv. 3.960 Investments Term 481 ꢀIF 1 3.906 4.779 5.222 Treasury Notes Securities Treasury Bill -Amoꢀizing 89,605,000.00 15,649,000.00 51.06 246 242 4.845 5.2948.78 302 174,404,574.70 171,376,209.37 172,195,736.06 100.00%273 147 4.467 4.529Investments Cash Passbook/Checking (not included in yield calculations) 7,124,122.94 7,124,122.94 7,124,122.94 0.000 0.000 Total Cash and Investments 181,528,697.64 178,500,332.31 179,319,859.00 273 147 4.467 4.529 Total Earnings December 31 Month Ending Fiscal Year To Date Current Year 659,703.34 3,567,670.12 Average Daily Balance Effective Rate of Return 3 Month T-Bill Benchmark: 174,678,278.34 4.45% 173,802,553.12 4.07% 5.40% NOTES: 1. See "Monies Held by Fiscal Agents" for additional amounts held in the capacity of a trustee. 2. The Maturity Aging Factor of the City's Poꢀfolio= 4.90 months. 3. The unrealized gain resulting from an increase in Market Values obtained from U.S. Bank of all Securities (excluding LAIF)= $923,003.76 4. The LAIF balance shown includes $5,430,581.32 in bond proceeds from the Gilroy Libraꢁ 201O Bonds that can be used exclusively ꢂr the construction of the library. 5. The City of Gilroy invested an additional $40M in US. Government Issues from Industrial LAIF. This is to certiꢃ that this schedule of investments is in compliance with the City of Gilroy's investment policy and that there are adequate funds available to meet the City's budgeted and actual expenses for the next six months. 02/16/2024 H ꢄꢅꢆꢇꢈꢉꢊꢋ ꢆꢅrꢉꢇd 07/01/2023-12/31/2023 Page 1 of 13 7.2 p. 28 of 478 City of Gilroy Portfolio Management ꢀꢁꢂꢃꢁꢄꢅꢁ Detaꢅꢄs - Investments December 31, 2023 Average Balance Purchase Stated Rate YTM 360 YTM Days to 365 Maturi� Maturity DateCUSIPInvestment#Issuer Date Par Value Market Value Book Value LAIF SYSLAIF01 SYSLAIF03 LAIF05 LAIF01 LAIF03 LAIF05 LAIF - City of Gilroy LAIF - Industrial Dev. Auth. LAIF LIBRARY 28,719,992.34 35,000,001.04 5,430,581.32 28,719,992.34 35,000,001.04 5,430,581.32 28,719,992.34 35,000,001.04 5,430,581.32 3.960 3.960 3.906 3.906 3.960 3.960 3.960 --3.90-6--3.-960-- -Subtotal and Average 68,827,994.05 69,150,574.70 69,150,574.70 69,150,574.70 3.906 3.960 Treasury Notes Securities 912828Z52 91282CGX3 91282CAB7 9128283V0 91282CEK3 9128284M9 91282CFA4 91282CDV0 912828YM6 912828X70 9128282N9 91282CDV0 USB-10 USB-11 USB-14 USB-15 USB-16 USB-17 USB-18 USB-5 USB-6 USB-7 USB-8 USB-9 U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U. S. TREASURY NOTES U.S. TREASURY NOTES U. S. TREASURY NOTES U.S. TREASURY NOTES 05/01/2023 07/31/2023 11/07/2023 11/07/2023 11/07/2023 11/07/2023 11/07/2023 11/01/2022 11/01/2022 11/01/2022 11/01/2022 01/31/2023 8,419,000.00 8,186,000.00 8,915,000.00 506,000.00 11,938,000.00 646,000.00 12,078,000.00 7,720,000.00 7,527,000.00 7,612,000.00 7,586,000.00 8,472,000.00 7,994,093.07 8,019,414.90 8,276,471.26 491,636.97 11,825,104.94 627,576.31 11,912,302.15 7,581,040.00 7,218,844.62 7,462,119.72 7,379,129.78 8,319,504.00 8,182,296.60 8,075,095.07 8,276,471.26 491,636.97 11,825,104.94 627,576.31 11,912,302.15 7,697,454.79 7,357,566.41 7,550,121.75 7,485,243.53 8,445,894.63 1.375 3.875 0.250 2.500 2.500 2.875 3.000 0.875 1.500 2.000 2.125 4.037 4.881 4.970 5.171 5.366 5.059 5.361 4.513 4.093 4.949 5.039 5.243 5.441 5.129 5.436 4.576 396 01/31/2025 485 04/30/2025 577 07/31/2025 396 01/31/2025 120 04/30/2024 485 04/30/2025 212 07/31/2024 30 01/31/2024 304 10/31/2024 120 04/30/2024 212 07/31/2024 4.296 4.355 4.521 4.466 4.584 4.528 0.875 --4.6 9-3--4.-758---30 01/31/2024Subtotal and Average 87,823,269.87 89,605,000.00 87,107,237.72 87,926,764.41 4.779 4.845 246 Treasury Bill -Amoꢀizing 912797JB4 912797HE0 USB-12 USB-13 U.S. TREASURY BILL U.S. TREASURY BILL 11/02/2023 11/02/2023 3,401,000.00 12,248,000.00 3,387,507.66 11,730,889.29 3,387,507.66 11,730,889.29 4.925 5.055 5.125 29 01/30/2024 5.000 --5.2 7-0--5.-343--3-04 10/31/2024Subtotal and Average Total and Average 15,085,902.82 174,678,278.34 15,649,000.00 15,118,396.95 171,376,209.37 15,118,396.95 172,195,736.06 5.222 5.294 242 174,404,574.70 4.467 4.529 147 Page 2 of 13 7.2 p. 29 of 478 City of Gilroy Portfolio Management Portfolio Details - Cash December 31, 2023 Average Balance Purchase Date Stated Rate YTM 360 YTM Days to 365 MaturiꢀCUSIP Investment#Issuer Par Value Market Value 6,618,763.21 Book Value Wells Fargo Checking SYSWFB WELLS FARGO WELLS FARGO 6,618,763.21 6,618,763.21 0.000 0.000 Other Banks-Misc.Account-Petty Cash SYSUNDERCOV SYS/MUFG SYSPETTY SYS/USBANK SYSBAIL SYSDISCOVERY SYSICS UNDERCOV MUFG PETTY USB-CASH BAIL DISCOVERY ICS CHASE BANK MUFG / UNION BANK PETTY CASH 07/01/2023 07/01/2023 07/01/2023 07/01/2023 07/01/2023 07/01/2023 07/01/2023 07/01/2023 698.30 0.00 2,661.56 627.46 698.30 0.00 2,661.56 627.46 698.30 0.00 2,661.56 627.46 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 0.000 U. S. BANK WELLS FARGO WELLS FARGO WELLS FARGO WORKING CASH 0.00 0.00 0.00 121,621.01 378,156.40 1,595.00 121,621.01 378,156.40 1,595.00 121,621.01 378,156.40 1,595.00 0.000 0.000 0.000SYSWORKINGWORKING 0.000 Average Balance o.oo Total Cash and Investments 174,678,278.34 181,528,697.64 178,500,332.31 179,319,859.00 4.467 4.529 147 Page 3 of 13 7.2 p. 30 of 478 City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 (408)846-0294 City of Gilroy Investments by Issuer Active Investments Grouped by Type - Sorted by Type December 31, 2023 Investment Class Current Bale ꢂarket ꢁꢂ Redemption CallRemaining Cost Market ValueCUSIPInvestment#Securiꢀ Type 365 CollateralPatePate Type: CHECKING ACCOUNTS CHASE BANK SYSUNDERCOV UNDERCOV Other Banks-isc.AccountPey Cash Fair 698.30 698.30 69830 12/31/2023 Subtotal and Average 698.30 LAIF - City of Gilroy SYSLAIF01 LAIF01 LAIF Fair 28,719,992.34 28,719,992.34 3.960 3.960 3.960 28,719,992.34 12/31/2023 28,719,992.34 3.960 Subtotal and Average 3.960 LAIF - Industrial Dev. Auth. SYSLAIF03 LAIF03 LAIF LAIF Fair 35,000,001.04 35,000,001.04 35,000,001.04 12/31/2023 35,000,001.04 3.960 3.960Subtotal and Average LAIF LIBRARY LAIF05 LAIF05 Fair 5,430,58132 5,430,581.32 5,430,581.32 12/31/2023 5,430,581.32 3.960 3.960Subtotal and Average MUFG / UNION BANK SYS/MUFG MUFG Oher Banksisc.AccounPey Cash Fair 0.00 0.00 0.00 Subtotal and Average 0.00 PETTY CASH SYSPETTY PETTY Other Banks-iscAccounPey Cash Fair 2,661.56 2,661.56 2,661.56 12/31/2023 2,661.56Subtotal and Average WELLS FARGO SYSWFB WELLS FARGO BAIL Wells Fargo Checking Fair 6,618,763.21 0.00 6,618,763.21 12/31/2023 0.00SYSBAILOher BanksiscAccounPey Cash Oher BanksiscAccountPey Cash Other Banks-iscAccount-Pey Cash Fair Fair Fair SYSDISCOVERY SYSICS DISCOVERY ICS 121,621.01 378,156.40 121,621.01 12/31/2023 378,156.40 12/31/2023 Page 4 of 13 7.2 p. 31 of 478 City of Gilroy Investments by Issuer Grouped by Type - Soed by Type Investment Class Current Bil Market YTM Redemption 365 CallRemaining Cost Market Value 7,118,540.62 CUSIP Investment# WORKING Security Type D Cati cam Collateral Subtotal and Average 7,118,540.62 WORKING CASH SYSWORKING Other Banks-Misc.AccountPey Cash Fair 1,595.00 1,595.00 12/31/2023 1,595.00Subtotal and Average 1,595.00 Type: NOT CALLABLE U.S. BANK SYS/USBANK USB-CASH Other Banks-Misc.AccounPey Cash Fair 627.46 627.46 12/31/2023 Subtotal and Average 627.46 627.46 U.S. TREASURY BILL 912797JB4 912797HE0 USB-12 USB-13 Treasury Bill -Amoizing Treasury Bill -Amortizing Fair Fair 3,359,592.48 11,628,827.96 4.925 5.000 3,386,987.88 12/31/2023 11,772,287.68 12/31/2023 5.125 01/30/2024 5.343 10/31/2024 29 304 Subtotal and Average 14,988,420.44 15,159,275.56 5.340 244 U. S. TREASURY NOTES 912828252 91282CGX3 91282CAB7 9128283V0 91282CEK3 9128284M9 91282CFA4 91282CDVO 912828YM6 912828X70 9128282N9 91282CDV0 USB-10 Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Treasury Notes Securities Fair Fair Fair Fair Fair Fair Fair Fair Fair Fair Fair Fair 8,035,851.31 8,039,879.90 8,215,606.30 489,642.10 11,773,361.37 625,487.03 11,869,314.50 7,377,312.75 7,120,136.45 7,330,453.97 7,282,780.07 8,154,384.72 1.375 3.875 0.250 2.500 2.500 2.875 3.000 0.875 1.500 2.000 2.125 0.875 8,122,735.39 12/31/2023 8,112,489.72 12/31/2023 8,349,075.80 12/31/2023 494,139.36 12/31/2023 11,828,886.68 12/31/2023 631,891.36 12/31/2023 11,935,479.60 12/31/2023 7,693,443.20 12/31/2023 7,319,179.53 12/31/2023 7,532,302.36 12/31/2023 7,458,024.18 12/31/2023 8,442,856.32 12/31/2023 4.093 01/31/2025 4.949 04/30/2025 5.039 07/31/2025 5.243 01/31/2025 5.441 04/30/2024 5.129 04/30/2025 5.436 07/31/2024 4.576 01/31/2024 4.355 10/31/2024 4.584 04/30/2024 4.528 07/31/2024 4.758 01/31/2024 396 485 577 396 120 485 212 30 304 120 212 30 USB-11 USB-14 USB-15 USB-16 USB-17 USB-18 USB-5 USB-6 USB-7 USB-8 USB-9 Subtotal and Average Total and Average 86,314,210.47 87,920,503.50 179,354,476.70 4.936 250 142177,577,328.55 4.392 Page 5 of 13 7.2 p. 32 of 478 City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 (408)846-0294 City of Gilroy Purchases Report Sorted by Type -Type October 1, 2023 - December 31, 2023 Sec. e Issuer Original Purchase Principal Purchased Accrued Interest Rate at at Purchase Purchase Maturity Ending Book ValueInvestment #Type T Par Value Date Payment Periods Date YTMCUSIPyp NOT CALLABLE 912797JB4 912797HE0 91282CAB7 9128283V0 91282CEK3 9128284M9 91282CFA4 USB-12 USB-13 USB-14 USB-15 USB-16 USB-17 USB-18 NOT NOT NOT NOT NOT NOT NOT ATD USTB ATD USTB TRC USTN TRC USTN TRC USTN TRC USTN TRC USTN 3,401,000.00 11/02/2023 01/30 -At Maturity 3,359,592.48 11,628,827.96 8,215,606.30 4.925 01/30/2024 5.000 10/31/2024 0.250 07/31/2025 5.055 5.270 5.039 3,387,507.66 12,248,000.00 11/02/2023 10/31 -At Maturity 11,730,889.29 8,276,471.26 491,636.97 11,825,104.94 627,576.31 8,915,000.00 11/07/2023 01/31 - 07/31 506,000.00 11/07/2023 01/31 - 07/31 11,938,000.00 11/07/2023 04/30 -Final Pmt. 646,000.00 11/07/2023 04/30 - 10/31 12,078,000.00 11/07/2023 01/31 - 07/31 5,995.82 3,403.13 5,739.42 357.16 489,642.10 11,773,361.37 625,487.03 2.500 01/31/2025 2.500 04/30/2024 2.875 04/30/2025 3.000 07/31/2024 5.243 5.441 5.129 5.43611,869,314.50 97,477.34 11,912,302.15 Subtotal Total Purchases 49,732,000.00 47,961,831.74 47,961,831.74 112,972.87 112,972.87 48,251,488.58 48,251,488.5849,732,000.00 Page 6 of 13 7.2 p. 33 of 478 City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 (408)846-0294 City of Gilroy Maturity Report Sorted by Maturity Date Amounts due during October 1, 2023 - December 31, 2023 Sec. e Issuer Maturity Purchase Date Rate Book Value at Maturi Maturity Proceeds Net IncomeCUSIPInvestment#Type T Par Value Date at Maturi Interestyp 91282CDD0 USB-4 NOT TRC USTN 7,771,000.00 10/31/2023 11/01/2022 0.375 7,771,000.00 14,570.63 7,785,570.63 14,570.63 Total Maturities 7,771,000.00 7,771,000.00 14,570.63 7,785,570.63 14,570.63 Page 7 of 13 7.2 p. 34 of 478 Quarterly Movement over the Last 4 Quarters DESCRIPTION MAR 2023 JUN SEP DEC 2023 % of Total DEC20232023 LAIF: CITY OF GILROY GILROY INDUSTRIAL DEV AGENCY LIBRARY 36,912,724 74,431,995 5,304,370 45,121,206 74,233,655 5,340,121 30,016,288 74,821,324 5,382,048 28,719,992 35,000,001 5,430,581 69,150,575 16.68% 20.33% 3.15% SUB TOTAL 116,649,089 124,694,981 110,219,660 40.16% CERTIFICATE OF DEPOSITS US GOVERNMENTAL AGENCIES: TREASURY NOTES SECURITIES TREASURY BILL-AMORTIZING FEDERAL NATIONAL MORTGAGE AGCY FEDERAL AGRICULTURAL MORTGAGE AGCY FEDERAL HOME LOAN BANK 60,916,089 0 61,547,102 0 62,171,563 0 87,926,764 15,118,397 51.06% 8.78% FEDERAL HOME LOAN MORTGAGE CORP FEDERAL FARM CREDIT BANK SUB TOTAL 60,916,089 61,547,102 62,171,563 103,045,161 59.84% GRAND TOTAL (Book Value)177,565,178 186,242,083 172,391,223 172,195,736 100.00% Note: The LAIF balance shown for Dec 2023, includes $5,430,581.32 in bond proceeds from the Gilroy Library 2010 Bonds that can be used exclusively for the construction of the library. Page 8 of 13 7.2 p. 35 of 478 City of Gilroy Investments From: December 31, 2021 to December 31, 2023 200,000,000 180,000,000 160,000,000 140,000,000 120,000,000 100,000,000 80,000,000 60,000,000 40,000,000 20,000,000 0 December 2021 March 2022 June 2022 September 2022 December 2022 March 2023 June 2023 September 2023 December 2023 LAIF US GOVT. AGENCIES Page 9 of 13 7.2 p. 36 of 478 Book Value by Investment Type As of December 31, 2023 Treasury Bill ‐ Amortizing,Cash or Equivelent, $7M, 4%$15M, 8% LAIF, $69M, 39% Treasury Notes Securities, $88M, 49% Value of Portfolio: $179,319,859 Page 10 of 13 7.2 p. 37 of 478 Portfolio By Maturity As Of December 31, 2023 Medium Term (1 to 5 years), $26M, 14% LAIF and Bank Checking Accounts, $76M, 43% Short Term (less than 1 year), $77M, 43% Value of Portfolio: $179,319,859 Page 11 of 13 7.2 p. 38 of 478 City of Gilroy Interest Earnings FY2014 - FY2024 Interest Earnings 8,000,000 7,000,000 6,000,000 5,000,000 4,000,000 3,000,000 2,000,000 1,000,000 0 13/14 14/15 15/16 16/17 17/18 18/19 19/20 20/21 21/22 22/23 23/24 est* Fiscal Years *Estimate of full year interest earnings for FY23/24 Page 12 of 13 7.2 p. 39 of 478 CITY OF GILROY MONIES HELD BY FISCAL AGENTS DESCRIPTION VALUE ** AS OF 12/31/23 HIGHWAY 152 SPECIAL TAX BONDS SERIES 2018 SPECIAL TAX FUND - Bond REVENUE - HELD BY U.S. BANK - GL Acct 810-10435 GOLDMAN SACHS MONEY MARKET FUND #466, CUSIP #3814W265 RESERVE FUND - HELD BY U.S. BANK - GL Acct 810-10430 6,970.33 GOLDMAN SACHS MONEY MARKET FUND #466, CUSIP #3814W265 SPECIAL TAX FUND - INTEREST ACCOUNT - HELD BY U.S. BANK - GL Acct 810-10550 GOLDMAN SACHS MONEY MARKET FUND #466, CUSIP #3814W265 SPECIAL TAX FUND - PRINCIPAL ACCOUNT - HELD BY U.S. BANK - GL Acct 810-10445 GOLDMAN SACHS MONEY MARKET FUND #466, CUSIP #3814W265 295,473.62 0.12 0.63 GILROY PUBLIC FACILITIES FINANCING AUTHORITY REFUNDING LEASE REV BONDS 2020A REVENUE FUND - HELD BY U.S. BANK - GL Acct 520-10435 GOLDMAN SACHS FINANCIAL SQUARE MMKT #466, CUSIP #38141W265 INTEREST ACCOUNT - HELD BY U.S. BANK - GL Acct 520-10440 GOLDMAN SACHS FINANCIAL SQUARE MMKT #466, CUSIP #38141W265 PRINCIPAL ACCOUNT - HELD BY U.S. BANK - GL Acct 520-10445 GOLDMAN SACHS TR FINL SQ GV ADM #466, CUSIP #38141W265 158.97 197.61 547.39 GILROY PUBLIC FACILITIES FINANCING AUTHORITY REFUNDING LEASE REV BONDS 2022A INTEREST ACCOUNT - HELD BY U.S. BANK - GL Acct 510-10440 FIRST AM.GOVT OB FD CL D, CUSIP #31846V401, U.S. TREASURY BILL #912796C31 PRINCIPAL ACCOUNT - HELD BY U.S. BANK - GL Acct 510-10445 45.11 FIRST AM.GOVT OB FD CL D, CUSIP #31846V401, U.S. TREASURY BILL #912796C31 141.08 GILROY PUBLIC FACILITIES FINANCING AUTHORITY WASTEWATER REV BONDS 2021A BOND PAYMENT FUND - HELD BY U.S. BANK - GL ACCT 700-10428 FIRST AM.GOVT OB FD CL D, CUSIP #31846V401, U.S. TREASURY BILL #912796C31, ACQUISITION AND CONSTRUCTION FUND - HELD BY U.S. BANK - GL Acct 700-10426 FIRST AM.GOVT OB FD CL D, CUSIP #31846V401 1,382.83 1,380.58 LAIF MONEY MARKET FUND #5399989H9 19,896,321.57 GILROY POST - EMPLOYMENT BENEFITS TRUST HELD BY PARS 3,804,562.68 24,007,182.52TOTAL ** Market Values reported by U.S. Bank Page 13 of 13 7.2 p. 40 of 478 Page 1 of 2 City of Gilroy STAFF REPORT Agenda Item Title:Approval of Final Map and PIA Tract 10594 700 W. 6th Street Subdivision Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Public Works Submitted By:Heba El-Guindy, Public Works Director Prepared By:Jorge Duran, Development Engineer STRATEGIC PLAN GOALS Promote Economic Development Activities RECOMMENDATION Approve the Final Map and Property Improvement Agreement No. 2023-02 for the 700 W 6th Street Development, Tract 10594, APN’s 799-26-033, 799-26-037, 799-26-049, 799-26-050, 799-26-051, and 799-269-052. BACKGROUND On May 11, 2022, Warmington Residential submitted an application requesting a tentative map to subdivide 3.70 acres into 19 single family residential lots. On July 7, 2022, the Planning Commission considered Tentative Map 22-01 in accordance with the Gilroy Zoning Code, and other applicable standards and regulations, and found that it conformed to the City’s General Plan and recommend Tentative Map 22-01 for Council approval. On August 1, 2022, Warmington Residential received Tentative Map Approval (TM 22- 01) to subdivide 3.70 acres into 19 single family residential lots with 0.26 acres of private open space, and 0.35 acres to be used for a private street. The subject property is located at 700 W 6th Street, Tract 10594, APN’s 799-26-033, 799-26-037, 799-26- 049, 799-26-050, 799-26-051, and 799-269-052. [Reference: Resolution No. 2022-57 and TM 22-01] 7.3 p. 41 of 478 Approval of Final Map and PIA Tract 10594 700 W. 6th St Subdivision City of Gilroy City Council Page 2 of 2 February 26, 20241 4 8 6 DISCUSSION The owner and developer are requesting City Council approval of the Tract 10594 Final Map and to enter into a Property Improvement Agreement (PIA 2023-02) with the City for the project’s public improvements. These improvements include new street construction, grading, paving, curb, gutter, sidewalk, landscape, lighting, storm drain, water, sewer, undergrounding of overhead utilities, and necessary utility extension and connection to serve the development. As part of the Property Improvement Agreement the developer is required to provide Faithful Performance and Payment Bonds of $2,201,728.00 for 100% of the estimated construction cost of the improvements. The Tract 10594 Final Map and Property Improvement Agreement 2023-02 are ready for recording with Santa Clara County upon approval by Council. ALTERNATIVES Council may deny the request to approve the Property Improvement Agreement (PIA 2023-02). Staff does not recommend this option because it will impose unnecessary delay for the development of the site. FISCAL IMPACT There is no net impact to the General Fund. Plan check and inspection fees have been collected to cover the costs associated with this action. The Developer has submitted bonding and insurance for the above-referenced Property Improvement Agreement and Final Map. Attachments: 1. Exhibit A - Vicinity Map 2. Exhibit B - PIA 3. Exhibit C - Final Map 7.3 p. 42 of 478 7.3 p. 43 of 478 -1- RECORDING REQUESTED BY: City of Gilroy WHEN RECORDED, MAIL TO: City Clerk City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 (SPACE ABOVE THIS LINE FOR RECORDER’S USE) Property Improvement Agreement No. 2023-02 Heritage on 6th – TRACT 10594 APN: 799-26-033, 037, 049, 050, 051, 052 Warmington 6th Street Gilroy LLC 7.3 p. 44 of 478 -2- PROPERTY IMPROVEMENT AGREEMENT RESIDENTIAL AGREEMENT FOR IMPROVEMENT OF STREETS AND OTHER PUBLIC WORKS FACILITIES Property Improvement Agreement No. 2023-02 This Property Improvement Agreement (“Agreement”) is made and entered into this ____ day of ___________________ 20____, by and between the City of Gilroy, a municipal corporation, herein called the “City,” and Warmington 6th Street Gilroy LLC, herein called the “Developer”. WHEREAS, a final map of subdivision or building permit (Site Clearance) application has been submitted to the City for approval and acceptance, covering certain real estate and property improvements on the Subdivision known as and called Heritage on 6th, a legal description of which is attached hereto and incorporated herein as Exhibit “A” (the “Property”), and as described in the project improvement plans entitled 700 W. 6th Street Improvement Plans Tract 10594, as Exhibit B. WHEREAS, the Owner is the fee owner of the Property and requires certain utilities and public works facilities in order to service the Property under the minimum standards established by the City and, WHEREAS, the City, by and through its City Council, has enacted certain Codes, Ordinances and Resolutions and certain Rules and Regulations have been promulgated concerning the subject matter of this Agreement and, WHEREAS, the City has certain responsibilities for maintenance and operation of such utilities and public service facilities after acceptance by City, and for providing the necessary connecting system, general plant and appurtenances, and the City is agreeing to discharge those responsibilities, provided that Developer has faithfully and fully complied with all of the terms, covenants, conditions to be performed by Developer pursuant to this Agreement. NOW THEREFORE, in consideration of the foregoing premises and in order to carry on the intent and purpose of said Codes, Ordinances, Resolutions and Regulations and established policies of the City and the laws of the State of California and the United States of America it is agreed by and between the parties as follows: SECTION 1 That all Codes, Ordinances, Resolutions, Rules and Regulations and established policies of the City and the laws of the State of California and the United States of America concerning the subject matter of this Agreement are hereby referred to and incorporated herein to the same effect as if they were set out at length herein. Said Codes, Ordinances, Resolutions, Rule and Regulations include, but are not limited to, the following: The Code of the City of Gilroy, the current Zoning Ordinance, and the currently adopted Uniform Building Code. SECTION 2 The Developer agrees: a. To perform each and every provision required by the City to be performed by the Developer in each and every one of said Codes, Ordinances, Resolution, Rules and other Regulations and established 7.3 p. 45 of 478 -3- policies of the City and the laws of the State of California and the United States of America, including without limitation, the California Labor Code and California Public Contract Code. Developer further agrees and acknowledges that it is its obligation to determine whether, and to what extent, the work performed under this Agreement is subject to any Codes, Ordinances, Resolutions, Rules and other Regulations and established policies of the City and the laws of the State of California, the United States of America, the California Labor Code and Public Contract Code relating to public contracting and prevailing wage laws. b. To grant to the City without charge, free and clear of encumbrances, any and all easements and rights of way in and to the Property necessary for the City in order that its water, electricity, storm drain, and/or sewer lines in or to said Property may be extended. c. To indemnify, defend with counsel of City’s choice and hold the City free and harmless from all suits, fees, claims, demands, causes of action, costs, losses, damages, liabilities and expenses (including without limitation attorneys’ fees) incurred by City in connection with (i) any damage done to any utility, public facility or other material or installation of the City on said Property which the Developer or any contractor or subcontractor of the Developer, or any employee of the foregoing, shall do in grading or working upon said Property; or (ii) arising or resulting directly or indirectly from any act or omission of Developer or Developer’s contractors, or subcontractors, or any employee of the foregoing in connection with the work performed by them in connection with this Agreement, including without limitation all claims relating to injury or death of any person or damage to any property. d. To construct and improve all public works facilities and other improvements described in this Agreement and the improvement plans submitted to the City of Gilroy entitled 700 W. 6th Street Improvement Plans Tract 10594 shown as Exhibit B, in furtherance of this Agreement on file with the City of Gilroy. All construction and improvements shall be completed in accordance with all standards established in the Codes, Ordinances, Resolutions, Rules and Regulations and established policies of the City and the laws of the State of California and the United States of America and this agreement, and in accordance with the grades, plans, and specifications approved by the City Engineer. Developer shall furnish two good and sufficient bonds, a Payment Bond on a form provided by the City and a Faithful Performance Bond, both of which shall be secured from a surety company admitted to do business in California. Each bond shall set forth a time period for performance by the contractor of its obligations and the terms and conditions on which the City may obtain the proceeds of the bond. The Faithful Performance Bond shall be in an amount not less than one hundred percent (100%) of the total estimated amount payable for the improvements described in this Agreement, and shall secure payment to City and the Developer of any loss due to the default of the contractor or its inability or refusal to perform its contract. The performance bond shall by its terms remain in full force and effect for a period of not less than one year after completion of the improvements by Developer and acceptance of the improvements by City, to guarantee the repair and replacement of defective material and faulty workmanship. Upon completion of the improvements by Developer and acceptance of the improvements by City, Developer may substitute for the performance bond securing maintenance described above, a separate maintenance bond issued by an admitted surety in the amount of ten percent (10%) of the total contract price of the improvements (provided that the amount of said bond shall not be less than One Thousand Dollars ($1,000) to cover the one-year maintenance period. The Payment Bond shall be in an amount not less than one hundred percent (100%) of the total estimated amount payable for the improvements described in this Agreement. The Payment Bond shall secure the payment of those persons or entities to whom the Developer may become legally 7.3 p. 46 of 478 -4- indebted for labor, materials, tools, equipment, or services of any kind used or employed by the contractor or subcontractor in performing the work, or taxes or amounts to be withheld thereon. The Payment Bond shall provide that the surety will pay the following amounts should the Contractor or a Subcontractor fail to pay the same, plus reasonable attorneys’ fees to be fixed by the court if suit is brought upon the bond: (1) amounts due to any of the persons named in California Civil Code Section 9100; (2) amounts due under the Unemployment Insurance Code with respect to work or labor performed for the improvements described in this Agreement; and (3) any amounts required to be deducted, withheld, and paid over to the Employment Development Department from the wages of employees of the Contractor and Subcontractors pursuant to Section 13020 of the Unemployment Insurance Code with respect to the work and labor. The Payment Bond shall, by its terms, inure to the benefit of any of the persons named in Civil Code Section 3181 so as to give a right of action to those persons or their assigns in any suit brought upon the bond. Simultaneously with the submission of its building permit application (Site Clearance), the Developer shall submit the following for both the surety that furnishes the Payment Bond and the surety that furnishes the Faithful Performance Bond: (1) a current printout from California Department of Insurance’s website (www.insurance.ca.gov) showing that the surety is permitted to do business in the State; or (2) a certificate from the Clerk of the County of Santa Clara that the surety’s certificate of authority has not been surrendered, revoked, canceled, annulled, or suspended or in the event that it has, that renewed authority has been granted. e. Except as otherwise expressly provided in this Agreement, all plan check and inspection fees which are payable by Developer pursuant to the attached comprehensive fee schedule are due and payable to the City prior to Council approval of the final map of the subdivision. Upon approval of the final map or the building permit covering the real estate to be improved and before any work is done therein, the Developer shall pay to the City all other sums payable by Developer pursuant to the attached comprehensive fee schedule. f. At all times during the term of this Agreement and until the improvements constructed by Developer are accepted by City, Developer shall, at no cost to City obtain and maintain (a) a policy of general liability and property damage insurance in the minimum amount of One Million Dollars ($1,000,000), combined single limit for both bodily injury and property damage; (b) workers’ compensation insurance as required by law; and (c) broad form “Builder’s Risk” property damage insurance with limits of not less than 100% of the estimated value of the improvements to be constructed by Developer pursuant to this Agreement. All such policies shall provide that thirty (30) days written notice must be given in advance to City prior to termination, cancellation, or modification. The insurance specified in (a) above shall name City as an additional insured and the insurance specified in (c) shall name City as a loss payee, and shall provide that City, although an additional insured or loss payee, may recover for any loss suffered by reason of the acts or omissions of Developer or Developer’s contractors or subcontractors or their respective employees. Developer hereby waives, and Developer shall cause each of its contractors and subcontractors to waive, all rights to recover against City for any loss or damage arising from a cause covered by the insurance required to be carried pursuant to this Agreement or actually carried by Developer in connection with the work described in this Agreement, and will cause each insurer to waive all rights of subrogation against City in connection therewith. All policies shall be written on an occurrence basis and not on a claim made basis and shall be issued by insurance companies acceptable to City. Prior to commencing any work pursuant this Agreement, Developer shall deliver to City the insurance company’s certificate evidencing the required coverage, or if required by City a copy of the policies obtained. 7.3 p. 47 of 478 -5- SECTION 3 That all the provisions of this Agreement and all work to be done pursuant to the terms of this Agreement are to be completed to City’s satisfaction within two year from and after the date and year of this Agreement first above written. Developer shall maintain such public works facilities and other improvements described in this Agreement at Developer’s sole cost and expense at all times prior to acceptance by City in a manner which will preclude any hazard to life or health or damage to property. SECTION 4 That the faithful and prompt performance by the Developer of each and every term and condition contained herein is made an express condition precedent to the duty of the City to perform any act in connection with this transaction, and the failure, neglect or refusal of the Developer to so perform, or to pay any monies due hereunder when due shall release the City from any and all obligations hereunder and the City, at its election, may enforce the performance of any provision herein, or any right accruing to the City or may pursue any remedy whatsoever it may have under applicable laws or the Codes, Ordinances, Resolutions, Rules and Regulations of the City, in the event of any such default by Developer. SECTION 5 That this Agreement, including without limitation the general stipulations outlined in Section 6 below, is an instrument affecting the title or possession of the real property and runs with the land. Except as expressly provided in the second sentence of Item 34 of the general stipulations set forth in Section 6 below (relating to the payment of reimbursement to the original Developer named in this Agreement), all the terms, covenants and conditions herein imposed shall be binding upon and inure to the benefit of City, Developer, the successors in interest of Developer, their respective successors and permitted assigns and all subsequent fees owners of the Property. The obligations of the Developer under this Agreement shall be the joint and several obligations of each and all of the parties comprising Developer if Developer consists of more than one individual and/or entity. Upon the sale or division of the Property, the terms of this Agreement shall apply separately to each parcel and the fee owners of each parcel shall succeed to the obligations imposed on Developer by this Agreement. SECTION 6 1. That the following general stipulations shall be completed subject to the approval of the Public Works Director/City Engineer. 2. The Project shall comply with all Tentative Map conditions and applicable mitigation measures as contained in City Council Resolution 2022-57 (TM 22-01approval). 3. All work within the public right-of-way shall be subject to the approval of the City Engineer. 4. The Developer shall perform all work in compliance with the City of Gilroy Specifications Standards Design Criteria and is subject to all laws of this community by reference. Street improvements and the design of all storm drainage, sewer lines, and all street sections shall be in accordance with City Standards Plans and shall follow the most current City Master plan for streets and each utility. 5. The developer shall defend, indemnify, and hold harmless the City, its City Council, Planning Commission, agents, officers, and employees from any claim, action, or proceeding against the City or its City Council, Planning Commission, agents, officer, and employees to attack, set aside, void, or annul an approval of the City, City Council, Planning Commission, or other board, advisory 7.3 p. 48 of 478 -6- agency, or legislative claim, action, or proceeding against it, and will cooperate fully in the defense. This condition is imposed pursuant to California Government Code Section 66474.9. 6. No building permit shall be issued in connection with this project if the Owner or Developer of such development (i) is not in compliance with the City’s Residential Development Ordinance (City Zoning Ordinance Sections 50.60 et seq.) referred to as the RDO, any conditions of approval issued in connection with such development or other City requirements applicable to such development; or (ii) is in default under any agreement entered into with the City in connection with such development pursuant to the RDO. The project must also comply with any of condition of exemption granted from the RDO, including but not limited to time limits in obtaining City approvals and completion of construction of the dwelling units. 7. The City shall be notified at least three (3) weeks prior to the start of any construction work and at that time the contractor shall provide a project schedule and a 24-hour emergency telephone number list. 8. At least three weeks prior to commencement of work, the developer shall post the site and mail to owners of property within (500’) five hundred feet of the exterior boundary of the project site, to the homeowner associations of nearby residential projects and to the Engineering Division, a notice that construction work will commence on or around the stated date. The notice shall include a list of contact persons with name, title, phone number and area of responsibility. The person responsible for maintaining the list shall be included. The list shall be current at all times and shall consist of persons with authority to initiate corrective action in their area of responsibility. The names of individuals responsible for dust, noise and litter control shall be expressly identified in the notice. 9. The developer shall create prior to construction, for City Engineer approval, a construction staging plan that addresses the ingress and egress location for all construction vehicles, employee parking and material storage area separate from occupied residential units. All construction vehicles, employee parking, and material storage shall be contained with the project boundary and there shall be no impact to public right of way or easements. 10. All area within 15-ft of the existing south boundary wall shall not be disturbed until a wall assessment is complete to determine that wall is not impacted by the site improvements. Wall assessment shall be prepared by the Geotechnical Engineer and approved by the City prior to any construction or disturbance within 15-ft of the existing boundary wall. Install temporary orange construction fence 15-ft from existing wall along project boundary. 11. Schedule the construction of improvements along existing public roads so that the work affecting vehicular traffic is completed with a minimum interruption to traffic. 12. All work shall be coordinated so that the existing residents on all adjacent streets have access to their properties. 13. Before construction utilizing combustible materials may proceed, an all-weather access must be provided to within 150 feet of the building site; and at least one in service fire hydrant must be available within 150 feet of each portion of the site wherein this construction is to take place. Location of the fire hydrants will be determined by the Fire Chief. 14. Developer shall submit for City approval a critical path construction schedule from start of construction to final occupancy, which shall include a detailed phasing plan (including traffic control 7.3 p. 49 of 478 -7- for each proposed phase). Schedule shall be approved prior to start of construction. Any deviation from the approved construction schedule and phasing plan shall be coordinated with the City Engineer. Deviating from the approved construction schedule and phasing plan without prior coordination with the City Engineer may prolong issuance of further building permits. In addition, a 5-week look-ahead schedule shall be provided weekly for general site inspection coordination and construction management. (a) Upon request by the City Engineer, the developer shall provide information for public outreach purposes, which may include maps and schedules for each phase of construction. 15. One hard copy and electronic copy of the approved/stamped PG&E Joint Trench Plans shall be submitted to the Engineering Division for approval. PG&E approved plans shall incorporate any and all City comments related to Joint Trench scope of work. The Developer will not be allowed to commence joint trench work “at-risk” without PG&E and City approval. The Developer assumes responsibility for any required redesign, and all costs associated with the redesign and additional city review resulting from final PG&E-approved joint trench plans. Design revisions and ultimate joint trench construction shall be completed to the satisfaction of the City Engineer. 16. No utility boxes are allowed to be constructed in the sidewalk. 17. The developer shall obtain the required Habitat Conservation Plan (HCP) Permit and pay the applicable fees prior to the issuance of grading permit work or improvement plan approval. 18. Site preparation and fill construction shall be conducted under the observation of, and tested by, a licensed soils or geotechnical engineer. A report shall be filed with the City of Gilroy stating that all site preparation and fill construction meets the requirements of the geotechnical investigation. This shall be subject to review and approval by the Building Division. [CBC] 19. All grading operations and soil compaction activities shall be per the approved soils report and shall meet with the approval of the City Engineer. 20. New and existing utility lines, appurtenances, and associated equipment, including but not limited to electrical transmission, street lighting, and cable television shall be required to be placed underground. [Municipal Code Section 21, Article V] 21. Construction activity shall be restricted to the period between 7:00 a.m. to 7:00 p.m. Mondays through Fridays. Saturday work is not allowed but can be requested for specific activities in writing. If approved, work hours shall be 9:00 a.m. to 7:00 p.m. and only with approval by the City Engineer and if City inspection services are available. Saturday work, if approved, will also require additional inspection overtime fees. No work shall be done on Sundays and City Holidays. The City Engineer will apply additional construction period restrictions, as necessary, to accommodate standard commute traffic along arterial roadways and along school commute routes. 22. Any damage resulting from project construction operations to existing city infrastructure on or adjacent to the subject property shall be repaired to the satisfaction of the City Engineer, at the full expense of the developer/contractor. This shall include slurry seal, overlay, street reconstruction, and repair to curb, gutter and sidewalk, driveway approach if reasonably deemed warranted by the City Engineer. 7.3 p. 50 of 478 -8- 23. Offsite Frontage W. 6th Street and Princevalle Street improvements as shown in the 700 W. 6th Street Improvement Plans Tract 10594 shall be constructed as the first phase of work and shall be completed prior to the first building occupancy. This includes all pavement widening, pavement grinding and paving, microsurface, signing, striping, lighting, joint trench, underground rule 20, curb, gutter, sidewalk, landscape, storm drain, water, sanitary sewer, and stormwater management facilities. 24. It is the responsibility of the project’s homeowner’s association or other legal entity to maintain the landscaping fronting W 6th Street and Princevalle Street . Prior to the issuance of the first building permit or as otherwise determined by the City Engineer, the Developer of the site shall enter into a Landscape Installation and Maintenance Agreement with the City for landscaping within the City right-of-way. The Developer shall record this agreement, against the property or properties involved, with the County of Santa Clara and it shall be binding on all subsequent owners of land. 25. Grading and any site work between September 15 and April 15 will require a winterized grading work plan. The winterized grading work plan shall identify all active and non-active areas on site and shall include a 7-month schedule during the winter months. All non-active areas shall be hydroseeded or approved soil seal. All active areas shall identify and describe the following: construction activities, equipment, number of construction workers, and a written plan describing how these areas will be protected in any rain event. Site work of any kind and grading will not be allowed after September 15 unless a winterized grading plan is approved by the City Engineer. 26. This project is subject to post-construction stormwater quality requirements per Section 27D of the Gilroy Municipal Code. 27. Storm water BMP Operation and Maintenance Agreement (a) Prior to the issuance of any building permit requiring stormwater management BMPs or as otherwise determined by the City Engineer, the owner(s) of the site shall enter into a formal written Stormwater BMP Operation and Maintenance Agreement with the City. The City shall record this agreement, against the property or properties involved, with the County of Santa Clara and it shall be binding on all subsequent owners of land served by the storm water management treatment BMPs. The City-standard Stormwater BMP Operation and Maintenance Agreement will be provided by Public Works Engineering. (b) This Agreement shall require that the BMPs not be modified and BMP maintenance activities not alter the designed function of the facility from its original design unless approved by the City prior to the commencement of the proposed modification or maintenance activity. (c) This Agreement shall also provide that in the event that maintenance or repair is neglected, or the stormwater management facility becomes a danger to public health or safety, the city shall have the authority to perform maintenance and/or repair work and to recover the costs from the owner. (d) All on-site stormwater management facilities shall be operated and maintained in good condition and promptly repaired/replaced by the property owner(s), an owners’ or homeowners’ association or other legal entity approved by the City. (e) Any repairs or restoration/replacement and maintenance shall be in accordance with City- approved plans. 7.3 p. 51 of 478 -9- (f) The property owner(s) shall develop a maintenance schedule for the life of any stormwater management facility and shall describe the maintenance to be completed, the time period for completion, and who shall perform the maintenance. This maintenance schedule shall be included with the approved Stormwater Runoff Management Plan. 28. Stormwater BMP Inspections will be required for this project and shall adhere to the following: (a) The property owner(s) shall be responsible for having all stormwater management facilities inspected for condition and function by a knowledgeable third party. (b) Unless otherwise required by the City Engineer or designee, stormwater facility inspections shall be done at least twice per year, once in Fall, in preparation for the wet season, and once in Winter. Written records shall be kept of all inspections and shall include, at minimum, the following information: 1. Site address; 2. Date and time of inspection; 3. Name of the person conducting the inspection; 4. List of stormwater facilities inspected; 5. Condition of each stormwater facility inspected; 6. Description of any needed maintenance or repairs; and 7. As applicable, the need for site re-inspection. 29. Upon completion of each inspection, an inspection report shall be submitted to Public Works Engineering no later than October 1st for the Fall report, and no later than March 15th of the following year for the Winter report. 30. A minimum of one exterior monument shall be set. Additional monuments can be required by the City Engineer or City Surveyor as deemed necessary. Location of monuments shall be tied out prior to work. 31. In accordance with the California Professional Land Surveyors’ Act (Business and Professions Code) Chapter 15 Sections 8771 and 8725, California Penal Code 605, and California Government Code 27581, the developer, their employees, subcontractors, and/or any person performing construction activities that will or may disturb an existing roadway/ street monument, corner stake, or any other permanent surveyed monument shall show all current monuments on the plans and shall ensure that a Corner Record and/or Record of Survey are filed with the County Surveyor Office prior to disturbing said monuments. All disturbed or destroyed monuments shall be reset and filed in compliance with Section 8771 at the developer’s sole expense. 32. Bonding as required by section 2.d of this agreement will be accepted for the proposed improvements for an amount of $2,201,728 as shown on the attached Cost Estimate spreadsheet. 33. If there are any reimbursements payable to the Developer, they must be specifically identified in this Agreement. Any such reimbursements shall be payable to the original Developer named in this Agreement above and shall not inure to the benefit of any subsequent owners of all or any portion of the Property. All reimbursements payable to Developer shall be subject to the City’s reimbursement policies and ordinances in effect from time to time, including without limitation any expiration dates identified in such policies and ordinances. Such reimbursement shall be solely contingent upon the availability of the City’s Traffic Impact Fee Funds and in no case shall the reimbursement be paid 7.3 p. 52 of 478 -10- beyond ten (10) years after the execution of the Agreement. In addition to any other conditions, requirements and limitations set forth in the City’s reimbursement policies and ordinances from time to time, (i) in no event shall any reimbursements be payable to Developer if City determines in its sole and absolute discretion from time to time that there are not sufficient reserves then on hand in the specific reimbursement fund from which Developer’s reimbursement is payable, over and above any amounts anticipated to be required to be expended from such reimbursement fund, which reserves, at a minimum, are equal to at least half of the remaining average yearly anticipated expenditures of such reimbursement fund as determined by City from time to time; (ii) City may, in its sole and absolute discretion, make partial reimbursement payments to Developer in yearly increments, as determined by City; and (iii) City may defer payments in any given year if projects deemed by City to be of high importance are determined by City, in its sole and absolute discretion, to be warranted or necessary, and the funds in such reimbursement fund are designated by the City for use on such projects of high importance. The Developer shall be reimbursed for the following traffic improvements and impact fee credits. Reimbursements for traffic improvements will be made as a credit to the Traffic Impact Fees. Reimbursements for the existing condition impact fee credits will be made as credit to their respective Impact Fee. Refer to the impact fee credit in Exhibit C City of Gilroy Public Works Department Engineering Division Cost Estimate (attached). a) W 6th. Street and Princevalle Intersection Curb Ramps: Total of two (2) curb ramps to be installed on the north-east and south-east quadrants of the intersection. The reimbursable amount for this work is $10,000.00. b) W 6th Street Pavement Restoration: Total of 8150 sq-ft of 2-inch grind and pave, north half of W. 6th Street from the west boundary line to the intersection of W 6th & Princevalle Street. The reimbursable amount for this street segment is $40,750.00. SECTION 7 That the attached Development Cost Schedule enumerates all fees and their extensions. 1. TOTAL AMOUNT DUE CITY $ 830,581.52 7.3 p. 53 of 478 -11- CITY OF GILROY By: Jimmy Forbis City Administrator Date: ________________________________ ATTEST: Thai Pham, City Clerk APPROVED AS TO FORM: Andrew L. Faber, City Attorney 7.3 p. 54 of 478 -12- DEVELOPER: Warmington 6th Street Gilroy LLC. By: Name: Michael G. Riddlesperger Title: Chief Financial Officer Date: NOTE: If Developer is a corporation, the complete legal name and corporate seal of the corporation and the corporate titles of the persons signing for the corporation shall appear above. 7.3 p. 55 of 478 -13- EXHIBIT A Real property in the City of Gilroy, County of Santa Clara, State of California, described as follows: PARCEL ONE: A PORTION OF LOS ANIMAS RANCH LOT 16, AS SHOWN ON MAP NO. 7 ACCOMPANYING THE FINAL REPORT OF THE REFEREES IN THE PARTITION ACTION OF WENDY MILLER, ET AL, VS. MASSEY THOMAS, ET AL, IN THE SUPERIOR COURT OF THE STATE OF CALIFORNIA, IN AND FOR THE COUNTY OF SANTA CLARA, CASE NO. 5536, AND BEING ALSO A PORTION OF THAT CERTAIN 169.06 ACRE TRACT CONVEYED BY MILLER & LUX INCORPORATED, A CORPORATION, TO F.E. STELLING BY DEED DATED JANUARY 27, 1927 AND RECORDED IN BOOK 296 OF OFFICIAL RECORDS, PAGE 249, RECORDS OF SANTA CLARA COUNTY, CALIFORNIA, MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT A POINT AT THE INTERSECTION OF THE SOUTHERLY LINE OF SIXTH STREET WITH PROLONGATION OF THE WESTERLY LINE OF PRINCEVALLE STREET AND RUNNING THENCE ALONG THE WESTERLY LINE OF PRINCEVALE STREET SOUTH 20°00' EAST 383.50 FEET; THENCE LEAVING THE WESTERLY LINE OF PRINCEVALLE STREET SOUTH 70°00' WEST 202.88 FEET; THENCE NORTH 76°30' WEST 226.82 FEET; THENCE NORTH 20°01' WEST 258.27 FEET TO A POINT IN THE SOUTHERLY LINE OF SIXTH STREET; THENCE ALONG SAID SOUTHERLY LINE OF SIXTH STREET NORTH 69°49' EAST 392.11 FEET TO THE POINT OF BEGINNING. EXCEPTING THEREFROM THAT PORTION THEREOF DESCRIBED AS FOLLOWS: BEGINNING AT A POINT IN THE SOUTHERLY LINE OF SIXTH STREET AT THE NORTHEAST CORNER OF LOT 14 OF TRACT NO. 4466, LOMA ORCHARD, UNIT NO 1, AS SHOWN ON MAP THEREOF FILED FOR RECORD IN BOOK 235 OF MAPS, AT PAGE 42, RECORDS OF SANTA CLARA COUNTY, AND RUNNING THENCE ALONG THE SOUTHERLY LINE OF SIXTH STREET NORTH 65°59' EAST 121.00 FEET; THENCE LEAVING SAID SOUTHERLY LINE SOUTH 11°30' EAST 19.00 FEET; THENCE ALONG A CURVE TO THE LEFT, FROM A TANGENT BEARING OF SOUTH 11°30' EAST HAVING A RADIUS OF 260 FEET THROUGH A CENTRAL ANGLE OF 66°30' FOR A DISTANCE OF 301.77 FEET; THENCE ALONG A NON-TANGENT LINE SOUTH 89°00' EAST 73.50 FEET; THENCE ALONG A CURVE TO THE RIGHT FROM A TANGENT BEARING OF NORTH 2°00' WEST HAVING A RADIUS OF 200 FEET, THROUGH A CENTRAL ANGLE OF 36°50' FOR A DISTANCE OF 128.57 FEET; THENCE ALONG A NON-TANGENT LINE NORTH 35°57'20" EAST 13.16 FEET TO THE WESTERLY LINE OF PRINCEVALLE STREET; THENCE ALONG SAID WESTERLY LINE SOUTH 20°00' EAST 188.50 FEET; THENCE LEAVING THE WESTERLY LINE OF PRINCEVALLE STREET SOUTH 70°00' WEST 202.88 FEET; THENCE NORTH 76°30' WEST 226.82 FEET; THENCE NORTH 20°01' WEST 258.27 FEET TO THE POINT OF BEGINNING. PARCEL TWO: ALL OF PARCEL A, AS SHOWN UPON THAT CERTAIN MAP ENTITLED, "PARCEL MAP PTN. OF LAS ANIMAS RANCHLOT NO. 16 LAS ANIMAS RANCHO PARTITION SUIT, MAP NO. 7 SUPERIOR COURT CASE NO. 5536", WHICH MAP WAS FILED FOR RECORD IN THE OFFICE OF THE RECORDER OF THE COUNTY OF SANTA CLARA, STATE OF CALIFORNIA, ON DECEMBER 12, 1980 IN BOOK 477 OF MAPS, AT PAGES 1 AND 2. PARCEL THREE: A PORTION OF PARCELS B AND D IN THE CITY OF GILROY, STATE OF CALIFORNIA AS SHOWN ON THE PARCEL MAP FILED DECEMBER 12, 1980 IN BOOK 477 OF MAPS, AT PAGES 1 AND 2 AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT AN IRON PIPE AT A COMMON CORNER OF PARCEL A AND D DISTANT S. 20°01' E., 258.27 FEET FROM THE SOUTHERLY RIGHT OF WAY OF SIXTH STREET (80 FEET WIDE) AS SHOWN ON SAID MAP; THENCE ALONG THE WESTERLY LINE OF PARCEL D AS SHOWN ON SAID MAP, S. 13°30' W., 44.81 FEET; THENCE ALONG THE NEW COMMON LINE OF PARCELS B AND D, S. 76°30' E., 181.30 FEET; 7.3 p. 56 of 478 -14- THENCE ALONG A CURVE TO THE LEFT WITH A RADIUS OF 300 FEET, THROUGH A CENTRAL ANGLE OF 07°51'52", AN ARC LENGTH OF 41.18 FEET; THENCE FROM A TANGENT BEARING OF N. 53°56'38" E., ALONG A CURVE TO THE LEFT WITH A RADIUS OF 245 FEET, THROUGH A CENTRAL ANGLE OF 43°41'08", AN AND LENGTH OF 186.80 FEET; THENCE ALONG THE PERIMETER OF PARCEL B AS SHOWN ON SAID MAP, N. 89°00' W. 73.50 FEET; THENCE ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 260 FEET, THROUGH A CENTRAL ANGLE OF 27°45'31" AN ARC LENGTH OF 125.97 FEET; THENCE S. 47° W., 68.79 FEET; THENCE S. 49° E., 15.00 FEET; THENCE S. 38° W., 85.00 FEET; THENCE N. 76°30' W., 27.00 FEET TO THE POINT OF BEGINNING. THIS LEGAL DESCRIPTION IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE OF COMPLIANCE LOT LINE ADJUSTMENT, RECORDED MAY 3, 1990, AS DOCUMENT NO. 10510443 OF OFFICIAL RECORDS. PARCEL FOUR: A PORTION OF PARCELS B, C AND D IN THE CITY OF GILROY, STATE OF CALIFORNIA AS SHOWN ON THE PARCEL MAP FILED DECEMBER 12, 1980 IN BOOK 477 OF MAPS, AT PAGE 1 AND 2, AND MORE PARTICULARLY DESCRIBED AS FOLLOWS: BEGINNING AT THE NORTHERLY CORNER OF PARCEL C ON THE WESTERLY RIGHT OF WAY OF PRINCEVALLE STREET (60 FEET WIDE), DISTANT S. 20° E., 195.07 FEET FROM THE SOUTHERLY RIGHT OF WAY OF SIXTH STREET (80 FEET WIDE) AS SHOWN ON SAID MAP; THENCE ALONG THE WESTERLY RIGHT OF WAY OF PRINCEVALLE STREET, S. 20°E., 250.58 FEET; THENCE S. 70° W., 100.00 FEET; THENCE ALONG A CURVE TO THE RIGHT WITH A RADIUS OF 300 FEET, THROUGH A CENTRAL ANGLE OF 25°38'08", AN ARC LENGTH OF 134.23 FEET; THENCE FROM A TANGENT BEARING OF N. 53°57'58" E., ALONG THE ARC OF A CURVE TO THE LEFT WITH A RADIUS OF 245 FEET, THROUGH A CENTRAL ANGLE OF 43°41'08", AN ARC LENGTH OF 186.80 FEET TO THE POINT OF REVERSE CURVATURE WITH A CURVE TO THE RIGHT WITH A RADIUS OF 200 FEET, THROUGH A CENTRAL ANGLE OF 36°50' AN ARC LENGTH OF 128.57 FEET; THENCE N. 35°57'20" E., 13.17 FEET TO THE POINT OF BEGINNING. THIS LEGAL DESCRIPTION IS MADE PURSUANT TO THAT CERTAIN CERTIFICATE OF COMPLIANCE LOT LINE ADJUSTMENT, RECORDED MAY 3, 1990, AS DOCUMENT NO. 10510443 OF OFFICIAL RECORDS. APN: 799-26-033 (Parcel One); 799-26-037 (Parcel Two); 799-26-049 and 799-26-050 (Parcel Three); and 799-26-051 and 799-26-052 (Parcel Four) 7.3 p. 57 of 478 -15- EXHIBIT B – Cover Sheet Improvement Plans 7.3 p. 58 of 478 -16- EXHIBIT C 7.3 p. 59 of 478 7.3 p. 60 of 478 7.3 p. 61 of 478 7.3 p. 62 of 478 7.3 p. 63 of 478 7.3 p. 64 of 478 7.3 p. 65 of 478 Page 1 of 3 City of Gilroy STAFF REPORT Agenda Item Title:Approval of Notice of Acceptance of Completion for Property Improvement Agreement No. 2017-06, Ballybunion Dr and Santa Teresa Blvd Roundabout and Traffic Impact Fund (TIF) Reimbursement Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Public Works Submitted By:Heba El-Guindy, Public Works Director Prepared By:Heba El-Guindy, Public Works Director STRATEGIC PLAN GOALS Promote Economic Development Activities RECOMMENDATION 1. Approve the Notice of Acceptance of completion for Property Improvement Agreement No. 2017-06, Ballybunion Dr and Santa Teresa Blvd Roundabout. 2. Adopt a resolution amending the Fiscal Year 2023-24 (FY24) budget in the Traffic Impact Fee Fund (Fund 425) to appropriate $2,336,800, for Traffic Impact Fee Project reimbursement, pursuant to the Traffic Impact Fee Reimbursement Policy. BACKGROUND In May 2014, Filice Family Estate, a California Limited Partnership (Developer), received Tentative Map approval which included the Ballybunion Dr and Santa Teresa Blvd Roundabout. [Reference: Resolution No. 2014-19, TM 13-08]. The approvals were to construct the roundabout, utilities, landscaping, lighting, and walls. On September 18, 2017, Lennar Homes of California, Inc., (formerly CalAtlantic Group, Inc.) received Council approval of Property Improvement Agreement 2017-06 for the development of the Ballybunion Dr and Santa Teresa Blvd Roundabout and related Public Improvements. 7.4 p. 66 of 478 Notice of Acceptance of Completion for Ballybunion and Sta Teresa Roundabout City of Gilroy City Council Page 2 of 3 February 26, 20241 5 1 4 The developer has paid plan check and inspection fees and submitted bonding and insurance for the above-referenced property improvement agreement. DISCUSSION Chapter 21, Article III, Section 21.81 of the City Code allows the City Council to authorize a reduction in the payment and performance bonds that the builder provided prior to the Property Improvement Agreements being accepted by Council. The amount of the bond reduction is consistent with the amount of work completed at the time of the request. A Maintenance Bond in the amount of 10% of the construction cost ensures that defective or damaged improvements will be corrected during the one-year maintenance warranty period. The project’s actual improvement costs have been reviewed to ensure that the Maintenance Security amount covers any anticipated issue with the installed improvements. The developer, Lennar Homes of California, Inc. (formerly CalAtlantic Group, Inc.), requests a reduction of the Ballybunion Dr and Santa Teresa Blvd Roundabout Faithful Performance and Payment Bonds to a Maintenance Bond. This Maintenance Bond is 10% of the bond’s value for the Roundabout improvements bond, reducing it from the original $1,217,545 to $121,754.50 The original security provided for 100% of the estimated construction cost and payment for roundabout improvements, which consist of new pavement, grading, curb, gutter, sidewalk, utilities, landscape, electrical lighting, utility, storm, water, and sewer. The project is fully complete, and the Notice of Completion document is ready for acceptance and recordation with Santa Clara County. Attachment 3 contains the Notice of Completion. The Ballybunion Dr and Santa Teresa Blvd Roundabout is included in the list of roadway improvements that make up the City’s Traffic Impact Fee Program. As such, the cost to build the improvements are eligible to be reimbursed from the Traffic Impact Fee Fund, pursuant to the Traffic Impact Fee (TIF) Reimbursement Policy. Staff recommends City Council adopt the attached resolution amending the appropriations in the Traffic Impact Fee Fund (425) in the amount of $2,336,800 so that the developer can be duly reimbursed. ALTERNATIVES Council may deny the request to approve the Notice of Acceptance and reduction of bonds or not adopt the budget amendment resolution. However, the developer has completed all improvements per the approved Property Improvement Agreement No. 2017-06 and the TIF reimbursement policy. Staff does not recommend either of these alternative as it will impose unnecessary delay for the site’s development and put the City at legal risk for not complying with the established reimbursement policy. 7.4 p. 67 of 478 Notice of Acceptance of Completion for Ballybunion and Sta Teresa Roundabout City of Gilroy City Council Page 3 of 3 February 26, 20241 5 1 4 FISCAL IMPACT/FUNDING SOURCE There is no net impact to the General Fund. The developer has paid plan check and inspection fees and submitted bonding and insurance for the above-referenced Property Improvement Agreement. The Faithful Performance and Payment Bonds held as security would be reduced from the original $1,217,545 to $121,754.50. In addition, the budget amendment would appropriate $2,336,800 in the Traffic Impact Fee Fund (Fund 425) for the TIF reimbursement. Attachments: 1. Exhibit A – Vicinity Map 2. Exhibit B – PIA 3. Exhibit C – Notice of Completion 4. Exhibit D – Resolution 7.4 p. 68 of 478 7.4 p. 69 of 478 7.4 p. 70 of 478 7.4 p. 71 of 478 7.4 p. 72 of 478 7.4 p. 73 of 478 7.4 p. 74 of 478 7.4 p. 75 of 478 7.4 p. 76 of 478 7.4 p. 77 of 478 7.4 p. 78 of 478 7.4 p. 79 of 478 7.4 p. 80 of 478 7.4 p. 81 of 478 7.4 p. 82 of 478 7.4 p. 83 of 478 7.4 p. 84 of 478 7.4 p. 85 of 478 7.4 p. 86 of 478 7.4 p. 87 of 478 7.4 p. 88 of 478 7.4 p. 89 of 478 7.4 p. 90 of 478 7.4 p. 91 of 478 7.4 p. 92 of 478 7.4 p. 93 of 478 SEPARATE PAGE PURSUANT TO GOVT. CODE 27361.6 RECORDING REQUESTED BY: City of Gilroy WHEN RECORDED MAIL TO: City Clerk City of Gilroy 7351 Rosanna Street Gilroy, CA 95020 NOTICE OF ACCEPTANCE OF COMPLETION NOTICE IS HEREBY GIVEN that work agreed to be performed under the property agreement between the City of Gilroy, a municipal corporation, whose address is 7351 Rosanna Street, Gilroy, CA 95020, and the Contractor mentioned below who developed said project, was accepted as completed by the City of Gilroy on the . Project No.: Property Improvement Agreement No. 2017-06, Santa Teresa/Ballybunion/Luchessa Roundabout and Class I Trail Contractor Name: Lennar Homes of California (Formerly CalAtlantic Group, Inc.) Contractor Address: 2603 Camino Ramon, 525, San Ramon, CA 94583 Surety on Contract: Harco National Insurance Company Location of Project: Intersection of Santa Teresa/Ballybunion/Luchessa Description of Work: Road, Trail, and Utility Improvements Interest of City: x Owner in Fee: Vendee under Agreement to Purchase; Lessee; x Owner of Easements; Holder of License; x Owner of Streets; x Owner of Utilities, Water, Sewer, Storm Systems Owner's Name: City of Gilroy Work Done:_Public Improvements include construction of the Santa Teresa/Ballybunion/Luchessa Roundabout, Class I Trail, and utilities.____________________________________________ This notice is given in accordance with the provisions of Section 3093 of the Civil Code of the State of California. The undersigned declares: That he is an officer of the City of Gilroy, that he has read the foregoing Notice of Acceptance of Completion and knows the contents thereof; and that the same is true of his own knowledge, except as to those matters that he believes it to be true. I certify under penalty of perjury that the foregoing is true and correct. Executed at the City of Gilroy, County of Santa Clara, State of California on February_26, 2024. CITY OF GILROY STATE OF CALIFORNIA COUNTY OF SANTA CLARA BY Jorge Duran TITLE Interim City Engineer. This document is for the benefit of the City of Gilroy. Request for Recordation without fee is made in accordance with Section 27383 of the Government Code of the State of California. 7.4 p. 94 of 478 SEPARATE PAGE PURSUANT TO GOVERNMENT CODE SECTION 27361.6 RECORDING REQUESTED BY: ) ) City of Gilroy ) ) ) ) WHEN RECORDED, MAIL TO: ) City Clerk ) City of Gilroy ) 7351 Rosanna Street ) Gilroy, CA 95020 ) RECORDED WITHOUT FEE PER CALIFORNIA GOVERNMENT CODE SECTION 27383 (SPACE ABOVE THIS LINE FOR RECORDER'S USE) NOTICE OF ACCEPTANCE OF COMPLETION PROPERTY IMPROVEMENT AGREEMENT NO. 2017 – 06 Santa Teresa/Ballybunion/Luchessa Roundabout and Class I Trail DEVELOPER NAME : Lennar Homes of California (Formerly CalAtlantic Group, Inc.) 7.4 p. 95 of 478 1 4 4 9 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AMENDING THE BUDGET FOR THE CITY OF GILROY FOR 2023-2024 AND APPROPRIATING FUNDS IN THE TRAFFIC IMPACT FEE FUND WHEREAS, the City Administrator prepared and submitted to the City Council a budget for the City of Gilroy for Fiscal Years 2023-2024 and 2024-2025, and the City Council carefully examined, considered and adopted the same on June 5, 2023; and WHEREAS, City Staff has prepared and submitted to the City Council proposed amendments to said budget for Fiscal Year 2023-2024 for the City of Gilroy in the staff report dated February 26, 2024 for the Acceptance of Completion for Property Improvement Agreement No. 2017-06, Ballybunion Dr and Santa Teresa Blvd Roundabout. NOW, THEREFORE, BE IT RESOLVED THAT the appropriations for Fiscal Year 2023-2024 in Fund 425 – Traffic Impact Fee Fund shall be increased by $2,336,800. PASSED AND ADOPTED this 26th day of February 2024 by the following roll call vote: AYES:COUNCIL MEMBERS: NOES:COUNCIL MEMBERS: ABSTAIN:COUNCIL MEMBERS: ABSENT:COUNCIL MEMBERS: APPROVED: Marie Blankley, Mayor ATTEST: _______________________ Beth Minor, Interim City Clerk 7.4 p. 96 of 478 Page 1 of 3 City of Gilroy STAFF REPORT Agenda Item Title:Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment for $20,813 for a County of Santa Clara Office of Emergency Management Training and Exercise Grant Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Fire Submitted By:Jim Wyatt, Fire Chief Prepared By:Jennifer Fortino, Management Analyst STRATEGIC PLAN GOALS Maintain and Improve City Infrastructure RECOMMENDATION Adopt a resolution of the City Council of the City of Gilroy amending the budget for Fiscal Year 2024 and appropriating proposed budget amendments of $20,813. EXECUTIVE SUMMARY The City of Gilroy was awarded a grant from the County of Santa Clara Office of Emergency Management (OEM) to pay for overtime associated with an Incident Response to Terrorist Bombings (IRTB) Train-the-Trainer course. The County of Santa Clara OEM awards grants annually to Fire Departments and other emergency response agencies within Santa Clara County to provide funding for critical emergency and disaster training. The Gilroy Fire Department was awarded $20,813 to fund the overtime for four (4) Fire Department personnel to attend the Federal Emergency Management Agency (FEMA) sponsored IRTB Train-the-Trainer course in May 2024. 7.5 p. 97 of 478 Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment for $20,813 for a County of Santa Clara Office of Emergency Management Training and Exercise Grant City of Gilroy City Council Page 2 of 3 February 26, 2024 BACKGROUND The County of Santa Clara OEM allocates yearly training and exercise grants to fire and emergency response agencies within Santa Clara County. These grants focus on preparing agencies to build, sustain, mitigate, and improve each agency’s ability to prepare and respond to terrorist threats and disasters. ANALYSIS The grants awarded by the County of Santa Clara OEM enhance the capabilities of Santa Clara County fire departments and emergency response agencies to prepare and effectively respond to terrorist attacks. Due to current fiscal constraints, participation in the IRTB Train-the-Trainer course is only feasible with grant funding. FEMA is sponsoring this course at no cost to the Department; however, FEMA will not pay for the overtime the Department will incur during this multi-day training course. This grant will provide the overtime funding needed to allow four (4) Fire Department personnel to attend. The Department will further benefit from this training when the four (4) personnel train department staff on the techniques they learned during this training course. The Fire Department has benefitted from the grants the County of Santa Clara OEM has awarded the Department over the years. In prior years, grant funds were used to participate in Emergency Medical Services (EMS) trainings, including last year’s Basic and Advanced Tactical Medic Training. City Council action is required to appropriate the grant funds into the FY 24 budget for Fund 100 to receive this grant funding. The proposed FY 24 appropriations are as follows: Expenditure Fund: 1003510-50130 - Overtime Revenue Fund: 1003500-47330 - Reimburesment ALTERNATIVES The City Council may reject the acceptance of the County of Santa Clara OEM grant for $20,813. However, staff does not recommend this option as it would prevent staff from participating in critical terrorist preparedness training that will benefit the City’s first responders and Gilroy residents. FISCAL IMPACT/FUNDING SOURCE Approval of this action would increase the revenue and the expenditure appropriations in the Fire Operations budget in the General Fund (100) by $20,813. 7.5 p. 98 of 478 Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment for $20,813 for a County of Santa Clara Office of Emergency Management Training and Exercise Grant City of Gilroy City Council Page 3 of 3 February 26, 2024 PUBLIC OUTREACH This item was included in the publicly posted agenda for this meeting. NEXT STEPS Upon Council approval, staff will register four (4) Fire Department personnel for the IRTB Train-the-Trainer course scheduled in May 2024. Attachments: 1. Budget amendment resolution 7.5 p. 99 of 478 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AMENDING THE BUDGET FOR THE CITY OF GILROY FOR FISCAL YEAR 2024 IN THE PROPOSED FIRE EXPENDITURE AND REVENUE FUNDS AND APPROPRIATING PROPOSED AMENDMENTS WHEREAS, the City Administrator prepared and submitted to the City Council a budget for the City of Gilroy for Fiscal Years 2024 and 2025, and the City Council carefully examined, considered, and adopted the same on June 5, 2023; and WHEREAS, City Staff has prepared and submitted to the City Council a proposed amendment to said budget for Fiscal Year 2024 for the City of Gilroy in the staff report dated February 26, 2024, for the related Fire Department expenditure and revenue funds, appropriating funding received from the County of Santa Clara Office of Emergency Management; and WHEREAS, the City Council has carefully examined and considered the same and is satisfied with said budget amendments. NOW, THEREFORE, BE IT RESOLVED that appropriations to the expenditure and revenue accounts in the General Fund, are hereby increased by $20,813 for Fiscal Year 2024. PASSED AND ADOPTED this 26th day of February 2024 by the following roll call vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: APPROVED: ______________________________ Marie Blankley, Mayor ATTEST: Beth Minor, Interim City Clerk 7.5 p. 100 of 478 Resolution No. 2024-XX Resolution Amending FY 2024 General Fund Budget City Council Regular Meeting | Monday, February 26, 2024 Page 2 of 2 CERTIFICATE OF THE CLERK I, BETH MINOR, Interim City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2024-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, February 26, 2024, with a quorum present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this February 26, 2024. ____________________________________ Beth Minor Interim City Clerk of the City of Gilroy (Seal) 7.5 p. 101 of 478 Page 1 of 3 City of Gilroy STAFF REPORT Agenda Item Title:Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment of $33,080.66 for a County of Santa Clara Health Care System Grant Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Fire Submitted By:Jim Wyatt, Fire Chief Prepared By:Jennifer Fortino, Management Analyst STRATEGIC PLAN GOALS Maintain and Improve City Infrastructure RECOMMENDATION Adopt a resolution of the City Council of the City of Gilroy amending the budget for Fiscal Year 2024 and appropriating proposed budget amendments of $33,080.66. EXECUTIVE SUMMARY The City of Gilroy was awarded a grant from the County of Santa Clara Health System to purchase Emergency Medical Services (EMS) equipment and supplies. The County of Santa Clara Health System awards grants annually to Fire Departments and EMS providers within Santa Clara County to provide funding to equip these agencies with critical EMS equipment and supplies. The Gilroy Fire Department was awarded $33,080.66 to purchase needed EMS software, equipment, and supplies. BACKGROUND The County of Santa Clara Health System allocates yearly grants to Fire and EMS providers within Santa Clara County. Each year, the County of Santa Clara Health System and Fire and EMS provider representatives vote on the type and category of EMS equipment and supplies to fund with that year's grant allocation. This year's EMS 7.6 p. 102 of 478 Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment of $30,080.66 for a County of Santa Clara Health Care System Grant City of Gilroy City Council Page 2 of 3 February 26, 2024 funding supports purchasing an electronic medication tracking system and iPads to collect patient care data in the field. ANALYSIS The County of Santa Clara Health System grant enhances the Fire Department's capabilities when responding to emergency calls for service. This grant will allow the Fire Department to replace its current manual medication tracking system with an electronic system. This system tracks when medications have been received and used and maintains an electronic log of who checks in and checks out medication. The system also alerts staff when medication is nearing expiration and when it is time to reorder medication. The purchase of new engine iPads will replace the Department's aging inventory. Properly functioning iPads are critical tools for the Department's paramedics, who capture crucial patient data when responding to medical calls. The Fire Department has benefitted from the grants the County of Santa Clara Health System has awarded the Department over the years. In prior years, grant funds were used to purchase Automated External Defibrillators (AEDs) and Automated Chest Compression (ACC) devices. City Council action is required to appropriate the grant funds into the FY24 Fire Operations budget in the General Fund (100) to receive and expend this grant funding. ALTERNATIVES The City Council may reject the acceptance of the County of Santa Clara Health System grant in the amount of $33,080.66. However, staff does not recommend this option as it would require the Department to delay the purchase of this equipment until alternative funding can be identified. FISCAL IMPACT/FUNDING SOURCE Approval of this action would increase the revenue, and related expenditure appropriations, in the Fire Operations budget in the General Fund (1003510) by $33,081. PUBLIC OUTREACH This item was included in the publicly posted agenda for this meeting. NEXT STEPS Upon Council approval, staff will finalize the purchase of the electronic medication 7.6 p. 103 of 478 Adoption of a Resolution of the City Council of the City of Gilroy Approving a Fiscal Year 2024 Budget Amendment of $30,080.66 for a County of Santa Clara Health Care System Grant City of Gilroy City Council Page 3 of 3 February 26, 2024 tracking system and the engine iPads. Attachments: 1. Budget amendment resolution. 7.6 p. 104 of 478 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AMENDING THE BUDGET FOR THE CITY OF GILROY FOR FISCAL YEAR 2024 IN THE PROPOSED FIRE EXPENDITURE AND REVENUE FUNDS AND APPROPRIATING PROPOSED AMENDMENTS WHEREAS, the City Administrator prepared and submitted to the City Council a budget for the City of Gilroy for Fiscal Years 2024 and 2025, and the City Council carefully examined, considered, and adopted the same on June 5, 2023; and WHEREAS, City Staff has prepared and submitted to the City Council a proposed amendment to said budget for Fiscal Year 2024 for the City of Gilroy in the staff report dated February 26, 2024, for the related Fire Department expenditure and revenue funds, appropriating funding received from the County of Santa Clara Office of Emergency Management; and WHEREAS, the City Council has carefully examined and considered the same and is satisfied with said budget amendments. NOW, THEREFORE, BE IT RESOLVED that appropriations to the expenditure and revenue accounts in the General Fund, are hereby increased by $20,813 for Fiscal Year 2024. PASSED AND ADOPTED this 26th day of February 2024 by the following roll call vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: APPROVED: ______________________________ Marie Blankley, Mayor ATTEST: Beth Minor, Interim City Clerk 7.6 p. 105 of 478 Resolution No. 2024-XX Budget Amendment City Council Regular Meeting | February 26, 2024 Page 2 of 2 CERTIFICATE OF THE CLERK I, BETH MINOR, Interim City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2024-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, February 26, 2024, with a quorum present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this February 27, 2024. ____________________________________ Beth Minor Interim City Clerk of the City of Gilroy (Seal) 7.6 p. 106 of 478 Page 1 of 5 City of Gilroy STAFF REPORT Agenda Item Title:Award a Contract in the amount of $408,134 to Blue Raster for Bicycle and Pedestrian Geographic Information Systems Consultant Services and Approve a Budget Amendment in the Measure B Fund Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Administration Submitted By:Bryce Atkins, Assistant to the City Administrator Prepared By:Bryce Atkins, Assistant to the City Administrator STRATEGIC PLAN GOALS Ensure Neighborhood Equity from City Services RECOMMENDATION Council: a. Award a contract to Blue Raster for $408,134 for bicycle and pedestrian geographic information systems consultant services, and authorize the City Administrator to execute the agreement and any non-financial amendments to the agreement. b. Adopt a resolution amending the FY24 adopted budget to increase appropriations in the Measure B Fund (Fund 212) by $408,134. BACKGROUND The City receives funding from an allocation of Measure B, adopted in 2016, for the intent of education and encouragement for bicycle and pedestrian activity (E/E Funds). The City receives an allocation each year based on an allocation formula managed by the Santa Clara Valley Transportation Authority (VTA). These funds can be used for education and encouragement activities but cannot be used for capital projects or improvements. 8.1 p. 107 of 478 Award a Contract to [Consultant] for Bicycle and Pedestrian Geographic Information Systems Consultant Services City of Gilroy City Council Page 2 of 5 February 26, 2024 A Geographic Information System (GIS) mapping of the City's bicycle and pedestrian paths and trails has been a recurring project on the annual program of projects. The City issued an RFP on December 12, 2023, with a final closing date of January 31, 2024. The City received six proposals. ANALYSIS The project entails a consultant to use global positioning systems (GPS) to map out the City’s various bicycle and pedestrian trails and paths, incorporate other bicycle and pedestrian activities such as Safe Routes to School Data and the County’s Public Health Active Transportation grant efforts, and map other features in the City’s bicycle and pedestrian network to educate and encourage residents to walk, jog, and bike along the pathway networks in the City. Upon successful mapping and providing all data and GIS layers to our IT Department for incorporation into our GIS systems, the project includes providing the data to various GPS mapping programs to allow routes for walking and biking to be available when mapping travel routes through the City. Below are the six proposals received, and the associated cost quotes, in alphabetical order. Firm Name Cost Estimate Evaluator’s Combined Score Arini Geographics $124,130 83 Blue Raster $408,134 169 Evari GIS $149,000 128 Geomate $55,300 84 Houseal Levigne $79,950 147 Kaart $63,700 124 Staff is requesting Council to approve the award of the project to Blue Raster, despite the cost proposal being the highest. The scope of the RFP involves using manual GPS to map the network, including fine details including path width, composition, direction of flow, etc. As part of the question-and-answer portion of the RFP process, one of the submitters inquired about the use of artificial intelligence (AI) to compile the data and handle the mapping. After consulting with our GIS Analyst, the data with AI (even as recently as a year ago) still requires significant cleanup and the chance of errors and inaccuracies are high. Thus, it was determined that the work must be manually captured, that the use of AI, aerial, or street imagery to conduct the mapping or assessment is not acceptable, and that physical GPS-based mapping is required. Despite this, only one firm submitted a methodology that matches this requirement, which is Blue Raster. The other firms propose to use either AI, aerial imagery, street imagery, or a combination of all three, to complete their work. This data collection work 8.1 p. 108 of 478 Award a Contract to [Consultant] for Bicycle and Pedestrian Geographic Information Systems Consultant Services City of Gilroy City Council Page 3 of 5 February 26, 2024 is also the largest cost item for Blue Raster, and accounts for a combined $357,749 of their estimated project costs. However, the increase in accuracy and detailed collection of pedestrian and bicycle network assets (fix-it stations, benches, water fountains, trail classifications, public art locations, etc.) will be valuable data to have, as well as the precision in data and awareness of network features for those using the public facing system and online resources. Proposed Scope of Work Below is the proposed scope of work as called for in the RFP. The scope specifics are still under refinement with Blue Raster to ensure that the detailed procedures and steps in the project are captured and correct. This is summarized from the RFP scope. Task 1: Project Management and Coordination with City Staff and Outside Expertise •The Consultant will schedule regular conference calls with City staff to review the project status and provide summaries of work completed and projected work plan for the remainder of the project. Invoices must be submitted electronically to the City’s project manager. Task 2: GPS Mapping of Locations Utilizing GPS, the Consultant shall map: •Bicycle lanes, paths, and all other bicycle designated routes and areas. •Sidewalks and walking trails, paths, and all other pedestrian designated routes and areas. •Key features and equipment along the above routes, including bicycle fixing stations, public drinking fountains, bike racks with distinction as to type, location of any wayfinding signs, and other public amenities along the above lanes, paths and routes, including any public art. •Mapping shall include the width, length, and other physical features of the various lanes and paths, as well as identifying which classifications and qualities are present in each of the above. Task 3: Creation of GIS layers for City •Consultant shall enter the data acquired in Task 2 into GIS layers, at least one layer for the bicycle trails and path network, and at least one layer for the pedestrian trails and path network. Final number of layers are subject to the selected proposal, and the proposed scope of work enhancements, as described in the proposal contents section below. Task 4: Creation and/or Coordination of Public Facing Websites and Portals of Certain GIS Maps •Consultant shall create a public facing, interactive map on the City’s website, or a separate website that would be under the control of the City, which shall provide a visual representation of the various bike and pedestrian facilities the City has, including any features such as the City’s Bike Fix-It stations, drinking fountains, 8.1 p. 109 of 478 Award a Contract to [Consultant] for Bicycle and Pedestrian Geographic Information Systems Consultant Services City of Gilroy City Council Page 4 of 5 February 26, 2024 and other features along the possible routes. The map will also feature the Safe Routes to School pathways and County Encouragement maps. •Consultant will also provide the information to mapping and navigation software providers to facilitate navigation along the bicycle and pedestrian pathways. Funding Source The funding for this project is coming from the Measure B E/E funds. According to VTA staff, the City has accumulated approximately $265,000 to-date in Measure B E/E funds. In consultation with VTA staff, the City may engage the full cost of the consultant now, and complete the project. The City would then invoice VTA and be reimbursed each fiscal year until the full balance is reimbursed. No General Fund sources are proposed for use in this project. A resolution amending the City’s adopted budget is attached to appropriate the contract amount. As additional funding allocations becomes available from VTA for Measure B E/E funds in future fiscal years, staff will then submit the reimbursement invoices to VTA until the expenditure in the Measure B fund for this project is fully reimbursed. About Blue Raster Blue Raster is a firm that specializes in GIS and software development for federal, state, and local governments. They have been in existence for 22 years and have 31 employees with various specialties within this field. The proposal also incorporates a subcontractor to do the GPS field work, Windrose Surveying and Land Services, that will provide survey teams to collect the physical data in person and provide to Blue Raster’s team for processing. The City’s RFP evaluation team, comprised of our GIS Analyst and one of our Public Works engineers, ranked the methodology for Blue Raster as the highest of all submittals, and the firm and staffing team qualifications were in the higher rankings of the firms. Staff feels that Blue Raster is the consulting firm with the best project approach and team at this time to deliver this project. Conclusion Staff is recommending that Council authorize the City Administrator to execute the agreement, as well as authorize any amendments for the duration of the project, except any that increase the not-to-exceed total contract amount of $408,134. Any amendments that would seek to increase the total contract amount would come back to Council for approval. ALTERNATIVES Council may choose to not award the contract or reject all bids. This is not recommended as the project proposals have been received and evaluated, and the proposed project is in keeping with the intent of the Measure B E/E funds and the Program of Projects. Re-bidding the project to modify the scope would reset the project to the RFP development phase, adding further time to implement the project. 8.1 p. 110 of 478 Award a Contract to [Consultant] for Bicycle and Pedestrian Geographic Information Systems Consultant Services City of Gilroy City Council Page 5 of 5 February 26, 2024 FISCAL IMPACT/FUNDING SOURCE $408,134 - Measure B Bicycle and Pedestrian Program. Upon completion of the project, the City will invoice VTA to draw down majority of the expenditure from the current allocation in the amount of $265,000 and draw down the remaining $143,134 from future fiscal year allocations. No General Fund sources are proposed for use by this project. PUBLIC OUTREACH The item was included on the publicly posted agenda for this meeting. Additionally, there will be a public outreach campaign developed by City staff to advertise this project and the final webpage for the maps and awareness events along the City’s bicycle and pedestrian networks. NEXT STEPS If approved, staff will finalize the contract with Blue Raster, and commence the project. ATTACHMENTS 1. Resolution – Budget Amendment – Measure B Fund 212 8.1 p. 111 of 478 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AMENDING THE BUDGET FOR THE CITY OF GILROY FOR FISCAL YEAR 2023-24 IN THE MEASURE B FUND AND APPROPRIATING PROPOSED EXPENDITURE AMENDMENTS WHEREAS, the City Administrator prepared and submitted to the City Council a budget for the City of Gilroy for Fiscal Years 2023-24 and 2024-2025, and the City Council carefully examined, considered and adopted the same on June 5, 2023; and WHEREAS, City Staff has prepared and submitted to the City Council a proposed amendment to said budget for Fiscal Year 2023-24 for the City of Gilroy in the staff report dated February 26, 2024 for the Bicycle and Pedestrian GIS Consultant Services Contract; and WHEREAS, the City Council has carefully examined and considered the same and is satisfied with said budget amendment. NOW, THEREFORE, BE IT RESOLVED THAT appropriations for Fiscal Year 2023-24 are hereby increased in the Measure B Fund, Fund 212, by $408,134. PASSED AND ADOPTED this 26th day of February 2024 by the following roll call vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: APPROVED: ______________________________ Marie Blankley, Mayor ATTEST: Beth Minor, Interim City Clerk 8.1 p. 112 of 478 Resolution No. 2024-XX Measure B Bicycle and Pedestrian GIS Project Budget Amendment City Council Regular Meeting | February 26, 2024 Page 2 of 2 CERTIFICATE OF THE CLERK I, BETH MINOR, Interim City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2024-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, Date, with a quorum present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this Date. ____________________________________ Beth Minor Interim City Clerk of the City of Gilroy (Seal) 8.1 p. 113 of 478 Page 1 of 3 City of Gilroy STAFF REPORT Agenda Item Title:Award a Contract to Kimley-Horn and Associates, Inc. for the Design of Two Traffic Signals Project No. 24- RFP-PW-498 in the amount of $149,854, Approve a Project Contingency of $29,971, and Approve a Total Project Expenditure of $179,825 for Design Services Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Public Works Submitted By:Heba El-Guindy, Public Works Director Prepared By:Julie Oates, Engineer II STRATEGIC PLAN GOALS Maintain and Improve City Infrastructure RECOMMENDATION Award a contract to Kimley-Horn and Associates, Inc. in the amount of $149,854 and approve a project contingency of $29,971 for a total project expenditure of $179,825 for the Design of Two Traffic Signals Project No. 24-RFP-PW-498 and authorize the City Administrator to execute the contract and associated documents. EXECUTIVE SUMMARY The Design of Two Traffic Signals Project No. 24-RFP-PW-498 (Project) includes the design and preparation of bid documents for new traffic signals at the Luchessa Avenue/Church Street and Monterey Street/I.O.O.F. Avenue intersections. These projects are included in the Fiscal Year 2024-2028 Capital Improvement Program (CIP), adopted by the City Council on June 5, 2023. The proposed not-to-exceed contract amount is $149,854. Staff requests authorization for an additional $29,971 for contingency, for a total project expenditure of $179,825 for design services. Staff recommends the City Council award a contract to Kimley-Horn and Associates, Inc. of Oakland, CA, to design and prepare the bid documents for the Project. 8.2 p. 114 of 478 Award a Contract to Kimley-Horn and Associates, Inc. for the Design of Two Traffic Signals Project No. 24-RFP-PW-498 in the amount of $149,854, Approve a Project Contingency of $29,971, and Approve a Total Project Expenditure of $179,825 for Design Services City of Gilroy City Council Page 2 of 3 February 26, 2024 BACKGROUND The Project includes the design and preparation of bid documents for two new traffic signals. These projects are included in the Fiscal Year 2024-2028 Capital Improvement Program (CIP), adopted by the City Council on June 5, 2023. 1. Luchessa / Church Traffic Signal Installation (800350) 2. Monterey / I.O.O.F. Traffic Signal Installation (800370) Signalization of these intersections will enhance pedestrian and vehicular safety and improve traffic operations for all modes of travel. The Supplemental EIR for the Gilroy Ice Center at the Outdoor Sports Park calls for the installation of a traffic signal at the intersection of Luchessa / Church Street to mitigate traffic needs. Traffic signal improvements at the Luchessa Avenue / Church Street intersection will include safety lighting, pedestrian countdown signals, a marked crosswalk across Luchessa Avenue, and upgrades to meet ADA compliance. Traffic signal improvements at the Monterey Street / I.O.O.F. Avenue intersection will include safety lighting, pedestrian countdown signals, and upgrades to meet ADA compliance. In addition, due to the proximity of the Union Pacific Railroad (UPRR) tracks, the design will include signal interconnection with the nearby at-grade highway- railroad crossing east of the intersection. The two signal projects have been bundled together to provide time and cost savings in the design and in the future construction of the improvements. ANALYSIS On December 29, 2023, a Request for Proposals (RFP) was issued to the seven consultants on the City’s prequalified list of design consultants (from a previous Request for Qualifications) for the design of traffic signal improvements. Staff received three proposals from the following consultant teams: 1. Hexagon Transportation Consultants, Inc. 2. Iteris, Inc. 3. Kimley-Horn and Associates, Inc. The proposals were evaluated by an internal scoring committee and ranked per the criteria identified in the RFP. Kimley-Horn and Associates, Inc. was ranked the highest and was selected based on their local knowledge, experience, project understanding, and project approach. 8.2 p. 115 of 478 Award a Contract to Kimley-Horn and Associates, Inc. for the Design of Two Traffic Signals Project No. 24-RFP-PW-498 in the amount of $149,854, Approve a Project Contingency of $29,971, and Approve a Total Project Expenditure of $179,825 for Design Services City of Gilroy City Council Page 3 of 3 February 26, 2024 ALTERNATIVES The alternative to the staff recommendation is to not award the contract. Staff does not recommend this option because it would delay the design, and ultimately, the construction of the traffic signal improvements. FISCAL IMPACT/FUNDING SOURCE The proposed cost for the design services is $149,854. Staff recommends a contingency of $29,971 (20%) to address any unanticipated changes or requests from outside agencies (e.g., UPRR or CA PUC due to the proximity of an at-grade highway- railroad crossing). Therefore, the total expenditure allocation request is $179,825. The Project will be funded by the Traffic Impact Fund (425). The design phase traffic installation at both intersections is included in the FY24 budget (CIP Project #800350 and 800370). PUBLIC OUTREACH There is no public outreach planned during the design phase of the project. Appropriate public outreach will be conducted for the construction phase of the project. NEXT STEPS If Council approves the proposed contract with Kimley-Horn and Associates, Inc., staff will direct the consultant to begin the design process. Final design and bid documents are anticipated to be completed in October 2024. Bidding and construction would begin soon after the design and bid documents are completed. Attachments: 1. Kimley-Horn and Associates, Inc. - Agreement 8.2 p. 116 of 478 8.2 p. 117 of 478 8.2 p. 118 of 478 8.2 p. 119 of 478 8.2 p. 120 of 478 8.2 p. 121 of 478 8.2 p. 122 of 478 8.2 p. 123 of 478 8.2 p. 124 of 478 8.2 p. 125 of 478 8.2 p. 126 of 478 8.2 p. 127 of 478 8.2 p. 128 of 478 8.2 p. 129 of 478 8.2 p. 130 of 478 8.2 p. 131 of 478 8.2 p. 132 of 478 8.2 p. 133 of 478 8.2 p. 134 of 478 8.2 p. 135 of 478 8.2 p. 136 of 478 8.2 p. 137 of 478 8.2 p. 138 of 478 8.2 p. 139 of 478 8.2 p. 140 of 478 8.2 p. 141 of 478 8.2 p. 142 of 478 8.2 p. 143 of 478 8.2 p. 144 of 478 8.2 p. 145 of 478 8.2 p. 146 of 478 8.2 p. 147 of 478 8.2 p. 148 of 478 8.2 p. 149 of 478 8.2 p. 150 of 478 Page 1 of 2 City of Gilroy STAFF REPORT Agenda Item Title:Consideration of a Ceasefire Resolution Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Administration Submitted By:Bryce Atkins, Assistant to the City Administrator Prepared By:Bryce Atkins, Assistant to the City Administrator STRATEGIC PLAN GOALS Not Applicable RECOMMENDATION Council discussion and direction. BACKGROUND At the February 5, 2024 regular City Council meeting, after receiving public comments, a Council-initiated agenda item was brought forth to consider the adoption of a ceasefire resolution regarding the Hamas – Israel conflict. ANALYSIS Staff has collected a few resolutions from other cities that have adopted resolutions regarding this matter. The resolutions vary in the claims made in the recitals and some variance in the nature of the peace/ceasefire request and terms of the called-for ceasefire. Staff is not making any recommendations regarding the Council-initiated discussion on a potential ceasefire resolution. ALTERNATIVES Council may issue direction to staff as it may deem appropriate. 11.1 p. 151 of 478 Consideration of a Cease-Fire Resolution City of Gilroy City Council Page 2 of 2 February 26, 2024 FISCAL IMPACT/FUNDING SOURCE None – this item carries no known fiscal impact. PUBLIC OUTREACH This agenda item was included on the publicly posted agenda for this meeting. NEXT STEPS Staff will implement direction received by the City Council. Attachments: 1. Resolution of the City of Gilroy for Peace in the Middle East - submitted by Mayor Blankley 2. Cease Fire Resolution - submitted by Council Member Hilton 3. Sample Peace Resolution JCRC 4. Santa Cruz Peace Resolution 5. Hollister Resolution 6. Long Beach Resolution 7. Montebello Resolution 8. Oakland Resolution 11.1 p. 152 of 478 Resolution of the City of Gilroy, California for Peace in the Middle East Whereas, the City of Gilroy, CA acknowledges the suffering of the peoples of the Middle East and affirms our shared humanity; and Whereas, the City of Gilroy, CA recognizes the history of conflicts in the Middle East and values peaceful conflict resolution; and Whereas, the City of Gilroy, CA calls for collaborative efforts supporting peaceful dialogue among all parties involved; and Whereas, the City of Gilroy, CA looks forward to a future where all can live with dignity and security in Peace around the world. Now, therefore, I, Marie Blankley, Mayor of the City of Gilroy, on this 26th day of February 2024, along with my colleagues on the City Council, do hereby urge our community to develop and participate in activities that foster tolerance, empathy, education, understanding of people of all backgrounds and religious faiths, and promote peaceful conflict resolution among all parties. 11.1 p. 153 of 478 A RESOLUTION CALLING FOR A PERMANENT CEASEFIRE IN ISRAEL AND PALESTINE WHEREAS, Gilroy is dedicated to fostering a community that embraces diversity, values all life, and upholds the principles of equality and human rights; and WHEREAS, incidents of anti-Semitic, anti-Arab, and anti-Muslim bigotry and violence are on the rise within our country, posing a significant threat to the well-being and safety of our diverse communities and all Americans; and acknowledges the suffering of Palestinians and Israelis, and affirms our shared humanity; WHEREAS, we express profound sorrow and condemnation for the tragic loss of innocent Israeli lives in the horrific attack on October 7th; and WHEREAS, we express profound sorrow and condemnation for the loss of innocent Palestinian lives from the horrific indiscriminate bombing upon the civilian population of Gaza. WHEREAS, Gilroy supports the dignity and safety of all residents in any community in which all human life is precious and valued, and the targeting of civilians-no matter their faith or ethnicity, or country of origin- is abhorrent; and WHEREAS, over two million Palestinian lives in Gaza, including Israeli hostages, are at imminent risk if a permanent cease-fire is not achieved and continuous humanitarian aid is not assured; and WHEREAS, Gilroy strives for people in our community with disparate perspectives to unite in our advocacy for peaceful and respectful dialogue for the good of humanity. NOW THEREFORE BE IT RESOLVED, that Gilroy calls for: 1) an immediate permanent ceasefire for sustainable peace to urgently end the current violence; and 2) the immediate release of all Israeli & Palestinian hostages; and 3) an immediate end to the blockade and siege of Gaza, with the prompt provision of humanitarian assistance to Gaza including supplying food, water, fuel, and medical supplies which are indispensable for the survival of the civilian population of Gaza; and 4) all parties to fully comply with their obligations under international law; and 5) affirms the American Academy of Pediatrics’ following policy statement: 11.1 p. 154 of 478 • Children should never be harmed because of the religious, cultural, and other beliefs and values of the child and/or their family; • Harm to children should never be used as a tool or tactic of war or conflict; • Children should be protected from the direct effects of armed conflicts and their food, housing, health, and other basic needs safeguarded. 11.1 p. 155 of 478 Resolution Calling for Peace and Supporting Communities Impacted by the 2023 Israel-Hamas Conflict WHEREAS,on October 7,2023,Hamas terrorists attacked villages and towns in southern Israel from Gaza,murdering at least 1,200 Israeli citizens and foreign nationals,and fired thousands of rockets at cities and towns across Israel;and WHEREAS,the resulting war between Israel and Hamas has tragically claimed the lives of tens of thousands of Palestinians in Gaza and led to the displacement of over a million people;and WHEREAS,the humanitarian situation in Gaza has deteriorated and there are ongoing international efforts to maintain humanitarian safe-zones and ensure civilians in Gaza have access to food,water,and other supplies;and WHEREAS,Hamas kidnapped and is currently holding over 120 people hostage;and WHEREAS,many members of the CITY community have family and friends directly impacted by the Israel-Hamas conflict;and WHEREAS,as with any foreign affairs issues,the CITY community has a diversity of opinions regarding the Israel-Hamas War and the broader Israeli-Palestinian conflict;and WHEREAS,many residents throughout CITY already live in heightened anxiety due to increasingly high levels of antisemitism and Islamophobia in California and the United States, which is being amplified by the conflict;and THEREFORE,BE IT RESOLVED,CITY condemns the horrific attacks against Israeli civilians and mourns the loss of all innocent lives in Gaza and Israel;and BE IT FURTHER RESOLVED,that the CITY calls for peaceful and just resolution to the Israel-Hamas War,provision of life-saving humanitarian aid in Gaza,the release of all hostages in Gaza,and the removal of Hamas from rule in Gaza;and BE IT FURTHER RESOLVED,CITY affirms the right of self-determination for both Jews and Palestinians,and will support efforts to ensure both peoples can coexistence peacefully,living side by side;and BE IT FURTHER RESOLVED,CITY is committed to ensuring the protection of all vulnerable religious and cultural centers,uplifting events that seek to bring diverse communities together, and rejecting inflammatory,threatening and violent language of all kind;and BE IT FURTHER RESOLVED,CITY remains committed to calling out all forms of hate, preventing this conflict for sowing division in CITY,and encouraging residents to show compassion and understanding to support their neighbors who may be in great pain. 11.1 p. 156 of 478 Resolu’on City of Santa Cruz California Resolution for Peace in the Middle East Whereas the City of Santa Cruz, CA acknowledges the suffering of the peoples of the Middle East and affirms our shared humanity. Whereas the City of Santa Cruz, CA recognizes the history of conflicts in the Middle East. Whereas the City of Santa Cruz, CA values peaceful conflict resolution. Therefore, be it resolved that the City of Santa Cruz, California: 1. Acknowledges the suffering of the peoples of the Middle East. 2. Affirms our shared humanity and wish for peace. 3. Calls for collaboraAve efforts supporAng peaceful dialogue among all parAes involved. 11.1 p. 157 of 478 4. Urges our community to develop and parAcipate in acAviAes that foster tolerance, empathy, educaAon, and understanding of people of all backgrounds and religious faiths. 5. Looks forward to a future where all can live with dignity and security in PEACE. 6. Declares that (day/month) will be “City of Santa Cruz, California Peace Day” where all can have the opportunity to parAcipate in acAviAes and dialogue that promotes peace in the Middle East and around the world. Please note: Words we believe would be divisive: Hamas Hezbollah Jews PalesAne/PalesAnians Gaza/Gazans Israel/Israelis Ceasefire Genocide 11.1 p. 158 of 478 Page 1 of 2 RESOLUTION NO. 2023-240 A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF HOLLISTER AFFIRMING THE CITY OF HOLLISTER’S SUPPORT FOR AN IMMEDIATE CEASEFIRE IN GAZA AND ISRAEL WHEREAS, the City of Hollister recognizes the importance of peace and security for all communities and nations around the world regardless of national, ethnic or religious affiliations; and WHEREAS, the City of Hollister advocates for the safety, dignity, freedom, and equality of all people, regardless of religion, race, or nationality; and WHEREAS, the City of Hollister recognizes that all human life is precious; and WHEREAS, since October 7, 2023, armed violence has claimed the lives of and wounded thousands of individuals in Gaza and Israel; and WHEREAS, lives continue to be at imminent risk if a ceasefire is not achieved without delay; and NOW, THEREFORE, BE IT RESOLVED that the City of Hollister joins other cities in calling on our Congress Members to demand an immediate ceasefire to urgently end the current violence in Gaza and Israel. NOW BE IT FURTHER RESOLVED that a copy of this resolution be sent to the offices of Assemblymember Robert Rivas, State Senator Anna Caballero, Governor of California Gavin Newsom, U.S. Congressional Representative Zoe Lofgren, U.S. Senator Laphonza Butler, U.S. Senator Alex Padilla, and U.S. President Joe Biden, urging them to take immediate action to use their position and influence to end violence. 11.1 p. 159 of 478 Page 2 of 2 Resolution No. 2023-240 PASSED AND ADOPTED, by the City Council of the City of Hollister at a regular meeting held this 4th day of December 2023, by the following vote: AYES: Councilmembers Resendiz, Morales, Burns, and Mayor Casey NOES: None ABSTAINED: None ABSENT: Councilmember Perez Mia Casey, Mayor ATTEST: APPROVED AS TO FORM: Lozano Smith Attorneys at Law ____ Jennifer Woodworth, MMC, City Clerk Mary F. Lerner, City Attorney I, Jennifer Woodworth, MMC, City Clerk of the City of Hollister, do hereby certify that the attached Resolution No. 2023-240 is an original resolution, or true and correct copy of a City resolution, duly adopted by the Council of the City of Hollister at a regular meeting held on this 4th day of December 2023, at which meeting a quorum was present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the official seal of the City of Hollister this 4th day of December 2023. Jennifer Woodworth, MMC City Clerk of the City of Hollister 11.1 p. 160 of 478 A PROCLAMATION OF THE CITY COUNCIL OF THE CITY OF LONG BEACH SUPPORTING A PEACEFUL RESOLUTION TO THE ONGOING CONFLICT AND HUMANITARIAN CRISIS IMPACTING GAZA AND ISRAEL. WHEREAS, the City of Long Beach has a longstanding commitment to advocating for peace, social justice, equity, safety, and fostering mutual respect and understanding for all people, regardless of religion, race, or nationality; and WHEREAS, since October 8th, 2023, the day following the attacks by Hamas militants on Israel, Long Beach’s city leadership has publicly acknowledged the ongoing violence and humanitarian crisis impacting Gaza and Israel; and WHEREAS, on November 14th, 2023, the City of Long Beach issued a statement affirming the City’s values of unity, respect, and understanding in light of the significant loss of Palestinian and Israeli lives, and condemning the increasing reports of Anti- Semitic, Islamophobic, Anti-Jewish, and Anti-Arab incidents that have occurred since October 7th; and WHEREAS, following news of a temporary ceasefire and the release of civilian hostages, Mayor Richardson issued a statement on November 28th, 2023, reiterating calls for a permanent ceasefire, the safe return of all hostages, and lasting peace in the region; and WHEREAS, the Long Beach City Council has previously adopted statements and resolutions on statewide, national, and international affairs deemed important to the diverse residents and constituencies that the Council represents; and WHEREAS, a growing number of cities throughout California and across the country have approved or are actively considering statements calling for peace, a lasting ceasefire and the safe return of all hostages, including Stanton, Oakland, San Francisco, Sacramento, Santa Ana, Seattle, Detroit, Providence, and Atlanta, among others; and WHEREAS, international organizations including the United Nations General Assembly, the World Health Organization, the U.S. Agency for International Development, and the International Rescue Committee have made calls for a ceasefire and the return of 11.1 p. 161 of 478 remaining hostages to prevent the further loss of civilian lives, and to be in accordance with international humanitarian law. NOW, THEREFORE, the City Council of the City of Long Beach proclaims as follows: Section 1. The City of Long Beach stands firmly on the foundation of peace, unity, respect, and understanding. The City Council recognizes that Palestinian lives and Israeli lives have the same value, and that all human life is precious. The City Council acknowledges the current humanitarian crisis in Gaza, and has condemned the attacks on Israel. Palestinian people deserve self-determination. Israel has a right to defend itself. Palestinians and Israelis equally deserve dignity, security, and to live without harm. Section 2. The City Council calls on our federal leaders to support negotiations that lead to a lasting humanitarian ceasefire in Israel and Gaza, the release of all hostages, the safe passage of food, water, medical supplies, and other life-saving humanitarian aid into Gaza, and a peaceful resolution that achieves both an end to the attacks on Israel by Hamas, and the protection of civilian life in Gaza and Israel. Section 3. The City Council requests city staff to identify and promote community education resources and services to support Long Beach residents and community members affected by the ongoing conflict, including counseling and mental health services, and support groups led by cultural and religious organizations. Section 4. The City Council unequivocally condemns all forms of violence, intolerance, racism, and xenophobia, including the recent rise of Anti-Semitic, Islamophobic, Anti-Jewish, and Anti-Arab sentiments, rhetoric, and attacks in our region and across the nation. Section 5. The City Council requests that a copy of this proclamation be transmitted to Long Beach’s delegation of federal representatives. Section 6. This proclamation shall take effect immediately upon its adoption by the City Council, and the City Clerk shall certify the vote adopting this proclamation. 11.1 p. 162 of 478 11.1 p. 163 of 478 ATTACHMENT A RESOLUTION NO. 24-06 A RESOLUTION OF THE CITY COUNCIL OF MONTEBELLO, CALIFORNIA AFFIRMING SUPPORT FOR THE CONGRESSIONAL AND WORLDWIDE CALLS FOR AN IMMEDIATE CEASEFIRE IN GAZA RECITALS WHEREAS, the City of Montebello believes that all people regardless of race, color, national origin, sex, and religion should be able to live in dignity, freedom, and equality without fear of destruction; and WHEREAS, the City of Montebello condemns the recent rise of Antisemitic, Islamophobic, racist, homophobic, and xenophobic attacks in our State and Region and across the nation; and WHEREAS, the current assault on Gaza, in response to Hamas’s attack on October 7, 2023 that killed 1,200 people and seized 253 people, has resulted in over 24,000 Palestinians killed by the State of Israel; and WHEREAS, the City of Montebello recognizes that the current crisis takes place within a long history and affirms the root causes of the crisis needs to be addressed for a pathway to lasting peace and justice to be developed; and WHEREAS, the Federal Government holds immense diplomatic power to save Israeli and Palestinian lives: NOW THEREFORE, THE CITY COUNCIL OF THE CITY OF MONTEBELLO HEREBY RESOLVES, FINDS, AND DECLARES AS FOLLOWS: SECTION 1. The City of Montebello will identify and support local programs that combat Antisemitism, Islamophobia, racism, homophobic and xenophobic attacks; and SECTION 2. The City of Montebello supports U.S. Congress Resolution H.R. 786 and joins other cities in calling on our congress members to demand: a permanent ceasefire; the release of all hostages and prisoners; the unrestricted entry of humanitarian assistance into Gaza; the restoration of food, water, electricity, and medical supplies to Gaza; the respect for international law; and SECTION 3. That a copy of this Resolution be sent to the offices of Assemblymember Miguel Santiago, Senator Bob Archuleta, Governor Gavin Newson, U.S. Representative Linda Sanchez, U.S. Senator Laphonza Butler, U.S. Senator Alex Padilla, Secretary of State Antony Blinken, Secretary of Defense Lloyd Austin, and U.S. President Joe Biden urging them to take immediate action to use their position and influence to end violence. 11.1 p. 164 of 478 RESOLUTION NO. 24-06 Page 2 of 2 SECTION 4. EFFECTIVE DATE. This Resolution shall take effect immediately upon its adoption by the City Council and the City Clerk shall certify to the passage and adoption of this resolution. APPROVED AND ADOPTED THIS 24TH DAY OF JANUARY 2024. _______________________________ Scarlet Peralta, Mayor ATTEST:APPROVED AS TO FORM: ________________________________ ________________________________ Christopher Jimenez, City Clerk Arnold M. Alvarez-Glasman, City Attorney STATE OF CALIFORNIA ) COUNTY OF LOS ANGELES ) SS: CITY OF MONTEBELLO ) I, Christopher Jimenez, City Clerk of the City of Montebello, County of Los Angeles, State of California, hereby certify that the foregoing Resolution No. 2024-XX was passed and adopted by the City Council of the City of Montebello, signed by the Mayor and attested by the City Clerk at a regular meeting of said Council held on the 24th day of January 2024 and that said Resolution was adopted by the following vote, to-wit: AYES: NOES: ABSTAIN: ABSENT: The undersigned, City Clerk of the City of Montebello, does hereby attest and certify that the foregoing Resolution is a true, full and correct copy of a resolution duly adopted at a meeting of said City which was duly convened and held on the date stated thereon, and that said document has not been amended, modified, repealed or rescinded since its date of adoption and is in full force and effect as of the date hereof. DATE: Christopher Jimenez, City Clerk 11.1 p. 165 of 478 1 APPROVED AS TO FORM AND LEGALITY ________________________ CITY ATTORNEY’S OFFICE OAKLAND CITY COUNCIL RESOLUTION NO. ______________ C.M.S. INTRODUCED BY COUNCILMEMBER CARROLL FIFE RESOLUTION AFFIRMING OAKLAND’S LOVE LIFE COMMITMENT AND SUPPORT FOR THE CONGRESSIONAL AND WORLDWIDE CALLS FOR AN IMMEDIATE CEASEFIRE IN GAZA WHEREAS, all life is precious and the City of Oakland's official motto “Love Life" calls on elected officials and residents alike to protect life and stand united against violence; and WHEREAS, the City of Oakland condemns the recent rise of Antisemitic, Islamophobic, racist, homophobic, and xenophobic attacks in our city and across the nation, including the doxxing of elected officials, students, professors, journalists, and others speaking truth to power; and WHEREAS, the City of Oakland advocates for the safety, dignity, freedom, and equality of all people, regardless of religion, race, or nationality; and WHEREAS, over one thousand people in Israel and more than eleven thousand Palestinians in Gaza have been killed in a matter of weeks, of whom over five thousand are children; and WHEREAS, the City of Oakland recognizes that the current crisis takes place within a long history and affirms that, for a pathway to lasting peace and justice to be developed, the root causes of the crisis need to be addressed; and WHEREAS, Gaza is in a dire humanitarian crisis that is getting worse with each passing day, with the only remaining hospitals running out of fuel and medical supplies, and over 1.5 million Palestinians facing displacement, homelessness, and starvation; and 11.1 p. 166 of 478 2 WHEREAS, international organizations like Amnesty International, the United Nations, the World Health Organization, the US Agency for International Development (USAID), the International Rescue Committee, and many others have made a call for a ceasefire in order to prevent the further loss of life of civilians and to be in accordance with international humanitarian law; and WHEREAS, sixty six percent of American voters support a ceasefire, according to an October 20th, 2023 Data For Progress poll1, and want to see the U.S. leverage its diplomatic relationships “to prevent further violence and civilian deaths"; now, therefore, be it RESOLVED that the City of Oakland supports U.S. Congress Resolution H.R.786 and joins other cities in calling on our Congress Members to demand: an immediate ceasefire; release of all hostages, the unrestricted entry of humanitarian assistance into Gaza; the restoration of food, water, electricity, and medical supplies to Gaza; and the respect for international law; and calls for a resolution that protects the security of all innocent civilians; and be it FURTHER RESOLVED that a copy of this resolution be sent to city councils in the San Francisco Bay Area, the offices of Assemblymember Mia Bonta, Assemblymember Buffy Wicks, State Senator Nancy Skinner, Governor of California Gavin Newsom, U.S. Representative Barbara Lee, U.S. Senator Laphonza Butler, U.S. Senator Alex Padilla, U.S. President Joe Biden, and U.S. Vice President Kamala Harris, urging them to take immediate action to use their position and influence to end violence. IN COUNCIL, OAKLAND, CALIFORNIA, PASSED BY THE FOLLOWING VOTE: AYES - FIFE, GALLO, JENKINS, KALB, KAPLAN, RAMACHANDRAN, REID, AND PRESIDENT FORTUNATO BAS NOES – ABSENT – ABSTENTION – ATTEST: ASHA REED City Clerk and Clerk of the Council of the City of Oakland, California 1 Data for Progress. “Voters Agree the U.S. Should Call For A Ceasefire and De-escalation of Violence in Gaza to Prevent Civilian Deaths” https://www.dataforprogress.org/blog/2023/10/19/voters-agree-the-us-should-call-for-a- ceasefire-and-de-escalation-of-violence-in-gaza Oct 20, 2023 11.1 p. 167 of 478 3 11.1 p. 168 of 478 1 Beth Minor From:Jeff Berta <jeff.berta@yahoo.com> Sent:Thursday, February 22, 2024 11:32 AM To:Public Comments; All Council Members Subject:EXTERNAL - YES on item 11.1 permanent ceasefire CAUTION: This email originated from an External Source. Please use proper judgment and cauƟon when opening aƩachments, clicking links, or responding to this email. Hello Mayor and Gilroy City Council Members, My name is Jeffrey Francis Berta and I’m a Gilroy Community Member. I’m emailing you to ask for your support to approve a resoluƟon calling for a permanent ceaseﬁre in Gaza. The conƟnued violence inside Gaza is having a devastaƟng impact on PalesƟnians and hostages. The longer the indiscriminate killing conƟnue, the more hatred is advanced. Some say a ceaseﬁre in Gaza and passing a resoluƟon will cause division within this community. I don’t believe that. What causes division is killing, murdering of innocent civilians, intenƟonal starvaƟon and collecƟve punishment—exactly what is occurring in Gaza now. Standing for peace and life should never divide. Some say it’s not up to ciƟes to pass proclamaƟons on world affairs. However, the Gilroy City Council itself voted unanimously in support of the Ukrainian ProclamaƟon only a couple years ago. We all inhabit this planet and it is all of our responsibiliƟes to speak up against injusƟce whenever and wherever it occurs. The violence occurring in Gaza has a direct impact to our Gilroy community. Our government should not be taking American tax payer dollars and handing it to the Israeli government knowing that the money will lead to more death and destrucƟon. Our country has so many pressing issues where this money could directly beneﬁt our own civilians here at home. Please approve item 11.1 and call for a permanent ceaseﬁre in Gaza. Thank you for your consideraƟon and Ɵme. Sincerely, Jeffrey Berta AGENDA ITEM 11.102/26/2024 Regular Meeting 11.1 p. 169 of 478 1 Beth Minor From:Nana B. <nahedkbarakat@gmail.com> Sent:Wednesday, February 21, 2024 10:19 AM To:All Council Members Subject:EXTERNAL - Please Vote for Ceasefire! Dear Council members, Please vote for Ceasefire so we can show our community that we are a peace advocate. We want to instill love and peace in the community, not hate and division of which side we're taking. This debate has been going on since October7 and the majority of us live in fear that this war will exacerbate more hatred and confusion. Let's call for Ceasefire so we can end all suffering and misery and return to our normal lives. -Thanks, CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #11.1 11.1 p. 170 of 478 From:Council Member Zachary Hilton To:Public Comments Cc:City Clerk Subject:Public Comment (February 26) Item #11.1 Resolution Calling For A Permanent Ceasefire in Israel and Palestine Date:Tuesday, February 20, 2024 11:10:55 AM Attachments:Future Council Initiated Agenda Item Ceasefire Resolution.pdf City Clerk, Attached is my public comment for (February 26) Item #11.1 Resolution Calling For A Permanent Ceasefire in Israel and Palestine. Thank you. Zach Hilton Gilroy City Council Member www.zachhilton.com #HiltonForCouncil @zachhilton_ca 2/26/2024 Regular Meeting AGENDA ITEM #11.1 11.1 p. 171 of 478 Contact:Zach Hilton Zachary.Hilton@cityofgilroy.org 669-270-6232 February 6,2024 Future Council Initiated Agenda Items-Below is the proposed language that is being submitted for this resolution brought forward by the community to Gilroy City Council through open public comment received during the February 5th Regular Meeting. Resolution Calling For A Permanent Ceasefire in Israel and Palestine (Community Version) WHEREAS,Gilroy is dedicated to fostering a community that embraces diversity,values all life,and upholds the principles of equality and human rights;and WHEREAS,incidents of anti-Semitic,anti-Arab,and anti-Muslim bigotry and violence are on the rise within our country,posing a significant threat to the well-being and safety of our diverse communities and all Americans;and acknowledges the suffering of Palestinians and Israelis,and affirms our shared humanity; WHEREAS,we express profound sorrow and condemnation for the tragic loss of innocent Israeli lives in the horrific attack on October 7th;and WHEREAS,we express profound sorrow and condemnation for the loss of innocent Palestinian lives from the horrific indiscriminate bombing upon the civilian population of Gaza. WHEREAS,Gilroy supports the dignity and safety of all residents in any community in which all human life is precious and valued,and the targeting of civilians-no matter their faith or ethnicity,or country of origin-is abhorrent;and WHEREAS,over two million Palestinian lives in Gaza,including Israeli hostages,are at imminent risk if a permanent cease-fire is not achieved and continuous humanitarian aid is not assured;and WHEREAS,Gilroy strives for people in our community with disparate perspectives to unite in our advocacy for peaceful and respectful dialogue for the good of humanity. NOW THEREFORE BE IT RESOLVED,that Gilroy calls for: 1 11.1 p. 172 of 478 1)an immediate permanent ceasefire for sustainable peace to urgently end the current violence;and 2)the immediate release of all Israeli &Palestinian hostages;and 3)an immediate end to the blockade and siege of Gaza,with the prompt provision of humanitarian assistance to Gaza including supplying food,water,fuel,and medical supplies which are indispensable for the survival of the civilian population of Gaza;and 4)all parties to fully comply with their obligations under international law;and 5)affirms the American Academy of Pediatrics’following policy statement: •Children should never be harmed because of the religious,cultural,and other beliefs and values of the child and/or their family; •Harm to children should never be used as a tool or tactic of war or conflict; •Children should be protected from the direct effects of armed conflicts and their food,housing,health,and other basic needs safeguarded. 2 11.1 p. 173 of 478 1 Beth Minor From:Nadia Jafri <njafri7865@gmail.com> Sent:Tuesday, February 20, 2024 2:42 PM To:All Council Members Subject:EXTERNAL - vote for CEASEFIRE in GAZA Hello, My name is Nadia Jafri and I am a constituent. I am requesting you to please vote YES for a Ceasefire in Gaza resolution. After the US's most recent veto of the Security Council Ceasefire Resolution today, I am so ashamed of what our great country has become. For a few weeks after the Oct 7 attacks, I was in complete sympathy for the Israeli victims and my unequivocal support was with them and their country. But since then I have seen a right wing, extremist government's campaign of slaughter, starvation, terror.... and quite frankly, a GENOCIDE that I can no longer ignore. Our government's complicity in this horror is undeniable. So I beseech you, recognizing that the city council's passing a ceasefire resolution will not affect anything that is going on in Gaza today, please please please show that world that the fine citizenry of Gilroy sees beyond party lines, and supports innocent civilians right to live a life free of terror that has lasted over 135 days. May God bless us all and may He forgive us our sins. Thank you. CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #11.1 11.1 p. 174 of 478 1 Beth Minor From:Alice Robinson <alicekrobinson37@gmail.com> Sent:Thursday, February 22, 2024 9:27 AM To:Public Comments; All Council Members Subject:EXTERNAL - Approve Item #11.1 Resolution Calling For A Permanent Ceasefire in Israel and Palestine Public Comment (February 26) Hello Gilroy City Councilmembers, I am a Jewish-American Bay Area resident, and I am writing to support Item 11.1, the Resolution Calling For A Permanent Ceasefire in Israel and Palestine (Community Version). I believe that at a time of turmoil and division, this resolution will help to unite the community around the most important value we all share: our deep respect for the value of human life. The resolution will also send a message to the citizens of Gilroy that the city stands against hate of all kinds, including Islamophobia and antisemitism. Ceasefire resolutions elsewhere in the Bay Area and around the country have united broad coalitions of individuals of different faiths, ethnicities, and countries of origin. I have seen this myself in my own city, where I am joined by other Jewish-Americans, as well as people of conscience of all faiths and no faith, in efforts to bring about a ceasefire resolution. I am horrified every day by the loss of life and human suffering Israel is inflicting upon the civilian population of Gaza. Like so many Americans, I am feeling unheard by our political leaders who continue to send my hard-earned tax dollars to Israel in the form of military aid. Passing a ceasefire resolution at the city level allows everyday Americans who value human life everywhere in the world and want to build inclusive communities here at home to feel that their voices matter. Please, pass the Resolution Calling For A Permanent Ceasefire in Israel and Palestine (Community Version) to show the United States and the world that the people of the Bay Area respect the value of human life for all people. Sincerely, Alice Robinson Redwood City CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #11.1 11.1 p. 175 of 478 1 Beth Minor From:doug Gary <doug_gary@hotmail.com> Sent:Wednesday, February 21, 2024 9:09 PM To:All Council Members Subject:EXTERNAL - Feb. 26 Item 11.1 Resolution of Ceasefire, etc. Please vote FOR item 11.1 (Feb. 26) Resolution calling for a permanent ceasefire in Israel and Palestine. It is important for all of us to express our humanity by doing every thing we can to stop this slaughter and immense suffering of innocent people. CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email.2/26/2024 Regular Meeting AGENDA ITEM #12.1 02/26/2024 Regular Meeting Agenda Item 11.111.1 p. 176 of 478 1 Beth Minor From:Nuzialavi <nuzialavi@yahoo.com> Sent:Thursday, February 22, 2024 2:05 AM To:All Council Members Subject:EXTERNAL - Ceasefire approval item #11.1 Hello Gilroy city council members I am writing to express my deep concern of the devastating humanitarian crisis that is unfolding in Gaza, how it is profoundly impacting our Gilroy and south county community, and urging you to pass the ceasefire resolution to take a stand for peace and humanity. Ceasefire will save lives in thousands, not just by bombs, but with food availability for the besieged people of Gaza. South county has many different ethnicities, most of whom support a ceasefire. Many have lost family members in the bombing of Gaza. With a ceasefire, there will be end to the hostilities, which will help communities here curtail Islamophobia, antisemitism, divisiveness and hate The city council represents the local community, and thus it is responsible to support it’s concerns. A resolution for a ceasefire will demonstrate your true representation of the community During the previous city council meeting on February 5, Gilroy residents shared how our local Gilroy community is being impacted by the continued violence in Gaza. . This ceasefire resolution is a unifying act to bring our community together as one. Gilroy previously passed proclamations and resolutions supporting Ukraine and standing against hate, and they did not lead to increased hate or division, they united the Gilroy community to support each other. Diverse communities across the Bay Area, including Hollister, Santa Clara, Richmond, and Oakland have come together to pass resolutions in support of peace and the protecting of all lives in Gaza. These are communities with families, students, and concerned citizens who have experienced personal losses in Palestine, just as here in Gilroy. The call for a ceasefire is deeply local and relevant to us as community members who advocate for justice and equality, and I believe that the Gilroy city council needs to promote and champion the values of the people they serve and represent. I urge the city of Gilroy to stand united alongside a majority of Americans in calling for a permanent ceasefire in Gaza, to advocate for sustainable peace in Palestine and Israel, for an immediate end to the killings of all innocent civilians and the release of all Palestinian and Israeli hostages. UNICEF says 1,000 Palestinian children have had limbs amputated without anesthesia due to the lack of basic medical resources. On average, more than 10 children per day have lost one or both of their legs in Gaza in the past 4 month time period (UN). According to the UN, women and children are the main victims in Gaza, with 2 mothers losing their lives every hour. There are currently over 66,000 children orphaned in the past 4 months in Gaza. 85% of the 2.2M population in Gaza has been made homeless, 1,870,000 people who are living in frigid temperatures with no shelter, no food, no water and no electricity (World Health Organization & UN). 90% of civilians in Gaza have regularly gone a full day without food and are facing death by disease, injury, and starvation, that's 1,980,000 peo Nuzi Alavi Sent from my iPad CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #11.1 11.1 p. 177 of 478 2 Sent from my iPad 11.1 p. 178 of 478 1 Beth Minor From:Emma Hartung <emmahartung@gmail.com> Sent:Wednesday, February 21, 2024 5:53 PM To:Public Comments; All Council Members Subject:EXTERNAL - Approve Item #11.1 Resolution Calling For A Permanent Ceasefire in Israel and Palestine Public Comment (February 26) Dear Gilroy City Councilmembers, I'm writing as a local Jewish resident urging you to support Item 11.1, the Resolution Calling For A Permanent Ceasefire in Israel and Palestine (Community Version). I see it as my duty as a Jewish American and as an educator (formerly middle school, now college) to stand up against genocide. I’ve spent the past five years working with undergraduates at Stanford, and like so many other community members across the county, our students are not okay and will not be okay until a permanent ceasefire is established. We have teenage students desperately fundraising to get their entire families out of Gaza. We have students facing terrifying Islamophobic and anti-Palestinian anti-Arab anti-Muslim threats: I had one Palestinian student tell me that they’ve switched from wearing hijab to wearing hoodies as a hair covering because they’re afraid of being targeted and attacked. We have an Arab student deliberately targeted in a hate crime by a hit and run driver who is still recovering from his injuries. We had a truck parked on campus with a sign in Arabic-only saying “we will shoot you if you approach.” These students all have the support of their peers including Jewish students, but they cannot be students right now – they need an immediate and permanent ceasefire to both save their family members’ lives and de-escalate this Islamophobic rhetoric we’re seeing on the news and social media. I have heard too many stories through friends and colleagues of bullying and harassment among younger students as well. For example, at Christopher High School just a few weeks ago, students and residents are experiencing a rise in targeted antisemitism and Islamophobia hate. Gilroy children and community are looking to our council members to show true leadership and "Stand United Against Hate". What occurs internationally has a direct impact here. A ceasefire resolution would demonstrate that our Gilroy city leaders recognize the horrific atrocities occurring in Gaza, the extensive killing of innocent civilians, and the heartbreaking impact on local families. It sends a clear message to all children and families in Gilroy that their leaders advocate for peace and against the killings of any innocent civilians rather than remaining silent while mass killings continue to occur. Please show the leadership we need by passing a ceasefire resolution to advocate for sustainable peace and an immediate end to the killings of all innocent civilians and the release of all Palestinian and Israeli hostages. Please immediately pass the Resolution Calling For A Permanent Ceasefire in Israel and Palestine (Community Version). Sincerely, Emma Hartung CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. 2/26/2024 Regular Meeting AGENDA ITEM #11.1 11.1 p. 179 of 478 1 Beth Minor From:Raeena Lari <raeena.lari@gmail.com> Sent:Thursday, February 22, 2024 11:29 AM To:Public Comments; All Council Members Subject:EXTERNAL - Support item#11.1 Resolution calling for a Permanent Ceasefire (February 26) Attachments:01292024_RESOLUTION_Recognizing Sustained Peace and Safety for All Children.pdf; Attachment-244201.pdf Dear Council Members, I am writing to you in my personal capacity. As a trustee of the area, Gilroy is very close to my heart. I would like to urge the Gilroy City Council to urgently pass a ceasefire resolution to end the humanitarian crisis in Gaza which is disproportionately impacting women and children. We need a ceasefire to stop the tragic loss of life and to release hostages on both sides. Gilroy needs to be on the right side of history and add our voice to the following: Santa Clara County Democratic Central Committee Resolution https://sccdp.org/wp- content/uploads/2024/01/A-Call-for-Immediate-Cease-fire-in-Gaza-and-Provision-of-Humanitarian-Aid.pdf Resolution passed by Santa Clara County Board of Education (attached) Human Rights Commission Santa Clara County Statement on the War on Gaza (attached) Statement by Congressman Ro Khanna https://x.com/reprokhanna/status/1728792989978288434?s=42&t=dTAhxKRjaryXG3OZprnQTQ Statement by Congresswoman Zoe Lofgren https://lofgren.house.gov/media/press-releases/rep-lofgren-urges- israel-hamas-all-involved-parties-continue-pursuing-terms Statement by Senator Dave Cortese: "A Message of Peace and Humanity "In the face of ongoing and unspeakable violence, let us please acknowledge the profound loss of lives, and recognize the humanity of both the Palestinian and Israeli people. The United States must reassert its leadership role as a negotiator in the pursuit of a lasting peace. This means addressing the root causes of this violence and working to bring about an end to this prolonged period of tragedies in which innocent people and children are bearing the brunt of the suffering. I join many other elected leaders, locally and globally, as well as countries, organizations, and voices for peace in calling for an urgent and immediate ceasefire. I believe that this is an attainable reality" Dave Cortese California State Senator, District 15" Looking forward to your support in this movement to make our world safer for all our children, Warmly, Raeena CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. AGENDA ITEM #11.102/26/2024 Regular Meeting11.1 p. 180 of 478 2 11.1 p. 181 of 478 RESOLUTION RECOGNIZING SUSTAINED PEACE AND SAFETY FOR ALL CHILDREN SANTA CLARA COUNTY BOARD OF EDUCATION RESOLUTION No. 2432-1 WHEREAS, the Santa Clara County Board of Education (SCCBOE) is committed to promoting inclusive and just conditions where all our students, staff members, and families feel a sense of belonging; and WHEREAS, the SCCBOE acknowledges the suffering of the peoples of the Middle East, including Palestinian and Israeli children, and affirms our shared humanity; and WHEREAS, the SCCBOE previously adopted resolutions “Denouncing Anti-Semitism” and “Denouncing Islamophobia'' and reaffirms our denunciation of Anti-Semitism and Islamophobia; and WHEREAS, we cherish our cultural richness and strive to ensure all communities feel respected and heard, including our Jewish, Muslim, Christian, Israeli-American, Arab-American, Palestinian-American, and other Middle Eastern-American communities; and WHEREAS, the SCCBOE recognizes the history of conflicts in the Middle East; and WHEREAS, the SCCBOE values peaceful conflict resolutions in the world and in our schools and classrooms; now THEREFORE, BE IT RESOLVED, that the SCCBOE strives to lead by example in demonstrating to students how people with disparate perspectives can support students’ emotional and mental health needs by uniting in our advocacy for peaceful and respectful dialogue and resolution among all parties involved in the Middle East; and BE IT FURTHER RESOLVED, that the SCCBOE urges our community to develop and participate in activities that foster respect, empathy, education, and understanding of people of all backgrounds and religious faiths; and BE IT FURTHER RESOLVED, that the SCCBOE looks forward to a future where all can live with dignity and security in peace; and BE IT FURTHER RESOLVED, that the SCCBOE believes together as concerned leaders we must foster hate-free communities, classrooms, and schools in which hate speech, bullying, and violence are addressed; and 11.1 p. 182 of 478 BE IT FURTHER RESOLVED that the SCCBOE calls for a ceasefire for sustainable peace and the release of all hostages in the Middle East, including Palestine and Israel, which demonstrates to Santa Clara County students that leaders can advocate for peaceful conflict resolution for the good of humanity and for the sake of children; and BE IT FURTHER RESOLVED that the SCCBOE affirms the American Academy of Pediatrics’ following policy statement: • Children should never be harmed because of the religious, cultural, and other beliefs and values of the child and/or their family; • Harm to children should never be used as a tool or tactic of war or conflict; • Children should be protected from the direct effects of armed conflicts and their food, housing, health, and other basic needs safeguarded; and BE IT FURTHER RESOLVED that the Santa Clara County Board of Education strives to ensure each and every Santa Clara County student feels safe and valued, and that hate speech, Islamophobia, Anti- Semitism, Anti-Palestinian racism, and Anti-Israeli racism must be condemned and eliminated in all learning environments. PASSED AND ADOPTED by the County Board of Education at a meeting held on January 29, 2024, by the following vote: AYES: President Berta and Trustees Chon, Di Salvo, Lari, and Mah NOES: none ABSTAIN: Vice President Rocha and Trustee Sreekrishnan ABSENT: none Maimona Afzal Berta, President Santa Clara County Board of Education 11.1 p. 183 of 478 Page 1 of 4 City of Gilroy STAFF REPORT Agenda Item Title:Consent of the Appointment of Beth Minor as Interim City Clerk (Retired Annuitant) Effective February 27, 2024, and Adoption of a Resolution of the City Council of the City of Gilroy Approving the Appointment and Employment Agreement Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Administrative Services Submitted By:LeeAnn McPhillips, Administrative Services and Human Resources Director / Risk Manager Prepared By:LeeAnn McPhillips, Administrative Services and Human Resources Director / Risk Manager STRATEGIC PLAN GOALS Not Applicable RECOMMENDATION a. Consent the City Administrator’s recommendation to appoint Beth Minor as Interim City Clerk (as a retired annuitant) effective February 27, 2024. b. Adopt a Resolution of the City Council of the City of Gilroy approving the appointment of Beth Minor as Interim City Clerk (Retired Annuitant) pursuant to California Government Code Section 21221(h) and authorizing the City Administrator to execute the employment agreement. EXECUTIVE SUMMARY To ensure continuity in the coordination of the City Clerk’s Office, it is recommended that the City Council consent the appointment of Beth Minor as Interim City Clerk (retired annuitant) effective February 27, 2024, and approve the resolution consenting the appointment and authorizing the City Administrator to execute the employment agreement. 11.2 p. 184 of 478 Consent of the Appointment of Beth Minor as Interim City Clerk (Retired Annuitant) Effective February 27, 2024 and Adoption of a Resolution of the City Council of the City of Gilroy Approving the Appointment and Employment Agreement City of Gilroy City Council Page 2 of 4 February 26, 20241 5 2 5 BACKGROUND Due to a recent resignation the City of Gilroy has a vacancy in the position of City Clerk. The City plans to commence a recruitment for City Clerk right away (prior to February 27, 2024) and hire an Interim City Clerk to serve in this position while the recruitment is being conducted. Former Palo Alto City Clerk Beth Minor is available to serve as the Interim City Clerk. Ms. Minor is a California Public Employees’ Retirement System (CalPERS) retired annuitant having retired in 2021. She has the education, skills, and experience to hit the ground running and serve as Gilroy’s Interim City Clerk beginning February 27, 2024. In fact, Ms. Minor has been hired as a temporary, extra-help employee until this interim appointment could be placed on the Council agenda. Ms. Minor has over twenty-eight years of related municipal work experience. She served in the City of Palo Alto City Clerk’s Office for fourteen years with six of those years as City Clerk and eight years as Assistant City Clerk. Given her work in Palo Alto, Ms. Minor is well versed with the Santa Clara County Registrar of Voters and election processes. In addition, she has experience with Fair Political Practices Commission (FPPC) and the required filings as well as the requirements of the Public Records Act. She is well-versed in open meeting laws, preparing agenda packets, taking minutes, maintaining records, and all of the important functions of a full-service City Clerk’s Office. California Government Code Section 21221(h) allows an agency to hire a retired annuitant to serve in an “interim” position when there is an immediate need for expertise and specialized skills and a recruitment is underway for the position. As noted above, prior to February 27, 2024, the city will initiate a recruitment for a new City Clerk and complete the selection process in the next three to four months. Further, the retired annuitant may not work more than 960 hours in a fiscal year and cannot receive any compensation other than the hourly rate of pay for the work performed by other employees performing comparable duties. In the Interim City Clerk role, Ms. Minor agrees to perform the following duties related to the Gilroy City Clerk’s Office: a. Develop and direct the implementation of goals, objectives, policies, procedures, and work standards for the City Clerk’s Office. b. Prepare and complete public noticing of hearings and meetings. c. Prepare and direct the distribution of Council agenda materials. d. Follow-up after Council meetings to ensure that appropriate actions are taken, questions answered, and individuals notified. e. Develop and/or maintain a Citywide, computer-based records management system. f. Answer questions regarding City activities, policies, and regulations. g. Distribute and process election documents. h. Coordinate the formation of assessment districts. 11.2 p. 185 of 478 Consent of the Appointment of Beth Minor as Interim City Clerk (Retired Annuitant) Effective February 27, 2024 and Adoption of a Resolution of the City Council of the City of Gilroy Approving the Appointment and Employment Agreement City of Gilroy City Council Page 3 of 4 February 26, 20241 5 2 5 i. Prepare and monitor the budget for the City Clerk’s office. j. Coordinate official filing for Fair Political Practices Commission documents. k. Evaluate and assign work to assigned clerical and/or support personnel and provide for their training and professional development. l. Be responsible for the morale and productivity of the City Clerk’s office. m. Interpret City and Department policies and procedures to assigned employees. n. Provide varied staff assistance to the City Administrator, including providing agenda support for agenda review and other similar meetings, ensuring for agenda production consistent with direction received, attending assigned meetings, proactively communicating matters related to the City Clerk’s office, obtaining information from various departments and conducting studies and projects related to any City function as directed. o. Coordinate City Clerk activities with those of other City departments to ensure completion of the work. p. Maintain records of Campaign Statements distribute and file same on all elected officials as required by law. q. Provide staff support directly, or through delegation to City Clerk’s Office staff, to the Mayor and City Council as requested. Support work includes items such as opening and evaluating mail, scheduling meetings, organizing files, preparing correspondence, gathering information, ordering supplies, coordinating training and/or conference registration, etc. r. Ensure that the City Council, City Clerk, and Boards & Commissions aspects of the City website are current. s. Comply with the Open Government Ordinance. t. Serve as Staff Liaison to Open Government Commission. Prepare agendas and minutes and attend quarterly meetings. u. Coordinate and/or respond to Public Records Act requests for records and information. v. Maintain Public Records Act log and ensure compliance as required by Public Records Act. w. Administer procedure for recruitment of City Council appointed Boards, Commissions, and Committees and maintain Local Appointments List as required by the Maddy Act. x. Any other duties or assignments typically assigned to the City Clerk. As Interim City Clerk, Ms. Minor will report directly to the City Administrator for day-to- day work and shall comply with all City rules, policies, guidelines, regulations, and laws. For specific work items noted in the City Charter (elections), Ms. Minor will report to the City Council. Ms. Minor will be paid $69.11 per hour with no other benefits or incentives. ALTERNATIVES 11.2 p. 186 of 478 Consent of the Appointment of Beth Minor as Interim City Clerk (Retired Annuitant) Effective February 27, 2024 and Adoption of a Resolution of the City Council of the City of Gilroy Approving the Appointment and Employment Agreement City of Gilroy City Council Page 4 of 4 February 26, 20241 5 2 5 The alternatives would be not to approve the interim appointment and the city would need to identify someone else to serve as the Interim City Clerk or leave the position vacant. These alternatives are not recommended. FISCAL IMPACT/FUNDING SOURCE This interim appointment provides a cost savings to the city as only the hourly rate for the position is paid to the retired annuitant and not any benefits. It is estimated that this interim appointment will save the city approximately $6,000 per month when filled on a full-time basis. Over a four-month period, the savings will total approximately $26,000. NEXT STEPS Upon Council approval, the City Administrator will sign the employment agreement. In addition, staff will initiate work to begin the City Clerk recruitment process prior to February 27, 2024. Attachments: 1. City Council Resolution Appointing Beth Minor as Interim City Clerk February 2024 2. Exhibit A Employment Agreement Beth Minor Retired Annuitant February 2024 11.2 p. 187 of 478 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY APPOINTING BETH MINOR AS INTERIM CITY CLERK AND APPROVING EMPLOYMENT AGREEMENT WHEREAS, Government Code Section 21221(h) permits the City Council to appoint a retired annuitant to a vacant position requiring specialized skills during recruitment for a permanent appointment, and provides that such appointment will not subject the retired person to reinstatement from retirement or loss of benefits so long as it is a single appointment that does not exceed 960 hours in a fiscal year; and WHEREAS, Beth Minor retired from California Public Employees’ Retirement System employment in July 2021; and WHEREAS, Beth Minor has over fourteen years of municipal City Clerk’s Office experience and most recently served as the City of Palo Alto City Clerk for six years; and WHEREAS, the position of City Clerk became officially vacant on February 16, 2024, following the resignation of Thai Pham; and WHEREAS, the Gilroy City Council desires to consent the City Administrator’s recommendation to appoint retired annuitant Beth Minor to the vacant position of Interim City Clerk for the City of Gilroy under Government Code Section 21221(h), effective February 27, 2024; and WHEREAS, Beth Minor has experience leading a full-service City Clerk’s Office to include experience with elections, open meeting requirements, Fair Political Practices Commission regulations, Public Records Act requirements, meeting agendas and minutes preparation, and most all functions found within a municipal City Clerk’s Office; and WHEREAS, an appointment under Government Code Section 21221(h) requires that the City has initiated steps to begin the recruitment process for the vacant position; and WHEREAS, this Section 21221(h) appointment shall only be made once and therefore will end on the date immediately preceding the date on which the permanent replacement for the vacant position of City Clerk for the City of Gilroy commences his or her employment or, if earlier, the date that this appointment is terminated by the City or Beth Minor; and WHEREAS, the entire employment agreement between Beth Minor and the City of Gilroy has been reviewed by this body and is attached hereto as Exhibit A; and WHEREAS, no matters, issues, terms, and/or conditions related to this employment and appointment have been or will be placed on the consent calendar; and WHEREAS, the employment shall be limited to 960 hours per fiscal year; and WHEREAS, the compensation paid to retirees cannot be less than the minimum nor exceed the maximum monthly base salary paid to other employees performing comparable duties, divided by 173.333 to equal the hourly rate; and 11.2 p. 188 of 478 Resolution No. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY APPOINTING BETH MINOR AS INTERIM CITY CLERK AND APPROVING EMPLOYMENT AGREEMENT City Council Meeting | February 26, 2024 Page 2 of 3 WHEREAS, the maximum base monthly salary for this position is $11,978.25 and the hourly equivalent is $69.11 and the minimum base monthly salary for this position is $8.983.33 and the hourly equivalent is $51.83; and WHEREAS, the hourly rate to be paid to Beth Minor will be $69.11; and WHEREAS, Beth Minor has not and will not receive any other benefit, incentive compensation in lieu of benefits or any other form of compensation in addition to this hourly pay rate. NOW, THEREFORE, the City Council of the City of Gilroy hereby finds, determines, and resolves as follows: 1. The City Council has considered the full record before it, which may include but is not limited to such things as the staff report, testimony by staff and the public, and other materials and evidence submitted or provided to it. Furthermore, the recitals s et forth above are found to be true and correct and are incorporated herein by reference. 2. The City Council hereby certifies the nature of the employment of Beth Minor as described herein and detailed in the attachment employment agreement and that this appointment is necessary to fill the critically needed position of City Clerk for the City of Gilroy to provide the specialized skills necessary to manage the Gilroy City Clerk’s Office functions. 3. The City Council hereby authorizes the appointment of Beth Minor to Interim City Clerk effective on February 27, 2024 pursuant to the authority provided under Government Code Sections 21221(h), which shall end on the date immediately preceding the date on which the permanent replacement for the vacant position of City Clerk for the City of Gilroy commences his or her employment or, if earlier, the date that this appointment is terminated by the City or Beth Minor. 4. The employment agreement with Beth Minor, a copy of which is attached hereto as Exhibit A and will be maintained on file with the Human Resources Department, is approved by the City Council, effective on February 27, 2024. 5. The City Administrator is authorized to execute said agreement on behalf of the City, with such technical amendments as may be deemed appropriate by the City Administrator and City Attorney. PASSED AND ADOPTED this 26th day of February, 2024 by the following roll call vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSTAIN: COUNCIL MEMBERS: 11.2 p. 189 of 478 Resolution No. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY APPOINTING BETH MINOR AS INTERIM CITY CLERK AND APPROVING EMPLOYMENT AGREEMENT City Council Meeting | February 26, 2024 Page 3 of 3 ABSENT: COUNCIL MEMBERS: APPROVED: Marie Blankley, Mayor ATTEST: _______________________ LeeAnn McPhillips Assistant City Administrator/ Administrative Services & Human Resources Director 11.2 p. 190 of 478 11.2 p. 191 of 478 11.2 p. 192 of 478 11.2 p. 193 of 478 11.2 p. 194 of 478 Page 1 of 10 City of Gilroy STAFF REPORT Agenda Item Title:Receive Fiscal Year 2023-2024 (FY24) Mid-Year Budget Report and Adopt a Budget Amendment Resolution Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Finance Submitted By:Harjot Sangha, Finance Director Prepared By:Carina Baksa, Finance Manager STRATEGIC PLAN GOALS Develop a Financially Resilient Organization RECOMMENDATION a. Receive Mid-Year Budget Report for FY24. b. Adopt a Resolution of the City Council of the City of Gilroy Amending the Appropriations for FY24 in Fund 293. EXECUTIVE SUMMARY This report provides the City Council with an update on the Fiscal Year 2024 (FY24) Budget as of December 31, 2023 and appropriates funds in the Opioid Settlement Fund (F293) BACKGROUND The FY24 budget was adopted on June 5, 2023, and FY24 activity began on July 1, 2023. The City has now had two full quarters of operations for FY24. Staff presented to Council the First Quarter Financial update on December 11, 2023. This report provides a financial summary of activity for the period of July 1, 2023, through December 31, 2023. 11.3 p. 195 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 2 of 10 February 26, 20241 4 7 5 Additionally, as part of the National Opioid Settlements with various pharmaceutical companies, settlements are to provide funds for the abatement of the opioid epidemic in California and throughout the United States and require that the companies change the way they conduct their businesses. The City, through an allocation from the State, has received approximately $41,000 in funds to date to continue investing in opioid treatment, education and prevention efforts. Staff requests that the City Council adopt a Resolution increasing the appropriations in the Opioid Settlement Fund for FY24 in the amount of $41,000. ANALYSIS General Fund Forecast Update The City Council last received the General Fund forecast at the December 11, 2023, City Council meeting. The chart below is an updated General Fund Forecast, which incorporates additional revenue adjustments based on the updates the City has received since December 2023. Following are the notable adjustments to the updated General Fund Forecast: •Sales Tax – At the October 2, 2023, and December 11, 2023, City Council meetings, staff shared with the City Council that the FY24 sales tax revenue is expected to come in under budget by $0.9 million. Based on the latest sales tax report, there is an additional decline of $0.2 million now projected for FY24, bringing the total to $1.1 million under budget. The additional decline is primarily in the County pool allocation of online sales in the current fiscal year. •Property Tax – At the October 2, 2023, City Council meeting, staff provided an update on the property tax revenue, particularly on developments regarding the Excess Educational Revenue Augmentation Fund (ERAF). The following are two updates regarding property tax revenue forecast and the ERAF. o Real Property Assessment Roll – Based on the latest County information, the annual growth in the real property assessment roll for FY25, countywide, is trending lower compared to the prior years, notably due to fewer home sales occurring which typically trigger a reassessment of 11.3 p. 196 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 3 of 10 February 26, 20241 4 7 5 property’s assessed value. As of February 1, 2024, The City of Gilroy’s FY25 real property assessment roll growth, compared to the FY24 closed roll, is 3.96%, which is higher than the countywide average of 3.46%. As a point in comparison, Gilroy’s real property assessment roll growth a year ago, as of February 1, 2023, was 5.09%, and the countywide average was 4.56%. Much of the growth for FY25 is projected to be the Proposition 13’s annual consumer price index (CPI) adjustment of 2%, with new construction and transfer of ownership added value. In addition, the County is expecting to receive increased assessment appeals from commercial property owners, likely triggering temporary reductions in assessed value as allowed by Proposition 8. Commercial properties, notably office buildings and shopping centers/malls, are experiencing high vacancy rates and projected to decline in value. If this materializes, property tax revenue from commercial real asset class will also decline. This will particularly impact cities to the north, such as San Jose, which have a large share of the assessment generated from such property types. For Gilroy, the impact is expected to be not as severe, as almost 80% of the assessed value is from residential properties, and approximately 10% is from commercial. No adjustment is recommended to the secured property tax forecast currently. o Excess ERAF – Staff previously shared with the City Council that the California School Boards Association (CSBA) legal matter regarding ERAF allocation to charter schools was resolved and the CSBA Appeal was ultimately denied. In January 2024, the Governor released his proposed budget for FY25, which includes a proposal to make a legislative change to allocate ERAF to charter schools, which would reverse the appellate decision. The potential impact of this proposal is approximately $0.2 million reduction in ERAF allocation to the City of Gilroy on a going forward basis. This adjustment is included in the updated forecast. In addition, as previously shared, the State Controller’s Office (SCO) is reviewing the Excess ERAF calculation for Marin County, a result of which could impact particularly the five bay area counties that generate excess ERAF, including Santa Clara County. The potential impact is approximately 22%, or $0.4 million, reduction in Excess ERAF to the City of Gilroy on a going forward basis. The SCO has asserted a three-year claw back provision as well, under which the County and cities would need to return or provide future offset from Excess ERAF allocations. For the prior three fiscal years, under claw back provision, staff calculated Gilroy’s amount to be $1.2 million. The County of Santa Clara filed a lawsuit against the SCO on this matter in late December 2023. Staff has included the ongoing 22%, or $0.4 million, reduction in the updated forecast. No adjustment for the potential claw back provision is made at this time as staff expect the result of the review and any related agreement reached 11.3 p. 197 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 4 of 10 February 26, 20241 4 7 5 will likely be on a going forward basis. Staff is monitoring the developments and will provide updates at future quarterly budget updates. •Investment Income – Given the rapid rise in the interest rate environment, the City’s idle cash, which is currently invested in the State’s Local Agency Investment Fund (LAIF) and US Treasury Securities, is projected to generate additional investment income. The General Fund is now projected to generate over $1.0 million in investment income in FY24. Subsequent years’ assumptions have also been adjusted. Overall, the adjustments resulted in a minor net revenue decrease of $0.2 million and $0.1 million in FY24 and FY25, respectively, and the operating margin is now projected to be negative $0.3 million and $0.8 million, respectively. The General Fund is expected to maintain the minimum required fund balance over the next several years, through FY27, and dip below the required level in the latter two years of the forecast which will need to be addressed in future budget development cycles to ensure the General Fund remains structurally balanced. General Fund Revenues General Fund revenues received through December 31, 2023 total $23.0 million, or 35% of the amended budget of $66.2 million. Revenues received up to this point are typically under the 50% fiscal-year mark, especially tax revenues, due to the lag between when the economic transaction occurs and when the City’s revenues are received. The table below provides a breakdown of General Fund revenues by category and a comparison of the actual revenues for the first quarter to the amended budget. Sales Tax - The City receives its sales tax revenue approximately two months after funds are collected by the California Department of Tax and Fee Administration. The FY24 budget for sales tax revenue is $21.8 million of which $7.0 million (32%) has been received as of December 31, 2023. Receipts reflect collections for the period of July G e ne ral Fund Re ve nues by Category FY24 Amended Budget Actuals through De cembe r 31, 2023 % of Budge t Sal e s Tax 21.8$ 7.0$ 32% Prope rty Tax 20.4 5.1 25% Uti l i ty User Tax 6.5 2.9 44% Franchi se Tax 2.3 0.4 15% Transi e nt Occupancy Tax 2.0 0.5 27% Busi ne ss Li cense 0.7 0.3 43% Other Re ve nue s 12.5 6.8 55% Total 66.2$ 23.0$ 35% (In Millions) 11.3 p. 198 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 5 of 10 February 26, 20241 4 7 5 through November 2023. Based on the previous quarterly sales tax report, it was reported that the City’s sales tax revenue for FY24 was expected to come in under budget by approximately $0.9 million, the latest quarterly report has revised the estimated shortfall to $1.1 million under budget for FY24. Property Tax - The City’s property tax revenues are received in various intervals from Santa Clara County and are not distributed in even amounts. Property tax installments are typically due in November and April of each fiscal year. The FY24 budget for property tax revenue is $20.4 million of which $5.1 million (25%) has been received as of December 31, 2023. Much of the annual property tax revenue is received in the second half of the fiscal year. At this time, property tax revenue is projected to come in at the budgeted amount. Utility Users Tax (UUT) - Utility taxes are assessed against the value of energy and telecommunications, such as gas, electricity, steam, cable, and phone charges. The current tax rates are 4.5% for telecommunications and 5% for gas and electricity. The City’s UUT revenues are received one month after the revenues are earned. The FY24 budget for utility user tax is $6.5 million of which $2.9 million (44%) has been received as of December 31, 2023. Receipts to date represent revenue through the month of November. The utility user tax is projected to come in higher than budget. Franchise Tax - The City receives franchise tax revenue from three franchise types, including gas and electric, cable tv, and garbage/refuse. The FY24 budget for franchise tax is $2.3 million of which $0.4 million (15%) has been received as of December 31, 2023, which primarily reflects quarterly cable franchise payments. The larger portion of franchise tax comes from PG&E, which remits payments once a year and is typically received in the fourth quarter of the fiscal year. Transient Occupancy Tax (TOT) - The City’s TOT revenue comes from a 9% tax on hotel room rentals under 30 days, as well as from some of the RV parks in the City. The hotels pay within one month after their quarter ends. FY24 budget for TOT is $2.0 million of which $0.5 million (27%) has been received as of December 31, 2023, which reflects one quarter of returns. At this time, TOT revenue is expected to come in at budgeted levels. Business License - The FY24 budget for Business License fees is $0.7 million of which $0.3 million (43%) has been received as of December 31, 2023. The business license revenue is tied to the timing of the annual renewal of the license. At this time, Business License revenue is expected to come in at budgeted levels. Other General Fund revenues - This category comprises departmental service charges, general administration charges, fines and forfeitures, and other intergovernmental revenues. The FY24 budget for this aggregate revenue category is $12.5 million of which $6.8 million (55%) has been received as of December 31, 2023. At this time, this revenue is expected to come in at budgeted levels. 11.3 p. 199 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 6 of 10 February 26, 20241 4 7 5 Expenditures General Fund expenditures as of December 31, 2023 total $33.1 million, or 45% of the amended budget of $74.1 million. The table below provides a breakdown by department and function. It compares the actual expenditures for the first two quarters to the amended budget. Generally, departments are within or below their expenditure target for this time of the fiscal year. Savings are primarily due to Departmental vacancies. Non-General Fund Revenues The City has approximately 60 non-general funds. The information (revenues and expenditures) for these funds is presented in the table below in aggregate, by fund type, along with a brief description of what is included in these categories. Non-General Fund revenues received as of December 31, 2023 total $37.4 million or 39% of the amended budget of $95.9 million. Revenues received up to this point are usually under the 50% fiscal-year mark due to the timing of receipts, especially for special revenue and capital/development funds. Ge ne ral Fund Expe nditures by De partment/Function FY24 Amended Budget Actuals through De cembe r 31, 2023 % of Budge t Admi ni strati on 3.8$ 1.5$ 41% Re cre ati on Transf er 1.5 0.8 50% Other Transfe rs 1.0 0.5 50% Human Resource s 1.7 0.7 38% Communi ty De vel opment 6.1 2.5 41% Fi nance 1.2 0.5 42% Fi re 15.4 7.3 47% Other General Government 2.8 1.3 46% Pol i ce 30.8 14.9 48% Publ i c Works 9.8 2.8 29% Total 74.1$ 32.8$ 44% (In Millions) 11.3 p. 200 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 7 of 10 February 26, 20241 4 7 5 Special Revenues – The primary source of this fund type is intergovernmental funds in the manner of tax sharing or grants from Federal, State, County, and other regional governments. For the City of Gilroy, these Special Revenues provide funding for transportation (Gas Taxes, Vehicle Registration, and Measure B), public safety (Proposition 172 sales tax, Gang Prevention, and regional task forces), and community development (CDBG and housing) among others. The FY24 budget for Special Revenues is $9.3 million of which $3.0 million (32%) has been received as of December 31, 2023. Recreation – The Recreation Fund receives an annual allocation of $1.5 million from the General Fund and, in addition, acquires revenues from charges for services or grants related to recreation programs. The services provided by Recreation are seasonal, typically most active during spring and summer. The FY24 budget for Recreation revenue is $2.3 million of which $1.1 million (48%) has been received as of December 31, 2023. Capital/Development Impact Funds – Revenues in the Capital and Development Impact Funds are primarily generated by new development approvals and the required contributions to offset infrastructure impacts. Revenue depends on the size and impact of the development and the timing of the project; therefore, revenue is not evenly distributed throughout the fiscal year. The FY24 budget for Capital/Development Funds revenue is $32.1 million of which $6.5 million (20%) has been received as of December 31, 2023. In discussion with the Public Works Department there is an indication that large development projects previously expected to materialize in FY24 may be delayed into FY25, thus the related impact fee revenues will also be collected in the next fiscal year. Debt Service - Debt Service funds receive their revenue from annual property tax levies and/or via interfund transfers from other funds and are typically aligned with the timing of the debt service payment. Non-General Fund Re venues by Fund Type FY24 Amended Budget Actuals through De cembe r 31, 2023 % of Budge t Speci al Re ve nue s 9.3$ 3.0$ 32% Re cre ati on 2.3 1.1 48% Capi tal /Devel opme nt 32.1 6.5 20% De bt Servi ce 5.0 1.6 31% Inte rnal Se rvice 16.2 7.9 49% Sewe r 16.4 9.0 55% Wate r 14.5 8.3 57% Total 95.9$ 37.4$ 39% (In Millions) 11.3 p. 201 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 8 of 10 February 26, 20241 4 7 5 Internal Service – Internal Service Funds (Information Technology (IT), Fleet, Facilities, Worker’s Compensation, and Liability Funds) primarily receive their revenue from charges to other departments and funds in the City. These charges are typically assessed in equal monthly amounts based on the budget, and therefore, it is expected that the full budgeted amount will be received. Sewer – The FY24 budget for Sewer revenue is $16.4 million of which $9.0 million (55%) has been received as of December 31, 2023. The Sewer Fund is tracking above for the period. The Sewer Enterprise Fund generates its revenue from utility user charges. Water – The FY24 budget for Water revenue is $14.5 million of which $8.3 million (57%) has been received as of December 31, 2023. The Water Fund is tracking above for the period. Like the Sewer Fund, the Water Fund generates its revenues from utility user charges. Expenditures Non-General Funds expenditures as of December 31, 2023 total $39.2 million, or 29%, of the amended budget. The table below presents the Non-General Fund expenditures by Fund Type. Special Revenues – The primary expenditures in this fund type are for roads and sidewalk infrastructure, followed by grant related expenditures for the Police Department. As of December 31, 2023, expenditures are at $6.2 million (41%) of the budgeted amount of $15.1 million. Road and infrastructure capital projects typically commence after the winter/rainy season. Therefore, staff expects funds to be encumbered and expenditures to occur in the latter part of the fiscal year. Recreation – As of December 31, 2023, expenditures are at $0.9 million (43%) of the budgeted amount of $2.1 million. The services provided by Recreation are seasonal, typically most active during spring and the summer. Non-G e neral Fund Expenditure s by Fund Type FY24 Amended Budge t Actuals through De cembe r 31, 2023 % of Budget Speci al Reve nue 15.1$ 6.2$ 41% Re cre ati on 2.1 0.9 43% Capi tal /De vel opme nt 35.1 3.3 10% De bt Service 4.9 2.9 59% Inte rnal Se rvi ce 22.0 7.0 32% Se we r 36.5 12.5 34% Wate r 20.0 6.3 31% Total 135.8$ 39.2$ 29% (In Millions) 11.3 p. 202 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 9 of 10 February 26, 20241 4 7 5 Capital/Development – As of December 31, 2023, expenditures are at $3.3 million (10%) of the budgeted amount of $35.1 million. The below target spending is primarily in the capital outlay. Several capital projects are currently in their design phases and the Capital/infrastructure construction phase, the larger category of expenditure, typically commence after the winter/rainy season, therefore staff expects funds to be encumbered and expended in the latter part of the fiscal year. Debt Service – As of December 31, 2023, expenditures are at $2.9 million (59%) of the budgeted amount of $4.9 million. The debt service payments typically include semiannual interest payments, and one annual principal payment. Internal Services - As of December 31, 2023, expenditures are at $7.0 million (32%) of the budgeted amount of $22.0 million. The City’s internal services funds are IT, Fleet, Facilities, Equipment Outlay, Worker’s Compensation, and Liability Funds. Sewer – As of December 31, 2023, expenditures are at $12.5 million (34%) of the budgeted amount of $36.5 million. Approximately $27.0 million of this budget is related to capital outlay, primarily the South County Regional Wastewater Authority’s Plant Expansion project which is currently under construction. Water – As of December 31, 2023, expenditures are at $6.3 million (31%) of the budgeted amount of $20.0 million. Approximately $4.2 million of this budget is related to capital outlay projects, several of which are in their design phases and expected to commence in the latter part of the fiscal year. FY24 Budget Adjustment As part of the National Opioid Settlements with various pharmaceutical companies, settlements are to provide funds for the abatement of the opioid epidemic in California and throughout the United States and require that the companies change the way they conduct their businesses. The City of Gilroy, through an allocation from national settlements and funneled via formula through the State of California, has received $41,000 thus far. Staff is recommending the City Council adopt a resolution to appropriate in FY24 $41,000 in the Opioid Settlement Fund (Org/Object Code: 2931000-52610) for the purchase of Narcan (Naloxone) and to continue the City’s campaign of public awareness about opioid addiction. ALTERNATIVES There are no recommended alternatives to the Mid-Year financial report for the period ending December 31, 2023. 11.3 p. 203 of 478 Receive Fiscal Year 2023-2024 Mid-Year Budget Report and Departmental Workplan Update City of Gilroy City Council Page 10 of 10 February 26, 20241 4 7 5 Council could reject the resolution to appropriate the $41,000 in Fund 293 for FY24. Staff does not recommend this option as it would mean an alternative funding source would need to be utilized for purchase of Narcan, or the City may not purchase the same quantity of Narcan as is possible with use of these funds. FISCAL IMPACT/FUNDING SOURCE The fiscal impact of the Mid-Year Financial Report for FY24 has been discussed in the above report. The fiscal impact of appropriating the $41,000 in the Opioid Settlement Fund would be an increase in budgeted appropriations in Fund 293. Attachments: 1. Draft Resolution – FY24 Increase Appropriations in Opioid Settlement Fund (F293) 11.3 p. 204 of 478 RESOLUTION NO. 2024-XX A RESOLUTION OF THE CITY COUNCIL OF THE CITY OF GILROY AMENDING THE BUDGET FOR THE CITY OF GILROY FOR FISCAL YEAR 2024 IN THE EXPENDITURE ACCOUNTS OF THE OPIOID SETTLEMENT FUND AND APPROPRIATING PROPOSED AMENDMENTS WHEREAS, the City Administrator prepared and submitted to the City Council a budget for the City of Gilroy for Fiscal Years 2024 and 2025, and the City Council carefully examined, considered and adopted the same on June 5, 2023; and WHEREAS, City Staff has prepared and submitted to the City Council a proposed amendment to said budget for Fiscal Year 2024 for the City of Gilroy in the staff report dated February 26, 2024, for the mid-year update, more specifically appropriating funding received from the national opioid settlements; and WHEREAS, the City Council has carefully examined and considered the same and is satisfied with said budget amendments. NOW, THEREFORE, BE IT RESOLVED that appropriations to the expenditure accounts in the Opioid Settlement Fund, Fund 293, are hereby increased by $41,000 for Fiscal Year 2024. PASSED AND ADOPTED this 26th day of February 2024 by the following roll call vote: AYES: COUNCIL MEMBERS: NOES: COUNCIL MEMBERS: ABSENT: COUNCIL MEMBERS: APPROVED: ______________________________ Marie Blankley, Mayor ATTEST: Beth Minor, Interim City Clerk 11.3 p. 205 of 478 Resolution No. 2024-XX Resolution Amending FY 2024 Opioid Settlement Fund Budget City Council Regular Meeting | February 26, 2024 Page 2 of 2 1 4 8 2 CERTIFICATE OF THE CLERK I, BETH MINOR, Interim City Clerk of the City of Gilroy, do hereby certify that the attached Resolution No. 2024-XX is an original resolution, or true and correct copy of a City Resolution, duly adopted by the Council of the City of Gilroy at a Regular Meeting of said held on Council held Monday, February 26, 2024, with a quorum present. IN WITNESS WHEREOF, I have hereunto set my hand and affixed the Official Seal of the City of Gilroy this February 26, 2024. ____________________________________ Beth Minor Interim City Clerk of the City of Gilroy (Seal) 11.3 p. 206 of 478 Page 1 of 5 City of Gilroy STAFF REPORT Agenda Item Title:FY24 and FY25 Departmental Workplan Updates Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Administration Submitted By:Bryce Atkins, Assistant to the City Administrator Prepared By:Bryce Atkins, Assistant to the City Administrator STRATEGIC PLAN GOALS Develop a Financially Resilient Organization Ensure Neighborhood Equity from City Services Promote Economic Development Activities Promote Safe Affordable Housing for All Maintain and Improve City Infrastructure RECOMMENDATION Council receive the report. BACKGROUND At the June 5, 2023 regular meeting, the City Council adopted the FY24 and FY25 operating budgets. As part of that process, the work plans for the various departments of the City were also presented and adopted by the City Council. This report is intended to provide an update on the attainment of those workplan items. ANALYSIS The departmental workplans provide a listing of the various projects that the departments are to work on over the two-year budget cycle. Overall, there were 63 workplan items for departments to work on in the listing adopted as part of the two-year cycle. The breakdown of these workplan items contained in Figure 1 below, identified by category. The categories and description of them is below as well. Categories •Mandated (13 workplan items) 11.4 p. 207 of 478 FY24 and FY25 Departmental Workplan Updates City of Gilroy City Council Page 2 of 5 February 26, 20241 4 9 3 These items are those imposed by regulation, law, or compliance requirement that the City has no discretion to avoid or defer. •Core (31 workplan items) Core items represent a fundamental aspect of the department’s purpose. It is what we do as a City, vital but not mandated. •Discretionary (19 workplan items) As its name implies, discretionary items are those that are provided by the City for the public good, and is usually Council and/or community driven, but not mandated nor an expected core service of the City. Figure 1 – Departmental Workplan Items at Adoption Department Mandated Core Discretionary Total Administration 0 4 8 12 Administrative Services 0 5 0 5 Community Development 5 6 3 14 Finance 3 4 0 7 IT 1 5 0 6 Fire 0 4 0 4 Police 1 2 6 9 Public Works 3 1 2 6 Total 13 31 19 63 Work across the various workplan items have reached various levels of completion. The update table attached to this staff report also identifies what the status of each item is. Below in Figure 2, the table identifies the number of workplan items that are in each status. Figure 2 – Departmental Workplan Item Status Summary Department Pending Underway Complete Cancelled Administration 4 4 3 1 Administrative Services 2 3 0 0 Community Development 5 6 3 0 Finance 2 2 2 1 IT 1 4 1 0 Fire 0 3 1 0 Police 1 4 4 0 Public Works 2 4 0 0 Total 17 (27%) 30 (48%) 14 (22%) 2 (3%) Overall, nearly a quarter of the number of items on the workplan have been completed to-date. Nearly half of the total initial workplan items are underway, and a little more than a quarter of the items are pending. 11.4 p. 208 of 478 FY24 and FY25 Departmental Workplan Updates City of Gilroy City Council Page 3 of 5 February 26, 20241 4 9 3 Council Initiated Items Since the adoption of the departmental workplans, the City Council has added 13 Council-initiated agenda items. These items range in labor hour consumption from a few hours to many days and weeks’ worth of labor hours. Below is the list of the items that have been added during this fiscal year to-date: 1. Report on Security, Safety, and Parking at Las Animas Park 2. JEDI Policy Consultant Update 3. Smoking Prohibition Ordinance Implementation 4. Sidewalk Vending Ordinance 5. Naming the Downtown Pop-Up Park after Donald “Elvis“ Prieto (introduction and discussion) and final approval staff report 6. Gilroy Garlic Festival Memorial Improvements 7. Council-Initiated Agenda Item Policy 8. Downtown Parklet Program 9. Downtown Plywood Storefront Ordinance 10.Downtown Vacancy Ordinance 11.Downtown Noise Ordinance 12.Downtown Beautification 13.Discussion on Rules of Conduct/Hybrid Meetings These 13 additions increased the total number of tasks by 21%. Community Development Department (CDD) Workload The CDD has recently received a significant quantity of Council-initiated items that have been added to their workplan, six of the 13 identified above, over 46% of all Council- initiated agenda items. The understanding regarding added Council-initiated items has been that whenever an item is added, it is to be prioritized and for as many additional items are added to the workload of the department, an equivalent workload will be removed from the workplan to reflect current workload capacity. As shown below staff is prioritizing the four newly added downtown items for Community Development against the other 12 current tasks and recommending the following prioritization of the remaining workplan items that have not been completed and the additional items from the Downtown Committee reports. Staff recommends continuing the use of the prioritization scheme that Council authorized with the initial workplan development: Mandated items, then core items, followed last by discretionary items: 1. Climate Action Benchmarks (Mandated) 2. Update Zoning Code and Zoning Map (Core) 3. Develop Vehicle Miles Traveled (VMT) Policy (Core) 4. Develop Transportation Demand Management (TDM) Policy (Core) 5. Partner with the County on 8th and Alexander Affordable Housing Development (Core) 6. Inclusionary Housing Policy/Ordinance (Core) 11.4 p. 209 of 478 FY24 and FY25 Departmental Workplan Updates City of Gilroy City Council Page 4 of 5 February 26, 20241 4 9 3 7. Conduct Community Development Focused Fee Study (Core) 8. Safe Parking Policy (Discretionary) 9. Revise Mobile Vending Ordinance (Discretionary) 10.Drive-Throughs Near Residential Areas (Discretionary) 11.Smoking Prohibition Ordinance Implementation (Discretionary) 12.Sidewalk Vending Ordinance (Discretionary) 13.Downtown Parklet Program (Discretionary) 14.Downtown Plywood Storefront Ordinance (Discretionary) 15.Downtown Vacancy Ordinance (Discretionary) 16.Downtown Noise Ordinance (Discretionary) Community Development currently has several key positions vacant (two retirements in December 2023) that are responsible for the higher-level work of addressing complex assignments and tasks involving legal and procedural functions. The majority of the Council initiated items, as well as the remaining original workplan items require this higher level of work. Community Development, working alongside Human Resources, are working diligently to fill these vacancies with capable staff. During this past year, it is worth noting that development activities and service demand have been increasing for the Community Development Department. Comparing the same period last fiscal year, at seven months after each fiscal year starts, the development-related revenue in FY 2023 was $1.78M, versus $2.63M in FY 2024. Revenue represents application and permit fees, reflecting the rising volume and scale of development projects. In examining the Building and Planning counter in-person customer data, in 2022, 3,364 customers were assisted with an average service time of 49 minutes. In 2023, 3,852 customers were assisted with an average service time of 59 minutes. This represents an increase of 61,455 minutes, or 1,024 hours, of counter customer service. The increasing number of customers as well as the length of service time also indicate the rising volume and complexity of development applications and inquiries. In addition, code enforcement activities have been surging. The number of new cases increased from 944 in 2022 to 1,658 in 2023, reflecting a 76% rise. These development and code enforcement activities represent the day-to-day operation of the Community Development Department. For some types of applications, there are also State- mandated processing and turnaround times that staff must meet. As vacancies get filled, new staff will need to assist and address development projects and enforcement activities. For now, the Department must focus on performing day-to-day activities, implementing mandated programs and policies, and lastly, address core and discretionary workplan items. Based on staff’s current assessment for the remaining 16 months of the workplan cycle, and the current vacancies and service demand, staff is stating that there is enough capacity to work on the first 12 workplan items. The last four will not be worked on until some of the first 12 workplan items are completed, which would then free up staff labor hours to take on the additional work. Should Council disagree with this prioritization, it 11.4 p. 210 of 478 FY24 and FY25 Departmental Workplan Updates City of Gilroy City Council Page 5 of 5 February 26, 20241 4 9 3 may provide direction to staff to elevate one or more workplan items from #13-16 and identify which of the original 12 will not be worked on until more workload capacity becomes available. ALTERNATIVES None, this is an informational item. FISCAL IMPACT/FUNDING SOURCE None, this is an informational item. PUBLIC OUTREACH This report was included on the publicly posted agenda for tonight’s meeting. NEXT STEPS None. Should Council determine to provide feedback or direction, staff will receive the information and return to Council should more structured discussion on the item be required. Attachments: 1. Department Workplan Update Table 11.4 p. 211 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Administration Workplan Item Category Estimated Completion Status Update 1 Develop City Logo Policy Core FY25 - Q4 Underway Work has commenced on this project. Anticipated completion in June of 2025, if not before. 2 Complete the Emergency Operations Center (EOC) Operations Plan Core FY24 - Q4 Underway Draft document under review. Review period anticipated to continue until April 2024. 3 Develop a Justice, Equity, Diversity and Inclusion (JEDI) Policy Core FY25 - Q2 Underway Project is still in progress. Current contract with consultant ends December 2024. Committee and staff training anticipated to commence in March of 2024. 4 Recreational Facility Needs Assessment Implementation Core FY25 - Q4 Pending Project is budgeted to take place in FY25. RFP development will start this current quarter and into the next. Anticipate entering into agreement at the beginning of the fiscal year. 5 Agency to Provide Drug Rehab, Job Training and Placement Discretionary N/A Cancelled No agency has been identified that will fullfill this role within Gilroy. All known service providers are outside of the City Limits. No funding source has been identified in order to incentivize them. Even when looking for grants, no agency responded that they would provide service if as grant was awarded. 6 Mobile Garbage Removal Program Discretionary N/A Complete Two-person crew hired for ongoing, roving garbage removal. Operation now moved to Public Works. Collaboration continues through various departments on larger garbage removal operations. 7 Downtown Strategic Plan Update Discretionary FY25 - Q4 Pending This will be a cooperative project between Community Development and Economic Development. This project is budgeted and planned to commence in FY25. 8 Ordinances to Address Vacancies and Noise Downtown Discretionary FY25 - Q2 Pending Staff work on these ordinances will be coordinated with the Downtown Committee. This work is transitioning to the Community Development Department. 9 Pursue Opportunities for an Assessment District Discretionary FY25 - Q2 Underway Staff has developed a draft plan and preliminary petition. To date, not enough support currently exists to support the ballot for the district to form. Work to gather input from more potential district members is underway, including support from the Gilroy Chamber of Commerce. 10 Establish a Downtown Pop-Up Park Discretionary N/A Complete The park has been established. Design changes will now be proposed by the Parks and Recreation Commission. 11 Beautification and Decorative Lighting Improvements Discretionary N/A Complete The decorative lighting improvements and beautification has been completed for the staff direction from the Ad Hoc Committee. Any future work will result from the work of the Downtonw Committee, Beautification of Downtown Subcommittee. 12 Planning for a Community/Youth Center/Civic Center Master Plan Discretionary FY25 - Q4 Pending Project is budgeted to take place in FY25. RFP development will start this current quarter and into the next. Anticipate entering into an agreement at the beginning of the fiscal year. 11.4 p. 212 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Administrative Services Workplan Item Category Estimated Completion Status Update 1 Transition Fleet from Paper to Electronic Work Orders/Documentation Core FY 25 - Q2 Underway The fleet team is in the process of transitioning to electronic work order documentation over hard copy paper records. 2 Performance Management System Update Core FY 25 - Q4 Pending Project not yet started. 3 Evaluate Possible Transition to Biweekly Payroll Core FY 25 - Q3 Underway Initial review underway; evaluating TM HCM system; beginning to develop action task list. 4 Update Human Resources Rules and Regulations Core FY 25 - Q2 Underway Personnel Commission completed training on January 22, 2024; legal review underway. 5 Update the City's Employer-Employee Relations Resolution to Incorporate State Laws Core FY 25 - Q3 Pending Project has not yet started. 11.4 p. 213 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Community Development Workplan Item Category Estimated Completion Status Update 1 Climate Action Benchmarks Mandated Depending on grant No later than FY27 - Q4 Pending The Climate Action Plan is combined with VMT/TDM policies. Staff submitted a grant application in January 2024. Applicants will be notified in the summer of 2024. If grant is not awarded, the $400,000 budget will be carried forward to FY25 so staff can issue the RFP to begin work. A project timeline will be provided after grant applicants are notified. 2 Implement AB 2234 for Building Permits Mandated N/A Complete Staff created an AB 2234 webpage along with a checklist and example applications and permits for various types of housing development projects. 3 Update Accessory Dwelling Unit (ADU) Ordinance Mandated N/A Complete City Council approved an ADU Ordinance in December 2023. Staff sent the approved ordinance to the California Department of Housing and Community Development (HCD) in December 2023. 4 Complete 10th Street Bridge Project Environmental Clearance Mandated FY25 - Q4 Underway The project is transferring to Public Works, with assistance currently of Administration during the transition and with vacant management analysts in Public Works. Timeframe is being re-established with consultant, due to retirement of staff member serving as liaison, and may be adjusted to a shorter timeframe. 5 Implement State Housing and Building Laws (SB 6, SB 35, SB 379, AB 2011)Mandated N/A Complete Staff created a new Planning Division webpage in 2023 with information, checklists, and approval process for AB 2011 and SB 6. Staff also created an SB 35 webpage along with checklist and approval process. Both webpages provide details on applicable residential or mixed-use development. Projects are processed in accordance with state law. Building Division met SB 379 through implementing an automated permitting platform, integrated with the new Gilroy Online "GO Permit" system, for residential solar energy systems. 6 Update Zoning Code and Zoning Map Core FY25 - Q2 Underway Project has been reassigned due to staff retirement. Initial recommendations are estimated to be scheduled for review by the Planning Commission and City Council at joint study sessions in mid- 2024. 7 Develop Vehicle Miles Traveled (VMT) Policy Core See Climate Action Pending See Climate Action update. 8 Develop Transportation Demand Management (TDM) Policy Core See Climate Action Pending See Climate Action update. 9 Partner with the County on 8th and Alexander Affordable Housing Development Core Estimated FY28 Underway Staff has provided input to the County. Draft documents related to the County's Request for Offers process are pending. County will issue a Request for Offers to invite developers to respond and submit proposals. 10 Inclusionary Housing Policy/Ordinance Core FY25 - Q2 Underway Inclusionary housing introduction was presented to the City Council in November 2023. A community workshop was held in November 2023. Consultant and staff are completing analysis and initial recommendations which will be presented to City Council in spring 2024. 11 Conduct Community Development Focused Fee Study Core FY25 - Q4 Pending Work will begin when resources become sufficient, anticipating in FY 25. Staff will conduct fee studies focused on each development services function to fully account for staff time and costs since fee updates have yet to achieve cost recovery. A fee schedule will be developed accordingly. 12 Safe Parking Policy Discretionary FY25 - Q4 Pending Development of a safe parking program needs to be evaluated with other department workplan priorities in FY25. 13 Revise Mobile Vending Ordinance Discretionary FY24 - Q4 (by Economic Development)Underway This workplan item has transitioned to Economic Development. After adoption of the Downtown Parking Management Plan, work will include researching ordinances and processes from other cities and developing a mobile vending ordinance. Staff anticipates bringing an ordinance to Council by mid- 2024. 11.4 p. 214 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Community Development Workplan Item Category Estimated Completion Status Update 14 Drive-Throughs Near Residential Areas Discretionary See Zoning Code Underway Regulations for drive-throughs will be included in the comprehensive Zoning Code update. Council Added 1 Smoking Prohibition Ordinance Implementation Discretionary FY25 - Q1 Underway Staff from several departments collaborated to create a webpage with forms, handouts, signage template, and utility bill insert. Code Enforcement team has been implementing the ordinance through identifying, notifying, and working with 552 properties. As of February 8, 2024, 279 properties met ordinance requirements and 273 properties have yet to comply. Over 120 interactions have occurred with individuals regarding the ordinance. Implementation, community education, and enforcement will continue. Council Added 2 Sidewalk Vending Ordinance Discretionary FY24 - Q3 Complete City Council adopted the sidewalk vending ordinance in August 2023 and permit fees in September 2023 after staff presented research and drafts between April and September 2023. Staff conducted outreach and education in English and Spanish starting in September 2023 via a new webpage with handouts and documents, notices at physical locations, in-person visits with vendors and businesses on nights and weekends, and community workshops with County Health. Since October 2023, staff has conducted enforcement in English and Spanish with Code Enforcement, Fire Prevention, and Building Inspection teams during weekdays and weekend nights. Field survey and complaint-based enforcement will be ongoing. Council Added 3 Downtown Parklet Program Discretionary FY24 - Q3 for Permits and Initial Direction on Program Development (by Community Development and Economic Development) FY24 - Q4 for Formal Program Development (by Downtown Committee) Underway The City Council provided direction between August 2023 and February 2024 regarding the temporary program, existing parklet permits, parklet interest survey, and pursuance of a formal program. The workplan item was originally transitioned to Economic Development and was planned to begin after adoption of the Downtown Parking Management Plan. In January 2024, Council directed Downtown Committee to research and develop a downtown parklet program. Council Added 4 Downtown Plywood Storefront Ordinance Discretionary TBD Pending City Council received Downtown Committee Plywood Removal Subcommittee report on January 8, 2024 and directed staff to create an ordinance incorporating the Downtown Committee's recommendations for managing plywood-covered storefronts in downtown. Council Added 5 Downtown Vacancy Ordinance Discretionary TBD Pending City Council received Downtown Committee Vacancy Ordinance Subcommittee report on January 8, 2024 and directed staff to create a vacancy ordinance for downtown incorporating the Downtown Committee's recommendations. Council Added 6 Downtown Noise Ordinance Discretionary TBD Pending City Council received Downtown Committee Noise Ordinance Subcommittee report on January 22, 2024 and directed staff to create a noise ordinance for downtown incorporating the Downtown Committee's recommendations. 11.4 p. 215 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Finance Workplan Item Category Estimated Completion Status Update 1 Implement GASB1 Statement. 96 - Subscription-based Information Technology Arrangements Mandated FY24 - Q2 Complete Implementation was completed as part of Fiscal Year 2023 (FY23) annual financial audit and is included in the FY23 Annual Comprehensive Financial Report (ACFR). 2 Other Post Employment Benefits (OPEB) Actuarial Valuation/Study Mandated FY25 - Q1 Pending Work will commence in FY24 - Q4 and be completed by FY25 - Q1. 3 Implementation of GASB Statement. 101 - Compensated Absences Mandated FY25 - Q4 Pending Work will commence during second half of the Fiscal Year 2025 and be included as part of the annual financial audit and audited statements preparation. 4 Update Fees and Charges Core FY24 - Q2 Complete The City adjusted the Citywide user fee schedule in July 2023, and completed the Comprehensive Water and Wastewater Rate Study in August 2023. The rates were adopted in October 2023, and the first of the five-year adjustment has been implemented as of January 1, 2024. 5 Utility Customer Water Usage Reports and Portal Core FY25 - Q2 Underway A Request-for-Proposal (RFP) will be issued in FY24 - Q3, with contract and implementation through the rest of 2024. 6 Upgrade City's Online Utility Bill Presentment and Payment System Core FY24 - Q2 Cancelled The City's online utility bill presentment and payment portal was evaluated for upgrade during FY24 Q1. After further review of functionality, features, and compatability with City's other systems, it was determined the upgrade should be deferred until certain features and functionality are available, and the new platform is widely adopted by the vendor’s client base. 7 Transient Occupancy Tax Compliance Review Core FY25 - Q4 Underway An RFP will be issued in FY24 - Q3, with contract and implementation through FY25. Information Technology Workplan Item Category Estimated Completion Status Update 1 Upgrade Enterprise Resource Planning System to Latest Version Mandated FY24 - Q4 Underway Financial modules testing is complete. Human Capital Management and Payroll testing scheduled to be conducted end of February 2024, with an expected Go Live of April 1st. 2 Land Management System Implementation Core FY24 - Q2 Complete LMS system went live in June/July 2023. System is in post go-live stabilization phase and refinement which is largely administered by the Community Development Department. 3 Implement Cybersecurity Assessment Recommendations Core FY25 - Q4 Underway Certain recommendations have been implemented. Majority of the network related improvements will commence upon hiring of the Network Administrator. 4 Develop Information Technology Asset Lifecycle Plan/Policy Core FY24 - Q4 Underway Policy has been drafted. It is pending IT Steering Committee review and approval. 5 Internet Capacity and Redundancy Upgrades Core FY25 - Q3 Underway Internet capacity upgrades are complete. Internet redundancy work will commence upon hiring of the Network Administrator. 6 Develop a GIS Program Roadmap/Strategic Plan Core FY25 - Q4 Pending This project will commence in FY25 upon completing the migration of the GIS services in-house, expected by June 2024. 1) Governmental Accounting Standards Board 11.4 p. 216 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Fire Workplan Item Category Estimated Completion Status Update 1 Develop and Implement the Santa Teresa Temporary/Permanent Fire Station Core FY24 - Q3 Underway The Fire Department will no longer lease a modular building due to the increased cost to complete the site work. The Department will continue using the TEEC building as the Interim Santa Teresa Fire Station. Funding was approved to modify the TEEC building so it can operate as a 24/7 fire station. Modifications are currently underway and will be completed in FY24 - Q3. 2 Identify Funding for Chestnut and Las Animas Station Retrofit Plan Core FY24 - Q2 Complete Funding for this project will be charged to the Equipment Outlay Fund. This project has two phases. The first phase will begin in FY24 for the design work of the Las Animas and Chestnut Stations. Approved FY24 funding is $250K per station. The Department anticipates that the construction phase of this project will begin in FY25. Approved funding for the construction phase is $2.5M. 3 Develop and Implement a Plan for Over the Air Mapping Core FY24 - Q3 Underway Currently implementing a new Records Management System that includes this feature. 4 Improve RMS Incident Data Reporting Core FY24 - Q3 Underway Currently implementing a new Records Management System that provides improved data analytics. 11.4 p. 217 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Police Workplan Item Category Estimated Completion Status Update 1 Implement Legislative Reforms and Mandates Mandated 2023-Q4 Complete The Department will be mandated to constantly implement reforms and mandates as legislation is passed. The two most current mandates, AB481, Military Equipment Use and Inventory and Concealed Carry Weapon (CCW) policies were completed. 2 Public Safety/Mental Health Response Team Core 2025-Q1 Underway A no-cost MOU with the County of Santa Clara for a Psychiatric Emergency Response Team (PERT) Justice and Mental Health Collaboration Program is underway. The clinician will be housed at the PD and staff will use best practices for keeping measures by utilizing the RIMS (Records/CAD) system. Fiscal uncertainty at the county level may cause a delay in finalizing the MOU. 3 Employee Wellness & Resiliency Program Core 2025-Q2 Underway State funding of $43,000 was received in February 2023 and funds are being expended to expand the peer support program and initiatives. Gilroy was selected by the University of San Diego and POST as a model to develop a wellness and resiliency program for other law enforcement agencies. 4 Conduct a Community Survey Discretionary 2024-Q2 Complete Community survey implemented October 2023 using My90 by Axon. A Council presentation was completed in January 2024 and results are posted on the City of Gilroy's Police Department webpage. 5 Reimplement The CPA (Community Police Academy)Discretionary 2023-Q4 Complete Youth, Spanish and English CPA's were completed for 2023 and 2024 academies are scheduled. 6 Supervisor Mentorship Program Discretionary 2024-Q1 Complete Two sergeants were were tasked to explore and develop a mentorship program. Identifying contemporary policing practices, The President's Task Force on 21st Century Policing Implementation Guidebook is being used as part of study sessions with department supervisor staff to mentor and create a blueprint for emerging leaders. 7 Develop the Police Department's Three-Year Strategic Plan Discretionary 2025-Q2 Underway This project is in progress and pending the onboarding of the Department's Community Engagement Coordinator. This project will be one of their first year's goals. 8 Develop a Department Succession Plan Discretionary 2025-Q1 Underway In concert with the mentorship program, a formalized succession plan is being used to develop staff for promotional opportunities to the supervision ranks for Corporal, Sergeant, Captain and Chief of Police and specialized units of Traffic, Anti-Crime Team and Investigations. 9 Promote Neighborhood Watch Program (NWP)Discretionary 2025-Q3 Pending The Department continues to recruit for vacant positions and hopes to onboard a Community Engagement Coordinator to implement a NWP. In the meantime, staff communicates to the public the steps to take to enhance community safety through social media platforms, community engagement and presentations. 11.4 p. 218 of 478 Fiscal Year 2024 and 2025 Council Legislative Agenda Public Works Workplan Item Category Estimated Completion Status Update 1 Implement State Mandate for City-wide Storm Drain Trash Capture Prog Mandated 35% by 2026 Underway The City has been mapped and trash capture plan identified. Devices have not been installed. Funding source still needs to be identified. 2 SB1383 Solid Waste Reporting and Enforcement Implementation Mandated FY25 - Q4 Underway The City has not yet determined its enforcement policy. Work is continuing on developing this program and implementing SB 1383 requirements. Staff will continue collaborating on organic waste implementation with Environmental Services staff. 3 Implement State Water Conservation Measures Mandated Ongoing Underway This program is ongoing. 4 Downtown Parking Management Plan Core FY24 - Q3 Complete Final Plan to be approved at March 4, 2024 City Council meeting. 5 Implement Strategies from the Public Works Department Evaluation Discretionary FY25 - Q4 Underway The City has hired a new Utilities Department Director, and is pursuing additional position recruitments. Utilities and Public Works are collaborating on the transition, and taking on elements of the evaluation recommendations respective to each department. 6 Explore a Transit First Policy Discretionary TBD Pending Work on this has not yet begun. Council Added 1 Downtown Beautification Discretionary TBD Pending The City Council received the Downtown Committee - Downtown Beautification Subcommittee report on January 22, 2024 and recommended staff to carry out capital projects, maintenance, and programs incorporating the Downtown Committee's recommendations. Multiple departments involved, but mostly Public Works. 11.4 p. 219 of 478 Page 1 of 3 City of Gilroy STAFF REPORT Agenda Item Title:Council-Initiated Agenda Item Policy Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Administration Submitted By:Bryce Atkins, Assistant to the City Administrator Prepared By:Bryce Atkins, Assistant to the City Administrator STRATEGIC PLAN GOALS Not Applicable RECOMMENDATION Council provide direction regarding the draft policy. BACKGROUND At the December 11, 2023 meeting of the Gilroy City Council, a Council-initiated agenda item was issued to discuss adoption of a policy/procedure for the submission and consideration of future Council-initiated items on the Council’s agendas. The instruction as part of that direction entailed creating a process to gather information on the future agenda items to allow more specificity and certainty about the nature of future requests, including an estimate of financial impacts or intent of the potential action. This information would then be provided when Council considers adding the item to a future agenda. ANALYSIS The current policy statement regarding the addition of future Council agenda items is contained in the adopted Council Norms. Below is an excerpt from the Council Norms relating to this subject. 2. Adding Agenda Items: 2.1. Any Council Member may propose an item for consideration as an agenda item for a future meeting by oral request during the portion of the Council 11.5 p. 220 of 478 Council-Initiated Agenda Item Policy City of Gilroy City Council Page 2 of 3 February 26, 2024 meeting designated for Future Council Initiated Agenda Items. The Council will decide whether to agendize the item for a future Council meeting. In conducting research on this subject, there is some variety in the ways other city councils process requests. A few of the cities in Santa Clara County have similar provisions, but most have some form of process for submitting agenda item requests. Attached to this staff report are excerpts of the various procedures and/or requirements for council members to add items to their councils‘ agendas. Proposed Policy The draft policy, attached to this staff report, is modeled after a process called a colleague's memorandum which is used by a few cities (Palo Alto, Sunnyvale), and modifies it to meet the needs of the City of Gilroy with our agenda process generally. The policy would require for items to be added by a majority of a quorum of the Council following a written submittal about the item. The council member(s) requesting to have an item added to a future agenda would be required to submit a Future Agenda Item Request Memorandum (FAIR Memo). To summarize the attached policy, there are a few procedural steps: •Before the FAIR Memo can be submitted, it requires council members proposing agenda items to meet and consult with the City Administrator to understand from an administrative and operational perspective the circumstances and potential impacts from the proposed action. •After, the council member(s) then prepare the memo, which must comply with the following structure: o Not exceed two (2) pages. o Be focused on the need for a future agenda item without advocating for or against the merits of the agenda item being requested. o Contain a brief summary outlining the request and any relevant background information. o Contain a fiscal impact estimate. o Contain a staffing/labor impact estimate. o Include copies of any resolutions, proclamations, documents and other associated material that is to be considered as part of the proposed action. •The FAIR Memo, if compliant with the above, would be placed on an agenda within 30-45 days of the request under the Future Agenda Items section. City staff will prepare a brief staff report discussing initial thoughts and considerations about the item, but not a detailed analysis. •There, the City Council may give direction if the item is to be brought back on a future agenda meeting for discussion and potential action. Council may direct the City Administrator to agendize the matter for Council action at least two meetings out, allowing City staff sufficient time to conduct its analysis and prepare a staff report. 11.5 p. 221 of 478 Council-Initiated Agenda Item Policy City of Gilroy City Council Page 3 of 3 February 26, 2024 •FAIR Memos that are not compliant will be returned to the submitting council member(s), with a description of precisely how the FAIR Memo does not comply with the policy. ALTERNATIVES Council may direct the policy to return as-is to Council for adoption, or with any amendments. Council may also direct work on such a policy to cease. FISCAL IMPACT/FUNDING SOURCE None. There are no anticipated costs financially for consideration of such a policy, nor implementing the draft policy discussed. There would be a negligible increase in staff time in processing the requests. PUBLIC OUTREACH The topic was raised as part of the discussion on future Council-initiated agenda items on December 11, 2023, and was included on the publicly posted agenda for this meeting. NEXT STEPS Staff will incorporate any changes or other direction received and return to Council with a policy for Council action. Attachments: 1. Draft Council Future Agenda Items Policy. 2. Summary of other Santa Clara County cities’ policies regarding future agenda items. 11.5 p. 222 of 478 City of Gilroy City Council Future Agenda Item Policy Adopted: TBD, 2024 11.5 p. 223 of 478 Purpose/Background The purpose of this policy is to establish procedural guidelines for the request of future Council-initiated agenda items. Policy Future Council-Initiated Agenda Items present an opportunity for City Council Members to request agenda items to be added to future Council meetings for discussion and potential action. Prior to this policy, Council initiated agenda items could be requested with a consensus of the Council without knowledge on the subject or the specific action being asked for before approving the item to be discussed. To aid in the determination of what items are appointed by Council to be discussed at future Council meetings, this policy establishes a set of information to be provided when asking for a future Council agenda item. All conditions and criteria identified below must be met before a Council-initiated agenda item may be brought to the Council for consideration. Items may be placed on the agenda by the Mayor, a majority of a quorum of the Council, or by the City Administrator. For items to be added by a majority of a quorum of the Council, the council member(s) requesting to have an item added to a future agenda must submit a Future Agenda Item Request Memorandum (FAIR Memo). Before Submitting a FAIR Memo Prior to preparing a FAIR Memo, Council Members will consult with the City Administrator to discuss the topic, to understand from an administrative and operational perspective the circumstances, planned activities, and other considerations regarding the matter before submitting the request. After the consultation, a FAIR Memo may be prepared and submitted to the City Administrator. Any FAIR Memo that is submitted without the prior consultation shall not be placed on an agenda until such consultation takes place. Procedure to Submit and Process a FAIR Memo •Either an individual or group of two or three Councilmembers may prepare a brief FAIR Memo outlining a request to create a future agenda item for the Council to consider at an upcoming Council meeting. •Councilmembers shall submit FAIR Memos directly to the City Administrator. •Completed FAIR Memos shall be provided to the City Administrator by noon on the Tuesday prior to the Council meeting that the memo is intended to be agendized, to provide time for the City Administrator and City Clerk to process for the Council packet. 11.5 p. 224 of 478 •To avoid a Brown Act violation, FAIR Memos are not to be shared with Councilmembers outside of the group who authored a specific memorandum. •FAIR Memos shall be structured as described below. FAIR Memos shall: o Not exceed two (2) pages. o Be focused on the need for a future agenda item without advocating for or against the merits of the agenda item being requested. o Contain a brief summary outlining the request and any relevant background information. o Contain a fiscal impact estimate. o Contain a staffing/labor impact estimate. o Include copies of any resolutions, proclamations, documents and other associated material that is to be considered as part of the proposed action. •The City Administrator will review and determine the compliance of the FAIR Memo consistent with this policy and the Ralph M. Brown Act (open meetings law) or provide feedback to the authors. •The City Administrator will schedule compliant FAIR Memos to be placed on a Council Meeting agenda within 30-45 days of the request. City staff shall prepare a brief staff report discussing initial thoughts and considerations about the item, and to address the fiscal and staff time impact estimates in the FAIR Memo. Maximum staff time spent on the FAIR Memo shall not exceed an hour. •Compliant FAIR Memos will be included under the Future Agenda Items portion of the Council meeting agenda. There, the City Council may give direction if the item is to be brought back on a future agenda meeting for discussion and potential action. Council may direct the City Administrator to agendize the matter for Council action at least two meetings out, allowing City staff sufficient time to conduct its analysis and prepare a staff report. •FAIR Memos that are not compliant with this policy shall be returned to the submitting Council Member(s) with a description of precisely how the FAIR Memo does not comply with the policy. 11.5 p. 225 of 478 Excerpts from Other Santa Clara County Cities Council Members Adding Agenda Items Cupertino 7. Agendas and Staff Reports 7.1 Future Agenda Items. The City Manager, the City Attorney, the Mayor, or any two Councilmembers may request that an item be added to a future agenda for Council action. The City Manager shall provide a quarterly report to Council regarding the status of future agenda items, which may include a request to remove items from the list of future agenda items. Any item may be removed for the future agenda items list by a majority vote of the City Council. Los Altos 10.9 Placing items on a future agenda. Members of the City Council may have any matter that can be legally agendized placed on the agenda of the City Council by indicating their desire to do so under that portion of the City Council agenda designated, “Future City Council Agenda Items.” Placing an item on a future agenda requires two Councilmembers to support the item if no staff work is required and three Councilmembers if staff work is required. Unless an item is deemed an urgency exception or emergency exception, as defined in the Norms, Councilmembers shall request the placement of items on future agendas at a public Council meeting. Los Gatos I. Preparation of the Agenda The agenda is prepared by staff in consultation with the Mayor for the Mayor’s final approval. If there is a disagreement between the Mayor and staff, the Mayor makes the ultimate call o the agenda and its items. Any member of the Council may submit a request through the Town Manager or directly to the Mayor to make a change or addition to the agenda. In no event may the subject of whether to amend the agenda be discussed outside of a public meeting by more than two (2) members of the Council. Items thus proposed to be added to the agenda require the Mayor’s agreement to be added for action. If the Mayor does not agree, the item shall be listed on the agenda for discussion purposes only under the Council Matters section of the agenda. Council may then discuss whether to place the item on a future agenda for action. Two (2) or more members of the Council must vote in favor of placing an item on a future agenda for action. The Mayor in good faith will make every effort to place the item on the first available Council agenda in consultation with the Town Manager. IF the wish of the Council is to add an item on the agenda of the current meeting, then the Brown Act generally requires a two-thirds(2/3) vote or a unanimous vote of those present if less than five(5) Council members are present, with a finding that there is a need to take immediate action and the need for action came to the attention of the Town after the agenda was posted. 11.5 p. 226 of 478 Excerpts from Other Santa Clara County Cities Council Members Adding Agenda Items Milpitas B. Agenda Item Submission 1. The City Manager has the primary responsibility for the development of the Council Agenda, ensuring all protocols are followed, and that management of the agenda is closely linked to organizational goals and work plans. Any item that is placed on the agenda shall be in accordance with the City’s Open Government ordinance (MMC I-310) so that it can be clearly understood by members of the community. 2. Mayor or Councilmember: a. The Mayor or a Councilmember may request the City Manager to add an item to a Council agenda. No staff report or other staff work will occur until the item is discussed before the full City Council. Discussion and prioritization by the City Council will occur on a quarterly basis. b. Councilmembers may make this request verbally during a meeting or may submit a written request to the City Manager at other times. c. See Section 2.C.4 “Request for Staff Resources” for further details on any associated staff work related an agenda item request. Requests for Staff Resources a. Mayor and Councilmember requests to consider new programs, services, or requests for significant allocations of resources, shall be directed to the budget process to the maximum extent possible. b. Mayor or Councilmember requests for minor (generally less than four hours of staff time) research or other staff work must be directed to the City Manager. c. If more than four hours of staff time will be required to complete the task/project, the item will be placed on the agenda to ask the City Council if time should be spent on the proposed item. A discussion and prioritization of Mayor and Councilmember requests are scheduled on a quarterly basis. d. Mayor and Councilmember requests for more than four hours of staff work for City Council consideration will adhere to all the City of Milpitas Open Government Ordinance provisions, including, but not limited to: - I-310-2.30 Agenda Requirements. “(b) At least six (6) days before a regular City Council meeting, a preliminary agenda shall be posted containing a meaningful description of each item of business to be transacted.” - “(c) A description is meaningful if it is sufficiently clear and specific to alert members of the public whose interests are affected by the item that he or she may have reason to attend the meeting or seek more information on the item. - To achieve the above requirements, all materials must be submitted to the City Clerk, to the extent possible, no less than eight (8) days in advance of a Council meeting. e. Staff responses to a Councilmember inquiry, including the original inquiry, shall be distributed to the Mayor and all City Councilmembers. 11.5 p. 227 of 478 Excerpts from Other Santa Clara County Cities Council Members Adding Agenda Items Monte Sereno 7. Agenda An agenda shall be prepared for each regular meeting containing the specific items of business to be transacted and the order thereof. Items of business may be placed on the agenda by any Council Member, the City Manager, or the City Attorney. The City Manager may advise, but cannot override, on the placement of items for consideration. In addition, a City Council Member may request that an item be placed on a future agenda during the future agenda portion of a City Council Meeting as outlined in Section 9 below. Morgan Hill Section 4 – AGENDA CONTENTS 4.2 Placement of items on the agenda: The Mayor, City Manager, or City Attorney may place items on the agenda. Members of the City Council may request items to be added to an upcoming City Council agenda by requesting an item during the “Future Council Initiated Agenda Items” Section of the agenda. When a Future Council Initiated Agenda Item is requested, the Council Member making the request will send the City Manager a brief summary outlining the request and any relevant background. If the requested item is not included in the current Strategic Priorities Workplan, the team will bring forward the item at a future Council Meeting within 30-45 days of the request via a brief staff report, including the brief summary provided by the requesting Council Member. At that meeting, the City Council will review the request and determine if the majority of the City Council want the items agendized at a future meeting for discussion. Mountain View b. Council Request for Agendizing A Councilmember request for an item to be agendized will be done as an action item with support work of up to one hour by staff. If more than one hour is required, then the item will be agendized to ask Council if time should be spent on preparing a full report on the proposed agenda item. Palo Alto K. Council Matters Any two Council Members may bring forward a colleague memo on any topic to be considered by the entire Council. Two Council Members are required to place such a memo on the agenda, reflective of the Council procedure requiring a motion and a second for consideration of a motion by the Council. Up to four Council Members may sign a colleague memo. The City Attorney recommends that the colleague memo be limited to three Council Members in order to avoid the potential of a Brown Act issue. Prior to preparing a colleague memo, Council Members will consult with the City Manager to determine whether he/she is or is willing and able to address the issues as part of his/her operational authority and within current budgeted resources. Colleague’s memos should have a section that identifies any potential staffing or fiscal impacts of the contemplated action. This section will be drafted by the City Manager. 11.5 p. 228 of 478 Excerpts from Other Santa Clara County Cities Council Members Adding Agenda Items Council Members shall provide a copy of the proposed memo with the City Manager or appropriate senior staff prior to finalization. Completed Council colleagues memos shall be provided to the City Clerk’s staff by noon on the Tuesday prior to the Council meeting that the memo is intended to be agendized, to provide time for the City Clerk to process for the Council packet. The City Council will not take action on the night that a colleague memo is introduced if it has any implications for staff resources or current work priorities which are not addressed in the memo. The Council will discuss the colleague memo and then direct the City Manager to agendize the matter for Council action within two meetings, allowing City staff time to prepare a summary of staffing and resource impacts. Action may be taken immediately by the Council on colleague memos where there are no resource or staffing implications or where these are fully outlined in the colleagues memo. The Brown Act requires that the public be fully informed of the potential action by the Council via the Agenda 72 hours before a scheduled Council meeting. In order to satisfy the Brown Act requirements, the Council should consult with the City Attorney to ensure that the proposed title to the colleague memo contains all actions that the Council Members want completed on the night of the Council review. Santa Clara Referral from Members of the City Council in Advance of a Meeting: After consultation with the City Manager (and/or City Attorney, as appropriate), the Mayor or any individual Councilmember may submit a written request by using the Council Item Request Form to the City Manager’s Office for inclusion of an item on a future City Council agenda,. An item may be referred to the City Manager for inclusion on a City Council agenda during a Council meeting by City Council action. The procedure for written request from the City Council shall be as follows: 1. Members of the City Council shall use the Council Item Request Form to submit a written request for inclusion of an item on a future City Council agenda. 2. Prior to submitting a Council Item Request from, the Member shall discuss the proposed request with the City Manager (And/or City Attorney, as appropriate) to determine if City staff’s response does not satisfy the Member’s request, the Member shall submit the Council Item Request form for placement on a future City Council agenda. 3. Once the City Clerk’s Office receives the Council Item Request form, it should immediately be forwarded to the City Manager for placement on an agenda, is possible, within two (2) Council meetings after receipt of the original request by the City Clerk’s Office. All written material (Council Item Request Form and any support material) will be submitted on the agenda in the form substantially provided by the requestor without any staff analysis, including fiscal review, legal review and policy review, until the City Council has had the opportunity to provide the direction to the City Manager. Referrals from Members of the Council at the Council Meeting 11.5 p. 229 of 478 Excerpts from Other Santa Clara County Cities Council Members Adding Agenda Items If an issue arises during a Council meeting that may require future City Council action a City Council member may also request, through a referral, that such item be agendized for future Council consideration. Such a request may be considered by the Council following the “Procedure for Handling Requests at the City Council Meeting” set forth below. Saratoga Agenda Items and the Agenda Planner Items may be placed on the agenda by the Mayor or the City Manager. Additionally, Council Members may request that items be added to a future meeting by making the request at the end of a regular meeting during the Council Items portion of the meeting. If a second Council Member supports the request, the item will be added to a future meeting. The City Manager and City Clerk hold weekly meetings with the Mayor and Vice Mayor to discuss upcoming agenda items and set the agenda of future meetings. Future agenda items are identified on the Agenda Planner, which is emailed to the City Council weekly. The Agenda Planner shows when items will go before the City Council, which section of the agenda the item will appear under, and the staff person preparing the report on the item. Sunnyvale Placing Items on the Agenda Items may be placed on the agenda by the Mayor, a majority of a quorum of the Council, or by the City Manager. The order in which items appear on the agenda shall be determined by the City Manager and approved by the Mayor. Colleagues Memorandum •A group of two or three Councilmembers may prepare a brief colleagues memorandum outlining a request to create a future agenda item for the Council to consider at an upcoming Council meeting. •Councilmembers shall submit colleagues memorandums directly to the City Manager. •Colleagues memorandums are not to be shared with Councilmembers outside of the group who authored a specific memorandum. •Memorandums shall not exceed two (2) pages and shall be focused on the need for a future agenda item without advocating for or against the merits of the agenda item being requested. •The City Manager will review and approve the Colleague Memorandums consistent with this policy and the Ralph M. Brown Act (open meetings law) or provide feedback to the authors. •The City Manager will schedule the approved colleagues memorandum for the next available Council agenda. 11.5 p. 230 of 478 Excerpts from Other Santa Clara County Cities Council Members Adding Agenda Items •Completed colleagues memorandums will be included under the Non-Agenda Items &Comments portion of the Council meeting agenda for Council action. •A colleagues memorandum is not required to request an agenda item be added to a future agenda. 11.5 p. 231 of 478 Page 1 of 3 City of Gilroy STAFF REPORT Agenda Item Title:Accept the Annual Comprehensive Financial Report for Fiscal Year-Ended June 30, 2023 Meeting Date:February 26, 2024 From:Jimmy Forbis, City Administrator Department:Finance Submitted By:Harjot Sangha, Finance Director Prepared By:Harjot Sangha, Finance Director STRATEGIC PLAN GOALS Develop a Financially Resilient Organization RECOMMENDATION Accept and file the report. EXECUTIVE SUMMARY Accept and file the audited Annual Comprehensive Financial Report (ACFR) for the fiscal year ended June 30, 2023 (FY23). ANALYSIS Following the close of each fiscal year on June 30th, the City’s external auditors conduct an audit of the City’s financial records and assist in the compilation of the ACFR. The objective of external financial reporting is to ensure accountability. The goal of a financial statement audit is to provide users with reasonable assurance from an independent auditor that the information presented in the statements is reliable. The audit for the fiscal year ended June 30, 2023, was recently completed by The Pun Group, LLP (Auditor), Certified Public Accountants. In conjunction with the annual audit, the City prepares the ACFR to comply with the 11.6 p. 232 of 478 Accept the Annual Comprehensive Financial Report for Fiscal Year-Ended June 30, 2023 City of Gilroy City Council Page 2 of 3 February 26, 2024 requirements to receive the Certificate of Achievement for Excellence in Financial Reporting administered by the Government Finance Officers Association (GFOA). The Certificate of Achievement is a prestigious national award recognizing conformance with the highest standard for preparation of state and local government financial reports. The City’s ACFR has received this award for the previous nine fiscal years, most recently for FY22, and staff believes the current report (FY23) continues to conform to GFOA’s highest standard. As a result of their annual independent audit of the City’s financial records and statements, the Auditor has rendered an unmodified (“clean”) opinion, the optimal opinion issued by independent auditors, on the City’s financial statements for the fiscal year ended June 30, 2023. A detailed analysis of the City’s financial position as of June 30, 2023, is included in the Management Discussion and Analysis (MD&A) in the ACFR attached to this staff report. In accordance with Government Auditing Standards, the auditors also identify any deficiencies in internal control over financial reporting and provide recommendations to City management on correcting these deficiencies. No such deficiencies in internal controls were identified during the FY23 audit. Summary of the highlights are as follows: Citywide: The City’s overall net position increased by $8.1 million to $381.8 million from prior fiscal year (FY22). Of the total net position, $100.7 million, or about 26%, remains unrestricted, and the majority of the remaining consists of net investment in capital assets. General Fund: For ACFR purposes, the City combines its Sidewalk Repair, Golf Course, Parking Management, and Community Recreation special revenue funds with the City’s General Fund for financial statement presentation as required under Governmental Accounting Standards Board (GASB) Statement 54. •Revenues: The actual revenues, excluding transfers, in the General Fund were $2.3 million better than the final budget, primarily due to better than projected investment income attributed to the increase in interest rates, and increased revenues from taxes (property and utility user) and charges for services during the fiscal year. •Expenditures: The actual expenditures, excluding transfers, in the General Fund were $3.5 million less than the final budget, primarily related to capital outlay which will carry into the next fiscal year, and other general operational savings across departments. •Fund Balance: The fund balance (for ACFR purposes) in the General Fund increased by $4.0 million to $41.9 million from the prior year. 11.6 p. 233 of 478 Accept the Annual Comprehensive Financial Report for Fiscal Year-Ended June 30, 2023 City of Gilroy City Council Page 3 of 3 February 26, 2024 FISCAL IMPACT/FUNDING SOURCE There are no direct fiscal impacts to receiving and filing the ACFR. The audit provides Council and other stakeholders with the assurance that the City is meeting its obligation for producing financial reports that are presented fairly and accurately. The annual financial audit is part of the Finance Department’s annual workplan, thus the resources and costs associated with the audit and preparation of the report are included in the adopted budget. Attachments: 1. Annual Comprehensive Financial Report as of June 30, 2023. 11.6 p. 234 of 478 Annual Comprehensive Financial Report Year Ended June 30, 2023 11.6 p. 235 of 478 City of Gilroy Gilroy, California Annual Comprehensive Financial Report and Independent Auditors’ Reports For the Year Ended June 30, 2023 Prepared by Finance Department Harjot Sangha, Finance Director Rosemary Guerrero, Finance Manager 11.6 p. 236 of 478 City of Gilroy Annual Comprehensive Financial Report For the Year Ended June 30, 2023 Table of Contents Page INTRODUCTORY SECTION (Unaudited) Letter of Transmittal ...................................................................................................................................................... i Elected Officials & City Staff ..................................................................................................................................... vii Organizational Chart .................................................................................................................................................. viii Map .............................................................................................................................................................................. ix GFOA Certificate of Achievement for Excellence in Financial Reporting .................................................................. x FINANCIAL SECTION Independent Auditors’ Report of the Financial Statements ................................................................................... 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ......................... 5 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position .............................................................................................................................. 20 Statement of Activities ................................................................................................................................... 22 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet .......................................................................................................................................... 29 Reconciliation of the Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ......................................................................... 30 Statement of Revenues, Expenditures, and Changes in Fund Balances ................................................................................................................ 31 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to the Government-Wide Statement of Activities ...................................................................................................................... 32 Proprietary Fund Financial Statements: Statement of Net Position ........................................................................................................................ 34 Statement of Revenues, Expenses, and Changes in Net Position ............................................................ 37 Statement of Cash Flows ......................................................................................................................... 38 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position ........................................................................................................ 43 Statement of Changes in Fiduciary Net Position ..................................................................................... 44 Notes to the Basic Financial Statements ........................................................................................................... 49 11.6 p. 237 of 478 City of Gilroy Annual Comprehensive Financial Report For the Year Ended June 30, 2023 Table of Contents (Continued) Page FINANCIAL SECTION (Continued) Required Supplementary Information (Unaudited) Schedule of Changes in the Net Pension Liability and Related Ratios– Last Ten Fiscal Years CalPERS Miscellaneous Plan ........................................................................................................................ 96 CalPERS Safety Plan ..................................................................................................................................... 98 Schedule of Plan Contributions - Pension – Last Ten Fiscal Years CalPERS Miscellaneous Plan ...................................................................................................................... 100 CalPERS Safety Plan ................................................................................................................................... 102 Schedule of Changes in the Net OPEB Liability and Related Ratios – Last Ten Fiscal Years ...................... 104 Notes to the Budgetary Comparison Schedules ................................................................................................ 107 Budgetary Comparison Schedules General Fund ................................................................................................................................................ 108 Supplementary Information: Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual: Public Facilities Impact Capital Projects Fund ............................................................................................ 113 Nonmajor Governmental Funds: Description of Nonmajor Governmental Funds ........................................................................................... 114 Combining Balance Sheet ............................................................................................................................ 116 Combining Statement of Revenues, Expenditures, and Changes in Fund Balances .................................... 124 Schedule of Revenues, Expenditures, and Changes in Fund Balance – Budget and Actual: Gas Tax Special Revenue Fund ............................................................................................................. 132 Pavement Management Special Revenue Fund ..................................................................................... 133 Public Safety Grants Special Revenue Fund ......................................................................................... 134 Prop 172 Sales Tax Special Revenue Fund ........................................................................................... 135 Community Development Block Grant Special Revenue Fund ............................................................ 136 Rehabilitation Loans Special Revenue Fund ......................................................................................... 137 Housing Trust Fund Special Revenue Fund .......................................................................................... 138 Community Facilities District Special Revenue Fund ........................................................................... 139 Measure B Special Revenue Fund ......................................................................................................... 140 Vehicle License Fee Special Revenue Fund .......................................................................................... 141 Los Arroyos Fund Special Revenue Fund ............................................................................................. 142 CalHome Funds Special Revenue Fund .............................................................................................. 143 11.6 p. 238 of 478 City of Gilroy Annual Comprehensive Financial Report For the Year Ended June 30, 2023 Table of Contents (Continued) Page Supplementary Information (Continued): Nonmajor Governmental Funds (Continued): Schedule of Revenues, Expenditures, and Changes in Fund Balances – Budget and Actual (Continued): Opioid Settlement Special Revenue Fund ............................................................................................. 144 Capital Projects Fund ............................................................................................................................ 145 Traffic Impact Capital Projects Fund .................................................................................................... 146 Storm Drains Capital Projects Fund ...................................................................................................... 147 Street Trees Development Capital Projects Fund .................................................................................. 148 Sewer Development Capital Projects Fund ........................................................................................... 149 Water Development Capital Projects Fund ........................................................................................... 150 Gilroy Community Library Capital Projects Fund ................................................................................ 151 Downtown Beautification Capital Projects Fund .................................................................................. 152 Stormwater Management Capital Projects Fund ................................................................................... 153 2013 Refunding Bond Debt Service Fund ............................................................................................. 154 Gilroy Community Library Debt Service Fund ..................................................................................... 155 CA Energy Commission Loan Debt Service Fund ................................................................................ 156 Lease Revenue Bonds Series 2020A Fund ............................................................................................ 157 Henry Miller Fund ................................................................................................................................. 158 Museum Trust Fund .............................................................................................................................. 159 Internal Service Funds: Combining Statement of Net Position.......................................................................................................... 162 Combining Statement of Revenues, Expenses and Changes in Net Position .............................................. 164 Combining Statement of Cash Flows ........................................................................................................... 166 Fiduciary Funds: Combining Statement of Fiduciary Net Position ......................................................................................... 171 Combining Statement of Changes in Fiduciary Net Position ...................................................................... 172 11.6 p. 239 of 478 City of Gilroy Annual Comprehensive Financial Report For the Year Ended June 30, 2023 Table of Contents (Continued) Page STATISTICAL SECTION (Unaudited) Description of Statistical Section Contents ............................................................................................................... 173 Financial Trends: Net Position By Component - Last Ten Fiscal Years ............................................................................................ 174 Changes in Net Position - Last Ten Fiscal Years .................................................................................................. 176 Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................................... 180 Changes in Fund Balances of Governmental Funds - Last Ten Fiscal Years ........................................................ 182 Revenue Capacity: Sales Tax by Category - Last Eleven Fiscal Years ................................................................................................ 184 Sales Tax Rates - Last Ten Fiscal Years ................................................................................................................ 187 Principal Sales Tax Producers – Last Fiscal Year and Nine Years Ago ................................................................ 188 Citywide Assessed Value and Estimated Actual Value of Taxable Property - Last Ten Fiscal Years .................. 189 Assessed Value of Property by Use Code - Last Five Fiscal Years ...................................................................... 191 Direct and Overlapping Property Tax Rates - Last Ten Fiscal Years .................................................................... 192 Principal Property Taxpayers – Last Fiscal Year and Nine Fiscal Years Ago ...................................................... 194 Property Tax Levies, and Tax Collections, and Delinquency - Last Ten Fiscal Years ......................................... 195 Debt Capacity: Ratios of Outstanding Debt by Type - Last Ten Fiscal Years ............................................................................... 196 Ratio of General Bonded Debt Outstanding - Last Ten Fiscal Years .................................................................... 198 Schedule of Direct and Overlapping Bonded Debt ................................................................................................ 199 Legal Debt Margin Information - Last Ten Fiscal Years ....................................................................................... 200 Wastewater System – Historical Debt Service Coverage Last Seven Fiscal Years ............................................... 202 Demographic and Economic Information: Demographic and Economic Statistics – Last Ten Fiscal Years ........................................................................... 205 Principal Employers – Last Fiscal Year and Eight Years Ago .............................................................................. 206 Operating Information: Full-Time Equivalent City Employees By Function/Program – Last Ten Fiscal Years ........................................ 207 Operating Indicators by Function / Program – Last Ten Fiscal Years ................................................................... 208 Capital Assets By Function – Last Ten Fiscal Years ............................................................................................. 210 11.6 p. 240 of 478 INTRODUCTORY SECTION 11.6 p. 241 of 478 11.6 p. 242 of 478 CITY ADMINISTRATOR’S OFFICE 7351 Rosanna Street Gilroy, CA 95020 Telephone (408) 846-0202 Facsimile (408) 846-0500 http://www.ci.gilroy.ca.us February 20, 2024 To the Honorable Mayor, Members of the City Council, and Citizens of Gilroy: The City of Gilroy’s (City) Charter requires that the City publish a complete set of audited financial statements for each fiscal year. This report is published to fulfill that requirement for the fiscal year ended June 30, 2023. This Annual Comprehensive Financial Report (ACFR) is submitted for your information and review. The information contained herein has been provided to allow the reader to gain an understanding of Gilroy’s financial activities. Management assumes full responsibility for the completeness and reliability of the information contained in this report. The Management Discussion and Analysis (MD&A) is included to assist the reader in its review of the City’s financial statements. It provides a roadmap for the financial statements and related notes. To provide a reasonable basis for making these representations, the management of the City has established a comprehensive framework of internal controls that is designed to both protect the government’s assets from loss, theft or misuse and to compile sufficient reliable information for the preparation of the City’s financial statements in conformity with U.S. Generally Accepted Accounting Principles (GAAP). Because the cost of internal controls should not outweigh their benefits, the City’s comprehensive internal controls framework has been designed to provide reasonable, rather than absolute assurance, that the financial statements will be free from material misstatements. Management is committed to maintaining the City’s internal controls to adequately safeguard assets and provide reasonable assurances of proper recording of financial transactions. The Pun Group LLP, Certified Public Accountants, have issued an unmodified (“clean”) opinion on Gilroy’s financial statements for the year ended June 30, 2023. The independent auditor’s report is located at the beginning of the financial section of this report. The MD&A immediately follows the independent auditor’s report and provides a narrative introduction, overview, and analysis of the basic financial statements. Profile of the government The City is the southernmost city in Santa Clara County, approximately 25 miles south of San Jose and about 75 miles south of San Francisco. Gilroy sits at the crossing of U.S. Highway 101 and State Highway 152. The City was first incorporated in 1870 and became a charter city on January 8, 1960. Per the California Department of Finance’s annual demographic report for 2023, as of January 1, 2023, the City had a population estimate of 60,078. Situated between the Diablo and Santa Cruz mountains in the Santa Clara Valley, the City experiences mild temperatures, while missing most of the coastal fog. The agricultural growing season ranges from 300 to 350 days a year. Over the past few decades, the City has been transitioning from an agricultural economy into a light-industrial and services-based economy. i 11.6 p. 243 of 478 The City operates under the Council Administrator form of government. The seven City Council members, including the Mayor, are elected-at-large to four-year terms in alternate slates of three elected every two years, and the Mayor being elected every four years. The City Council appoints the City Administrator, who heads the executive branch of the government, implements City Council directives and policies, and manages the administrative and operational functions through the department directors. The City Administrator appoints the department directors, except for the City Clerk and the City Attorney, which are appointed by the City Council. The city's budget is a detailed operating and capital improvement plan that identifies estimated costs and activities related to estimated revenues. The City Administrator submits to the City Council a proposed biennial budget for all funds, and the Council then proceeds to make any changes to the proposed budget it deems necessary. Before adopting the proposed budget, the Council holds a public hearing. After the conclusion of the public hearing, the Council may make further revisions to the proposed budget. Thereafter, the Council adopts the budget with revisions, if any. Once adopted, the City Council may make further changes to the budget via budget amendments adopted by a resolution. In addition to the primary government, the City also reports on a Component Unit, the South County Regional Wastewater Authority, a joint powers agreement between the City of Gilroy and the City of Morgan Hill for the sewer treatment plant. The City is a full-service city. It provides municipal services, including public safety (police and fire), community and economic development, recreation activities, parks and street maintenance, water and sewer utilities, and general City administration. Some City operations are supplemented with service contracts, such as legal services and infrastructure maintenance services. Pacific Gas and Electric Company provides natural gas and electricity. The City provides water service. Wastewater is collected and treated by the South County Regional Wastewater Authority. Recycling and solid waste disposal services are provided in the city by Recology South Valley. The City is committed to citizen participation in evaluating and enhancing its services. This is achieved via direct community engagement and the City Council’s advisory boards, commissions, and ad-hoc committees. Economic Setting and Outlook Gilroy’s economy has been dominated by agriculture and its related industries (food processing, etc.) since the 1800s. However, the growing influence of Silicon Valley and regional population growth have resulted in significant changes in the local economy during the past twenty years. The economic boom in Silicon Valley, which began in the early 1990s, had profound impacts on the local economy, resulting in significant increases in home prices and land values as well as significant decreases in local unemployment. The COVID-19 pandemic fueled a crisis in the housing market, sending demand and prices for homes soaring to all-time highs in an already supply-tight market. Today, Gilroy’s economy is diversified into non-agricultural commercial and industrial activities such as light manufacturing, wholesale operations, automobile sales, and large retail centers. The Gilroy Outlets, Auto Mall area, and retail developments east of Highway 101 have put the City on the map as a regional retail destination and helped strengthen the City’s tax revenues. Manufacturing and wholesale/distribution operations take advantage of Gilroy’s proximity to Silicon Valley and easy access to Highway 152, leading to Interstate 5 and the Central Valley. Development activity has also been active in the commercial sector in southeast Gilroy, near Hwy 152, east of 101. Various industrial and warehouse developments anticipate adding jobs to Gilroy. A new retail center at 10th Street and Chestnut Street will include a five-story, 112-room hotel, three restaurants with drive- ii 11.6 p. 244 of 478 through, a convenience store, a gas station, a carwash, and intersection improvements at 10th Street and Chestnut. These commercial developments provide the City with millions of square feet of retail and professional services space. Overall, the City’s economic outlook is projected to remain stable in the near-term. Over the last two years, the city’s finances have stabilized with healthy reserve levels due to strong economic recovery from the COVID-induced recession and the unprecedented economic stimulus provided by the federal government. In 2022, the Federal Reserve adjusted its monetary policy to raise federal fund interest rates to curb high inflation. This shift is the economic policy that remained intact during 2023, where the Federal Reserve increased the federal funds rate from nearly 0% to over 5%. The higher interest rate environment has impacted consumer spending and curbed typically financed business investments. Evidence shows that the Federal Reserve’s adjusted policy is achieving its goal to curb inflation and restoring price stability. Compared to the December 2022 consumer price index (CPI) inflation, CPI inflation fell by 3.1%, from 6.5% in December 2022 to 3.4% in December 2023. Core inflation, which excludes volatile food and energy prices, was 3.9% in December 2023, down 1.8% from its 12-month December 2022 rate of 5.7%. While the inflation stands above the Federal Reserve’s target of 2%, some economics predict that the Federal Reserve has reached the peak in its current cycle of rate hikes and that a weakening economy in 2024 will initiate a mild easing of the federal funds rate by the fourth quarter of 2024, followed by additional easing into 2025. The General Fund is the most discretionary funding source and funds most of the City’s public services. The General Fund’s primary source of revenues is taxes, including sales, property, utility, franchise, and transient occupancy taxes. The chart below depicts these significant tax revenues and their year-over-year change for five years. Additionally, the top two sources are further discussed below. $20.2 $17.2 $18.3 $21.6 $21.0 $14.5 $15.6 $17.0 $17.9 $19.2 $4.7 $5.2 $4.4 $5.5 $6.6 $1.7 $1.9 $1.7 $1.9 $2.2 $1.8 $1.2 $1.1 $1.5 $1.8 $- $10.0 $20.0 $30.0 $40.0 $50.0 $60.0 Actual Actual Actual Actual Actual FY 2019 FY 2020 FY 2021 FY 2022 FY 2023Millions Sales Tax Property Tax Utility User Tax Franchise Tax Trasient Occupancy Tax Other Tax iii 11.6 p. 245 of 478 Sales tax is the largest single source, approximately 32% of total General Fund revenues in FY23, and is very volatile as it relies directly on consumers’ discretionary spending. Sales tax revenue rebounded quickly in the preceding two years as the pandemic-related measures were lifted and economic activity resumed; however, sales tax revenue of $21.0 million in FY23 was $0.6 million lower, or down 3%, compared to FY22’s revenue of $21.6 million, which was a record high. The City’s FY24 budgeted sales tax revenue is $21.8 million and is currently projected to come in at $20.7 million, approximately, $1.1 million, or about 5%, under budget notably due to slowdown in consumer spending in the general retail, construction, and County pool (online sales) sales tax categories. Property tax is the second largest source, approximately 30% of total General Fund revenues in FY23, and has had steady growth, 7% on average, over the last four years. Property tax revenues totaled $19.2 million, an increase of $1.3 million, or 7%, from the prior year’s $17.9 million. In FY24, the property tax revenue is projected to come in at the budgeted $20.4 million, approximately 6% higher than in FY23. The increases are due to a combination of new developments added to the assessment roll, annual CPI adjustments to assessed values pursuant to Proposition 13, and Excess Education Revenue Augmentation Fund (ERAF) distribution. The City’s General Fund’s primary expenditure is related to personnel. At the beginning of FY23, the City Council approved various multi-year labor contracts focusing on recruitment and retention, which helps provide stability for the employees and the organization overall and helps to project and budget for the planned increases for the next two fiscal years. In addition, during FY23, the City initiated the first automatic CPI adjustment, 4.2%, to its citywide user fee schedule to ensure it can continue to recoup the costs of providing certain services. As previously mentioned, the City also provides water and wastewater utility to its residents. The utilities are funded by rates assessed as charges for services to the customers. The rates were last adjusted in 2019. During FY23, the City engaged a consultant to conduct a comprehensive water and wastewater rate study for both utilities. Subsequently, in October 2023, the City Council approved multi-year rate adjustments for both utilities, commencing on January 1, 2024, with annual increases thereafter for five years. The rates are projected to keep both utilities fiscally sound, keep up with the operational costs, and make the necessary capital investments in the aging infrastructure. Fiscal Year 2023 (FY23) Financial Results The City as a whole ended the FY23 with an operating gain, resulting in a change in net position of $8.1 million. The City’s net pension liabilities increased by $43 million to $103.7 million. The increase in the liabilities was primarily driven by negative investment earnings and higher interest costs on total pension liability which decreased the pension plans’ fiduciary net position during the measurement year. In the General Fund, the revenues for FY23 were $2.3 million better than budget, primarily due to higher than projected investment income attributed to the rapid increase in interest rate environment, increased revenues from taxes (property and utility user), and charges for services during the fiscal year. Additionally, expenditures were $3.5 million lower than budget, primarily related to capital outlay, which will carry into the next fiscal year, and additional operational savings across all departments. Excluding transfers, the revenues exceeded the expenditure by $3.6 million, resulting in a net increase in fund balance for the General Fund of $4.0 million to $41.9 million. iv 11.6 p. 246 of 478 Revitalization and Capital Improvements Commercial development in specific corridors in Gilroy has added millions of square feet of retail and professional services space to the City. Downtown revitalization efforts have helped attract new businesses, retained existing businesses, and created a core area of antique stores, specialty shops, and restaurants. Restored historic buildings also add to the downtown’s character, including the Old City Hall and the Train Depot. However, some vacant storefronts persist, and the city continues to focus additional efforts on revitalizing these spaces by offering economic incentives to the property and the business owners. Through FY23, the City Council continued its commitment to revitalizing the downtown area to make façade improvements, implementing a blight removal program, and forming a City Council downtown committee. The Council also authorized several surplus lands act declarations on city-owned properties to allow future development of those real estate assets via strategic partnerships or sales. In addition, a few key projects were completed or initiated during the year, notably the completion of the Downtown Gourmet Parking Lot – 140 surface parking spaces with electric vehicle charging infrastructure - $2.3 million budget, completion of FY22 Citywide Pavement Rehabilitation Project – $4.5 million budget, and award of FY23 Citywide Pavement Rehabilitation Project - $6.7 million budget. The City also took action to commence the design of an indoor, two-rink ice facility at the Gilroy Sports Park in partnership with Sharks Sports and Entertainment LLC. The City’s capital improvement plan (CIP) provides a 5-year window for projects to be completed within the CIP horizon. The primary funding source is capital project funds - which derive revenues from development impact fees, and special revenue funds – which derive revenues from intergovernmental grants and tax- sharing allocations, such as gas taxes. In addition, the City has contributed General Fund dollars to augment the City’s annual pavement rehabilitation program in recent years. The current five-year CIP program was adopted on June 5, 2023, focusing on significant utilities infrastructure improvements based on the updated 2023 water and wastewater master plan. Long-term Financial Planning General Fund The City’s general fund balance as of June 30, 2023, was $41.9 million. The City Council adopted a general fund reserve policy of retaining a general fund reserve equal to 20% of annual general fund expenditures. The policy adopted a separate economic stability reserve used only for limited purposes, at 10% of general fund expenditures. The City prepares a five-year forecast for the fund, which projects the operating revenues and expenditures. The current forecast projects the City to maintain reserve requirements for several years. However, there are signs of an overall slowdown in the economy as it returns to normalcy, which may require adjustments in future budget cycles to ensure the fund remains structurally balanced. The City adopted its FY24 and FY25 budget on June 5, 2023. As previously mentioned, the City accumulated healthy reserve levels over the past two years. As such, the adopted FY24 and FY25 budgets were crafted in a manner that uses the accumulated fund balances and cautiously plans for new service level enhancements. The budget includes significant one-time investments for street pavement rehabilitation, critical public safety equipment, improvements to various public facilities, and long-term master planning initiatives. Enterprise Fund The total net position of the Sewer Fund increased by $1.2 million, to $106.2 million from the prior fiscal year. The unrestricted net position of the Sewer Fund at the end of the year amounted to $104.3 million, an increase of $19.0 million, or about 22%, from the prior year, offset by a decrease in net investment in capital assets of approximately $17.8 million mainly due to drawdown of the 2021A bond proceeds to finance City’s share of the South County Regional Wastewater Treatment plant expansion project. v 11.6 p. 247 of 478 The total net position of the Water Fund increased by $2.6 million, to $80.2 million from the prior fiscal year. The unrestricted net position of the Water Fund at the end of the year amounted to $26.0 million, an increase of $2.0 million, or about 8%, from the prior year. The net investment in capital assets increased by $0.6 million to $54.2 million. In October 2023, the City Council adopted the comprehensive water and sewer utilities rate study and enacted the recommended rate adjustments. The study includes the establishment of operational and capital rehabilitation/replacement. Reserves. As such, both utilities maintain six months of operating expenses as an operational reserve and a 50% of the average annual capital improvement program over the five-year period as a capital reserve. Both utilities are projected to maintain respective reserves for the five- year rate adjustment period. Award and Acknowledgements The Government Finance Officers Association (GFOA) awarded a Certificate of Achievement for Excellence in Financial Reporting to the City of Gilroy for its annual comprehensive financial report for the fiscal year ended June 30, 2023. This was the nineteenth consecutive year that the City achieved this prestigious award. To be awarded a Certificate of Achievement, the City had to publish an easily readable and efficiently organized ACFR that satisfied both generally accepted accounting principles and applicable program requirements. A Certificate of Achievement for Excellence in Financial Reporting is valid for a period of one year only. We believe that our FY23 ACFR meets the Certificate of Achievement for Excellence in Financial Reporting Program’s requirements and are submitting the FY23 ACFR to the GFOA to determine its eligibility for another certificate. The preparation of this report would not have been possible without the skill, diligence, and commitment of the entire Finance Department staff, specifically Finance Manager Rosemary Guerrero. We wish to thank all departments for their assistance in providing the data necessary to prepare this report. Credit is also due to the Mayor and the City Council for their continuing support for maintaining the highest standards of professionalism in managing Gilroy’s finances and prioritizing financial sustainability. Respectfully submitted, Jimmy Forbis Harjot Sangha City Administrator Finance Director vi 11.6 p. 248 of 478 City of Gilroy Elected Officials & City Staff As of Fiscal Year-End - June 30, 2023 ELECTED OFFICIALS Marie Blankley Mayor Dion Bracco Mayor Pro Tempore Rebeca Armendariz Council Member Tom Cline Council Member Zach Hilton Council Member Carol Marques Council Member Fred Tovar Council Member EXECUTIVE STAFF Jimmy Forbis City Administrator Sharon Goei Community Development Director Harjot Sangha Finance Director Jim Wyatt Fire Chief LeeAnn McPhillips Assistant City Administrator/Administrative Services and Human Resources Director Pedro Espinoza Police Chief Karl Bjarke Interim Public Works Director Bryce Atkins Assistant to the City Administrator vii 11.6 p. 249 of 478 ORGANIZATION CHART Gilroy CommunityCity CouncilCity AttorneyCity AdministratorCommunity DevelopmentPublic WorksAdministrative ServicesFinancePoliceFireCity Clerkviii 11.6 p. 250 of 478 ix 11.6 p. 251 of 478 Government Finance Officers Association Certificate of Achievement for Excellence in Financial Reporting Presented to City of Gilroy California For its Annual Comprehensive Financial Report For the Fiscal Year Ended June 30, 2022 Executive Director/CEO x 11.6 p. 252 of 478 FINANCIAL SECTION 11.6 p. 253 of 478 11.6 p. 254 of 478 200 E. Sandpointe Avenue, Suite 600 Santa Ana, California 92707 INDEPENDENT AUDITORS’ REPORT To the Honorable Mayor and the Members of the City Council of the City of Gilroy Gilroy, California Report on the Audit of the Financial Statements Opinions 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 City of Gilroy, California (the “City”) as of and for the year ended June 30, 2023, and the related notes to the basic financial statements, which collectively comprise the City’s basic financial statements as listed in the table of contents. In our opinion, the financial statements referred to above present fairly, in all material respects, the respective financial position of the governmental activities, the business-type activities, the discretely presented component unit (“DCU”), each major fund, and the aggregate remaining fund information of the City, as of June 30, 2023, 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. Basis for Opinions We conducted our audit in accordance with auditing standards generally accepted in the United States of America and the standards applicable to financial audits contained in Government Auditing Standards, issued by the Comptroller General of the United States. Our responsibilities under those standards are further described in the Auditors’ Responsibilities for the Audit of the Financial Statements section of our report. We are required to be independent of the City, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audits. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Emphasis of Matter Implementation of New GASB Pronouncements As discussed in Note 1 and Note 19 to the basic financial statements, the City implemented Governmental Accounting Standards Board (“GASB”) Statement No. 96, Subscription Based Information Technology Arrangements during the year. The implementation of GASB Statement No. 96 requires the City to record subscription assets and corresponding subscription liabilities for all SBITAs with a noncancellable term over one year. As a result of the implementation, the City reported a restatement of its net position in the amount of $377,925. Our opinion is not modified with respect to this matter. 11.6 p. 255 of 478 To the Honorable Mayor and the Members of the City Council of the City of Gilroy Gilroy, California Page 2 2 Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for twelve months beyond the financial statement date, including any currently known information that may raise substantial doubt shortly thereafter. Auditors’ Responsibilities for the Audit of the Financial Statements Our objectives are to obtain reasonable assurance about whether the financial statements as a whole are free from material misstatement, whether due to fraud or error, and to issue an auditors’ report that includes our opinions. Reasonable assurance is a high level of assurance but is not absolute assurance and therefore is not a guarantee that an audit conducted in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with auditing standards generally accepted in the United States of America and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the City’s internal control. Accordingly, no such opinion is expressed.  Evaluate the appropriateness of accounting policies used and the reasonableness of significant accounting estimates made by management, as well as evaluate the overall presentation of the financial statements.  Conclude whether, in our judgment, there are conditions or events, considered in the aggregate, that raise substantial doubt about the City’s ability to continue as a going concern for a reasonable period of time. We are required to communicate with those charged with governance regarding, among other matters, the planned scope and timing of the audit, significant audit findings, and certain internal control-related matters that we identified during the audit. 11.6 p. 256 of 478 To the Honorable Mayor and the Members of the City Council of the City of Gilroy Gilroy, California Page 3 3 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, the Schedules of Changes in Net Pension Liability and Related Ratios, the Schedules of Contributions – Pensions, the Schedule of Changes in Net Other Postemployment Benefits Liability and Related Ratios, and the Schedule of Contributions – Other Postemployment Benefits, as listed in the table of contents, be presented to supplement the basic financial statements. Such information is the responsibility of management and, although not a part of the basic financial statements, is required by the Governmental Accounting Standards Board who considers it to be an essential part of financial reporting for placing the basic financial statements in an appropriate operational, economic, or historical context. We have applied certain limited procedures to the required supplementary information in accordance with auditing standards generally accepted in the United States of America, which consisted of inquiries of management about the methods of preparing the information and comparing the information for consistency with management’s responses to our inquiries, the basic financial statements, and other knowledge we obtained during our audit of the basic financial statements. We do not express an opinion or provide any assurance on the information because the limited procedures do not provide us with sufficient evidence to express an opinion or provide any assurance. Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the City’s basic financial statements. The Combining and Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are presented for purposes of additional analysis and are not a required part of the basic financial statements. Such information is the responsibility of management and was derived from and relates directly to the underlying accounting and other records used to prepare the basic financial statements. The information has been subjected to the auditing procedures applied in the audit of the basic financial statements and certain additional procedures, including comparing and reconciling such information directly to the underlying accounting and other records used to prepare the basic financial statements or to the basic financial statements themselves, and other additional procedures in accordance with auditing standards generally accepted in the United States of America. In our opinion, based on our audit, the Combining and Individual Nonmajor Fund Financial Statements and Budgetary Comparison Schedules are fairly stated, in all material respects, in relation to the basic financial statements as a whole. Other Information Management is responsible for the other information included in the annual report. The other information comprises the Introductory and Statistical Sections but does not include the basic financial statements and our auditors’ report thereon. Our opinions on the basic financial statements do not cover the other information, and we do not express an opinion or any form of assurance thereon. In connection with our audit of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. 11.6 p. 257 of 478 To the Honorable Mayor and the Members of the City Council of the City of Gilroy Gilroy, California Page 4 4 Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated February 20, 2024, on our consideration of City’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is solely to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on the effectiveness of City’s internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering City’s internal control over financial reporting and compliance. Santa Ana, California February 20, 2024 11.6 p. 258 of 478 5 This page intentionally left blank. 11.6 p. 259 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) For the Year Ended June 30, 2023 5 The following discussion and analysis of the financial performance of the City of Gilroy (the “City”) provides an overview of the City’s financial activities for the fiscal year ended June 30, 2023 (FY23). Please read it in conjunction with the financial statements identified in the accompanying table of contents. Using the Accompanying Financial Statements This annual report consists of a series of financial statements. The government-wide financial statements, which include Statement of Net Position and the Statement of Activities, provide information about the activities of the City as a whole and about overall financial condition of the City in a manner similar to a private sector business. Also included in the accompanying report are fund financial statements. For governmental activities, the fund financial statements tell how these services were financed in the short term as well as what remains for future spending. Fund financial statements also report the City’s operations in more detail than the government-wide statements by providing information about the City’s most significant funds. The remaining statements provide financial information about activities for which the City acts solely as a trustee or agent for the benefit of those outside of the government. Notes to the Basic Financial Statements The notes provide additional information that is essential to a full understanding of the data provided in the government- wide and fund financial statements. FINANCIAL HIGHLIGHTS • During FY23, the City’s overall net position, representing the difference between total assets plus deferred outflows of resources of the City, and total liabilities plus deferred inflows of resources, increased by $8.5 million to $381.8 million. Of the total net position, $100.7 million, or about 26%, remains unrestricted, which can be utilized for future spending or obligations, and the majority of the remaining, about 54%, consists of net investment in capital assets. Additional details can be found in the Statement of Net Position on page 20. • Total citywide revenues were $113.3 million, a net decrease of $10.5 million from the prior fiscal year. The net decrease in revenue is primarily in the operating and capital grants within the governmental activities, offset by increases in tax revenues (property and utility user taxes), and investment income. It is important to note that the operating and capital grants and contributions were notably higher in the prior fiscal year due to the American Rescue Plan Act (ARPA) funding the City received, and increased development related capital contributions in the form of development impact fees. • Total citywide expenses were $105.2 million, a net increase of $7.4 million from the prior fiscal year. The increases were primarily in public safety and public works operations. • As of June 30, 2023, the City’s governmental funds reported a combined ending fund balance of $115.5 million, an increase of 4%, or $4.4 million, from the prior fiscal year. • The fund balance in the City’s General Fund increased by $4.0 million to $41.9 million, primarily from increases in tax revenues (property and utility user), charges for services, and investment income. During FY23, the General Fund had an excess of revenues over expenditures of $3.6 million, excluding transfers. • Actual revenues, excluding transfers, in the General Fund were $65.7 million, $2.3 million better than the final budget, primarily due to increased revenues from taxes, charges for services, and better than projected investment income attributed to the rapid increase in interest rate environment during the fiscal year. • Actual expenditures, excluding transfers, in the General Fund were $62.1 million, $3.5 million less than the final budget, primarily related to capital outlay and additional operational savings across all departments. 11.6 p. 260 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 6 •As of June 30, 2023, the City had $105.4 million in long-term debt, a net decrease of $6.3 million from the prior fiscal year. Of the total, governmental activities long-term debt portion is $52.9 million, consisting of $23.5 million in general obligation bonds, $28.2 million in lease revenue bonds, a loan payable of $0.7 million, and subscriptions payable of $0.6 million. The remaining $52.5 million is for business-type activities in the form of sewer revenue bonds. During the fiscal year, the City refinanced its Lease Revenue Bonds 2013 series in the amount of $14.6 million. The refunding resulted in $2.6 million savings in future debt service payments, with an economic gain of $2.1 million. •The City’s net pension liabilities increased by $43 million to $103.7 million. The increase in the liabilities was primarily driven by negative investment earnings and higher interest costs on total pension liability which decreased the plans’ fiduciary net position during the measurement year. As a result, the deferred outflows related to pension for governmental activities increased by $17.0 million, and deferred inflows decreased by $20.0 million. See Note 11 in the Notes to Basic Financial Statements for details. •The City’s other post‐employment benefit (OPEB) liabilities decreased by $3.5 million to $14.5 million. The decrease in the liabilities was primarily driven by the change in the assumption of a higher discount rate. See Note 12 in the Notes to Basic Financial Statements for details. •The City implemented Governmental Accounting Standards Board (GASB) Statement No. 96, Subscription‐Based Information Technology Arrangements (SBITA), effective fiscal year ended June 30, 2023. See Note 10 in the Notes to Basic Financial Statements for details. OVERVIEW OF THE FINANCIAL STATEMENTS The annual report consists of four parts – management’s discussion and analysis (this section), the basic financial statements, required supplementary information, and a supplementary information section that presents combining statements for nonmajor governmental funds, internal service funds and fiduciary funds. The basic financial statements include two kinds of statements that present different views of the City: •The first two statements are government-wide financial statements that provide both long-term and short-term information about the City’s overall financial status. •The remaining statements are fund financial statements that focus on individual parts of the City government, reporting the City’s operations in more detail than the government-wide statements. •The governmental funds statements tell how general government services like public safety were financed in the short term as well as what remains for future spending. •Proprietary funds statements offer short-term and long-term financial information about the activities the government operates like businesses, such as the water and sewer system. •Fiduciary funds statements provide information about the fiduciary relationships – like the custodial funds of the City – in which the City acts solely as agent or trustee for the benefit of others, to whom the resources in question belong. The financial statements also include notes that explain some of the information in the financial statements and provide more detailed data. The statements are followed by a section of required supplementary information that provides additional financial and budgetary information. Figure A-1 summarizes the major features of the City’s financial statements, including the portion of the City government they cover and the types of information they contain. The remainder of this overview section of management’s discussion and analysis explains the structure and contents of each of the statements. 11.6 p. 261 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 7 Figure A-1 Major Features of the City’s Government-wide and Fund Financial Statements ` Fund Statements Government-wide Statements Governmental Funds Proprietary Funds Fiduciary Funds Scope Entire City government (except fiduciary funds) The activities of the City that are not proprietary or fiduciary Activities the City operates similar to private businesses Instances in which the City is the trustee or agent for someone else’s resources Required financial statements •Statement of net position •Statement of activities •Balance sheet •Statement of revenues, expenditures and changes in fund balances •Statement of net position •Statement of revenues, expenses and changes net position •Statement of cash flows •Statement of fiduciary net position •Statement of change in fiduciary net position Accounting basis and measurement focus Accrual accounting and economic resources focus Modified accrual accounting and current financial resources focus Accrual accounting and economic resources focus Accrual accounting and economic resources focus Type of asset/ liability information All assets, deferred outflows of resources and liabilities, both financial and capital, and short-term and long-term Only assets expected to be used up and liabilities and deferred inflows of resources that come due during the year or soon thereafter; no capital assets or long-term debt included All assets, deferred outflows of resources and liabilities, both financial and capital, and short-term and long-term All assets and liabilities, both short- term and long-term; the City’s fiduciary funds do not currently contain capital assets, although they can Type of inflow/ outflow information All revenues and expenses during year, regardless of when cash is received or paid Revenues for which cash is received during or soon after the end of the year; expenditures when goods or services have been received and payment is due during the year or soon thereafter All revenues and expenses during the year, regardless of when cash is received or paid All revenues and expenses during the year, regardless of when cash is received or paid 11.6 p. 262 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 8 Reporting the City as a Whole The accompanying government-wide financial statements include two statements that present financial data for the City as a whole. One of the most important questions asked about the City’s finances is, “Is the City as a whole better off or worse off as a result of the year’s activities?” The Statement of Net Position and the Statement of Activities report information about the City as a whole and about its activities in a way that helps answer this question. These statements include all assets, deferred outflows of resources and liabilities using the accrual basis of accounting, which is similar to the accounting used by most private-sector companies. All the current year’s revenues and expenses are considered regardless of when cash is received or paid. These two statements report on the City’s net position and changes in them. The City’s net position – the difference between assets, deferred inflows/outflows of resources and liabilities – can be considered one way to measure the City’s financial health, or financial position. Over time, increases and decreases in the City’s net position are one indicator of whether its financial health is improving or deteriorating. Other things to consider include other nonfinancial factors, such as changes in the City’s property tax base and the condition of the City’s roads, to assess the overall health of the City. In the Statement of Net Position and the Statement of Activities, we divide the City into two kinds of activities: •Governmental activities - Most of the City’s basic services are reported here. Sales taxes, property taxes, and other revenues finance most of these activities. •Business-type activities - The City charges a fee to customers to help it cover all or most of the cost of the services accounted for in these funds. Reporting the City’s Major Funds The fund financial statements provide detailed information about the City’s most significant funds – not the City as a whole. Some funds are required to be established by State law or by bond covenants. However, City Council establishes many other funds to help it control and manage money for particular purposes or to show that it is meeting administrative responsibilities for using certain taxes, grants, or other money (such as grants received). The City’s two kinds of funds – governmental and proprietary – use different accounting approaches. •Governmental funds - Most of the City’s basic services are reported in governmental funds, which focus on how money flows into and out of those funds and the balances left at year end that are available for spending. These funds are reported using an accounting method called modified accrual accounting, which measures cash and all other current financial assets that can readily be converted to cash. The governmental fund statements provide a detailed short-term view of the City’s general government operations and the basic services it provides. Governmental fund information helps you determine whether there are more or fewer financial resources that can be spent in the near future to finance the City’s programs. We describe the relationship or differences between governmental activities (reported in the Statement of Net Position and the Statement of Activities) and governmental funds in reconciliations following the fund financial statements. •Proprietary funds - When the City charges customers for the services it provides - whether to outside customers or to other units of the City - these services are generally reported in proprietary funds. Proprietary funds are reported in the same way that all activities are reported in the Statement of Net Position and the Statement of Activities. In fact, the City’s enterprise funds (a component of proprietary funds) are the same as the business- type activities we report in the government-wide statements but provide more detail and additional information, such as cash flows for proprietary funds. We use internal service funds (the other component of proprietary funds) to report activities that provide supplies and services for the City’s other programs and activities. 11.6 p. 263 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 9 Reporting the City’s Fiduciary Responsibilities The City is an agent for certain assets held for, and under the control of, other organizations and individuals. All of the City’s fiduciary activities are reported in a separate Statement of Fiduciary Net Position and Changes in Fiduciary Net Position. We exclude these activities from the City’s other financial statements because the City cannot use these assets to finance its operations. The City is responsible for ensuring that the assets reported in these funds are used for their intended purposes. The City currently serves as a fiduciary agent for various funds; however, pursuant to GASB 84 - which qualifies fiduciary activities for accounting and reporting purposes, only the following two funds are reported as fiduciary Funds in the Financial Statement. Other funds are reported as non-major funds or are grouped with the General Fund for Financial Statement purposes. • Senior Advisory Board. The Senior Advisory Board fund is used to account for revenues generated from fundraising and donations. The funds are used to buy equipment and supplies for the Senior Center. • Highway 152 Series 2018. fund is used to account for special assessments collected to pay the bonded indebtedness for the Highway 152 Series 2018 Assessment District Bonds. GOVERNMENT-WIDE FINANCIAL STATEMENTS Figure 1: A summary of the government-wide statement of net position (in millions) follows: 11.6 p. 264 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 10 2023 2022 2023 2022 2023 2022 Assets Cash and investments $ 136.7 $ 131.6 $ 79.6 $ 91.1 $ 216.3 $ 222.7 Other assets 18.7 17.9 93.7 77.9 112.4 95.8 Capital assets 202.4 202.8 83.1 84.0 285.5 286.8 Total Assets 357.8 352.3 256.4 253.0 614.2 605.3 Deferred outflows Related to pension 28.7 11.6 3.3 1.3 32.0 12.9 Related to OPEB 2.2 2.6 0.4 0.5 2.6 3.1 Total Deferred Outflows 30.9 14.2 3.7 1.8 34.6 16.0 Liabilities Other Liabilities 18.4 15.3 6.1 5.2 24.5 20.5 Long term liabilities 161.8 130.2 66.4 63.5 228.2 193.7 Total Liabilities 180.2 145.5 72.5 68.7 252.7 214.2 Deferred inflows Deferred gain on refunding 0.5 - - - 0.5 - Related to pension 1.1 21.1 0.2 3.0 1.3 24.1 Related to OPEB 5.1 2.7 1.0 0.5 6.1 3.2 Related to leases 6.3 6.6 - - 6.3 6.6 Total Deferred Inflows 13.0 30.4 1.2 3.5 14.2 33.9 Net Position Net investment in capital assets 149.5 147.1 56.1 73.4 205.6 220.5 Restricted 73.0 71.6 - - 73.0 71.6 Unrestricted (deficit) (27.0) (28.0) 130.3 109.2 103.3 81.2 Total Net Position $ 195.5 $ 190.7 $ 186.4 $ 182.6 $ 381.9 $ 373.3 Governmental Activities Business-Type Activities Total 11.6 p. 265 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 11 Figure 2: A summary of the government-wide statement of activities follows: Changes in Net Position (In millions) The increase or decrease in net position can provide an indication as to whether the overall position of the City improved or deteriorated during the year. 2023 2022 2023 2022 2023 2022 Revenues Program revenues: Charges for services 10.6$ 10.3$ 26.3$ 26.9$ 36.9$ 37.2$ Operating grants and contributions 8.7 15.5 - 0.4 8.7 15.9 Capital grants and contributions 7.2 18.2 0.6 0.6 7.8 18.8 General revenues: Taxes:- - - - Property taxes 21.6 20.3 - - 21.6 20.3 Sales taxes 22.9 23.2 - - 22.9 23.2 Transient occupancy taxes 1.8 1.5 - - 1.8 1.5 Franchise taxes 2.2 1.9 - - 2.2 1.9 Utility user taxes 6.6 5.5 - - 6.6 5.5 Real property transfer taxes 0.4 0.6 - - 0.4 0.6 Investment income/(loss)3.4 (0.4) (0.4) (4.0) 3.0 (4.4) Miscellaneous income/(loss)1.4 3.3 - - 1.4 3.3 Total revenues 86.8 99.9 26.5 23.9 113.3 123.8 Expenses: General government 10.4 10.2 - - 10.4 10.2 Public safety 42.8 38.7 - - 42.8 38.7 Public works 17.3 13.8 - - 17.3 13.8 Community development 7.0 7.7 - - 7.0 7.7 Recreation services 1.8 1.6 - - 1.8 1.6 Interest expense 2.2 2.1 - - 2.2 2.1 Water - - 11.6 10.9 11.6 10.9 Sewer - - 12.1 12.7 12.1 12.7 Total expenses 81.5 74.1 23.7 23.6 105.2 97.7 Change in net position before transfers 5.3 25.8 2.8 0.3 8.1 26.1 Transfers (0.9) (0.1) 0.9 0.1 - - Change in net position 4.4 25.7 3.7 0.4 8.1 26.1 Net position, beginning of year as restated (Note 19)191.1 164.9 182.6 182.3 373.7 347.2 Net position, end of year 195.5$ 190.7$ 186.4$ 182.6$ 381.9$ 373.3$ Business-Type Activities TotalGovernmental Activities 11.6 p. 266 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 12 Governmental Activities: Figure 1 – Statement of Net Position illustrates the total net position increased by $4.4 million compared to the prior year, primarily in net investment in capital assets. Total asset’s increased by $5.5 million in the form of cash and investments. Total liabilities increased by $34.7 million, attributable to the increase in pension liabilities driven by negative investment earnings and higher interest costs on the total pension liability. Figure 2 – Statement of Activities illustrates the program level revenues and expenses for the fiscal year. Total revenues for governmental activities were $86.8 million, about $13.1 million, or 13%, lower compared to the prior year primarily in the operating and capital grants and contributions. Revenues were notably higher in the prior fiscal year due to the one-time American Rescue Plan Act (ARPA) funding the City received, approximately $10.3 million, and increased development related capital contributions in the form of development impact fees. Tax revenues had a net increase of $2.5 million from prior year, primarily in property, a result of increases in assessed values and new developments added to the assessed roll, and utility user tax (notably in energy segment to include gas and electricity), a result of rise in energy prices. Total expenses for governmental activities were $81.5 million, about $7.4 million, or 10%, more compared to the prior fiscal year. The increase in expenses was primarily in the public safety (police and fire) and public works programs. Business-type Activities: Figure 1 – Statement of Net Position illustrates the total net position for business-type activities increased by $3.8 million compared to the prior fiscal year, with a notable increase in unrestricted net position, offset by a decrease in net investment in capital assets related to investments in the Discretely presented Component Unit (DCU). Total assets increased by $3.5 million, notably in the other assets category, offset by a decrease in cash and investments. In 2021, the City issued sewer revenue bonds, 2021A series, to finance its share of the South County Regional Wastewater Treatment plant expansion project. The project commenced in 2021 and is expected to complete by 2025, thus the decrease in cash and investment for draws against the bond proceeds, offset by increase in other assets including City’s investment in the plant. Total liabilities increased by $3.8 million, attributable to increase in the pension liabilities. Figure 2 - Statement of Activities illustrates the total revenues for business-type activities, excluding transfers, were $26.5 million, a net increase of $2.6 million from prior year, notably from investment income driven by the rapid increase in the interest rate environment during the fiscal year. Total expenses for business-type activities were $23.7 million, about $0.3 million more than the prior fiscal year. MAJOR FUNDS As noted earlier, the City uses fund accounting to provide proper financial management of the City’s resources and to demonstrate compliance with finance-related legal requirements. Major Governmental Funds. The General Fund is the chief operating fund of the City. The City combines its Sidewalk Repair, Golf Course, Parking Management, and Community Recreation special revenue funds with the City’s General Fund for financial statement presentation as required under GASB 54 as they are subsidized by the general fund. During FY21, the City implemented GASB 84 which provides guidance on accounting and reporting for fiduciary activities of the City. The implementation of GASB 84 resulted in an increase of assets and liabilities in the City’s governmental funds as some funds that were previously classified as fiduciary no longer met the criteria under GASB 84. For the City, these primarily include Revolving Deposits and Deposits on hand for other purposes such as employee wellness, and Barney J. Garcia EMS Training. At the end of FY23, the total fund balance of the general fund (as presented in the aforementioned manner) was $41.9 million consisting of $33.2 million in unassigned fund balance, $6.2 million in committed balance for economic reserves pursuant to the Council adopted General Fund reserve policy, and $2.5 million in restricted fund balance set aside in a Section 115 trust to prefund pension liabilities. 11.6 p. 267 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 13 Revenues decreased between the years ended June 30, 2022 and June 30, 2023 by $7.6 million, primarily in the intergovernmental revenues (one-time ARPA funds received in prior fiscal year), offset by an overall increases in taxes (property and utility user), charges for services, and investment income. Property taxes increased by $1.3 million compared to prior year, or about 7%, a result of increases in assessed values and new developments added to the assessed roll and additional excess Educational Revenue Augmentation Fund (ERFAF) distribution. Utility user tax increased by $1.1 million, compared to prior year, or about 20%, primarily in the energy segment of the tax base (gas and electricity) which had significant increases in prices due to inflationary factors. Expenditures increased between the years ended June 30, 2022, and June 30, 2023 by $6.4 million, notably in the general government, public safety, and capital outlay. The primary category of expenditures in the General Fund is salaries and benefits. At the beginning of FY23, the City approved multi-year memorandum of understanding with various collective bargaining units with a focus on recruitment and retention in a competitive labor market. The City also made capital investments in the street rehabilitation program from the General Fund. The Public Facilities Impact Capital Projects Fund has a total fund deficit of $1.1 million at the end of FY23, a decrease of $1.1 million from prior fiscal year. Excluding transfers, the revenues exceeded the expenditures by $2.1 million during the year. Transfers out exceeded transfers in by $3.1 million. The primary purposes of transfers out were to support various debt instruments and repayment of an interfund loan. In February 2008, this fund borrowed $13.7 million from several funds for the purchase of Gilroy Gardens. See Note 5, in the Notes to the Basic Financial Statements for additional information. The interfund loan balance outstanding at June 30, 2023 is $4.0 million. Major Enterprise Funds. The City provides water and sewer utility services to the Gilroy community and operatives both as enterprises. The total net position of the Sewer Fund increased by $1.2 million, to $106.2 million from the prior fiscal year. The unrestricted net position of the Sewer Fund at the end of the year amounted to $104.3 million, an increase of $19.0 million, or about 22%, from the prior year, offset by a decrease in net investment in capital assets of about $17.8 million largely due to drawdown of the 2021A bond proceeds to finance City’s share of the South County Regional Wastewater Treatment plant expansion project. The total operating revenues and operating expenditures for the Sewer Fund were $13.0 million and 10.7 million, respectively, netting $2.3 million in operating income for the year. Total nonoperating loss was $2.4 million attributed to interest expense and the fund’s share of the net loss on the DCU related to depreciation. Transfers in exceeded transfers out by $1.2 million, which were primarily to support debt obligations. The total net position of the Water Fund increased by $2.6 million, to $80.2 million from the prior fiscal year. The unrestricted net position of the Water Fund at the end of the year amounted to $26.0 million, an increase of $2.0 million, or about 8%, from the prior year. The net investment in capital assets increased by $0.6 million to $54.2 million. The total operating revenues and operating expenditures for the Water Fund were $13.3 million and 11.6 million, respectively, netting $1.7 million in operating income for the year. Total nonoperating income was $0.7 million, primarily from investment earnings. The fund received $0.6 million in capital contributions in the form of donated infrastructure from developments, off set by a transfer out of $0.4 million, for a net $0.2 million increase from capital contributions. The last rate increases for both utilities were implemented in the 2019. During FY23, the City engaged a consultant to conduct a comprehensive water and wastewater rate study for both utilities. Subsequently, in October 2023, the City Council approved multi-year rate adjustments for both utilities, commencing on January 1, 2024, and annually there after for a five-year period. The table on the next page illustrates the average single-family monthly water (8,300 gallon consumption) and fixed monthly sewer charge for the five-year period. 11.6 p. 268 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 14 Average Single-Family Water and Sewer Utility Bill 1/1/2024 1/1/2025 1/1/2026 1/1/2027 1/1/2028 Water $ 61.13 $ 64.80 $ 68.69 $ 72.81 $ 77.18 Sewer 51.07 53.11 55.24 57.45 59.74 Total Bill $ 112.20 $ 117.91 $ 123.93 $ 130.26 $ 136.92 % Increase 5% 5% 5% 5% GENERAL FUND The final budgeted operating revenues, excluding transfers, of the General Fund were $63.4 million. The actual operating revenues, excluding transfers, of the General Fund were $65.7 million, $2.3 million more than the final budget, from an overall increase in taxes (property and utility taxes), charges for services, and investment earnings. The final budgeted operating expenditures, excluding transfers, of the General Fund were $65.6 million. The actual operating expenditures, excluding transfers, of the General Fund were $62.1 million, approximately $3.5 million less than the final budget. Notable savings were capital outlay, approximately $2.1 million, related to streets and sidewalk rehabilitation, and general operational savings across all departments. In June 2017, the City Council adopted a general fund reserve policy that consisted of (i) an unrestricted General Fund Reserve of 20% of general fund expenditures and (ii) an Economic Stability Reserve of 10% of general fund expenditures that is intended to help the City weather a severe economic crisis. The following table summarizes the adopted general fund reserve policy: General Fund Reserve Description of Use Amount Unrestricted Unbudgeted costs or revenue shortfall Minimum of 20% of expenditures Economic Stability Specific triggers in severe economic downturn Minimum of 10% of expenditures The Economic Stability Reserve shall only be used in extraordinary circumstances, upon satisfaction of one of the following “economic triggers” and with the majority vote of the City Council: •State take-away of significant revenue •Large drop in property taxes (decrease in assessed valuations) •Major business closures (sales tax and/or utility users’ tax impact) •Dramatic drop in development from projections •Large unexpected drop in sales taxes (or other primary revenues - utility users’ tax, franchise fees or transient occupancy tax) due to severe recession •The economic triggers cause the General Fund Reserve to fall below a predetermined percentage of expenditures (e.g., 20%). When the Economic Stability Reserve is used, the City is obligated to replenish the reserve by the end of the next biennial budget to 10% of the general fund expenditures for the given year. During FY23, the City adequately maintained the Unrestricted General Fund Reserves and the Economic Stability Reserves as required by the policy. 11.6 p. 269 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 15 Budgetary Highlights See the Required Supplementary Information in the City’s financial statements for a comparison of the City’s budgeted revenues and expenditures to actual revenues and expenditures for the General Fund. When preparing its budget, the City projects its revenues using realistic, but conservative methods so as to budget its expenditure appropriations in a prudent manner. As noted above, the City has two unrestricted reserve levels – the Unrestricted General Fund Reserves and the Economic Stability Reserve, neither of which were utilized during FY23. The City continues its conservative spending measures to ensure long-term fiscal sustainability. In addition, the City continued economic incentive transfers from the general fund to the impact funds, to make these funds whole for the previously granted incentives. The City continues to take a conservative approach in its spending in order to maintain a balanced budget – for and on behalf of the community – and will continue to be financially prudent during the current biennial budget. The City regularly reviews its revenues and expenditures and reports to the City Council to keep both the Council and the residents apprised of its current fiscal health and to ensure the adequate protection of the City’s financial resources. CAPITAL ASSETS As of June 30, 2023, the City’s capital assets, net of accumulated depreciation and amortization, for both the governmental and business-type activities, amounted to $285.5 million, a net decrease of $2.6 million primarily a result of depreciation and amortization. Additional information on the City’s capital assets can be found in Note 7 of the Basic Financial Statements. 2023 2022 2023 2022 2022 2021 Land $ 21.3 $ 21.3 $ - $ - $ 21.3 $ 21.3 Construction in progress 13.2 5.7 0.1 0.1 13.3 5.8 Buildings and improvements 72.6 75.6 - - 72.6 75.6 Equipment and furniture 1.5 2.0 - - 1.5 2.0 IT equipment and software 1.2 0.5 - - 1.2 0.5 Vehicle 4.1 3.8 0.2 0.2 4.3 4.0 Infrastructure 87.5 93.9 82.8 83.7 170.3 177.6 Subscription assets 1.0 1.3 - - 1.0 1.3 Total $ 202.4 $ 204.1 $ 83.1 $ 84.0 $ 285.5 $ 288.1 (in millions) Governmental activities Business-type activities Total 11.6 p. 270 of 478 City of Gilroy Management’s Discussion and Analysis (Unaudited) (Continued) For the Year Ended June 30, 2023 16 LONG-TERM DEBT As of June 30, 2023, the City’s governmental activities had bonded debt outstanding of $52.9 million, including $2.1 million of unamortized premium. Of this amount, $23.5 million represents general obligation bonds secured solely by specified revenue sources, $28.2 million represents lease refunding revenue bonds, and $0.6 million represents streetlights related loan payable. During the fiscal year, the City refinanced its Lease Revenue Bonds 2013 series in the amount of $14.6 million. The refunding resulted in $2.6 million savings in future debt service payments, with an economic gain of $2.1 million. As of June 30, 2023, the City’s business-type activities had $52.5 million bonded debt outstanding, consisting of $5.4 million of unamortized premium, and $47.1 million of 2021 wastewater revenue refunding bonds. During the year, the 2010 wastewater revenue bonds fully matured thus were retired. See Note 10 in the Notes to the Basic Financial Statements for further discussion. Requests for Information This financial report is designed to provide our citizens, taxpayers, customers, and creditors with a general overview of the City’s finances and to show the City’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Finance Director’s Office, at the City of Gilroy, 7351 Rosanna Street, Gilroy, California 95020. 2023 2022 Governmental Activities: Loan Payable 0.6$ 0.7$ General Obligation Bonds 23.5 24.6 Refunding Lease Revenue Bonds 28.2 31.3 Subscriptions payable 0.6 - Total Governmental Activities 52.9$ 56.6$ Business-Type Activites: Revenue Bonds 52.5 55.1 Total Business-Type Activities 52.5$ 55.1$ Total Long-Term Debt 105.4$ 111.7$ (in millions) 11.6 p. 271 of 478 BASIC FINANCIAL STATEMENTS 17 11.6 p. 272 of 478 18 11.6 p. 273 of 478 GOVERNMENT-WIDE FINANCIAL STATEMENTS 19 11.6 p. 274 of 478 Discrete Component Unit (DCU) South County Governmental Business-Type Regional Wastewater Activities Activities Total Authority ASSETS Current assets: Cash and investments 134,234,370$ 54,125,363$ 188,359,733$ 11,207,900$ Cash and investments with fiscal agent 2,535,176 25,470,094 28,005,270 - Accounts receivable, net 948,474 3,060,200 4,008,674 217,930 Due from other governments 5,219,607 - 5,219,607 3,936,322 Prepaid items 134,351 12,200 146,551 - Interest receivable 2,082,457 - 2,082,457 106 Loans receivable 3,043,638 - 3,043,638 - Lease receivable - current 256,201 - 256,201 - Due from primary government - - - 3,889,410 Total current assets 148,454,274 82,667,857 231,122,131 19,251,668 Noncurrent assets: Land held for resale 706,754 - 706,754 - Equity investment in DCU - 90,606,337 90,606,337 - Lease receivable - noncurrent 6,186,556 - 6,186,556 - Capital assets - nondepreciable 34,542,512 108,139 34,650,651 77,576,425 Capital assets - depreciable/amortizable, net 167,883,221 83,018,468 250,901,689 58,804,203 Total noncurrent assets 209,319,043 173,732,944 383,051,987 136,380,628 Total assets 357,773,317 256,400,801 614,174,118 155,632,296 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources related to pensions 28,654,962 3,302,164 31,957,126 - Deferred outflows of resources related to OPEB 2,209,539 433,450 2,642,989 - Total deferred outflows of resources 30,864,501 3,735,614 34,600,115 - Primary Government City of Gilroy Statement of Net Position June 30, 2023 See accompanying Notes to the Basic Financial Statements 20 11.6 p. 275 of 478 Discrete Component Unit (DCU) South County Governmental Business-Type Regional Wastewater Activities Activities Total Authority LIABILITIES Current liabilities: Accounts payable 4,159,690 518,594 4,678,284 7,102,883 Accrued payroll and benefits 3,535,084 280,216 3,815,300 15,108 Deposits payable 3,983,548 25,000 4,008,548 - Interest payable 525,445 638,958 1,164,403 - Unearned revenues 670,673 - 670,673 - Due to DCU - 3,889,410 3,889,410 - Compensated absences, due within one year 193,723 28,035 221,758 2,115 Claims payable, due within one year 1,682,152 - 1,682,152 - Long-term debt, due within one year 3,562,430 725,000 4,287,430 - Total current liabilities 18,312,745 6,105,213 24,417,958 7,120,106 Noncurrent liabilities: Compensated absences, due in more than one year 1,743,510 252,316 1,995,826 19,035 Claims payable, due in more than one year 6,964,768 - 6,964,768 - Long-term debt, due in more than one year 49,381,573 51,769,265 101,150,838 - Aggregate net pension liabilities 91,683,383 12,050,787 103,734,170 - Total OPEB liabilities 12,119,260 2,377,462 14,496,722 - Total noncurrent liabilities 161,892,494 66,449,830 228,342,324 19,035 Total liabilities 180,205,239 72,555,043 252,760,282 7,139,141 DEFERRED INFLOWS OF RESOURCES Deferred gain on refunding 509,284 - 509,284 - Deferred lease-related items 6,318,655 - 6,318,655 32,679 Deferred pension-related items 1,120,520 211,315 1,331,835 - Deferred OPEB-related items 5,026,401 986,040 6,012,441 - Total deferred inflows of resources 12,974,860 1,197,355 14,172,215 32,679 NET POSITION Net investment in capital assets 149,484,869 56,102,436 205,587,305 136,380,628 Restricted for: Minority interest of DCU - - - 57,854,139 Public Agency Retirement Services (PARS)2,506,565 - 2,506,565 - Public safety 930,460 - 930,460 - Community development 13,324,704 - 13,324,704 - Public works 57,098,436 - 57,098,436 - Debt service 1,659,894 - 1,659,894 - Total restricted 75,520,059 - 75,520,059 57,854,139 Unrestricted (deficit)(29,547,209) 130,281,581 100,734,372 (45,774,291) Total net position 195,457,719$ 186,384,017$ 381,841,736$ 148,460,476$ June 30, 2023 Statement of Net Position (Continued) City of Gilroy Primary Government See accompanying Notes to the Basic Financial Statements 21 11.6 p. 276 of 478 Capital Grants Charges for Operating Grants and Expenses Services and Contributions Contributions Functions/Programs Primary Government (PG) Governmental Activities: General government 10,440,465$ 4,645,730$ 737,581$ -$ Public safety 42,789,395 713,565 1,344,843 - Community development 6,999,373 3,513,190 1,965,448 - Public works 17,285,317 1,122,432 4,635,560 7,203,431 Recreation services 1,755,454 561,859 - - Interest 2,199,547 - - - Total Governmental Activities 81,469,551 10,556,776 8,683,432 7,203,431 Business-Type Activities: Sewer 12,134,168 13,037,892 - - Water 11,574,875 13,286,485 47,697 561,591 Total Business-Type Activities 23,709,043 26,324,377 47,697 561,591 Total Primary Government 105,178,594$ 36,881,153$ 8,731,129$ 7,765,022$ Discretely Presented Component Unit (DCU) South County Regional Wastewater Authority 12,620,571$ 688,372$ 8,565,098$ 30,964,183$ City of Gilroy Statement of Activities For the Year Ended June 30, 2023 Program Revenues See accompanying Notes to the Basic Financial Statements 22 11.6 p. 277 of 478 Discrete Component Unit (DCU) South County Governmental Business-Type Regional Wastewater Activities Activities Total Authority Functions/Programs Primary Government (PG) Governmental Activities: General government (5,057,154)$ -$ (5,057,154)$ -$ Public safety (40,730,987) - (40,730,987) - Community development (1,520,735) - (1,520,735)- Public works (4,323,894) - (4,323,894)- Recreation services (1,193,595) - (1,193,595)- Interest (2,199,547) - (2,199,547)- Total Governmental Activities (55,025,912) - (55,025,912) - Business-Type Activities: Sewer - 903,724 903,724 - Water - 2,320,898 2,320,898 - Total Business-Type Activities - 3,224,622 3,224,622 - Total Primary Government (55,025,912) 3,224,622 (51,801,290) - Discretely Presented Component Unit (DCU) South County Regional Wastewater Authority - - - 27,597,082 General Revenues: Taxes: Property taxes 21,600,130 - 21,600,130 - Sales taxes 22,936,208 - 22,936,208 - Transient occupancy taxes 1,754,615 - 1,754,615 - Franchise taxes 2,198,150 - 2,198,150 - Utility users tax 6,551,417 - 6,551,417 - Real property transfer taxes 404,075 - 404,075 - Investment income(loss)3,438,121 (365,320)3,072,801 276,765 Miscellaneous 1,417,790 6,586 1,424,376 - Transfers (878,113) 878,113 - - Total General Revenues 59,422,393 519,379 59,941,772 276,765 Changes in Net Position 4,396,481 3,744,001 8,140,482 27,873,847 Net Position - Beginning, as restated (Note 19)191,061,238 182,640,016 373,701,254 120,586,629 Net Position - Ending 195,457,719$ 186,384,017$ 381,841,736$ 148,460,476$ Net (Expense) Revenue and Changes in Net Position City of Gilroy Statement of Activities (Continued) For the Year Ended June 30, 2023 See accompanying Notes to the Basic Financial Statements 23 11.6 p. 278 of 478 24 11.6 p. 279 of 478 FUND FINANCIAL STATEMENTS 25 11.6 p. 280 of 478 26 11.6 p. 281 of 478 GOVERNMENTAL FUND FINANCIAL STATEMENTS 27 11.6 p. 282 of 478 28 11.6 p. 283 of 478 Capital Projects Fund Public Other General Facilities Governmental Fund Impact Funds Total ASSETS Cash and investments 41,687,877$ 2,970,804$ 69,777,899$ 114,436,580$ Receivables: Accounts 590,797 - 303,504 894,301 Due from other governments 4,761,994 - 457,613 5,219,607 Interest 1,158,641 - 922,354 2,080,995 Loans - - 3,043,638 3,043,638 Leases 5,692,308 - - 5,692,308 Due from other funds 456,085 - - 456,085 Advances from other funds - - 1,523,222 1,523,222 Prepaid items 23,750 - - 23,750 Land held for resale - - 706,754 706,754 Restricted assets: Cash and investments with fiscal agents 2,532,036 - 3,140 2,535,176 Total assets 56,903,488$ 2,970,804$ 76,738,124$ 136,612,416$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable 2,784,476$ 1,485$ 789,751$ 3,575,712$ Accrued liabilities 1,877,001 - 59,273 1,936,274 Deposits payable 3,943,972 - 35,299 3,979,271 Unearned revenue 421,472 - 249,201 670,673 Due to other funds 300,761 - 155,324 456,085 Advances to other funds - 4,019,735 - 4,019,735 Total liabilities 9,327,682 4,021,220 1,288,848 14,637,750 Deferred inflows of resources: Lease related 5,623,833 - - 5,623,833 Unavailable revenues - - 860,105 860,105 Total deferred inflows of resources 5,623,833 - 860,105 6,483,938 Fund balances (deficit): Nonspendable 23,750 - - 23,750 Restricted 2,532,036 - 71,140,553 73,672,589 Committed 6,205,317 - - 6,205,317 Assigned - - 3,603,942 3,603,942 Unassigned (deficit)33,190,870 (1,050,416) (155,324) 31,985,130 Total fund balances (deficit)41,951,973 (1,050,416) 74,589,171 115,490,728 Total liabilities, deferred inflows of resources, and fund balances 56,903,488$ 2,970,804$ 76,738,124$ 136,612,416$ City of Gilroy Balance Sheet June 30, 2023 Governmental Funds See accompanying Notes to the Basic Financial Statements 29 11.6 p. 284 of 478 Total Fund Balances - Total Governmental Funds 115,490,728$ Nondepreciable, net of $2,899,734 reported in Internal Service Funds 31,642,778$ Depreciable/amortizable, net of $6,492,417 reported in Internal Service Funds 161,390,804 193,033,582 Bonds payable (49,629,176)$ Subscription liabilities, net of $625,093 reported in Internal Service Funds - Premium on bonds payable (2,109,609) Unamortized deferred charges on refunding (509,284) Loans payable (580,125) Interest payable, net of $5,447 reported in Internal Service Funds (519,998) Compensated absences, net of $77,983 reported in Internal Service Funds (1,859,250) (55,207,442) Pension related deferred outflows of resources 28,654,962$ Aggregate net pension liability (91,683,383) Pension related deferred inflows of resources (1,120,520) (64,148,941) OPEB related deferred outflows of resources 2,209,539$ Aggregate net OPEB liability (12,119,260) OPEB related deferred inflows of resources (5,026,401) (14,936,122) 860,105 20,365,809 Net Position of Governmental Activities 195,457,719$ City of Gilroy Reconciliation of the Governmental Funds Balance Sheet to the June 30, 2023 Government-Wide Statement of Net Position Amounts reported for governmental activities in the Statement of Net Position were reported differently because: Long-term liabilities are not due and payable in the current period and accordingly are not reported as fund liabilities. All liabilities, both current and long-term, are reported in the Statement of Net Position: Capital assets used in governmental activities were not current financial resources. Therefore, they were not reported in the Governmental Funds Balance Sheet. Internal Service Funds were used by management to charge the costs of certain activities, such as insurance and equipment replacement to individual funds. The assets and liabilities of the Internal Service Funds were included in the governmental activities in the Government-Wide Statement of Net Position. Revenue reported as unavailable revenue in the governmental funds when it is not received soon enough after year-end to be considered available. The availability criteria does not apply to the Government-Wide Financial Statements and, therefore, the revenue is recognized when eligibility requirements are met and earned. Net pension liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements: Net OPEB liabilities and the related deferred outflows of resources and deferred inflows of resources are not due and payable in the current period or not available for current expenditures and are not reported in the governmental fund financial statements: See accompanying Notes to the Basic Financial Statements 30 11.6 p. 285 of 478 Capital Projects Fund Public Other General Facilities Governmental Fund Impact Funds Total Revenues: Taxes 51,164,140$ -$ 2,737,595$ 53,901,735$ Intergovernmental 1,257,731 - 8,530,523 9,788,254 Charges for services 7,621,129 - - 7,621,129 Developer impact fees - 2,073,785 4,948,116 7,021,901 Licenses and permits 2,696,318 - - 2,696,318 Fines and forfeitures 255,359 - - 255,359 Investment income (loss)1,813,640 60,303 1,220,154 3,094,097 Miscellaneous 901,169 - 1,494,365 2,395,534 Total revenues 65,709,486 2,134,088 18,930,753 86,774,327 Expenditures: Current: General government 9,321,641 - 13,413 9,335,054 Public safety 39,386,899 - 1,160,311 40,547,210 Recreation services 1,755,215 - - 1,755,215 Community development 4,695,567 - 986,613 5,682,180 Public works 5,296,285 8,928 768,638 6,073,851 Capital outlay 1,575,059 - 10,571,845 12,146,904 Debt service: Principal retirement 22,500 - 2,938,964 2,961,464 Interest and fiscal charges - 58,858 2,038,287 2,097,145 Bond issuance cost - - 169,268 169,268 Total expenditures 62,053,166 67,786 18,647,339 80,768,291 Excess of revenues over expenditures 3,656,320 2,066,302 283,414 6,006,036 Other financing sources (uses): Issuance of debt - - 14,587,831 14,587,831 Payment to refunded bond escrow - - (15,352,976) (15,352,976) Transfers in 2,579,508 40,763 3,705,026 6,325,297 Transfers out (2,189,571) (3,188,031) (1,825,808) (7,203,410) Total other financing sources (uses)389,937 (3,147,268) 1,114,073 (1,643,258) Net change in fund balances 4,046,257 (1,080,966) 1,397,487 4,362,778 Fund balances(deficit): Beginning of year 37,905,716 30,550 73,191,684 111,127,950 End of year 41,951,973$ (1,050,416)$ 74,589,171$ 115,490,728$ City of Gilroy Statement of Revenues, Expenditures, and Changes in Fund Balances Governmental Funds For the Year Ended June 30, 2023 See accompanying Notes to the Basic Financial Statements 31 11.6 p. 286 of 478 Net Change in Fund Balances - Total Governmental Funds 4,362,778$ Capital outlay, net of $2,200,956 reported in Internal Service Fund 8,615,696$ Depreciation and amortization, net of $1,199,705 reported in Internal Service Funds (10,809,339) Net effect on disposal of capital assets (414,264) (2,607,907) 59,856 (509,284) Bonds payable 18,030,605$ Subscription liabilities 22,500 Loans payable 93,359 18,146,464 (14,587,831) (57,826) 801,952 (106,317) (1,517,891) 96,062 316,425 Change in Net Position of Governmental Activities 4,396,481$ Internal Service Funds are used by management to charge the costs of certain activities, such as insurance and equipment replacement, to individual funds. The net revenue of the Internal Service Funds is reported in governmental activities. Certain pension expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Certain OPEB expenses reported in the Statement of Activities do not require the use of current financial resources and, therefore, are not reported as expenditures in governmental funds. Compensated absences were reported in the Government-Wide Statement of Activities, but they did not require the use of current financial resources. Therefore, compensated absences were not reported as expenditures in the governmental funds. Compensated absences is net of $2,598 reported in Internal Service Funds. Net change in revenues that was considered unavailable in the governmental funds. These items have been reported as revenue in the Statement of Activities. Amortization of bond premium was recognized in interest expense on the Government-Wide Statement of Activities, but did not require the use of current financial resources. Therefore amortization of bond premium was not reported as an expenditure in the governmental funds. Deferred outflow related to the refunding gain is not a expenditure in the Statement of Activities, but is reported as a deferred outflow on the Government-Wide Statement of Net Position. Principal repayment on long-term debt is not an expense in the Statement of Activities, but is considered an expenditure in governmental funds. Interest accrued on long-term debt is reported in the Statement of Activities, but does not require the use of current financial resources. Therefore, accrued interest is not reported as an expenditure in governmental funds. This amount represents the change in accrued interest from the prior year. Bond proceeds on long-term debt is not a revenue in the Statement of Activities, but is considered an other financing resources in governmental funds Capital assets used in governmental activities are not financial resources and therefore are not reported in governmental funds. Governmental activities in the Statement of Activities were reported differently because: City of Gilroy Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes For the Year Ended June 30, 2023 in Fund Balances to the Government-Wide Statement of Activities See accompanying Notes to the Basic Financial Statements 32 11.6 p. 287 of 478 PROPRIETARY FUND FINANCIAL STATEMENTS 33 11.6 p. 288 of 478 Governmental Activities Total Internal Enterprise Service Sewer Water Funds Funds ASSETS Current assets: Cash and investments 23,070,297$ 31,055,066$ 54,125,363$ 19,797,790$ Cash and investments with fiscal agent 25,470,094 - 25,470,094 - Accounts receivable 1,465,887 1,594,313 3,060,200 54,173 Interest receivable - - - 1,462 Lease receivable - current - - - 96,347 Prepaid items 6,100 6,100 12,200 110,601 Total current assets 50,012,378 32,655,479 82,667,857 20,060,373 Noncurrent assets: Advances to other funds - - - 2,496,513 Equity investment in DCU 90,606,337 - 90,606,337 - Lease receivable - noncurrent - - - 654,102 Capital assets: Capital assets, not depreciated/amortizable - 108,139 108,139 2,899,734 Capital assets, depreciated/amortizable, net 28,895,390 54,123,078 83,018,468 6,492,417 Total noncurrent assets 119,501,727 54,231,217 173,732,944 12,542,766 Total assets 169,514,105 86,886,696 256,400,801 32,603,139 DEFERRED OUTFLOWS OF RESOURCES Deferred outflows of resources related to pension 1,693,787 1,608,377 3,302,164 - Deferred outflows of resources related to OPEB 208,796 224,654 433,450 - Total deferred outflows of resources 1,902,583 1,833,031 3,735,614 - June 30, 2023 Proprietary Funds Statement of Net Position City of Gilroy Business-Type Activities See accompanying Notes to the Basic Financial Statements 34 11.6 p. 289 of 478 Governmental Activities Total Internal Enterprise Service Sewer Water Funds Funds LIABILITIES Current liabilities: Accounts payable 22,433 496,161 518,594 583,978 Accrued liabilities 131,458 148,758 280,216 1,598,810 Deposits payable - 25,000 25,000 4,277 Interest payable 638,958 - 638,958 5,447 Due to DCU 3,889,410 - 3,889,410 - Compensated absences, current portion 14,658 13,377 28,035 7,798 Claims payable, current portion - - - 1,682,152 Bonds payable, current portion 725,000 - 725,000 - Subscription liabilities, current portion - - - 311,213 Total current liabilities 5,421,917 683,296 6,105,213 4,193,675 Noncurrent liabilities: Compensated absences 131,922 120,394 252,316 70,185 Claims payable - - - 6,964,768 Bonds payable 51,769,265 - 51,769,265 - Subscription liabilities - - - 313,880 Net pension liability 6,181,240 5,869,547 12,050,787 - Net OPEB liability 1,145,241 1,232,221 2,377,462 - Total noncurrent liabilities 59,227,668 7,222,162 66,449,830 7,348,833 Total liabilities 64,649,585 7,905,458 72,555,043 11,542,508 DEFERRED INFLOWS OF RESOURCES Deferred inflows of resources related to leases - - - 694,822 Deferred inflows of resources related to pension 108,390 102,925 211,315 - Deferred inflows of resources related to OPEB 474,983 511,057 986,040 - Total deferred inflows of resources 583,373 613,982 1,197,355 694,822 NET POSITION Net investment in capital assets 1,871,219 54,231,217 56,102,436 9,392,151 Unrestricted 104,312,511 25,969,070 130,281,581 10,973,658 Total net position 106,183,730$ 80,200,287$ 186,384,017$ 20,365,809$ City of Gilroy Statement of Net Position (Continued) Proprietary Funds June 30, 2023 Business-Type Activities See accompanying Notes to the Basic Financial Statements 35 11.6 p. 290 of 478 36 11.6 p. 291 of 478 Governmental Activities Total Internal Enterprise Service Sewer Water Funds Funds OPERATING REVENUES: Charges for services 13,037,892$ 13,286,485$ 26,324,377$ 11,567,760$ Miscellaneous - 6,586 6,586 520,467 TOTAL OPERATING REVENUES 13,037,892 13,293,071 26,330,963 12,088,227 OPERATING EXPENSES: Operations 7,535,006 8,516,647 16,051,653 7,739,282 Depreciation and amortization 1,511,887 1,419,650 2,931,537 1,199,705 Billing 924,907 884,298 1,809,205 - Administration 775,649 754,280 1,529,929 246,197 Claims and judgments 2,295 - 2,295 597,649 Insurance premiums - - - 2,313,195 TOTAL OPERATING EXPENSES 10,749,744 11,574,875 22,324,619 12,096,028 OPERATING INCOME (LOSS)2,288,148 1,718,196 4,006,344 (7,801) NONOPERATING REVENUES (EXPENSES): Investment income 825,083 605,084 1,430,167 344,096 Interest expense (1,384,424) - (1,384,424) (15,419) Intergovernmental - 47,697 47,697 - Gain (loss) on disposal of capital assets - - - (4,451) Share of DCU net loss (1,795,487) - (1,795,487) - Total Nonoperating Income (Loss)(2,354,828) 652,781 (1,702,047) 324,226 NET INCOME (LOSS) BEFORE TRANSFERS AND CAPITAL CONTRIBUTIONS (66,680) 2,370,977 2,304,297 316,425 TRANSFERS AND CAPITAL CONTRIBUTIONS: Transfers in 1,543,668 - 1,543,668 - Transfers out (311,862) (353,693) (665,555) - Capital contributions - 561,591 561,591 - TOTAL TRANSFERS AND CAPITAL CONTRIBUTIONS 1,231,806 207,898 1,439,704 - CHANGES IN NET POSITION 1,165,126 2,578,875 3,744,001 316,425 NET POSITION: Beginning of the year 105,018,604 77,621,412 182,640,016 20,049,384 End of the year 106,183,730$ 80,200,287$ 186,384,017$ 20,365,809$ Proprietary Funds Statement of Revenues, Expenses, and Changes in Net Position City of Gilroy Business-Type Activities For the Year Ended June 30, 2023 See accompanying Notes to the Basic Financial Statements 37 11.6 p. 292 of 478 Governmental Activities Total Internal Enterprise Service Sewer Water Funds Funds CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers and users 13,223,888$ 13,498,079$ 26,721,967$ 12,032,724$ Cash paid to suppliers for goods and services (6,700,799) (6,765,815) (13,466,614) (8,132,530) Cash paid to employees for services (3,010,762) (3,437,478) (6,448,240) (133,467) Cash paid for insurance claims - - - (2,571,081) Net Cash Provided by Operating Activities 3,512,327 3,294,786 6,807,113 1,195,646 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Cash received from other governments - 47,697 47,697 - Cash received from (paid to) other funds 1,231,806 (353,693) 878,113 252,117 Contributions to DCU (15,139,972) - (15,139,972) - Net Cash Provided by (Used in) Noncapital Financing Activities (13,908,166) (305,996) (14,214,162) 252,117 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Proceeds from issuance of debt - - - 165,908 Acquisition of capital assets (72,711) (1,430,626) (1,503,337) (2,200,956) Principal paid (2,451,250) (11,250) (2,462,500) (408,524) Interest paid (1,594,500) - (1,594,500)(9,972) Net Cash (Used in) Capital and Related Financing Activities (4,118,461) (1,441,876) (5,560,337) (2,407,091) CASH FLOWS FROM INVESTING ACTIVITIES: Investment income 825,083 605,084 1,430,167 343,380 Net Cash Provided by Investing Activities 825,083 605,084 1,430,167 343,380 Net Change In Cash and Cash Equivalents (13,689,217) 2,151,998 (11,537,219) (615,948) CASH AND CASH EQUIVALENTS: Beginning of year 62,229,608 28,903,068 91,132,676 20,413,738 End of year 48,540,391$ 31,055,066$ 79,595,457$ 19,797,790$ CASH AND CASH EQUIVALENTS: Cash and investments 23,070,297$ 31,055,066$ 54,125,363$ 19,797,790$ Cash and investments with fiscal agent 25,470,094 - 25,470,094 - Total cash and cash equivalents 48,540,391$ 31,055,066$ 79,595,457$ 19,797,790$ City of Gilroy Statement of Cash Flows Proprietary Funds For the Year Ended June 30, 2023 Business-Type Activities See accompanying Notes to the Basic Financial Statements 38 11.6 p. 293 of 478 Governmental Activities Total Internal Enterprise Service Sewer Water Funds Funds Reconciliation of Operating Income (Loss) to Net Cash Provided by Operating Activities: Operating income (loss)2,288,148$ 1,718,196$ 4,006,344$ (7,801)$ Adjustments to reconcile to net cash provided by Operating activities: Depreciation and amortization 1,511,887 1,419,650 2,931,537 1,199,705 Changes in assets and liabilities: (Increase)/decrease in accounts receivables 185,996 198,696 384,692 (30,591) (Increase)/decrease in lease receivables - - - 49,370 (Increase)/decrease in prepaid items (6,100) (6,100) (12,200) (24,926) (Increase)/decrease in deferred outflows of resources related to pensions (997,211) (999,449) (1,996,660) - (Increase)/decrease in deferred outflows of resources related to OPEB 57,820 38,825 96,645 - Increase/(decrease) in accounts payable (14,400) (53,291) (67,691) 71,411 Increase/(decrease) in accrued liabilities (34,781) (63,312) (98,093) 73,252 Increase/(decrease) in deposits payable - 6,312 6,312 1 Increase/(decrease) in compensated absences 33,653 13,880 47,533 (16,098) Increase/(decrease) in claims payable - - - (44,364) Increase/(decrease) in net pension liabilities 2,142,945 2,339,382 4,482,327 - Increase/(decrease) in net OPEB liabilities (386,869) (281,865) (668,734) - Increase/(decrease) in deferred inflows of resources related to lease related - - - (74,313) Increase/(decrease) in deferred inflows of resources related to pensions (1,471,651) (1,278,303) (2,749,954) - Increase/(decrease) in deferred inflows of resources related to OPEB 202,890 242,165 445,055 - Net Cash Provided by Operating Activities 3,512,327$ 3,294,786$ 6,807,113$ 1,195,646$ Noncash Financing, capital or Investing activities: City share of DCU net loss (1,795,487)$ -$ -$ -$ Capital asset contributions -$ 561,591$ 561,591$ -$ City of Gilroy Statement of Cash Flows (Continued) Proprietary Funds For the Year Ended June 30, 2023 Business-Type Activities See accompanying Notes to the Basic Financial Statements 39 11.6 p. 294 of 478 40 11.6 p. 295 of 478 FIDUCIARY FUND FINANCIAL STATEMENTS 41 11.6 p. 296 of 478 42 11.6 p. 297 of 478 Custodial Funds ASSETS Cash and investments 840,399$ Cash and investments with fiscal agent 299,364 Accounts receivable 9,549 Total assets 1,149,312 NET POSITION Restricted For: Individuals, organizations and other governments 1,149,312 Total net position 1,149,312$ As of June 30, 2023 Statement of Fiduciary Net Position City of Gilroy Fiduciary Funds See accompanying Notes to the Basic Financial Statements 43 11.6 p. 298 of 478 Custodial Funds ADDITIONS: Taxes 932,693$ Investment income 15,273 Other income 58 Total additions 948,024 DEDUCTIONS: General administration 43,453 Payments on conduit bonds - principal 701,610 Payments on conduit bonds - interest 184,083 Total deductions 929,146 CHANGE IN NET POSITION 18,878 NET POSITION: Beginning of year 1,130,434 End of year 1,149,312$ City of Gilroy Statement of Changes in Fiduciary Net Position Fiduciary Funds For the Year Ended June 30, 2023 See accompanying Notes to the Basic Financial Statements 44 11.6 p. 299 of 478 45 NOTES TO THE BASIC FINANCIAL STATEMENTS 11.6 p. 300 of 478 46 11.6 p. 301 of 478 City of Gilroy Index to the Notes to the Basic Financial Statements For the Year Ended June 30, 2023 47 Page Note 1 – Summary of Significant Accounting Policies ..................................................................................... 49 A. Description of the Reporting Entity ............................................................................................... 49 B. Basis of Accounting and Measurement Focus ............................................................................... 50 C. Cash and Investments ..................................................................................................................... 52 D. Interfund Loans Receivable and Payable ....................................................................................... 53 E. Accounts Receivable and Due from Other Governments .............................................................. 53 F. Loans Receivable ........................................................................................................................... 53 G. Land Held for Resale ...................................................................................................................... 54 H. Leases ............................................................................................................................................ 54 I. Capital Assets ................................................................................................................................. 54 J. Subscription-Based Information Technology Arrangements (SBITAs) ........................................ 55 K. Deferred Outflows/Inflows of Resources ....................................................................................... 56 L. Interest Payable .............................................................................................................................. 56 M. Unearned Revenue ......................................................................................................................... 56 N. Compensated Absences .................................................................................................................. 57 O. Net Pension Liability ...................................................................................................................... 57 P. Other Postemployment Benefits Liability ...................................................................................... 58 Q. Claims Payable ............................................................................................................................... 58 R. Net Position .................................................................................................................................... 58 S. Fund Balances ................................................................................................................................ 58 T. Spending Policy ............................................................................................................................. 59 U. Property Taxes ............................................................................................................................... 60 V. Use of Estimates ............................................................................................................................. 60 W. Implementation of New GASB Pronouncements .......................................................................... 61 X. New GASB Pronouncements ......................................................................................................... 61 Note 2 – Stewardship, Compliance and Accountability ................................................................................... 62 A. Encumbrances ................................................................................................................................ 62 B. Continuing Appropriations ............................................................................................................. 62 C. Deficit Fund Balances/Net Position ............................................................................................... 62 D. Excess of Expenditure Over Appropriations .................................................................................. 63 Note 3 – Cash and Investments .......................................................................................................................... 63 A. Demand Deposits ........................................................................................................................... 64 B. Investments Authorized by the California Government Code and the City's Investment Policy ................................................................................................................. 64 C. Fair Value Measurements ............................................................................................................... 64 D. Disclosures Relating to Interest Rate Risk ..................................................................................... 65 E. Disclosures Relating to Credit Risk ............................................................................................... 65 F. Concentration of Credit Risk .......................................................................................................... 66 G. Custodial Credit Risk ..................................................................................................................... 66 H. Investment in State Investment Pool .............................................................................................. 66 Note 4 – Loans Receivable .................................................................................................................................. 67 11.6 p. 302 of 478 City of Gilroy Index to the Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 48 Page Note 5 – Interfund Transactions ......................................................................................................................... 67 A. Due to/from Other Funds .................................................................................................................. 67 B. Advances to/from Other Funds ......................................................................................................... 67 C. Transfers ............................................................................................................................................ 68 D. Due to/from Component Unit ........................................................................................................... 68 Note 6 – Lease Receivables .................................................................................................................................. 69 Note 7 – Capital Assets ........................................................................................................................................ 70 Note 8 – Equity Investment in Discretely Presented Component Unit ........................................................... 72 Note 9 – Deferred Compensation ........................................................................................................................ 73 Note 10 – Long-Term Liabilities ......................................................................................................................... 73 A. Governmental Activities ................................................................................................................. 73 B. Business-Type Activities ................................................................................................................. 77 C. Debt without Government Commitment ......................................................................................... 78 Note 11 – Defined Benefit Pension Plans (CalPERS) ........................................................................................ 79 A. Summary ......................................................................................................................................... 79 B. General Information about the Pension Plans ................................................................................. 80 C. Net Pension Liability ....................................................................................................................... 82 D. Changes in the Net Pension Liability .............................................................................................. 84 E. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions .................... 85 Note 12 – Other Postemployment Benefits (OPEB) .......................................................................................... 87 Note 13 – Claims Payable .................................................................................................................................... 90 Note 14 – Risk Management ................................................................................................................................ 90 Note 15 – Commitments and Contingencies ...................................................................................................... 91 Note 16 – Net Investment in Capital Assets ....................................................................................................... 92 Note 17 – Classification of Fund Balances ......................................................................................................... 93 Note 18 – Tax Abatement .................................................................................................................................... 94 Note 19 – Prior Period Adjustments ................................................................................................................... 94 11.6 p. 303 of 478 City of Gilroy Notes to the Basic Financial Statements For the Year Ended June 30, 2023 49 Note 1 – Summary of Significant Accounting Policies The basic financial statements of the City of Gilroy, California, (the “City”) have been prepared in conformity with accounting principles generally accepted in the United States of America (“U.S. 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 following is a summary of the City’s significant policies: A. Description of the Reporting Entity The City was incorporated in 1870 under the general laws of the State of California and became a charter city on January 8, 1960. The City operates under the Council-Administrator form of government. As required by accounting principles generally accepted in the United States of America, these financial statements present the City and its component units, entities for which the City is considered to be financially accountable. The City is considered to be financially accountable for an organization if the City appoints a voting majority of that organization’s governing body and the organization is able to provide specific financial benefits to or impose specific financial burdens on the City. The City is also considered to be financially accountable if an organization is fiscally dependent (i.e., it is unable to adopt its budget, levy taxes, set rates or charges or issue bonded debt without approval from the City). In certain cases, other organizations are included as component units if the nature and significance of their relationship with the City are such that their exclusion would cause the City’s financial statements to be misleading or incomplete. The Gilroy Public Facilities Financing Authority (“Gilroy Public Authority”) is considered to be a blended component unit of the reporting entity of the City because its sole purpose is to finance and construct the City’s public facilities. Blended component units, although legally separate entities, are in substance, part of the City’s operations and so data from these units are reported within the funds of the primary government. The Gilroy Public Facilities Financing Authority does not issue separate component unit financial statements. Discretely Presented Component Unit (“DCU”) The South County Regional Wastewater Authority (“Authority”) was created on July 1, 1992 by the City of Gilroy and City of Morgan Hill (“Member Agencies”). The purpose of the Authority is to plan and implement regional solutions to the wastewater treatment and management problems resulting from the generation of wastewater within the service areas of the Member Agencies. To achieve this purpose, the Authority constructs, maintains and operates facilities for sewage treatment and wastewater reclamation. The City of Gilroy and the City of Morgan Hill have a 58.1% and 41.9% capacity interest in the wastewater treatment plant, respectively which is used to determine the capital contribution amounts by the Member Agencies and the pro-rata share of the Authority’s income (loss). The Authority is governed by a Board of Directors, which consists of three members from the Gilroy City Council and two members from the Morgan Hill City Council. The Authority’s budget and annual contribution requirements are approved by the Board of Directors of the Authority. The City’s management provides accounting services, engineering services and administrative support to the Authority. Daily operations of the Authority have been contracted directly to a private provider of services for wastewater management and operations. The Authority is presented in a separate column to emphasize that it is legally separate from the City but provides a financial benefit to the City. Debt issued by the Authority requires approval by the City, and the City approves the budget of the Authority. Complete financial statements of the Authority can be obtained from the City’s administrative offices. 11.6 p. 304 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 50 Note 1 – Summary of Significant Accounting Policies (Continued) A. Description of the Reporting Entity (Continued) The government-wide financial statements (i.e., the statement of net position and the statement of activities) report information about the reporting government as a whole, except for its fiduciary activities. All fiduciary activities are reported only in the fund financial statements. Governmental activities, which normally are supported by taxes, intergovernmental revenues and other nonexchange transactions, are reported separately from business-type activities, which rely to a significant extent on fees and charges for support. Likewise, the primary government is reported separately from discretely presented component . B. Basis of Accounting and Measurement Focus The accounts of the City are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for by providing a separate set of self-balancing accounts that comprise its assets, liabilities, net position/fund balance, revenues and expenditures or expenses, as appropriate. Fund accounting segregates funds according to their intended purpose and is used to aid management in demonstrating compliance with finance-related legal and contractual provisions. The minimum number of funds is maintained in accordance with legal and managerial requirements. Government-Wide Financial Statements The City’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental and business-type activities for the City accompanied by a total column. The DCU column in the government-wide statement of net position and statement activities includes the financial data of the Authority. The City’s equity investment in the Authority is reported in the Sewer Fund as an Equity Investment in the DCU and is adjusted annually using the equity method of accounting. Fiduciary activities of the City are not included in the Government-Wide statements. These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the City’s assets and liabilities, including capital assets, as well as infrastructure assets, and long-term liabilities, are included in the accompanying Statement of Net Position. The Statement of Activities presents changes in Net Position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. Certain types of transactions are reported as program revenues for the City in three categories:  Charges for services  Operating grants and contributions  Capital grants and contributions Certain eliminations have been made in regards to interfund activities, payables and receivables. All internal balances in the Statement of Net Position have been eliminated except those representing balances between the governmental activities and the business-type activities, which are presented as internal balances and eliminated in the total primary government column. In the Statement of Activities, internal service fund transactions have been eliminated; however, those transactions between governmental and business-type activities have not been eliminated. 11.6 p. 305 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 51 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) The following interfund activities have been eliminated:  Due to/from other funds  Advances to/from other funds  Transfers in/out Governmental Fund Financial Statements Governmental Fund Financial Statements include a Balance Sheet and a Statement of Revenues, Expenditures and Changes in Fund Balances for all major governmental funds and nonmajor funds aggregated. An accompanying schedule is presented to reconcile and explain the differences between fund balance as presented in these statements to the net position presented in the Government-Wide Financial Statements. The City has presented all major funds that met the applicable criteria. All governmental funds are accounted for on a spending or "current financial resources" measurement focus and the modified accrual basis of accounting. Accordingly, only current assets and current liabilities are included on the Balance Sheet. The Statement of Revenues, Expenditures and Changes in Fund Balances presents increases (revenues and other financing sources) and decreases (expenditures and other financing uses) in net current assets. Under the modified accrual basis of accounting, revenues are recognized in the accounting period in which they become both measurable and available to finance expenditures of the current period. 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. For this purpose, the City considers revenues to be available if they are collected within 60 days of the end of the current fiscal period. The primary revenue sources, which have been treated as susceptible to accrual by the City, are property tax, sales tax, intergovernmental revenues and other taxes. Expenditures are recorded in the accounting period in which the related fund liability is incurred. The Reconciliation of the Fund Financial Statements to the Government-Wide Financial Statements is provided to explain the differences created by the integrated approach of GASB Statement No. 34. The City reports the following major governmental funds: General Fund - The General Fund is used to account for resources traditionally associated with governments which are not required by law or sound financial management to be accounted for in another fund. Public Facilities Impact Capital Projects Fund - This fund has been established to track expenditures related to the construction of facilities for public use. Proprietary Fund Financial Statements Proprietary Fund Financial Statements include a Statement of Net Position, a Statement of Revenues, Expenses and Changes in Net Position, and a Statement of Cash Flows for each major Proprietary Fund. A separate column representing internal service funds is also presented in these statements. However, internal service balances and activities have been combined with the governmental activities in the Government-Wide Financial Statements. The City’s internal service funds include three individual funds which provide services directly to other City funds. These areas of service include - Fleet Services, Equipment Outlay, Workers' Compensation, General Liability, Facility Services, Information Technologies and Personnel Benefits. 11.6 p. 306 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 52 Note 1 – Summary of Significant Accounting Policies (Continued) B. Basis of Accounting and Measurement Focus (Continued) Proprietary Fund Financial Statements (Continued) Proprietary funds are accounted for using the "economic resources" measurement focus and the accrual basis of accounting. Accordingly, all assets and liabilities (whether current or noncurrent) are included on the Statement of Net Position. The Statement of Revenues, Expenses and Changes in Net Position presents increases (revenues) and decreases (expenses) in total net position. Under the accrual basis of accounting, revenues are recognized in the period in which they are earned while expenses are recognized in the period in which the liability is incurred. In these funds, receivables have been recorded as revenue and provisions have been made for uncollectible amounts. Operating revenues in the proprietary funds are those revenues that are generated from the primary operations of the fund. All other revenues are reported as nonoperating revenues. Operating expenses are those expenses that are essential to the primary operations of the fund. All other expenses are reported as nonoperating expenses. The City reports the following major enterprise funds: Sewer Fund - This fund is used to account for sewage stations and collection systems provided by the City to the public. Water Fund - This fund is used to account for water services provided by the City to the public. Fiduciary Fund Financial Statements Fiduciary fund financial statements include a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. These funds have been established to account for assets received and held by the City while acting in the capacity of an agent or custodian. The City reports the following custodial funds: Custodial Funds – These funds account for resources held by the City in custodial capacity for special assessments collected to pay the bonded indebtedness for the Highway 152 Series Bonds and for the revenues that come from fundraising and donations used to buy equipment for the Senior Center. Discretely Presented Component Unit Financial Statements The activities of the Authority closely resemble those of ongoing businesses in which the purpose is to conserve and add to basic resources while meeting operating expenses from current revenues. The Authority provides services on a continuous basis and its activities are substantially financed by revenues derived from user charges and contributions from the member agencies. The Authority utilizes the accrual basis of accounting. Revenues are recognized when earned and expenses are recognized as they are incurred. C. Cash and Investments The City pools its available cash for investment purposes. Highly liquid market investments with maturities of one year or less at time of purchase are stated at amortized cost. All other investments are stated at fair value. 11.6 p. 307 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 53 Note 1 – Summary of Significant Accounting Policies (Continued) C. Cash and Investments (Continued) U.S. GAAP defines fair value, establishes a framework for measuring fair value and establishes disclosures about fair value measurement. Investments, unless otherwise specified, recorded at fair value in the financial statements, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. The three levels of the fair value measurement hierarchy are described below: Level 1 – Inputs are unadjusted, quoted prices for identical assets and liabilities in active markets at the measurement date. Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the assets and liabilities through corroboration with market data at the measurement date. Level 3 – Unobservable inputs that reflect management’s best estimate of what market participants would use in pricing the assets and liabilities at the measurement date. A statement of cash flows is presented for proprietary fund types. For purposes of reporting cash flows, the City considers all highly liquid investments with maturities of three months or less when purchased and cash and investments maintained in the City’s pool to be cash equivalents. Disclosures for deposits and investment risks, as required and applicable, have been provided in Note 2:  Interest Rate Risk  Credit Risk - Overall - Custodial Credit Risk - Concentration of Credit Risk D. Interfund Loans Receivable and Payable Activity between funds that are representative of lending/borrowing arrangements outstanding at the end of the fiscal year are referred to as “due from/to other funds” (i.e., current portion of interfund loans) or advances to/from other fund (i.e., non-current interfund loans). Any residual balances outstanding between the governmental activities and business-type activities are reported in the government-wide financial statements as “interfund balances”. E. Accounts Receivable and Due from Other Governments All accounts receivable and due from other governments are shown net of any allowance for doubtful accounts, if applicable, and estimated refunds due. F. Loans Receivable The accompanying financial statements reflect the recording of certain loans receivable that represent loans made to various parties for homebuyer and rehabilitation loan programs. Where reasonably estimable, an allowance for doubtful accounts has been recorded to reflect management’s best estimate of probable losses associated with nonrepayment. 11.6 p. 308 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 54 Note 1 – Summary of Significant Accounting Policies (Continued) G. Land Held for Resale Land held for resale represents land, structures, and their related improvements acquired for resale. The current land held for resale includes a multi-family residential project which was acquired via foreclosure process by the Housing Trust Fund and converted to affordable rental units and is recorded at the lower of cost or net realizable value and is evaluated for impairment on an annual basis.. The City intends to sell the property to a non-profit affordable housing developer to rehabilitate the existing facility and maintain it as affordable housing units. H. Leases The City is a lessor for leases of buildings and land and recognizes leases receivable and deferred inflows of resources in the financial statements. Variable payments based on future performance or usage of the underlying asset are not included in the measurement of the lease receivable. At the commencement of a lease, the lease receivable is measured at the present value of payments expected to be received during the lease term. Subsequently, the lease receivable is reduced by the principal portion of lease payments received. The deferred inflows of resources are initially measured as the initial amount of the lease receivable, adjusted for lease payments received at or before the lease commencement date. Subsequently, the deferred inflows of resources are recognized as revenue over the life of the lease term in a systematic and rational method. Key estimates and judgments include how the City determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The City uses the average of the LAIF rate and the incremental borrowing rate (IBR) provided by the City’s financial institution for existing leases or the current rate at the time a new lease is executed.  The lease term includes the noncancelable period of the lease plus any option periods that are likely to be exercised.  Lease receipts included in the measurement of the lease receivable is composed of fixed payments from the lessee. The City monitors changes in circumstances that would require a remeasurement of its lease and will remeasure the lease receivable and deferred inflows of resources if certain changes occur that are expected to significantly affect the amount of the lease receivable. I. Capital Assets Capital assets are recorded at cost where historical records are available and at an estimated historical cost where no historical records exist. Contributed capital assets are valued at acquisition value at the date of the contribution. Generally, capital asset purchases in excess of $10,000 are capitalized if they have an expected useful life of more than one year. Capital assets include all public domain (infrastructure) assets consisting of certain improvements including roads, streets, sidewalks, medians and storm drains. 11.6 p. 309 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 55 Note 1 – Summary of Significant Accounting Policies (Continued) I. Capital Assets (Continued) The following schedule summarizes capital asset useful lives: Buildings and improvements 40 years Machinery and equipment 5 - 25 years Furniture and fixtures 10 - 20 years Vehicles 8 years Infrastructure 5 - 70 years Depreciation has been provided using the straight-line method over the estimated useful life of the asset in the government-wide financial statements and in the fund financial statements of the proprietary funds. J. Subscription-Based Information Technology Arrangements (SBITAs) The City has a policy to recognize a subscription liability and a right‐to‐use subscription asset (subscription asset) in the financial statements. The City recognizes subscription liabilities with an initial, individual value of $5,000 or more with a subscription term greater than one year. Variable payments based on future performance of the City, usage of the underlying IT asset, or number of user seats are not included in the measurement of the subscription liability, rather, those variable payments are recognized as outflows of resources (expenses) in the period the obligation for those payments is incurred. At the commencement of a SBITA, the City initially measures the subscription liability at the present value of payments expected to be made during the subscription term. Subsequently, the subscription liability is reduced by the principal portion of subscription payments made. Subscription assets are recorded at the amount of the initial measurement of the subscription liabilities, less any payments made to the SBITA vendor before the commencement of the subscription term, and capitalizable initial implementation cost, less any incentives received from the SBITA vendor at or before the commencement of the subscription term.  Preliminary Project Stage: Outlays are expensed as incurred.  Initial Implementation Stage: Outlays are capitalized as an addition to the subscription asset. Upon adoption, the City elected to exclude the capitalizable outlays associated with the initial implementation stage and the operation and additional implementation stage that were incurred prior to the implementation of this Statement in the measurement of subscription assets as of July 1, 2022. Subscription assets are reported within capital assets and subscription liabilities are reported with long-term debt on the statement of net position. Subscription assets are amortized using the straight-line method over the shorter of the subscription term or the useful life of the underlying IT asset, unless the subscription contains a purchase option that the City has determined is reasonably certain of being exercised. In this case, the subscription asset is amortized over the useful life of the underlying IT asset. 11.6 p. 310 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 56 Note 1 – Summary of Significant Accounting Policies (Continued) J. Subscription-Based Information Technology Arrangements (SBITAs) (Continued) Key estimates and judgments related to SBITA include how the City determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.  The City uses the interest rate charged by the SBITA vendor as the discount rate. When the interest rate charged by the SBITA vendor is not provided, the City generally uses its estimated incremental borrowing rate as the discount rate for SBITA.  The subscription term includes the noncancellable period of the SBITA. Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option price that the City is reasonably certain to exercise. K. Deferred Outflows/Inflows of Resources The statement of financial position reports separate sections for deferred outflows of resources and deferred inflows of resources, when applicable. Deferred Outflows of Resources represent outflows of resources (consumption of net assets) that applies to future periods and that, therefore, will not be recognized as an expense until that time. The City reports pension contributions after the measurement date and deferred losses related to pensions and OPEB in this category. Deferred Inflows of Resources represent inflows of resources (acquisition of net assets) that applies to future periods and that, therefore, are not recognized as revenue until that time. The City reports lease related inflows, unavailable revenues and deferred gains related to pensions and OPEB in this category. L. Interest Payable In the government-wide financial statements, interest payable on long-term debt is recognized as the liability is incurred for governmental activities and business-type activities. In the fund financial statements, only proprietary fund and private-purpose trust fund types recognize the interest payable when the liability is incurred. M. Unearned Revenue Unearned revenue is reported for transactions for which revenue has been received but has not yet been earned. Unearned revenues primarily consist of prepaid charges for services and grant allocations, primarily for American Rescue Plan Act funding, which have not yet been spent. 11.6 p. 311 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 57 Note 1 – Summary of Significant Accounting Policies (Continued) N. Compensated Absences All full-time employees accumulate vacation benefits in varying annual amounts. Sick leave benefits accrue at the rate of one day per month for all full-time employees (except fire shift employees who accrue 12 hours of sick leave per month) regardless of their length of service to the City. Upon termination or retirement, employees are paid for all unused vacation time and overtime. No cash payment is made for unused sick leave upon termination or retirement. A liability is recorded for unused vacation and similar compensatory leave balances since the employees’ entitlement to these balances are attributable to services already rendered and it is probable that virtually all of these balances will be liquidated by either paid time off or payments upon termination or retirement. If material, a proprietary fund liability is accrued for all leave benefits relating to the operations of the proprietary funds. A current liability is accrued in the governmental funds for material leave benefits due on demand to governmental fund employees that have terminated prior to year-end. All other amounts are recorded in the government-wide financial statements. These noncurrent amounts will be recorded as fund expenditures in the year in which they are paid or become due. O. Net Pension Liability For purposes of measuring the net pension liability, deferred outflows and inflows of resources related to pensions, and pension expense, information about the fiduciary net position and additions to/deductions from the fiduciary net position have been determined on the same basis as they are reported by the CalPERS Financial Office. For this purpose, benefit payments (including refunds of employee contributions) are recognized when currently due and payable in accordance with the benefit terms. Investments are reported at fair value. The following timeframes are used for pension reporting: Valuation Date June 30, 2021 Measurement Date June 30, 2022 Measurement Period July 1, 2021 to June 30, 2022 Gains and losses related to changes in total pension liability and fiduciary net position are recognized in pension expense systematically over time. The first amortized amounts are recognized in pension expense for the year the gain or loss occurs. The remaining amounts are categorized as deferred outflows and deferred inflows of resources related to pensions and are to be recognized in future pension expense. The amortization period differs depending on the source of the gain or loss. The difference between projected and actual earnings is amortized straight-line over 5 years. All other amounts are amortized straight-line over the average expected remaining service lives of all members that are provided with benefits (active, inactive, and retired) as of the beginning of the measurement period. 11.6 p. 312 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 58 Note 1 – Summary of Significant Accounting Policies (Continued) P. Other Postemployment Benefits Liability (OPEB) For purposes of measuring the OPEB liability, deferred outflows of resources and deferred inflows of resources related to OPEB and OPEB expense, information about the City's OPEB plan have been determined by an independent actuary. For this purpose, benefit payments are recognized when currently due and payable in accordance with the benefit terms. Generally accepted accounting principles require that the reported results must pertain to liability and asset information within certain defined timeframes. For this report, the following timeframes are used: Valuation Date June 30, 2022 Measurement Date June 30, 2022 Measurement Period July 1, 2021 to June 30, 2022 Q. Claims Payable The City records a liability for litigation, judgments and claims when it is probable that an asset has been impaired or a liability has been incurred prior to year-end and the probable amount of loss (net of any insurance coverage) can be reasonably estimated. This liability is recorded in the internal service fund that accounts for the City’s self-insurance activity. R. Net Position In the government-wide financial statements and proprietary fund financial statements, net position is classified as follows: Net Investment in Capital Assets – This component of net position consists of capital assets, net of accumulated depreciation and amortization and related deferred charges on refunding, reduced by the outstanding balances of debt that are attributable to the acquisition, construction, or improvement of those items, net of unspent debt proceeds. Restricted – This component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Separate line items are used to distinguish among major categories of restrictions and are further displayed as expendable or nonexpendable based on the nature of the restriction. Unrestricted – This component of net position is the amount of the assets, deferred outflows of resources, liabilities, and deferred inflows of resources that are not included in the determination of net investment in capital assets or the restricted component of net position. S. Fund Balances In the governmental fund financial statements, fund balances are classified as follows: Nonspendable fund balance includes amounts that cannot be spent because they are either (a) not in spendable form or (b) legally or contractually required to be maintained intact. The City’s nonspendable fund balance represents inventory, prepaid expenses, land held for resale, and loans receivable unless the proceeds from the collection of those loans receivable or from sale of the properties is restricted, committed, or assigned. 11.6 p. 313 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 59 Note 1 – Summary of Significant Accounting Policies (Continued) S. Fund Balances (Continued) Restricted fund balance includes resources that are subject to externally enforceable legal restrictions. It includes amounts that can be spent only for the specific purposes stipulated by constitution, external resource providers, or through enabling legislation. Committed fund balance includes amounts that can be used only for the specific purposes determined by a formal action of the City’s highest level of decision-making authority. The City Council, as the City’s highest level of decision-making authority, may commit, through a resolution, fund balance for specific purposes pursuant to constraints imposed by such formal actions taken. Committed amounts cannot be used for any other purpose unless the City Council removes or changes the specific use through the same type of formal action taken to establish the commitment. Assigned fund balance consists of funds that are set aside for specific purposes by the City’s highest level of decision-making authority or a body or official that has been given the authority to assign funds. The City has not adopted a policy on the authority to assign amounts for specific purposes. Unassigned fund balance is the residual classification for the City’s fund balance and includes all spendable amounts not contained in the other classifications. This category also provides the resources necessary to meet unexpected expenditures and revenue shortfalls. The General Fund is the only fund that reports a positive unassigned fund balance amount. In other governmental funds, it is not appropriate to report a positive unassigned fund balance amount. However, in governmental funds other than General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. T. Spending Policy Government-Wide Financial Statements and the Proprietary Fund Financial Statements When expenses are incurred for purposes for which both restricted and unrestricted components of net position are available, the City’s policy is to apply the restricted component of net position first, then the unrestricted component of net position as needed. Governmental Fund Financial Statements When expenditures are incurred for purposes for which both restricted and unrestricted fund balances are available, the City’s policy is to apply restricted fund balances first, then unrestricted fund balances as needed. When expenditures are incurred for purposes where only unrestricted fund balances are available, the City uses the unrestricted resources in the following order, except for instances wherein an ordinance specifies the fund balance:  Committed  Assigned  Unassigned 11.6 p. 314 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 60 Note 1 – Summary of Significant Accounting Policies (Continued) U. Property Taxes Property taxes in the State of California are administered for all local agencies at the County level, and consist of secured, unsecured and utility tax rolls. The following is a summary of major policies and practices relating to property taxes: Property Valuations - are established by the Assessor of the County of Santa Clara for the secured and unsecured property tax rolls; the utility property tax roll is valued by the State Board of Equalization. Under the provisions of Article XIIIA of the State Constitution (Proposition 13 adopted by the voters on June 6, 1978), properties are assessed at 100% of full value. From this base of assessment, subsequent annual increases in valuation are limited to a maximum of 2%. However, increases to full value are allowed for property improvements or upon change in ownership. Personal property is excluded from these limitations and is subject to annual reappraisal. Tax Levies - are limited to 1% of full market value which results in a tax rate of $1.00 per $100 assessed valuation, under the provisions of Proposition 13. Tax rates for voter-approved indebtedness are excluded from this limitation. Tax Levy Dates - are attached annually on March 1 preceding the fiscal year for which the taxes are levied. The fiscal year begins July 1 and ends June 30 of the following year. Taxes are levied on both real and unsecured personal property as it exists at that time. Liens against real estate, as well as the tax on personal property, are not relieved by subsequent renewal or change in ownership. Tax Collections - are the responsibility of the County Tax Collector. Taxes and assessments on secured and utility rolls which constitute a lien against the property may be paid in two installments. The first is due on November 1 of the fiscal year and is delinquent if not paid by December 10, and the second is due on March 1 of the fiscal year and is delinquent if not paid by April 10. Unsecured personal property taxes do not constitute a lien against real property unless the taxes become delinquent. Payment must be made in one installment, which is delinquent if not paid by August 31 of the fiscal year. Significant penalties are imposed by the County for late payments. Tax Levy Apportionments - Due to the nature of the City-wide maximum levy, it is not possible to identify general purpose tax rates for specific entities. Under State legislation adopted subsequent to the passage of Proposition 13, apportionments to local agencies are made by the County Auditor-Controller based primarily on the ratio that each agency represented of the total City-wide levy for the three years prior to fiscal year 1979. Property Tax Administration Fees - The State of California fiscal year 1990-91 Budget Act authorized counties to collect an administrative fee for collection and distribution of property taxes. Property taxes are recorded as net of administrative fees withheld during the fiscal year. V. Use of Estimates The preparation of financial statements in accordance with U.S. GAAP, requires management to make certain estimates and assumptions that affect the reported amounts of assets and liabilities, and disclosure of contingent assets and liabilities, at the date of the financial statements, as well as the reported amounts of revenue and expenses during the reporting period. Actual results could differ from those estimates. 11.6 p. 315 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 61 Note 1 – Summary of Significant Accounting Policies (Continued) W. Implementation of New GASB Pronouncements During fiscal year ended June 30, 2023, the City implemented the following new GASB Pronouncement: GASB Statement No. 91 In May 2019, GASB issued Statement No. 91, Conduit Debt Obligations (GASB Statement No. 91), to provide a single method of reporting conduit debt obligations by issuers and eliminate diversity in practice associated with (1) commitments extended by issuers, (2) arrangements associated with conduit debt obligations, and (3) related note disclosures. This statement achieves those objectives by clarifying the existing definition of a conduit debt obligation; establishing that a conduit debt obligation is not a liability of the issuer; establishing standards for accounting and financial reporting of additional commitments and voluntary commitments extended by issuers and arrangements associated with conduit debt obligations; and improving required note disclosures. Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2023. GASB Statement No. 94 In March 2020, GASB issued Statement No. 94, Public-Private and Public-Public Partnerships and Availability Payment Arrangements (GASB Statement No. 94) to improve financial reporting by addressing issues related to public-private and public-public partnership arrangements (PPPs). This Statement also provides guidance for accounting and financial reporting for availability payment arrangements (APAs). Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2023. GASB Statement No. 96 In May 2020, GASB issued Statement No. 96, Subscription-Based Information Technology Arrangements (GASB Statement No. 96), to provide guidance on the accounting and financial reporting for subscription based information technology arrangements (SBITAs) for government end users (governments). This Statement (1) defines a SBITA; (2) establishes that a SBITA results in a right-to-use subscription asset- -an intangible asset and a corresponding subscription liability: (3) provides the capitalization criteria for outlays other than subscription payments, including implementation costs of a SBITA; and (4) requires note disclosures regarding a SBITA. Implementation of this Statement had a moderate effect on the City’s financial statements for the fiscal year ended June 30, 2023. GASB Statement No. 99 - In April 2022, the GASB issued Statement No. 99, Omnibus 2022. The objectives of this Statement are to enhance comparability in accounting and financial reporting and to improve the consistency of authoritative literature by addressing (1) practice issues that have been identified during implementation and application of certain GASB Statements and (2) accounting and financial reporting for financial guarantees. The Statement is effective immediately for the requirements related to extension of the use of LIBOR, accounting for SNAP distributions, disclosures of nonmonetary transactions, pledges of future revenues by pledging governments, clarification of certain provisions in Statement 34, as amended, and terminology updates related to Statement 53 and Statement 63. The Statement is effective for fiscal year years beginning after June 15, 2022 for requirements related to leases, PPPs, and SBITAS. Implementation of this Statement did not have a significant effect on the City’s financial statements for the fiscal year ended June 30, 2023. X. New GASB Pronouncements The City is currently evaluating its accounting practices to determine the potential impact on the financial statements for the following GASB Statements:  In June 2022, GASB issued Statement No. 100, Accounting Changes and Error Corrections – an Amendment of GASB Statement No. 62. The primary objective of this Statement is to enhance accounting and financial reporting requirements for accounting changes and error corrections to provide more understandable, reliable, relevant, consistent, and comparable information for making decisions or assessing accountability. Application of this statement is effective for the City’s fiscal year ending June 30, 2024. 11.6 p. 316 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 62 Note 1 – Summary of Significant Accounting Policies (Continued) X. New GASB Pronouncements (Continued)  In June 2022, GASB issued Statement No. 101, Compensated Absences. The objective of this Statement is to better meet the information needs of financial statement users by updating the recognition and measurement guidance for compensated absences. That objective is achieved by aligning the recognition and measurement guidance under a unified model and by amending certain previously required disclosures. Application of this statement is effective for the City’s fiscal year ending June 30, 2025.  In December 2023, GASB issued Statement No. 102, Certain Risk Disclosures. The objective of this Statement is to provide users of government financial statements with essential information about risks related to a government’s vulnerabilities due to certain concentrations or constraints. That objective is achieved by requiring governments to assess whether a concentration or constraint makes the primary government reporting unit or other reporting units that report a liability for revenue debt vulnerable to the risk of a substantial impact. The statement also requires a government to assess whether an event or events associated with a concentration or constraint that could cause the substantial impact have occurred, have begun to occur, or are more likely than not to begin to occur within 12 months of the date the financial statements are issued. Application of this statement is effective for the City’s fiscal year ending June 30, 2025. Earlier application is encouraged. Note 2 – Stewardship, Compliance and Accountability A. Encumbrances Encumbrances are estimations of costs related to unperformed contracts for goods and services. These commitments are recorded for budgetary control purposes in the General, Special Revenue, and similar governmental funds. Encumbrances outstanding at fiscal year-end are reported as committed or assigned fund balance. They represent the estimated amount of the expenditure ultimately to result if unperformed contracts in- process at fiscal year-end are completed. They do not constitute expenditures or estimated liabilities. The significant amounts of encumbrances outstanding as of June 30, 2023 was $13,481,631. B. Continuing Appropriations The unexpended and unencumbered appropriations that are available and recommended for continuation are approved by the City Council for carryover to the following fiscal year. These commitments are reported as committed or assigned fund balance. C. Deficit Fund Balances/Net Position The following funds contained a deficit fund balance/net position as of June 30, 2023: Funds Amount Major Governmental Fund: Public Facilities Impact Capital Project Fund 1,050,416$ Internal Service Fund: Workers’ Compensation Fund 1,767,704 Nonmajor Funds: Downtown Beautification 155,324 11.6 p. 317 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 63 Note 2 – Stewardship, Compliance and Accountability (Continued) C. Deficit Fund Balances/Net Position (Continued) In the Government-Wide Financial Statements, the City had a deficit unrestricted net position at June 30, 2023 for its governmental activities of $(27,040,644) of which, $(91,683,383) and $(12,119,260) were attributed to aggregate net pension liabilities and net other postemployment benefits liabilities, respectively. D. Excess of Expenditure Over Appropriations The following funds contained excess of expenditures over final appropriations for the year ended June 30, 2023: Final Funds Appropriations Expenditures Excess Nonmajor Funds: Special Revenue Fund: Los Arroyos Fund 101,000$ 128,866$ (27,866)$ Capital Project Fund: Traffic Impact Capital Projects Fund 3,955,605 4,040,372 (84,767) Debt Service Funds: 2013 Refunding Bond Debt Service Fund 1,848,756 1,866,894 (18,138) Gilroy Community Library Fund 1,836,111 1,841,001 (4,890) Note 3 – Cash and Investments The City maintains a cash and investment pool, which includes cash balances and authorized investments of all funds. The City had the following cash and investments at June 30, 2023: Statement of Governmental Business-type Component Fiduciary Activities Activities Unit Net Position Total Cash and investments 134,234,370$ 54,125,363$ 11,207,900$ 840,399$ 200,408,032$ Cash and investment with fiscal agent 2,535,176 25,470,094 - 299,364 28,304,634 Total cash and investments 136,769,546$ 79,595,457$ 11,207,900$ 1,139,763$ 228,712,666$ Government-Wide Statement of Net Position The City’s cash and investments at June 30, 2023 in more detail: Cash and cash equivalents: Demand deposits 5,334,399$ Petty cash 4,955 Total cash and cash equivalents 5,339,354 Investments: Local Agency Investment Fund 133,966,263 U.S. Treasury Notes 61,102,415 Investments with Fiscal Agent: Local Agency Investment Fund 25,468,374 Money Market Mutual Fund 2,836,260 Total investments 223,373,312 Total cash and investments 228,712,666$ 11.6 p. 318 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 64 Note 3 – Cash and Investments (Continued) A. Demand Deposits The carrying amount of the City’s demand deposits were $5,334,399 at June 30, 2023. Bank balances before reconciling items were $5,424,034 at that date, the total amount of which was insured or collateralized with securities held by the pledging financial institutions in the City’s name as discussed below. The California Government Code requires California banks and savings and loan associations to secure the City’s cash deposits by pledging securities as collateral. This Code states that collateral pledged in this manner shall have the effect of perfecting a security interest in such collateral superior to those of a general creditor. Thus, collateral for cash deposits is considered to be held in the City's name. The market value of pledged securities must equal at least 110% of the City's cash deposits. California law also allows institutions to secure City deposits by pledging first trust deed mortgage notes having a value of 150% of the City’s total cash deposits. The City may waive collateral requirements for cash deposits, which are fully insured up to $250,000 by the Federal Deposit Insurance Corporation (“FDIC”). The City, however, has not waived the collateralization requirements. B. Investments Authorized by the California Government Code and the City's Investment Policy The table below identifies the investment types that are authorized by the City's investment policy and the California Government Code. The table also identifies certain provisions of the California Government Code (or the City's investment policy, if more restrictive) that address interest rate risk, credit risk, and concentration of credit risk. This table below does not identify investment types that are authorized and held by bond trustees that are governed by the provisions of debt agreements of the City, rather than the general provisions of the California Government Code or the City's investment policy. Maximum Maximum Maximum Percentage of Investment in One Authorized Investment Type Maturity Portfolio Issuer Local Agency Investment Fund (LAIF) N/A None None U.S. Government Sponsored Agency Securities N/A None None Insured Certificate of Deposit (CD's) N/A 15% $250,000 Banker's Acceptances N/A 15% None Commercial Paper N/A 10% None Passbook Savings or Money Market Demand Deposits N/A None None Money Market Mutual Funds N/A 5% None Liquidity: *Securities or bonds purchased under a prior investment policy may be held or sold but additional purchases shall not be made. N/A- Not applicable C. Fair Value Measurements At June 30, 2023, investments are reported at fair value. Investments in investment contracts are valued at cost and exempt from the fair value hierarchy. Investments that are measured at fair value using the net asset value (NAV) per share are not classified in the fair value hierarchy. The City values investments in money market mutual funds at NAV based on amortized cost The following table presents the fair value measurement of investments on a recurring basis and the levels within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2023: 11.6 p. 319 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 65 Note 3 – Cash and Investments (Continued) C. Fair Value Measurements (Continued) Primary Government Total Level 1 U.S. Treasury Notes 61,102,415$ 61,102,415$ Total Investments 61,102,415$ 61,102,415$ Primary Government Investments measured at the net asset value (NAV) Local Agency Investment Fund 148,265,183$ Money Market Mutual Funds 2,836,260 Total investments measured at the net asset value (NAV) 151,101,443$ Component Unit Investments measured at the net asset value (NAV) Local Agency Investment Fund 11,169,454$ Total investments measured at the net asset value (NAV) 11,169,454$ D. Disclosures Relating to Interest Rate Risk Interest rate risk is the risk that changes in market interest rates will adversely affect the fair value of an investment. Generally, the longer the maturity of an investment, the greater the sensitivity of its fair value to changes in market interest rates. One of the ways that the City manages its exposure to interest rate risk is by purchasing a combination of shorter term and longer-term investments and timing cash flows from maturities so that a portion of the portfolio is maturing or coming close to maturity evenly over time as necessary to provide the cash flow and liquidity needed for operations. Information about the sensitivity of the fair values of the City's investments to market interest rate fluctuations is as follows: 12 Months More than Investment Type Total or less 12 Months Local Agency Investment Fund 159,434,637$ 159,434,637$ -$ U.S. Treasury Notes 61,102,415 38,674,950 22,427,465 Money Market Mutual Funds 2,836,260 2,836,260 - Total 223,373,312$ 200,945,847$ 22,427,465$ Remaining Maturity (in Months) E. Disclosures Relating to Credit Risk Generally, credit risk is the risk that an issuer of an investment will not fulfill its obligation to the holder of the investment. This is measured by the assignment of a rating by a nationally recognized statistical rating organization. Presented below is the minimum rating required by (where applicable) the California Government Code, the City’s investment policy or debt agreements, and the actual rating by Standard & Poor’s as of year-end for each investment type. Minimum Legal Investment Type Total Rating Local Agency Investment Fund 159,434,637$ N/A U.S. Treasury Notes 61,102,415 Aaa Money Market Mutual Funds 2,836,260 N/A Total 223,373,312$ 11.6 p. 320 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 66 Note 3 – Cash and Investments (Continued) F. Concentration of Credit Risk The investment policy of the City contains no limitations on the amount that can be invested in any one issuer beyond that stipulated by the California Government Code. There are no investments in any one issuer (other than U.S. Treasury securities, mutual funds and external investment pools) that represent 5% or more of total City investments. The money market funds held with fiscal agents are related to bond issuances and reserves and not subject to the limitation set by California Government Code. G. Custodial Credit Risk Custodial credit risk for deposits is the risk that, in the event of the failure of a depository financial institution, a government will not be able to recover its deposits or will not be able to recover collateral securities that are in the possession of an outside party. The custodial credit risk for investments is the risk that, in the event of the failure of the counterparty (e.g., broker-dealer) to a transaction, a government will not be able to recover the value of its investment or collateral securities that are in the possession of another party. The California Government Code and the City’s investment policy do not contain legal or policy requirements that would limit the exposure to custodial credit risk for deposits or investments, other than the following provision for deposits. The California Government Code requires that a financial institution secure deposits made by state or local governmental units by pledging securities in an undivided collateral pool held by a depository regulated under state law (unless so waived by the governmental unit). The 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. For investments identified herein as held by fiscal agent, the trustee selects the investment under the terms of the applicable trust agreement, acquires the investment, and holds the investment on behalf of the reporting government. H. Investment in State Investment Pool The City is a voluntary participant in the Local Agency Investment Fund (“LAIF”) that is regulated by California Government Code Section 16429 under the oversight of the Treasurer of the State of California. The fair value of the City’s investment in this pool is reported in the accompanying financial statements at amounts based upon the City’s pro-rata share of the fair value provided by LAIF for the entire LAIF portfolio (in relation to the amortized cost of that portfolio). The balance available for withdrawal is based on the accounting records maintained by LAIF, which are recorded on an amortized cost basis. The City investments in LAIF at June 30, 2023 included a portion of pool funds invested in Structured Notes and Asset-Backed Securities. Structured Notes: debt securities (other than asset-backed securities) whose cash flow characteristics (coupon rate, redemption amount, or stated maturity) depend upon one or more indices and/or that have embedded forwards or options. Asset-Backed Securities: generally, mortgage-backed securities that entitle their purchasers to receive a share of the cash flows from a pool of assets such as principal and interest repayments from a pool of mortgages (for example, Collateralized Mortgage Obligations) or credit card receivables. As of June 30, 2023, the City and DCU had $148,265,183 and $11,169,454 invested in LAIF, respectively, which had invested 2.78% of the pool investment funds in Structured Notes and Asset-Backed Securities. 11.6 p. 321 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 67 Note 4 – Loans Receivable At June 30, 2023, loans receivable consisted of the following: Governmental Activities Down payment assistance 1,465,977$ Housing improvement to non-profits 450,000 Involuntary liens 131,345 Affordable housing development loans 790,000 Housing rehabilitation 206,316 Total loans receivable 3,043,638$ The City made deferred loans to senior citizens, the physically handicapped, and low to moderate income residents for the purposes of rehabilitation and down payment assistance. These loans are repaid at the end of a 30 year term or when the title to the property changes. The City also made deferred loans to third party housing non-profits to fund housing projects which are due the earlier of 55 years after completion of the projects or December 31, 2074. Where reasonably estimable, an allowance for doubtful accounts has been recorded to reflect management’s best estimate of probable losses associated with nonrepayment. Estimates of any additional potential losses associated with nonrepayment cannot be reasonably estimated at this time. Note 5 - Interfund Transactions A. Due to/from Other Funds The following is a summary of amount due to and from other funds as of June 30, 2023: Due From Other Funds Due To Other Funds General Fund Total Nonmajor Governmental Funds 456,085$ 456,085$ Total 456,085$ 456,085$ B. Advances to/from Other Funds The following is a summary of advances to and from other funds as of June 30, 2023: Advances to Other Funds Nonmajor Governmental Funds Internal Service Fund Total Public Facilities Impact Capital Projects Fund 1,523,222$ 2,496,513$ 4,019,735$ Total 1,523,222$ 2,496,513$ 4,019,735$ Advances from Other Funds 11.6 p. 322 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 68 Note 5 – Interfund Transactions (Continued) B. Advances to/from Other Funds (Continued) In February 2008, the City purchased the Gilroy Gardens Property (Property), which includes a horticultural education and theme park, for approximately $13.7 million. At the same time, the City entered into a single tenant lease of the Property with the seller, Gilroy Gardens Family Theme Park, Inc. To fund the acquisition, the Public Facilities Impact Fund borrowed from certain funds which is accounted for as a long-term advance for a period of 20 years. The annual loan activity is budgeted through revenue and expenditure transactions. The loan interest is at the City’s annual average portfolio yield. The original loan amounts were as follows: Storm Drain Fund ($1.2 million), the Sewer Development Fund ($5.0 million), the Fleet Services Fund ($4.3 million), the Equipment Outlay Fund ($2.2 million) and the Water Fund ($1.0 million). The outstanding balance of the interfund loan was $4,019,735 as of June 30,2023. C. Transfers During the year ended June 30, 2023, the City had the following transfers: Public Facilities Nonmajor Sewer Water Impact Capital Governmental Enterprise Enterprise Transfers In General Fund1 Projects Fund2 Funds3 Fund4 Fund4 Total General Fund 1,750,900$ -$ 163,053$ 311,862$ 353,693$ 2,579,508$ Public Facilities Impact Capital Projects Fund 40,763 - - - - 40,763 Nonmajor Governmental Funds 397,908 3,188,031 119,087 - - 3,705,026 Sewer Enterprise Fund - - 1,543,668 - - 1,543,668 Total 2,189,571$ 3,188,031$ 1,825,808$ 311,862$ 353,693$ 7,868,965$ Transfers Out 1General Fund support of certain capital projects, safety related grants, and IT services. 2Public Facilities Impact Capital Projects Fund supports various debt instruments. 3Other Governmental Funds support of grant personnel costs, debt retirements and sewer development project costs. 4Enterprise Fund transfers to the General Fund to support impact to local streets and roads costs and subsidize environmental costs. D. Due to/from Component Unit The following is a summary of due to and from the Authority as of June 30, 2023: Due to component unit South Regional Wastewater Authority Sewer Enterprise Fund 3,889,410$ 3,889,410$ The amounts owed by the City to the Authority are primarily for outstanding operating and capital contributions at year end. 11.6 p. 323 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 69 Note 6 – Lease Receivables The City leases various types of property including land and buildings. Leases receivable consist of agreements with other entities for the “right–to–use” the underlying assets at various locations owned by the City. The remaining terms of the agreements range from 2 to 40 years. The interest rates used calculated the net present value of the lease receivable ranged from 1% to 1.5%. For the fiscal year ended June 30, 2023, the City and DCU recognized $360,226 and $78,428 in lease revenue, respectively, and the outstanding net present value of the lease receivable amount is $6,442,757 for the City. Governmental Activities A summary of changes in lease receivable for the governmental activities for the year ended June 30, 2023 is as follows: Amounts Amounts Balance Balance due within due in more July 1, 2022 Additions Reductions June 30, 2023 one year than one year 6,649,983$ 86,394$ (293,620)$ 6,442,757$ 256,201$ 6,186,556$ At June 30, 2023, the required payments for these leases, including interest, and deferred inflow-lease related future revenue are: NPV lease Total lease Year Ending Deferred inflows receivables Interest payments June 30, of resources 2024 256,201$ 103,079$ 359,280$ 2024 320,035$ 2025 233,978 100,236 334,214 2025 279,845 2026 247,535 97,254 344,789 2026 279,845 2027 198,678 94,245 292,923 2027 220,565 2028 200,388 91,335 291,723 2028 220,565 2029 - 2033 880,084 413,187 1,293,271 2029 - 2033 1,102,825 2034 - 2038 616,955 356,625 973,580 2034 - 2038 701,200 2039 - 2043 671,375 302,205 973,580 2039 - 2043 701,200 2044 - 2048 730,595 242,985 973,580 2044 - 2048 701,200 2049 - 2053 795,038 178,542 973,580 2049 - 2053 701,200 2054 - 2058 865,166 108,414 973,580 2054 - 2058 701,200 2059 - 2062 746,764 32,100 778,864 2059 - 2062 388,975 Total 6,442,757$ 2,120,207$ 8,562,964$ Total 6,318,655$ Discretely Presented Component Unit A summary of changes in lease receivable for the discretely presented component unit for the year ended June 30, 2023 is as follows: Amounts Amounts Balance Balance due within due in more July 1, 2022 Additions Reductions June 30, 2023 one year than one year 89,597$ -$ (89,597)$ -$ -$ -$ 11.6 p. 324 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 70 Note 7 – Capital Assets Governmental Activities The following is a summary of changes in capital assets for the governmental activities for the year ended June 30, 2023: Balance July 1, 2022 Balance as restated Additions Deletions Transferes June 30, 2023 Capital assets not being depreciated: Land 21,334,900$ -$ -$ -$ 21,334,900$ Construction in progress 5,733,926 8,111,015 (461,507) (175,822) 13,207,612 Total capital assets not being depreciated 27,068,826 8,111,015 (461,507) (175,822) 34,542,512 Capital assets being depreciated: Building and improvements 125,118,480 64,324 - - 125,182,804 Equipment and furniture 11,291,870 - - - 11,291,870 IT equipment and software 2,821,187 605,613 - 175,822 3,602,622 Vehicle 13,660,148 986,502 (482,671) - 14,163,979 Infrastructure 289,765,532 883,289 (146,084) - 290,502,737 Total capital assets being depreciated 442,657,217 2,539,728 (628,755) 175,822 444,744,012 Less accumulated depreciation for: Building and improvements (49,529,384) (3,056,340) - - (52,585,724) Equipment and furniture (9,278,960) (485,910) - - (9,764,870) IT equipment and software (2,299,591) (167,709) - - (2,467,300) Vehicle (9,945,280) (551,698) 482,625 - (10,014,353) Infrastructure (195,857,669) (7,342,678) 142,468 - (203,057,879) Total accumulated depreciation (266,910,884) (11,604,335) 625,093 - (277,890,126) Total capital assets being depreciated, net 175,746,333 (9,064,607) (3,662) 175,822 166,853,886 Subscription assets 1,268,134 165,909 - - 1,434,043 Less accumulated amortization - (404,708) - - (404,708) Total subscription assets, net 1,268,134 (238,799) - - 1,029,335 Total governmental activities 204,083,293$ (1,192,391)$ (465,169)$ -$ 202,425,733$ Depreciation and amortization expense was charged to functions/programs of governmental activities for the year ended June 30, 2023 as follows: General government 898,176$ Public safety 1,079,301 Public works 7,573,170 Community development 1,258,691 Internal service fund 1,199,705 Total 12,009,043$ 11.6 p. 325 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 71 Note 7 – Capital Assets (Continued) Business-Type Activities The following is a summary of changes in capital assets for the business-type activities for the year ended June 30, 2023: Balance July 1, 2022 Balance as restated Additions Deletions Transfers June 30, 2023 Capital assets not being depreciated: Construction in progress 108,139$ -$ -$ -$ 108,139$ Total capital assets not being depreciated 108,139 - - - 108,139 Capital assets being depreciated: Land improvements 427,852 - - - 427,852 Equipment and furniture 212,630 - - - 212,630 IT Equipment/software 15,000 - - - 15,000 Vehicles 213,353 - - - 213,353 Infrastructure 156,700,282 2,064,928 - - 158,765,210 Total capital assets being depreciated 157,569,117 2,064,928 - - 159,634,045 Less accumulated depreciation for: Land improvements (427,853) - - - (427,853) Equipment and furniture (199,632) (2,737) - - (202,369) IT Equipment/software (1,250) (5,000) - - (6,250) Vehicles (33,189) (14,223) - - (47,412) Infrastructure (73,044,616) (2,899,577) - - (75,944,193) Total accumulated depreciation (73,706,540) (2,921,537) - - (76,628,077) Total capital assets being depreciated, net 83,862,577 (856,609) - - 83,005,968 Subscription assets 22,500 - - - 22,500 Less accumulated amortization - (10,000) - - (10,000) Total subscription assets, net 22,500 (10,000) - - 12,500 Total business-type activities 83,993,216$ (866,609)$ -$ -$ 83,126,607$ Depreciation and amortization expense was charged to the business-type activities as follows: Sewer 1,511,887$ Water 1,419,650 Total 2,931,537$ 11.6 p. 326 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 72 Note 7 – Capital Assets (Continued) Discretely Presented Component Unit The following is a summary of changes in capital assets for the DCU for the year ended June 30, 2023: Balance Balance June 30, 2022 Additions Deletions Transfers June 30, 2023 Capital assets not being depreciated: Land 13,396,202$ -$ -$ -$ 13,396,202$ Construction in progress 35,257,312 28,922,911 - - 64,180,223 Total capital assets not being depreciated 48,653,514 28,922,911 - - 77,576,425 Capital assets being depreciated: Building and improvements 72,257,749 - - 72,257,749 Land improvements 10,681,371 - - - 10,681,371 Equipment and furnitures 20,081,738 16,112 - - 20,097,850 Vehicles 1,505,201 83,144 - - 1,588,345 Infrastructure 35,874,536 - - - 35,874,536 Total capital assets being depreciated 140,400,595 99,256 - - 140,499,851 Less accumulated depreciation for: Building and improvements (42,873,925) (1,663,219) - - (44,537,144) Land improvements (6,098,263) (190,342) - - (6,288,605) Equipment and furniture (16,274,554) (666,258) - - (16,940,812) Vehicles (1,173,839) (37,155) - - (1,210,994) Infrastructure (11,072,338) (1,645,755) - - (12,718,093) Total accumulated depreciation (77,492,919) (4,202,729) - - (81,695,648) Total capital assets being depreciated, net 62,907,676 (4,103,473) - - 58,804,203 Total discretly component unit 111,561,190$ 24,819,438$ -$ -$ 136,380,628$ Note 8 – Equity Investment in DPCU The City and the City of Morgan Hill are members of the South County Regional Wastewater Authority, a joint powers authority (“Authority”), that provides for the construction, ownership, maintenance and operation of a domestic sewer treatment plant. The agreement provides for the participants’ capacity right to use the system. The participants are also obligated to share in the annual direct operating costs of the Authority. The City maintains the accounting records for the Authority. The City’s equity investment in the DCU is reported on the statement of net position of the City’s sewer enterprise fund as an “equity investment in DCU” in the amount of $90,606,337 as required under the equity method of accounting for investments. The financial statements of the Authority can be obtained from the City’s finance department. 11.6 p. 327 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 73 Note 9 – Deferred Compensation The City maintains a deferred compensation plan under Section 457 of the Internal Revenue Code (IRC) for the benefit of its employees. The plan allows the employees to defer or postpone the taxation of a designated amount of earnings set aside for retirement. The City has a fiduciary responsibility to safeguard the assets of the program and to ensure that the plan is properly maintained by the plan administrator. Generally speaking, assets are available to participants only upon termination of employment with the City, retirement, death or disability. The City has placed the plan assets into a trust for the exclusive benefit of plan participants and their beneficiaries. Accordingly, all plan assets have been excluded from the accompanying financial statements. Note 10 – Long-Term Liabilities A. Governmental Activities The following is a summary of changes in the City’s long-term liabilities for the fiscal year ended June 30, 2023: Balance June 30, 2022 Balance Due within Due in more as restated Additions Deletions June 30, 2023 One Year than One Year Governmental Activities: Refunding Lease Revenue Bonds: 2013 Series 16,220,000$ -$ (16,220,000)$ -$ -$ -$ 2020A Series 12,235,000 - (755,000) 11,480,000 795,000 10,685,000 2022 Series - 14,587,831 - 14,587,831 1,063,146 13,524,685 Unamortized premium 2,911,561 - (801,953) 2,109,608 209,217 1,900,391 Loan payable 673,484 - (93,359) 580,125 94,281 485,844 Subscription payable 890,209 165,909 (431,024) 625,094 311,213 313,881 Direct borrowings and placement General Obligation Bonds: Library 2019A Series 7,678,649 - (347,829) 7,330,820 358,853 6,971,967 Library 2019B Series 16,938,301 - (707,776) 16,230,525 730,720 15,499,805 Total long-term debt 57,547,204 14,753,740 (19,356,941) 52,944,003 3,562,430 49,381,573 Other long-term liabilities Claims payable 8,691,284 865,516 (909,880) 8,646,920 1,682,152 6,964,768 Compensated absences 1,847,014 1,937,234 (1,847,015) 1,937,233 193,723 1,743,510 Total long-term liabilities 68,085,502$ 17,556,490$ (22,113,836)$ 63,528,156$ 5,438,305$ 58,089,851$ Classification Lease Revenue Refunding Bonds (LRBs) 2022 Series On December 12, 2022, the City refinanced its Lease Revenue Bonds 2013 Series by issuing Lease Revenue Refunding Bonds, 2022 Series in the amount of $14,587,831. The proceeds from the issue were used to redeem the 2013 Series. The refunding resulted in $2,567,275 saving in future debt service payment and an economic gain of $2,096,091. Interest on the bonds is payable semiannually at rates ranging from 3.66% to 4.66% on May 1 and November 1 of each year commencing on May 1, 2023, and the Bonds mature on November 1, 2033. The principal balance of outstanding bonds at June 30, 2023 was $14,587,831. 11.6 p. 328 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 74 Note 10 – Long-Term Liabilities (Continued) A. Governmental Activities (Continued) The annual debt service requirements to maturity for the Refunding LRBs 2022 Series are as follows: Year ending June 30, Principal Interest Total 2024 1,063,146$ 587,398$ 1,650,544$ 2025 1,140,757 474,128 1,614,885 2026 1,183,287 431,598 1,614,885 2027 1,227,403 387,482 1,614,885 2028 1,273,163 341,722 1,614,885 2029-2034 8,700,075 989,236 9,689,311 Total 14,587,831$ 3,211,564$ 17,799,395$ Refunding Lease Revenue Bonds (LRBs) 2020A Series On August 1, 2020, the Gilroy Public Facilities Financing Authority issued its Series 2020A Lease Revenue Refunding Bonds in the amount of $13,740,000. The bonds were issued at a premium of $2,719,825 which was deferred and will be amortized over the life of the bonds. The proceeds from the issuance were used to refund the outstanding Series 2010 Refunding LRBs and to pay the costs incurred in connection with the issuance of the 2020A bonds. Interest on the bonds is payable semiannually at rates ranging from 1.21% to 2.08% on May 1 and November 1 of each year commencing on November 1, 2020, and the Bonds mature on November 1, 2033. The principal balance of outstanding bonds at June 30, 2023 was $11,480,000. The annual debt service requirements to maturity for the Refunding Lease Revenue Bonds 2020A Series are as follows: Year ending June 30, Principal Interest Total 2024 795,000$ 554,125$ 1,349,125$ 2025 840,000 513,250 1,353,250 2026 880,000 470,250 1,350,250 2027 925,000 425,125 1,350,125 2028 1,000,000 377,000 1,377,000 2029-2033 5,715,000 1,074,375 6,789,375 2034 1,325,000 33,125 1,358,125 Total 11,480,000$ 3,447,250$ 14,927,250$ Loan Payable The City entered into a loan agreement with the California Energy Commission (CEC) to provide funds to install equipment for energy conservation. Under the original loan agreement the City was authorized to borrow up to $1,812,722 with interest at 1% per annum, semiannual payments to be paid commencing December following the year the project was completed. The City borrowed a total of $1,201,155 with semiannual payments of interest and principal of $49,931 with the first payment occurring on December 27, 2016. The final payment will be on June 22, 2029. The principal balance of outstanding at June 30, 2023 was $580,125. 11.6 p. 329 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 75 Note 10 – Long-Term Liabilities (Continued) A. Governmental Activities (Continued) Loan Payable (Continued) The annual debt service requirements to maturity for the loan is as follows: Year ending June 30, Principal Interest Total 2024 94,281$ 5,581$ 99,862$ 2025 95,240 4,622 99,862 2026 96,195 3,667 99,862 2027 97,159 2,702 99,861 2028 98,129 1,732 99,861 2029 99,121 745 99,866 Total 580,125$ 19,049$ 599,174$ General Obligation Bonds (Gilroy Community Library Project) 2019 Refunding Bonds, Series A On June 26, 2019, the City issued General Obligation Refunding Bonds 2019 Series A through a private placement, in the amount of $8,633,538. The proceeds from the issue were used to currently refund the General Obligation Bonds Series 2009. Interest on the bonds is payable semiannually at 3.12% on February 1 of each year commencing on February 1, 2021. The Bonds mature on February 1, 2039. The bonds are payable solely from ad valorem property taxes levied by the City and collected by the County. The principal balance of outstanding bonds at June 30, 2023 was $7,330,820. The annual debt service requirements to maturity for the General Obligation Refunding Bonds, 2019 Series A are as follows: Year ending June 30, Principal Interest Total 2024 358,853$ 228,722$ 587,575$ 2025 370,226 217,525 587,751 2026 381,960 205,974 587,934 2027 394,066 194,057 588,123 2028 406,556 181,762 588,318 2029-2033 2,234,430 710,309 2,944,739 2034-2038 2,611,692 338,931 2,950,623 2039 573,037 17,879 590,916 Total 7,330,820$ 2,095,159$ 9,425,979$ 11.6 p. 330 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 76 Note 10 – Long-Term Liabilities (Continued) A. Governmental Activities (Continued) General Obligation Bonds (Gilroy Community Library Project) 2019 Refunding Bonds, Series B On November 5, 2019, the City issued General Obligation Refunding Bonds 2019 Series B through a private placement, in the amount of $19,087,551. The proceeds from the issue were used to currently refund the General Obligation Bonds Series 2010. Interest on the bonds is payable semiannually at a rate of 3.19% on February 1 of each year commencing on February 1, 2020. The Bonds mature on February 1, 2040. The bonds are payable solely from ad valorem property taxes levied by the City and collected by the County. The principal balance of outstanding bonds at June 30, 2023 was $16,230,525. The annual debt service requirements to maturity for the General Obligation Refunding Bonds, 2019 Series B are as follows: Year ending June 30, Principal Interest Total 2024 730,720$ 517,754$ 1,248,474$ 2025 754,408 494,444 1,248,852 2026 778,864 470,378 1,249,242 2027 804,112 445,532 1,249,644 2028 830,179 419,881 1,250,060 2029-2033 4,572,452 1,684,573 6,257,025 2034-2038 5,363,214 906,425 6,269,639 2039-2040 2,396,576 115,286 2,511,862 Total 16,230,525$ 5,054,273$ 21,284,798$ Subscription payable The City entered into subscription agreements with various vendors for software. The terms of the agreements are ranging from 16 months to 56 months. The calculated interest rates range from 0.00% to 3.2067%. As of June 30, 2023, the capitalized right-to-use assets related to SBITAs were $1,434,043 and the total subscription liability was $625,094, of which $311,213 is reported as a current liability representing the amount due within the next fiscal year. The future subscription payments are as follows: Year ending June 30, Principal Interest Total 2024 311,213$ 12,970$ 324,183$ 2025 169,229 6,765 175,994 2026 144,652 3,422 148,074 Total 625,094$ 23,157$ 648,251$ 11.6 p. 331 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 77 Note 10 – Long-Term Liabilities (Continued) B. Business-Type Activities Balance June 30, 2022 Balance Due within Due in more as restated Additions Deletions June 30, 2023 One Year than One Year Business-type Activities: 2010 Wastewater Revenue Bonds 2,440,000$ -$ (2,440,000)$ -$ -$ -$ 2021 Wastewater Revenue Bonds 47,080,000 - - 47,080,000 725,000 46,355,000 Unamortized premium 5,573,508 - (159,243) 5,414,265 - 5,414,265 Subscription payable 22,500 - (22,500) - - - 55,116,008 - (2,621,743) 52,494,265 725,000 51,769,265 Other long-term liabilities Compensated absences 232,818 218,330 - 280,351 28,035 252,316 55,348,826$ 218,330$ (2,621,743)$ 52,774,616$ 753,035$ 52,021,581$ Classification 2021A Wastewater Revenue Bonds On June 30, 2021, the Gilroy Public Facilities Financing Authority issued revenue bonds in the amount of $47,080,000. The bonds were issued to finance the City’s portion of certain improvements to the Authority’s treatment facility. The bonds are payable from revenues consisting primarily of installment payments payable by the City under an installment purchase agreement. The obligation of the city to make installment payments is a special obligation of the City payable solely from and secured by a pledge of net wastewater revenues of the City’s wastewater system on a parity with the City’s obligation to pay installment payments that secure the 2010 Wastewater Revenue Bonds. Interest on the bonds is payable at rates ranging from 3.0% to 4.0%. Principal payments range from $725,000 to $2,210,000 payable on August 1 of each year beginning in 2023 and maturing in 2057. The principal balance of outstanding bonds at June 30, 2023 was $47,080,000. The annual debt service requirements (principal and interest) to maturity for the 2021A Wastewater Revenue Bonds are as follows: Year ending June 30, Principal Interest Total 2024 725,000$ 1,519,000$ 2,244,000$ 2025 755,000 1,489,400 2,244,400 2026 785,000 1,458,600 2,243,600 2027 815,000 1,426,600 2,241,600 2028 850,000 1,393,300 2,243,300 2029-2033 4,805,000 6,416,600 11,221,600 2034-2038 5,840,000 5,378,175 11,218,175 2039-2043 6,855,000 4,373,925 11,228,925 2044-2048 7,955,000 3,265,575 11,220,575 2049-2053 9,240,000 1,977,900 11,217,900 2054-2057 8,455,000 516,825 8,971,825 Total 47,080,000$ 29,215,900$ 76,295,900$ 11.6 p. 332 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 78 Note 10 – Long-Term Liabilities (Continued) C. Debt without Government Commitment Community Facilities District No. 2000-1, Highway 152, Special Tax Bonds In December 2002, Community Facilities District No. 2000-1 pursuant to Mello-Roos Community Facilities Act of 1982, issued $7,185,000 of Special Tax Bonds to finance the costs associated with the construction of public facilities for interchange improvements at State Highway 152 and U.S. Highway 101 and for widening and improving Highway 152. In September 2006, Community Facilities District No. 2000-1 pursuant to Mello-Roos Community Facilities Act of 1982, issued $8,670,000 of Special Tax Bonds to finance the costs associated with the construction of public facilities for interchange improvements at State Highway 152 and U.S. Highway 101 and for the widening and improving Highway 152. These bonds were refunded in July 2018 with proceeds from the issuance in a private placement of Community Facilities District No. 2000-1 (Highway 152) Special Tax Refunded Bonds, Series 2018 in the aggregate principal amount of $7,815,860. These bonds do not constitute a debt or obligation of the City because they are payable solely from the Special Tax revenue assessed on the underlying parcels. The City is not liable for repayment but acts as an agent for the property owners in collecting the assessments, forwarding the collections to bondholders, and initiating foreclosure proceedings, if appropriate. The outstanding principal balance as of June 30, 2023 was $5,181,734. 11.6 p. 333 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 79 Note 11 – Defined Benefit Pension Plans (CalPERS) A. Summary The following is the summary of net pension liabilities and the related deferred outflows of resources and deferred inflows of resources at June 30, 2023 and pension expenses for the year then ended: Governmental Business-Type Activities Activities Total Deferred outflows of resources: Pension contributions after measurement date: Miscellaneous 3,127,883$ 1,325,888$ 4,453,771$ Safety 7,730,256 - 7,730,256 Total contributions after measurement date 10,858,139 1,325,888 12,184,027 Changes in assumptions: Miscellaneous 1,498,120 635,042 2,133,162 Safety 5,072,647 - 5,072,647 Total changes in assumptions 6,570,767 635,042 7,205,809 Difference between expected and actual experience: Safety 1,056,818 - 1,056,818 Total difference between expected and actual experience 1,056,818 - 1,056,818 Difference between projected and actual earnings on plan investments: Miscellaneous 3,164,088 1,341,234 4,505,322 Safety 7,005,150 - 7,005,150 Total difference between projected and actual earnings on plan investments 10,169,238 1,341,234 11,510,472 Total deferred outflows of resources 28,654,962$ 3,302,164$ 31,957,126$ Aggregate net pension liabilities: Miscellaneous 28,428,847$ 12,050,787$ 40,479,634$ Safety 63,254,536 - 63,254,536 Total aggregate net pension liabilities 91,683,383$ 12,050,787$ 103,734,170$ Deferred inflows of resources: Difference between expected and actual experience: Miscellaneous 498,510 211,315 709,825 Safety 622,010 - 622,010 Total difference between expected and actual experience 1,120,520 211,315 1,331,835 Total deferred inflows of resources 1,120,520$ 211,315$ 1,331,835$ Pension expense: Miscellaneous 3,455,084$ 1,464,586$ 4,919,670$ Safety 8,517,961 - 8,517,961 Total net pension expense 11,973,045$ 1,464,586$ 13,437,631$ 11.6 p. 334 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 80 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) B. General Information about the Pension Plans Plan Descriptions The City’s defined benefit pension plans provide retirement and disability benefits, annual cost-of-living adjustments and death benefits to plan members and beneficiaries. The Plans are part of the Public Agency portion of the California Public Employees Retirement System (CalPERS), an agent multiple-employer plan administered by CalPERS, which acts as a common investment and administrative agent for participating public employers within the State of California. A menu of benefit provisions as well as other requirements are established by state statutes within the Public Employees’ Retirement Law. The City selects optional benefit provisions from the benefit menu by contract with CalPERS and adopts those benefits through City ordinance. CalPERS issues a separate annual comprehensive financial report. Copies of CalPERS’s annual financial report may be obtained from the CalPERS Executive Office, 400 P Street, Sacramento, CA 95814. All full-time employees of the City are eligible to participate in the Plans. Part-time employees and temporary employees who work an average of 20 hours per week and over 1,000 hours per year are also eligible to participate. Upon 5 years of service, miscellaneous employees and public safety employees who retire at or after age 50 are entitled to receive an annual retirement benefit. The benefit is payable monthly for life, in an amount that varies from each Tier, of the employees’ single highest year’s salary for each year of credited service. The Plans also provide death and disability benefits. Benefits Provided CalPERS provides service retirement and disability benefits, annual cost of living adjustments and death benefits to plan members, who must be public employees and beneficiaries. Benefits are based on years of credited service, equal to one year of full-time employment. Members with five years of total service are eligible to retire at age 50 to 62 with statutorily reduced benefits. For employees hired into a plan with the 1.5% at 65 formula, eligibility for service retirement is age 55 with at least five years of services. PEPRA miscellaneous members become eligible for service retirement upon attainment of age 52 with at least five years of service. All members are eligible for nonduty disability benefits after five years of service. The death benefit is one of the following: the Basic Death Benefit, the 1957 Survivor Benefit or the Optional Settlement 2W Death Benefit. Safety members can receive a special death benefit if the member dies while actively employed and the death is job-related. Fire members may receive the alternate death benefit in lieu of the Basic Death Benefit or the 1957 Survivor Benefit if the member dies while actively employed and has at least 20 years of total CalPERS service. The cost-of-living adjustments for each plan are applied as specified by the Public Employees’ Retirement Law. 11.6 p. 335 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 81 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) B. General Information about the Pension Plans (Continued) Benefits Provided (Continued) The Plans’ provisions and benefits in effect at the measurement date of June 30, 2022 are summarized as follows: Hire date Prior to January 1, 2013 On or after January 1, 2013 Benefit formula 2.5% @ 55 2% @ 62 Benefit vesting schedule 5 years of service 5 years of service Benefit payments Monthly for life Monthly for life Retirement age 50 52 Benefit per year of service, as a percentage of salary 2.0% to 3.0% 1.0% to 2.5% Required employee contribution rates 8.000% 7.000% Required contribution during measurement period 10.700% 10.700% Hire Date Prior to January 5, 2011 Prior to January 1, 2013 On or After January 1, 2013 Benefit formula 3% @ 50 2% @ 50 2.7% @ 57 Benefit vesting schedule 3 years of service 3 years of service 3 years of service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50-55 50-55 50-57 Benefit per year of service, as a percentage of salary 3.000% 2.00%-2.70% 2.00%-2.70% Required employee contribution rates 9.000% 9.000% 13.000% Required contribution during measurement period 25.870% 25.870% 25.870% Hire Date Prior to January 5, 2011 Prior to January 1, 2013 On or After January 1, 2013 Benefit formula 3% @ 55 2% @ 55 2% @ 57 Benefit vesting schedule 3 years of service 3 years of service 3 years of service Benefit payments Monthly for life Monthly for life Monthly for life Retirement age 50-55 50-55 50-57 Benefit per year of service, as a percentage of salary 2.4%-3.0% 1.426%-2.0% 1.426%-2.0% Required employee contribution rates 9.000% 7.000% 10.500% Required contribution during measurement period 21.077% 21.077% 21.077% Miscellaneous Safety - Police Safety - Fire 11.6 p. 336 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 82 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) B. General Information about the Pension Plans (Continued) Employees Covered At the measurement date of June 30, 2022, the following employees were covered by the benefit terms for all Plans: Miscellaneous Safety Active employees 122 100 Transferred and terminated employees 198 45 Retired Employees and Beneficiaries 248 149 Total 568 294 Contributions Section 20814(c) of the California Public Employees’ Retirement Law requires that the employer contribution rates for all public employers are determined on an annual basis by the actuary and shall be effective on the July 1 following notice of a change in the rate. The total plan contributions are determined through CalPERS’s annual actuarial valuation process. The actuarially determined rate is the estimated amount necessary to finance the costs of benefits earned by employees during the year, with an additional amount to finance any unfunded accrued liability. The City is required to contribute the difference between the actuarially determined rate and the contribution rate of employees. City contribution rates may change if plan contracts are amended. Payments made by the employer to satisfy contribution requirements that are identified by the pension plan terms as plan member contributions requirements are classified as plan member contributions. C. Net Pension Liability Actuarial Methods and Assumptions Used to Determine Total Pension Liability The June 30, 2021 valuation was rolled forward to determine the June 30, 2022 total pension liability, based on the following actuarial methods and assumptions: Actuarial Cost Method Actuarial Assumptions: Discount Rate Inflation Salary Increases Mortality Rate Table1 Post Retirement Benefit Increase Entry Age Actuarial Cost Method 6.90% 2.30% Varies by Entry Age and Service 1The mortality table used was developed based on CalPERS-specific data. The probabilities of mortality are based on the 2021 CalPERS Experience Study for the period from 2001 to 2019. Pre-retirement and Post-retirement mortality rates include generational mortality improvement using 80% of Scale MP-2020 published by the Society of Actuaries. For more details on this table, please refer to the CalPERS Experience Study and Review of Actuarial Assumptions report from November 2021 that can be found on the CalPERS website. Derived using CalPERS’ membership data for all funds. The lesser of contract COLA or 2.30% until Purchasing Power Protection Allowance floor on purchasing power applies, 2.30% thereafter 11.6 p. 337 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 83 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) C. Net Pension Liability (Continued) Long-Term Expected Rate of Return The long-term expected rate of return on pension plan investments was determined using a building-block method in which expected future real rates of return (expected returns, net of pension plan investment expense and inflation) are developed for each major asset class. In determining the long-term expected rate of return, CalPERS took into account both short-term and long-term market return expectations. Using historical returns of all of the funds’ asset classes, expected compound (geometric) returns were calculated over the next 20 years using a building-block approach. The expected rate of return was then adjusted to account for assumed administrative expenses of 10 Basis points. The expected real rates of return by asset class are as follows: The expected real rates of return by asset class are as follows: Current Target Asset Class1 Allocation Real Return1 2 Global Equity - Cap-weighted 30.00% 4.54% Global Equity - Non-cap-weighted 12.00% 3.84% Private Equity 13.00% 7.28% Treasury 5.00% 0.27% Mortgage-backed Securities 5.00% 0.50% Investment Grade Corporates 10.00% 1.56% High Yield 5.00% 2.27% Emerging Market Debt 5.00% 2.48% Private Debt 5.00% 3.57% Real Assets 15.00% 3.21% Leverage -5.00% -0.59% 1 An expected inflation of 2.30% used for this period. 2 Figures are based on the 2021 Asset Liability Management study. Discount Rate The discount rate used to measure the total pension liability was 6.90%. The projection of cash flows used to determine the discount rate assumed that contributions from plan members will be made at the current member contribution rates and that contributions from employers will be made at statutorily required rates, actuarially determined. Based on those assumptions, the Plan’s fiduciary net position was projected to be available to make all projected future benefit payments of current plan members. Therefore, the long-term expected rate of return on plan investments was applied to all periods of projected benefit payments to determine the total pension liability. Return on Investments On July 12, 2021, CalPERS reported a preliminary 21.3% net return on investments for fiscal year 2020-21. Based on the thresholds specified in CalPERS Funding Risk Mitigation policy, the excess return of 14.3% prescribes a reduction in investment volatility that corresponds to a reduction in the discount rate used for funding purposes of 0.20%, from 7.00% to 6.80%. Since CalPERS was in the final stages of the four-year Asset Liability Management (ALM) cycle, the board elected to defer any changes to the asset allocation until the ALM process concluded, and the board could make its final decision on the asset allocation in November 2021. 11.6 p. 338 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 84 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) C. Net Pension Liability (Continued) Strategic Asset Allocation On November 17, 2021, the board adopted a new strategic asset allocation. The new asset allocation along with the new capital market assumptions, economic assumptions and administrative expense assumption support a discount rate of 6.90% (net of investment expense but without a reduction for administrative expense) for financial reporting purposes. This includes a reduction in the price inflation assumption from 2.50% to 2.30% as recommended in the November 2021 CalPERS Experience Study and Review of Actuarial Assumptions. This study also recommended modifications to retirement rates, termination rates, mortality rates and rates of salary increases that were adopted by the board. These new assumptions will be reflected in the GASB 68 accounting valuation reports for the June 30, 2022, measurement date. D. Changes in the Net Pension Liability The following table shows the changes in net pension liability for the City’s miscellaneous plan recognized over the measurement period. Total Pension Plan Fiduciary Net Net Pension Liability Position Liability/(Asset) (a) (b) (c) = (a) - (b) Balance at June 30, 2021 (Valuation Date) 125,181,567$ 100,869,134$ 24,312,433$ Changes Recognized for the Measurement Period: Service cost 2,240,104 - 2,240,104 Interest on the total pension liability 8,651,774 - 8,651,774 Changes of assumptions 3,774,056 - 3,774,056 Difference between expected and actual experience (1,151,738) - (1,151,738) Contributions from the employer - 4,103,355 (4,103,355) Contributions from employees - 923,404 (923,404) Net investment income - (7,616,929) 7,616,929 Benefit payments, including refunds of employee contributions (7,071,816) (7,071,816) - Administrative expenses - (62,835) 62,835 Net changes during July 1, 2021to June 30, 2022 6,442,380 (9,724,821) 16,167,201 Balance at June 30, 2022(Measurement Date) 131,623,947$ 91,144,313$ 40,479,634$ Increase (Decrease) Miscellaneous Plan 11.6 p. 339 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 85 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) D. Changes in the Net Pension Liability (Continued) Total Pension Plan Fiduciary Net Net Pension Liability Position Liability/(Asset) (a) (b) (c) = (a) - (b) Balance at June 30, 2021 (Valuation Date) 190,123,734$ 153,732,839$ 36,390,895$ Changes Recognized for the Measurement Period: Service cost 4,253,470 - 4,253,470 Interest on the total pension liability 13,345,415 - 13,345,415 Changes of assumptions 6,821,836 - 6,821,836 Difference between expected and actual experience (810,081) - (810,081) Contributions from the employer - 7,117,603 (7,117,603) Contributions from employees - 1,371,949 (1,371,949) Net investment income - (11,646,787) 11,646,787 Benefit payments, including refunds of employee contributions (9,700,828) (9,700,828) - Administrative expenses - (95,766) 95,766 Net changes during July 1, 2021 to June 30, 2022 13,909,812 (12,953,829) 26,863,641 Balance at June 30, 2022 (Measurement Date) 204,033,546$ 140,779,010$ 63,254,536$ Safety Increase (Decrease) Sensitivity of the Net Pension Liability to Changes in the Discount Rate The following presents the net pension liability of the City for all Plans, calculated using the discount rate for each Plan, as well as what the City’s net pension liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Discount Rate Current Discount Discount Rate - 1% (5.90%) Rate (6.90%) + 1% (7.90%) Miscellaneous Plan 56,849,099$ 40,479,634$ 26,894,431$ Safety Plan 90,776,961$ 63,254,536$ 40,606,496$ Plan's Net Pension Liability/(Asset) E. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions For the year ended June 30, 2023, the City recognized pension expense in the amounts of $4,919,670 and $8,517,961 for the miscellaneous plan and safety plan, respectively. 11.6 p. 340 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 86 Note 11 – Defined Benefit Pension Plans (CalPERS) (Continued) E. Pension Expense and Deferred Outflows/Inflows of Resources Related to Pensions (Continued) As of measurement date of June 30, 2022, the City has deferred outflows and deferred inflows of resources related to pensions as follows: Deferred outflows Deferred inflows of Resources of Resources Contributions made after the measurement date 4,453,771$ -$ Changes of assumptions 2,133,162 - Difference between expected and actual experience - (709,825) Net difference between projected and actual earning on pension plan investments 4,505,322 - Total 11,092,255$ (709,825)$ Miscellaneous Plan Deferred outflows Deferred inflows of Resources of Resources Contributions made after the measurement date 7,730,256$ -$ Difference between expected and actual experience 1,056,818 (622,010) Net difference between projected and actual earnings on pension plan investments 7,005,150 - Total 20,864,871$ (622,010)$ Safety Plan The $4,453,711 reported in the Miscellaneous Plans and $$7,730,256 reported in the Safety Plans as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the net pension liability in the measurement period ending June 30, 2023. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to pensions will be recognized as pension expense as follows: Measurement Period Miscellaneous Safety Ending June 30 Plan Plan 2023 1,768,113$ 3,178,485$ 2024 969,137 3,019,899 2025 292,653 1,872,614 2026 2,898,756 4,441,607 5,928,659$ 12,512,605$ Deferred Outflows/(Inflows) of Resources 11.6 p. 341 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 87 Note 12 – Other Postemployment Benefits (OPEB) Governmental Business-Type Activities Activities Total Deferred outflows of resources: Employer contributions made subsequent to the measurement date 463,523$ 90,930$ 554,453$ Changes in assumption 1,746,016 342,520 2,088,536 Total deferred outflows of resources 2,209,539$ 433,450$ 2,642,989$ Total OPEB liability 12,119,260$ 2,377,462$ 14,496,722$ Total OPEB liability 12,119,260$ 2,377,462$ 14,496,722$ Deferred inflows of Resources: Change in assumption 3,663,534$ 718,684$ 4,382,218$ Difference between expected and actual experience 1,362,867 267,356 1,630,223 Total deferred inflows of resources 5,026,401$ 986,040$ 6,012,441$ OPEB Expense 186,508$ 36,588$ 223,096$ Plan Description The City’s Retiree Healthcare Plan (Plan) is a single-employer defined benefit healthcare plan administered by the City. The plan provides healthcare benefits to eligible retirees and their dependents through the California Public Employee’s Retirement System healthcare program (PEMHCA) and a post-employment retention/recognition incentive benefit program (RRIB) which requires proof of medical coverage. Benefit provisions are established and may be amended through agreements and memorandums of understanding between the City, its management employees and unions representing City employees. For all retirees under the plan, the City contributes the PEMHCA minimum contribution on the unequal method for eligible retirees and surviving spouses. The PEMHCA minimum amount is $149 in 2022 and $151 in 2023. No dental, vision or life insurance benefits are provided. The RRIB incentive benefit is for certain bargaining units’ retirees that retired prior to July 1, 2014 (police and fire employees), July 1, 2015 (management employees) or November 1, 2015 (AFSCME, miscellaneous employees). Prior employees that retired on or before these dates and were fifty (50) or more years of age (police and fire employees) or fifty-five (55) or more years of age (AFSCME and management employees) and previously retired from City service with a minimum of fifteen (15) years of service with the City are eligible to receive this postretirement benefit until reaching the age of sixty-five (65). Additional tiers of years of service were added to the plan to qualify for benefits. This supplemental pension plan has been discontinued for new participants after the dates noted above. The employer contribution under RRIB provides a temporary monthly annuity (to age 65) up to $300 per month based on service at retirement to eligible retirees. All classes of employees are covered, if eligible. The City offers a Health Reimbursement Plan (PEMHCA) for new retirees after the dates noted above. No assets are accumulated in a trust that meets the criteria in paragraph 4 of GASB Statement 75. The plan does not issue a separate report. 11.6 p. 342 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 88 Note 12 – Other Postemployment Benefits (Continued) Employees Covered At the measurement date of June 30, 2022, the following current and former employees were covered by the benefit terms under the plan: Active plan members 220 Retirees 235 Total 455 Total OPEB Liability The City’s OPEB liability of $14,496,722 was measured as of June 30, 2022 and was determined by an actuarial valuation as of June 30, 2021 rolled forward to 2022 using standard update procedures. The OPEB liability from the governmental activities is primarily liquidated from the general fund. Actuarial Assumptions and Other Inputs The total OPEB liability as of June 30, 2021 actuarial valuation was determined using the following actuarial assumptions and other inputs, applied to all periods included in the measurement, unless otherwise specified: Actuarial Valuation Date June 30, 2021 Discount Rate 4.09% Inflation 2.30% Salary Increase 2.80% wage inflation plus seniority, merit, & promotion increases based on November 2021 CalPERS Experience Study & Review of Actuarial Assumptions Healthcare Trend Rate Based on 2021 Getzen model that reflects actual premium increases through 2023, followed by 5.50% in 2023, decreasing gradually to an ultimate rate of 4.04% in 2075 Changes in total OPEB Liability The change in total OPEB liability are as follows: Total OPEB Liability Balance at June 30, 2021 (Valuation Date) 18,024,828$ Changes Recognized for the Measurement Period: Service Cost 973,126 Interest on the total OPEB liability 410,441 Difference between expected and actual experience (150,527) Changes of assumptions (4,245,661) Benefit payments (515,485) Net Changes during July 1, 2021 to June 30, 2022 (3,528,106) Balance at June 30, 2022 (Measurement Date) 14,496,722$ 11.6 p. 343 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 89 Note 12 – Other Postemployment Benefits (Continued) Sensitivity of the Total OPEB Liability to Changes in the Discount Rate The following presents the total OPEB liability of the City, calculated using the discount rate for the Plan, as well as what the City’s total OPEB liability would be if it were calculated using a discount rate that is one percentage point lower or one percentage point higher than the current rate: Discount Rate - 1% Current Discount Discount Rate + 1% Rate (3.09%) Rate (4.09%) Rate (5.09%) 16,521,983$ 14,496,722$ 12,832,707$ Plan's Total OPEB Liability Sensitivity of the Total OPEB Liability to Changes in the Discount Rate (Continued) The following presents the total OPEB liability of the City, as well as what the City’s total OPEB liability would be if it were calculated using healthcare cost trend rates that are one percentage point lower or one percentage point higher) than the current healthcare cost trend rates: -1% Healthcare Cost Trend Rates 1% 12,587,299$ 14,496,722$ 16,897,843$ Plan's Total OPEB Liability OPEB Expense and Deferred Outflows/Inflows of Resources Related to OPEB For the year ended June 30, 2023, the City recognized OPEB expense of $236,096. At June 30, 2023, the City reported deferred outflows of resources and deferred inflows of resources related to OPEB from the following sources: Deferred outflows Deferred inflows of Resources of Resources Difference between expected and actual experience -$ (1,630,223)$ Changes in assumptions 2,088,536 (4,382,218) Employer contributions made subsequent to the measurement date 554,453 # - Total 2,642,989$ (6,012,441)$ The $554,453 reported as deferred outflows of resources related to contributions subsequent to the measurement date will be recognized as a reduction of the OPEB liability in the year ending June 30, 2024. The change in assumptions was due to the change in discount rate to 4.09% from 2.19% for the June 30, 2022 measurement date and is amortized over the average expected remaining service lives. Other amounts reported as deferred outflows of resources and deferred inflows of resources related to OPEB will be recognized in OPEB expense as follows: Year end Deferred Outflows/ Ended June 30 (Inflows) of Resources 2024 (965,210)$ 2025 (772,210) 2026 (689,162) 2027 (544,703) 2028 (952,620) (3,923,905)$ 11.6 p. 344 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 90 Note 13 – Claims Payable The workers’ compensation and general liability claims administrators have estimated liabilities for probable future payments relating to claims outstanding as of June 30, 2023 in the following amounts which are recorded in separate internal service funds: Worker' compensation claims 6,363,000$ General liability claims 2,283,920 Total claims payable 8,646,920$ Although the eventual outcome of these claims is uncertain, in the opinion of management, the resolution of these matters is not expected to have a material adverse effect on the financial condition of the City, beyond the provision for losses reflected in the recorded claims payable liabilities. Changes in claims payable for workers’ compensation for the past three fiscal years are as follows: Current Year Amounts Beginning Claims and End Amounts Due in of Year Changes in Claim of Year Due within more than Workers' Compensation Liability Estimates Payments Liability One Year One Year 2020-2021 2,932,396$ 2,058,195 (1,397,737) 3,592,854$ 970,000$ 2,622,854$ 2021-2022 3,592,854 3,863,535 (787,389) 6,669,000 1,062,000 5,607,000 2022-2023 6,669,000 481,389 (787,389) 6,363,000 965,000 5,398,000 Changes in claims payable for general liability for the past three fiscal years are as follows: Current Year Amounts Beginning Claims and End Amounts Due in of Year Changes in Claim of Year Due within more than General Liability Liability Estimates Payments Liability One Year One Year 2020-2021 690,049$ 4,456,029$ (2,380,120)$ 2,765,958$ 470,000$ 2,295,958$ 2021-2022 2,765,958 (322,612) (421,062) 2,022,284 734,997 2,022,284 2022-2023 2,022,284 384,127 (122,491) 2,283,920 717,152 1,566,768 Note 14 – Risk Management Bodily injury, property damage and public officials’ errors and omissions insurance is provided via participation in a joint power’s authority. Effective July 1, 2015, the City is a member of the Municipal Pooling Authority (MPA), a joint powers authority established pursuant to California Government Code Sections 990.4-990.8 and 6500, et seq. The pool has 20 member cities. The City is insured by the MPA for up to $29,000,000 per claim for liability coverage, including $28,000,000 provided by an excess policy with the California Affiliated Risk Management Authority, after a deductible of $50,000 which is paid by the City. Premiums paid by the participating members may be retrospectively increased or decreased to reflect the actual operating costs of MPA and the City’s share of incurred losses. The City is contingently liable for assessments which may be made by MPA in the event that MPA has insufficient resources to pay unexpectedly large claims. 11.6 p. 345 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 91 Note 14 – Risk Management (Continued) The City is self-insured for the first $500,000 of each workers’ compensation claim. The City belongs to the Local Agency Workers’ Compensation Excess (LAWCX) joint powers authority, established pursuant to California Government Code Sections 990.4-990.8 and 6500 et seq., for the purpose of workers’ compensation excess coverage. LAWCX coverage is for individual workers’ compensation claims in excess of $500,000 up to $5,000,000. In addition, additional excess coverage beyond $5,000,000 is purchased via California State Association of Counties Excess Insurance Authority (CSAC EIA) bringing statutory coverage to $50,000,000. Note 15 – Commitments and Contingencies The City had the following commitments outstanding as of June 30, 2023: Name of Project Outstanding Amount 2023 Citywide Pavement Rehabilitation 6,574,047$ Fleet Replacement 741,087 10th Street and Uvas Creek Bridge Design Services 667,235 Community Development Contractual Services 545,425 Public Works Contractual Services 470,852 Downtown Gourmet Parking Lot Project 422,686 Type III Fire Engine 415,673 Traffic Circulation Master Plan and Impact Fees 396,649 McCarthy Well Project Design and Engineering 396,404 Public Safety Rescue Vehicle 360,497 Enterprise Resource Planning (ERP) and Permitting Software Systems 350,703 Repairs and Renovation at Cherry Blossom Apartments 312,957 Miscellaneous capital projects and services 1,827,417 13,481,631$ Grant Program Under the terms of federal, county, and state grants, periodic audits are required, and certain costs may be questioned as not appropriate expenditures under the terms of the grants. Such audits could lead to reimbursements to the grantor agencies. If expenditures were disallowed, the City believes such disallowances, if any, would be immaterial. The City is a defendant in certain legal claims and actions arising from the normal course of operations. In the opinion of management and legal counsel, such claims and actions will not have a material adverse effect on the City’s financial position. Gilroy Garlic Festival On July 28, 2019, the Gilroy Garlic Festival, held at Christmas Hill Park, was the site of an unexpected and random shooting. The gunman killed himself, three others and wounded 17 people. The City has been named as a party in litigation lawsuits against the Gilroy Garlic Festival Association responsible for organizing the festival. Currently, the Gilroy Garlic Festival Association’s insurance is covering all legal costs. The City of Gilroy was recently granted a Motion for Summary Judgment in the Towner et al v. Gilroy Garlic Festival Association, et al. case. However, we expect the Towner plaintiffs to file an appeal. Motions for Summary Judgment were recently filed in the Salazar and Henderson cases and those are scheduled to be heard in April 2024. Until these matters are fully resolved, the City may incur additional financial impacts because of this event. Currently, the extent of those impact is unknown. 11.6 p. 346 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 92 Note 15 – Commitments and Contingencies (Continued) October 2021 Halloween Incident. The City has received several government claims which arise out of a shooting that occurred in the early morning of October 30, 2021 during a Halloween party at Gilroy City Councilmember Rebecca Armendariz’s residence. The City of Gilroy had no involvement in the private Halloween party. The claims have been submitted by the family members of two individuals who died as a result of the shooting. Two lawsuits have been filed naming the City as a defendant. Only one lawsuit has been served on the City. Both lawsuit’s theory of liability against the City appears to be primarily that the City is vicariously liable for Councilmember Armendariz’s involvement in hosting the Halloween party. Note 16 – Net Investment in Capital Assets The following is the calculation of net investment in capital assets at June 30, 2023: Governmental Business-Type Activities Activities DCU Capital assets, net of accumulated depreciation and amortization 202,425,733$ 83,126,607$ 136,380,628$ Unspent bond proceeds 3,139 25,470,094 - Less: oustanding principal on capital related debts (50,209,301) (47,080,000) - Less: subscription liabilities (625,094) Less: bond premium (2,109,608) (5,414,265) - Net investment in capital assets 149,484,869$ 56,102,436$ 136,380,628 11.6 p. 347 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 93 Note 17 – Classification of Fund Balances Public Facilities Nonmajor General Impact Capital Governmental Fund Projects Fund Funds Total Nonspendable: Prepaid items 23,750$ -$ -$ 23,750$ Subtotal 23,750 - - 23,750 Restricted: General capital projects - - 5,330,906 5,330,906 PARS 2,506,565 - - 2,506,565 Debt service 25,471 - - 25,471 Public safety - - 930,460 930,460 Street maintenance - - 6,598,283 6,598,283 Grant programs - - 2,075,003 2,075,003 Housing - - 3,338,781 3,338,781 Traffic impact - - 17,264,934 17,264,934 Sewer development - - 15,895,458 15,895,458 Water development - - 6,168,778 6,168,778 Storm drains - - 2,156,826 2,156,826 Stormwater Management 794,089 794,089 Community development - - 7,515,489 7,515,489 Debt service - - 2,340,479 2,340,479 Museum - - 8,914 8,914 City poor assistance - - 15,399 15,399 Land held for resale - - 706,754 706,754 Subtotal 2,532,036 - 71,140,553 73,672,589 Committed: Economic stability reserve 6,205,317 - - 6,205,317 Subtotal 6,205,317 - - 6,205,317 Assigned: Opioid Settlement - - 46,551 46,551 Capital projects - - 3,557,391 3,557,391 Subtotal - - 3,603,942 3,603,942 Unassigned (deficit) 33,190,870 (1,050,416) (155,324) 31,985,130 Total 41,951,973$ (1,050,416)$ 74,589,171$ 115,490,728$ General Fund Balance Policy The City’s general fund reserve policy consists of an unrestricted General Fund Reserve of 20% of general fund expenditures and an Economic Stability Reserve of 10% of general fund expenditures. The Economic Stability Reserve would only be used in extraordinary circumstances, upon satisfaction of one of the following “economic triggers” and with the majority vote of the City Council: (i) state take-away of significant revenue; (ii) large drop in property taxes (decrease in assessed valuations), (iii) major business closures (sales tax and/or utility users’ tax impact); (iv) dramatic drop in development from projections; (v) large unexpected drop in sales taxes (or other primary revenues - utility users’ tax, franchise fees or transient occupancy tax) due to severe recession or (vi) the economic triggers cause the General Fund Reserve to fall below a predetermined percentage of expenditures (e.g. 20%). In the event the Economic Stability Reserve is used, the City is obligated to replenish the reserve by the end of the next biennial budget to 10% of the general fund expenditures for the given year. 11.6 p. 348 of 478 City of Gilroy Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2023 94 Note 18 – Tax Abatement GASB Statement No. 77 defines a tax abatement as resulting from an agreement between a government and an individual or entity in which the government promises to forgo tax revenues and the individual or entity promises to subsequently take a specific action that contributes to economic development or otherwise benefits the government or its citizens. According to the GASB 77, the substance of these agreements meets the definition of “tax abatements” as the revenues received were not available for general municipal services purposes, but rather used to effectively reduce the net tax liability of certain taxpayers per the conditions of an agreement. The County of Santa Clara has identified two programs, the Williamson Act and the Mills Act, that would affect taxing entity’s share of the 1% ad valorem tax (property tax), including the City of Gilroy. The Williamson Act enables the County to enter into contracts with private landowners for restricting specific parcels of land to agricultural or related open space use. In return, landowners receive property tax assessments which are much lower than normal because they are based upon farming and open space uses as opposed to full market value. The Mills Act, enables the County to enter into contracts with owners of qualified historic properties who actively participate in the restoration and maintenance of their history properties in exchange for receiving property tax relief. For the fiscal year ended June 30, 2023, Gilroy’s share of the abated 1% Ad Valorum Tax is $13,500. Note 19 – Prior Period Adjustments Net position for governmental and business-type activities were restated as of July 1, 2022 as follows: Governmental Business-type Activities Activities Total Net position, as previously reported, at July 1, 2022 190,683,313$ 182,640,016$ 373,323,329$ Adjust GASB 96 beginning balance 377,925 - 377,925 Net position at July 1, 2022, as restated 191,061,238$ 182,640,016$ 373,701,254$ The beginning net position at July 1, 2022 of the Information Technology Internal Service Fund financial statement was restated as follows: Net position, as previously reported, at July 1, 2022 5,571,755$ Adjust GASB 96 beginning balance 377,925 Net position at July 1, 2022, as restated 5,949,680$ 11.6 p. 349 of 478 REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) 95 11.6 p. 350 of 478 Measurement period 2021-22 2020-21 2019-20 2018-19 2017-18 Total pension liability Service cost 2,240,104$ 2,545,114$ 2,360,748$ 2,218,281$ 2,107,888$ Interest 8,651,774 8,496,663 8,220,201 7,888,537 7,397,421 Changes of benefit terms - - - - - Changes of assumptions 3,774,056 - - - (870,201) Differences between expected and actual experience (1,151,738) (176,531) 670,381 3,067,906 1,618,519 Benefit payments, including refunds of employee contributions (7,071,816) (6,844,176) (6,415,856) (6,003,668) (5,515,662) Net change in total pension liability 6,442,380 4,021,070 4,835,474 7,171,056 4,737,965 Total pension liability - beginning 125,181,567 121,160,497 116,325,023 109,153,967 104,416,002 Total pension liability - ending (a)131,623,947$ 125,181,567$ 121,160,497$ 116,325,023$ 109,153,967$ Pension fiduciary net position Contributions - employer 4,103,355$ 3,772,061$ 3,645,000$ 3,254,181$ 2,796,490$ Contributions - employee 923,404 914,541 1,076,549 992,926 1,003,145 Net investment income (7,616,929) 18,954,052 4,099,977 5,226,520 6,275,073 Benefit payments, including refunds of employee contributions (7,071,816) (6,844,176) (6,415,856) (6,003,668) (5,515,662) Plan to plan resource movement - - 1,029 - (182) Administrative expense2 (62,835) (84,067) (115,410) (55,985) (115,667) Other Miscellaneous Income/(Expense)1 - - - 182 (219,654) Net change in plan fiduciary net position (9,724,821) 16,712,411 2,291,289 3,414,156 4,223,543 Plan fiduciary net position - beginning 3 100,869,134 84,156,723 81,865,434 78,451,278 74,227,735 Plan fiduciary net position - ending (b)91,144,313$ 100,869,134$ 84,156,723$ 81,865,434$ 78,451,278$ Plan net pension liability - ending (a) - (b)40,479,634$ 24,312,433$ 37,003,774$ 34,459,589$ 30,702,689$ Plan fiduciary net position as a percentage 69.25% 80.58% 69.46% 70.38% 71.87% of the total pension liability Covered payroll3 11,194,925$ 14,371,056$ 13,093,445$ 12,003,033$ 11,457,160$ Plan net pension liability as a percentage of covered payroll 361.59% 169.18% 282.61% 287.09% 267.98% Notes to Schedule: Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15%to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. California Public Employees' Retirement System Defined Pension Plan - Miscellaneous Plan 1 Historical information is presented only for measurement periods for which GASB 68 is applicable. 2 Includes any beginning of year adjustment. Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred d on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary. 3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. City of Gilroy Required Supplementary Information (Unaudited) Schedule of Changes in the Net Pension Liability and Related Ratios For the Year Ended June 30, 2023 Last Ten Fiscal Years1 96 11.6 p. 351 of 478 Measurement period 2016-17 2015-16 2014-15 2013-141 Total pension liability Service cost 2,119,709$ 1,974,107$ 1,914,477$ 1,886,470$ Interest 7,057,333 6,992,371 6,720,915 6,378,166 Changes of benefit terms - - - - Changes of assumptions 5,558,063 - (1,563,145) - Differences between expected and actual experience (2,724,046) (878,722) 67,994 - Benefit payments, including refunds of employee contributions (4,810,256) (4,335,513) (4,140,599) (3,800,609) Net change in total pension liability 7,200,803 3,752,243 2,999,642 4,464,027 Total pension liability - beginning 97,215,199 93,462,956 90,463,314 85,999,287 Total pension liability - ending (a)104,416,002$ 97,215,199$ 93,462,956$ 90,463,314$ Pension fiduciary net position Contributions - employer 2,535,645$ 2,448,744$ 2,236,836$ 2,105,469$ Contributions - employee 888,342 895,816 894,531 978,326 Net investment income 7,621,577 355,337 1,523,463 10,200,504 Benefit payments, including refunds of employee contributions (4,810,256) (4,335,513) (4,140,599) (3,800,609) Plan to plan resource movement - - - - Administrative expense2 (100,535) (41,912) (77,393) - Other Miscellaneous Income/(Expense)1 - - - - Net change in plan fiduciary net position 6,134,773 (677,528) 436,838 9,483,690 Plan fiduciary net position - beginning 3 68,092,962 68,770,490 68,333,652 58,849,962 Plan fiduciary net position - ending (b)74,227,735$ 68,092,962$ 68,770,490$ 68,333,652$ Plan net pension liability - ending (a) - (b)30,188,267$ 29,122,237$ 24,692,466$ 22,129,662$ Plan fiduciary net position as a percentage 71.09% 70.04% 73.58% 75.54% of the total pension liability Covered payroll3 10,902,171$ 11,189,178$ 10,920,524$ 10,072,452$ Plan net pension liability as a percentage of covered payroll 276.90% 260.27% 226.11% 219.70% Notes to Schedule: City of Gilroy Required Supplementary Information (Unaudited) Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years1 Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15%to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. California Public Employees' Retirement System Defined Pension Plan - Miscellaneous Plan 1 Historical information is presented only for measurement periods for which GASB 68 is applicable. 2 Includes any beginning of year adjustment. 3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. Benefit Changes: The figures above generally include any liability impact that may have resulted from voluntary benefit changes that occurred d on or before the Measurement Date. However, offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes) that occurred after the Valuation Date are not included in the figures above, unless the liability impact is deemed to be material by the plan actuary. 97 11.6 p. 352 of 478 Measurement period 2021-22 2020-21 2018-19 2018-19 2017-18 Total pension liability Service cost 4,253,470$ 3,976,010$ 4,116,535$ 4,001,654$ 3,782,506$ Interest 13,345,415 12,848,427 12,139,906 11,586,454 11,090,179 Changes of benefit terms - - - - - Changes of assumptions 6,821,836 - - - (633,599) Differences between expected and actual experience (810,081) 2,169,260 (85,114) (560,783) (600,354) contributions (9,700,828) (8,821,983) (8,070,115) (7,569,570) (7,391,540) Net change in total pension liability 13,909,812 10,171,714 8,101,212 7,457,755 6,247,192 Total pension liability - beginning 190,123,734 179,952,020 171,850,808 164,393,053 158,145,861 Total pension liability - ending (a)204,033,546$ 190,123,734$ 179,952,020$ 171,850,808$ 164,393,053$ Pension fiduciary net position Contributions - employer 7,117,603$ 6,718,586$ 6,320,224$ 5,572,994$ 4,906,333$ Contributions - employee 1,371,949 1,307,559 1,575,349 1,245,565 1,196,981 Net investment income (11,646,787) 28,749,163 6,112,651 7,469,298 8,983,812 Benefit payments, including refunds of employee contributions (9,700,828) (8,821,983) (8,070,115) (7,569,570) (7,391,540) Plan to plan resource movement - - (1,029) - (263) Administrative expense2 (95,766) (125,772) (169,364) (80,996) (165,621) Other Miscellaneous Income/(Expense)1 - - - 263 (314,517) Net change in plan fiduciary net position (12,953,829) 27,827,553 5,767,716 6,637,554 7,215,185 Plan fiduciary net position - beginning 3 153,732,839 125,905,286 120,137,570 113,500,016 106,284,831 Plan fiduciary net position - ending (b)140,779,010$ 153,732,839$ 125,905,286$ 120,137,570$ 113,500,016$ Plan net pension liability - ending (a) - (b)63,254,536$ 36,390,895$ 54,046,734$ 51,713,238$ 50,893,037$ Plan fiduciary net position as a percentage 69.00% 80.86% 69.97% 69.91% 69.04% of the total pension liability Covered payroll3 13,805,486$ 13,936,242$ 13,479,938$ 13,479,938$ 12,879,248$ Plan net pension liability as a percentage of covered payroll 458.18% 261.12% 400.94% 383.63% 395.16% Notes to Schedule: 2 Includes any beginning of year adjustment. 3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15%to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. City of Gilroy Required Supplementary Information (Unaudited) Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years California Public Employees' Retirement System Defined Pension Plan - Safety Plan 1 Historical information is presented only for measurement periods for which GASB 68 is applicable. 98 11.6 p. 353 of 478 Measurement period 2016-17 2015-16 2014-15 2013-141 Total pension liability Service cost 3,795,030$ 3,436,724$ 3,251,786$ 3,441,840$ Interest 10,658,420 10,258,316 9,778,748 9,235,218 Changes of benefit terms - - - - Changes of assumptions 9,024,447 - (2,444,546) - Differences between expected and actual experience (1,138,485) (557,694) 437,762 - contributions (6,957,768) (6,616,198) (5,976,690) (5,792,746) Net change in total pension liability 15,381,644 6,521,148 5,047,060 6,884,312 Total pension liability - beginning 142,764,217 136,243,069 131,196,009 124,311,697 Total pension liability - ending (a)158,145,861$ 142,764,217$ 136,243,069$ 131,196,009$ Pension fiduciary net position Contributions - employer 4,528,260$ 4,131,687$ 3,911,991$ 3,844,918$ Contributions - employee 1,157,337 1,130,369 1,106,970 1,082,775 Net investment income 10,785,793 541,083 2,139,791 14,460,928 Benefit payments, including refunds of employee contributions (6,957,768) (6,616,198) (5,976,690) (5,792,746) Plan to plan resource movement - - - - Administrative expense2 (143,087) (59,596) (110,062) - Other Miscellaneous Income/(Expense)1 - - - - Net change in plan fiduciary net position 9,370,535 (872,655) 1,072,000 13,595,875 Plan fiduciary net position - beginning 3 96,914,296 97,786,951 96,714,951 83,119,076 Plan fiduciary net position - ending (b)106,284,831$ 96,914,296$ 97,786,951$ 96,714,951$ Plan net pension liability - ending (a) - (b)51,861,030$ 45,849,921$ 38,456,118$ 34,481,058$ Plan fiduciary net position as a percentage 67.21% 67.88% 71.77% 73.72% of the total pension liability Covered payroll3 12,700,905$ 12,637,804$ 12,055,260$ 12,092,757$ Plan net pension liability as a percentage of covered payroll 408.33% 362.80% 319.00% 285.14% Notes to Schedule: Changes of Assumptions: Effective with the June 30, 2021 valuation date (2022 measurement date), the accounting discount rate was reduced from 7.15%to 6.90%. In determining the long-term expected rate of return, CalPERS took into account long-term market return expectations as well as the expected pension fund cash flows. Projected returns for all asset classes are estimated, combined with risk estimates, and are used to project compound (geometric) returns over the long term. The discount rate used to discount liabilities was informed by the long-term projected portfolio return. In addition, demographic assumptions and the inflation rate assumption were changed in accordance with the 2021 CalPERS Experience Study and Review of Actuarial Assumptions. The ac counting discount rate was 7.15% for measurement dates 2017 through 2021, 7.65% for measurement dates 2015 through 2016, and 7.50% for measurement date 2014. California Public Employees' Retirement System Defined Pension Plan - Safety Plan 1 Historical information is presented only for measurement periods for which GASB 68 is applicable. 2 Includes any beginning of year adjustment. 3 Includes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018-21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. Benefit Changes: The figures above do not include any liability impact that may have resulted from plan changes which occurred after the June 30, 2017 valuation date. This applies for voluntary benefit changes as well as any offers of Two Years Additional Service Credit (a.k.a. Golden Handshakes). City of Gilroy Required Supplementary Information (Unaudited) Schedule of Changes in the Net Pension Liability and Related Ratios (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years 99 11.6 p. 354 of 478 Fiscal Year End 2022-23 2021-22 2020-21 2019-20 2018-19 2017-18 Actuarially determined contribution 4,453,771$ 4,103,555$ 3,772,061$ 3,645,000$ 3,254,181$ 2,796,490$ Contributions in relation to the actuarially determined contribution1 (4,453,771) (4,103,555) (3,772,061) (3,645,000) (3,254,181) (2,796,490) Contribution deficiency (excess) -$ -$ -$ -$ -$ -$ Covered payroll2 11,390,836$ 11,194,925$ 14,371,056$ 13,093,445$ 12,003,033$ 11,457,160$ Contributions as a percentage of covered payroll2 39.10% 36.66% 26.25% 27.84% 27.11% 24.41% Notes to Schedule: Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of payroll Asset valuation method Market value Inflation 2.50% Salary increases Varies by entry age and service Payroll Growth 2.750% Investment rate of return Retirement age Mortality City of Gilroy Required Supplementary Information (Unaudited) Schedule of Plan Contributions - Pension For the Year Ended June 30, 2023 Last Ten Fiscal Years California Public Employees' Retirement System Defined Pension Plan - Miscellaneous 1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. 2 Inc ludes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018- 21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. 7.00% net of pension plan investment expenses; includes Inflation. The probabilities of retirement are based on the 2017 CalPERS Experience study for the period from 1997 to 2015. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were derived from the June 30, 2019 funding valuation report. 100 11.6 p. 355 of 478 Fiscal Year End 2016-17 2015-16 2014-15 2013-14 Actuarially determined contribution 2,535,645$ 2,448,744$ 2,236,836$ 2,105,469$ Contributions in relation to the actuarially determined contribution1 (2,535,645) (2,448,744) (2,236,836) (2,105,469) Contribution deficiency (excess) -$ -$ -$ -$ Covered payroll2 10,920,524$ 11,189,178$ 10,920,524$ 10,072,452$ Contributions as a percentage of covered payroll2 23.22% 21.88% 20.48% 20.90% Notes to Schedule: Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of payroll Asset valuation method Market value Inflation 2.50% Salary increases Varies by entry age and service Payroll Growth 2.750% Investment rate of return Retirement age Mortality 1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. 2 Inc ludes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018- 21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. City of Gilroy Required Supplementary Information (Unaudited) Schedule of Plan Contributions - Pension (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years California Public Employees' Retirement System Defined Pension Plan - Miscellaneous The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were derived from the June 30, 2019 funding valuation report. 7.00% net of pension plan investment expenses; includes Inflation. The probabilities of retirement are based on the 2017 CalPERS Experience study for the period from 1997 to 2015. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries 101 11.6 p. 356 of 478 Fiscal Year End 2022-23 2021-22 2020-21 2019-20 2018-19 Actuarially determined contribution 7,730,256$ 7,117,603$ 6,718,586 6,320,224$ 5,572,994$ Contributions in relation to the actuarially determined contribution1 (7,730,256) (7,117,603) (6,718,586) (6,320,224) (5,572,994) Contribution deficiency (excess) -$ -$ -$ -$ -$ Covered payroll2 14,185,137$ 13,805,486$ 13,936,242$ 14,083,254$ 13,479,938$ Contributions as a percentage of covered payroll2 54.50% 51.56% 48.21% 44.88% 41.34% Notes to Schedule: Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of payroll Asset valuation method Market value Inflation 2.50% Salary increases Varies by entry age and service Payroll Growth 2.750% Investment rate of return 7.00% net of pension plan investment expenses; includes Inflation. Retirement age Mortality The probabilities of retirement are based on the 2017 CalPERS Experience study for the period from 1997 to 2015. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries 2 Inc ludes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018- 21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were derived from the June 30, 2019 funding valuation report. City of Gilroy Required Supplementary Information (Unaudited) Schedule of Plan Contributions - Pension (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years California Public Employees' Retirement System Defined Pension Plan - Safety Plan 1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. 102 11.6 p. 357 of 478 Fiscal Year End 2017-18 2016-17 2015-16 2014-15 2013-14 Actuarially determined contribution 4,906,333$ 4,528,260$ 4,131,687$ 3,911,991$ 3,844,918$ Contributions in relation to the actuarially determined contribution1 (4,906,333) (4,528,260) (4,131,687) (3,911,991) (3,844,918) Contribution deficiency (excess) -$ -$ -$ -$ -$ Covered payroll2 12,879,248$ 12700905 12,637,804$ 12,055,260$ 12,092,757$ Contributions as a percentage of covered payroll2 38.09% 35.65% 32.69% 32.45% 31.80% Notes to Schedule: Methods and assumptions used to determine contribution rates: Actuarial cost method Entry Age Normal Cost Method Amortization method Level percentage of payroll Asset valuation method Market value Inflation 2.50% Salary increases Varies by entry age and service Payroll Growth 2.750% Investment rate of return Retirement age Mortality 1 Employers are assumed to make contributions equal to the actuarially determined contributions. However, some employers may choose to make additional contributions towards their unfunded liability. Employer contributions for such plans exceed the actuarially determined contributions. 2 Inc ludes one year’s payroll growth using 2.80% payroll growth assumption for fiscal year ended June 30, 2022; 2.75% payroll growth assumption for fiscal years ended June 30, 2018- 21; 3.00% payroll growth assumption for fiscal years ended June 30, 2014-17. The actuarial methods and assumptions used to set the actuarially determined contributions for Fiscal Year 2021-22 were derived from the June 30, 2019 funding valuation report. 7.00% net of pension plan investment expenses; includes Inflation. The probabilities of retirement are based on the 2017 CalPERS Experience study for the period from 1997 to 2015. The probabilities of mortality are based on the 2017 CalPERS Experience Study for the period from 1997 to 2015. Pre-retirement and Post-retirement mortality rates include 15 years of projected mortality improvement using 90% of Scale MP-2016 published by the Society of Actuaries City of Gilroy Required Supplementary Information (Unaudited) Schedule of Plan Contributions - Pension (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years California Public Employees' Retirement System Defined Pension Plan - Safety Plan 103 11.6 p. 358 of 478 Measurement period 2021-2022 2020-21 2019-20 Total OPEB liability Service cost 973,126$ 1,252,941$ 906,127$ Interest 410,441 435,960 533,762 Difference between expected vs actual experience (150,527) (1,132,716) - Changes of assumptions (4,245,661) (724,033) 3,218,042 Benefit payments, including refunds of employee contributions (515,485) (559,128) (500,729) Net change in total OPEB liability (3,528,106) (726,976) 4,157,202 Total OPEB liability - beginning 18,024,828 18,751,804 14,594,602 Total OPEB liability - ending (a)14,496,722$ 18,024,828$ 18,751,804$ Covered employee-payroll 3 23,600,000$ 23,024,828$ 28,912,941$ Plan OPEB liability as a percentage of covered payroll 61.43% 78.28% 64.86% Notes to Schedule: Benefit Changes: There were no changes in benefits. Changes in Assumptions: The discount rate for the June 30, 2017 measurement date was increased to 3.58% from 2.85%. The discount rate for the June 30, 2018 measurement date was increased to 3.87% from 3.58%. The discount rate for the June 30, 2019 measurement date was decreased to 3.50% from 3.87%. The discount rate for the June 30, 2020 measurement date was decreased to 2.21% from 3.50% The discount rate for the June 30, 2021 measurement date was decreased to 2.19% from 2.21% Plan assets: There are no plan assets accumulated in a trust that meets the criteria of GASB to pay related benefits for the OPEB plan. Historical information is presented only for measurement periods for which GASB 75 is applicable. For the Year Ended June 30, 2023 Schedule of Changes in the Net OPEB Liability and Related Ratios Required Supplementary Information (Unaudited) City of Gilroy Other Post Employment Benefit Plan Last Ten Fiscal Years 104 11.6 p. 359 of 478 Measurement period 2018-19 2017-18 2016-17 Total OPEB liability Service cost 697,310$ 723,000$ 832,000$ Interest 594,793 546,000 463,000 Actual vs. expected experience (1,655,290) - - Changes of assumptions 547,789 (625,000) (1,691,000) Benefit payments, including refunds of employee contributions (524,000) (491,000) (479,000) Net change in total OPEB liability (339,398) 153,000 (875,000) Total OPEB liability - beginning 14,934,000 14,781,000 15,656,000 Total OPEB liability - ending (a)14,594,602$ 14,934,000$ 14,781,000$ Covered employee-payroll 3 29,906,910$ 27,610,000$ 26,626,000$ Plan OPEB liability as a percentage of covered payroll 48.80% 54.09% 55.51% Notes to Schedule: Benefit Changes: There were no changes in benefits. Changes in Assumptions: The discount rate for the June 30, 2017 measurement date was increased to 3.58% from 2.85%. The discount rate for the June 30, 2018 measurement date was increased to 3.87% from 3.58%. The discount rate for the June 30, 2019 measurement date was decreased to 3.50% from 3.87%. The discount rate for the June 30, 2020 measurement date was decreased to 2.21% from 3.50% The discount rate for the June 30, 2021 measurement date was decreased to 2.19% from 2.21% Plan assets: There are no plan assets accumulated in a trust that meets the criteria of GASB to pay related benefits for the OPEB plan. City of Gilroy Required Supplementary Information (Unaudited) Schedule of Changes in the Net OPEB Liability and Related Ratios (Continued) For the Year Ended June 30, 2023 Last Ten Fiscal Years Other Post Employment Benefit Plan Historical information is presented only for measurement periods for which GASB 75 is applicable. 105 11.6 p. 360 of 478 106 11.6 p. 361 of 478 The City Administrator submits to the City Council a proposed budget for all funds. Council then proceeds to make any changes to the proposed budget it deems necessary. Before adopting the proposed budget, Council holds a public hearing for any interested party desiring to be heard. Notice must be given 10 days prior to the hearing and must be published in the City’s official newspaper. After the conclusion of the public hearing, Council may further make revisions to the proposed budget. Thereafter, Council adopts the budget with revisions, if any. Legally adopted budgets for all governmental funds are established on a basis consistent with accounting principles generally accepted in the United States of America. City Council approval is required for all revisions to the adopted budget that require additional appropriations or new funding. City Administrator approval is required for all transfers within the adopted budget. Operational appropriations lapse at fiscal year-end unless City Council takes formal action to carry forward appropriations into the following fiscal year. The level on which expenditures may not legally exceed appropriations is the fund level. City of Gilroy Required Supplementary Information Notes to the Budgetary Comparison Schedules For the Year Ended June 30, 2023 Budget and Budgetary Accounting 107 11.6 p. 362 of 478 Original Final Variance with Budget Budget Actual Final Budget REVENUES: Taxes: Property taxes 16,416,000$ 18,682,000$ 19,164,448$ 482,448$ Sales tax 20,576,773 22,565,773 21,029,959 (1,535,814) Transient occupancy tax 1,833,898 1,833,898 1,754,615 (79,283) Utility taxes 4,307,959 5,479,958 6,551,417 1,071,459 Franchise taxes 1,753,800 1,753,800 2,198,150 444,350 Document transfer tax 530,400 530,400 404,075 (126,325) Motor vehicle in lieu tax 34,161 34,161 61,476 27,315 Total taxes 45,452,991 50,879,990 51,164,140 284,150 Intergovernmental: Grants 135,000 1,058,100 1,257,731 199,631 Total intergovernmental Charges for Services: Administrative charges 3,811,497 3,811,497 3,921,412 109,915 Plan checks and inspections 1,655,780 2,275,480 1,971,054 (304,426) Special planning services 481,200 451,200 668,785 217,585 Special police services 54,122 25,000 31,603 6,603 Special fire services 200,000 200,000 408,852 208,852 Community recreation 598,455 598,455 619,423 20,968 Total charges for services 6,801,054 7,361,632 7,621,129 259,497 Licenses and Permits: Business licenses 586,496 710,496 727,164 16,668 Hazardous material permits 210,000 210,000 313,867 103,867 Building permits 1,943,500 1,943,500 1,577,288 (366,212) Other licenses and permits 49,276 49,276 77,999 28,723 Total licenses and permits 2,789,272 2,913,272 2,696,318 (216,954) Fines: Vehicle fines 83,526 83,526 80,830 (2,696) Parking fines 21,150 21,150 20,401 (749) Abandoned vehicle 100,000 150,000 154,128 4,128 Total fines 204,676 254,676 255,359 683 Investment income (loss) 163,355 163,355 1,813,640 1,650,285 Miscellaneous: Police and fire 24,085 24,085 47,288 23,203 Recreation 4,400 4,400 3,212 (1,188) Other 678,404 773,826 850,669 76,843 Total miscellaneous 706,889 802,311 901,169 98,858 TOTAL REVENUES 56,253,237 63,433,336 65,709,486 2,276,150 (Continued) City of Gilroy Required Supplementary Information Budgetary Comparison Schedule - General Fund For the Year Ended June 30, 2023 108 11.6 p. 363 of 478 Original Final Variance with Budget Budget Actual Final Budget EXPENDITURES: General Government: City council 230,272 226,735 241,345 (14,610) City administration 1,541,019 2,002,289 1,865,950 136,339 Emergency services 101,100 287,200 33,277 253,923 Finance 1,012,714 1,045,823 929,361 116,462 General administration 2,805,895 3,915,223 4,098,914 (183,691) City attorney 450,000 450,000 612,282 (162,282) Human resources 1,399,381 1,557,268 1,540,512 16,756 Total general government 7,540,381 9,484,538 9,321,641 162,897 Public Safety: Police administration 3,983,593 4,133,029 4,214,385 (81,356) Police patrol operations 15,545,233 17,003,635 16,830,011 173,624 Police investigation 1,572,666 1,565,930 1,511,299 54,631 Communications 2,313,304 2,493,152 2,220,417 272,735 Police records 1,230,167 1,241,650 1,034,794 206,856 Fire administration 1,983,083 2,012,239 2,125,461 (113,222) Fire operations 10,628,472 11,212,180 11,450,532 (238,352) Total public safety 37,256,518 39,661,815 39,386,899 274,916 Public works: Public works administration 600 301,361 205,722 95,639 Street maintenance/forestry 1,234,543 1,100,130 1,092,842 7,288 Landscape maintenance 2,871,024 2,909,823 2,922,318 (12,495) Engineering 1,321,560 1,282,574 1,075,403 207,171 Total public works 5,427,727 5,593,888 5,296,285 297,603 Community development: Administration 1,115,873 1,311,203 1,141,450 169,753 Planning 1,424,615 1,693,466 1,417,950 275,516 Buildings 1,563,201 1,590,457 1,718,758 (128,301) Chemical containment hazardous materials 370,573 367,570 411,909 (44,339) Economic development - 100,000 5,500 94,500 Total community development 4,474,262 5,062,696 4,695,567 367,129 Recreation services: Community recreation 1,966,883 2,072,292 1,755,215 317,077 Total recreation services 1,966,883 2,072,292 1,755,215 317,077 Capital outlay: Capital outlay 2,122,000 3,722,000 1,575,059 2,146,941 Total capital outlay 2,122,000 3,722,000 1,575,059 2,146,941 Debt services Principal payment - - 22,500 (22,500) Total debt services - - 22,500 (22,500) TOTAL EXPENDITURES 58,787,771 65,597,229 62,053,166 3,544,063 EXCESS OF REVENUES OVER EXPENDITURES (2,534,534) (2,163,893) 3,656,320 5,820,213 OTHER FINANCING SOURCES: Transfers in 2,532,888 2,571,340 2,579,508 8,168 Transfers out (1,231,734) (2,200,743) (2,189,571) 11,172 Total other financing sources 1,301,154 370,597 389,937 19,340 NET CHANGE IN FUND BALANCE (1,233,380)$ (1,793,296)$ 4,046,257 5,839,553$ FUND BALANCE: Beginning of Year 37,905,716 End of Year 41,951,973$ (Concluded) For the Year Ended June 30, 2023 City of Gilroy Required Supplementary Information Budgetary Comparison Schedule - General Fund (Continued) 109 11.6 p. 364 of 478 110 11.6 p. 365 of 478 SUPPLEMENTARY INFORMATION 111 11.6 p. 366 of 478 112 11.6 p. 367 of 478 Original Final Variance with Budget Budget Actual Final Budget REVENUES: Developer impact fee 7,018,599$ 7,018,599$ 2,073,785$ (4,944,814)$ Investment income 7,145 7,145 60,303 53,158 Total revenues 7,025,744 7,025,744 2,134,088 (4,891,656) EXPENDITURES: Current: Public works 10,000 10,000 8,928 1,072 Debt service: Interest and fiscal charges 58,858 58,858 58,858 - Total expenditures 68,858 68,858 67,786 1,072 EXCESS OF REVENUES OVER (UNDER) EXPENDITURES 6,956,886 6,956,886 2,066,302 (4,890,584) OTHER FINANCIN SOURCES (USES): Transfers in 40,763 40,763 40,763 - Transfers out (3,872,081) (3,872,081) (3,188,031) 684,050 Total other financing sources (uses)(3,831,318) (3,831,318) (3,147,268) 684,050 NET CHANGE IN FUND BALANCE 3,125,568$ 3,125,568$ (1,080,966) (4,206,534)$ FUND BALANCE(DEFICIT): Beginning of Year 30,550 End of Year (1,050,416)$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Facilities Impact Capital Projects Fund For the Year Ended June 30, 2023 113 11.6 p. 368 of 478 NONMAJOR GOVERNMENTAL FUNDS These funds account for revenue sources that are restricted for specific purposes (other than those resources to be expended solely for the construction of major capital facilities). Gas Tax Fund - This fund is used to account for the City’s share of state gasoline tax required to be used for construction and maintenance of the City’s road network system. Pavement Management Fund - This fund is used to account for County Measure A and other transportation grants used to repair and rebuild various roads. Public Safety Grants Fund - This fund is used to account for state and federal grants used for public safety activities. SPECIAL REVENUE FUNDS Prop 172 Sales Tax Fund - This fund is used to account for funds received from state sales tax used for public safety activities. Opioid Settlement Fund -State led participation in the National Opioid Settlement with Teva, Allergan, CVS, Walgreens, and Walmart. Money can be used for opioid abatement. 85% of the monies received from the settlement will be distributed to cities and counties. Los Arroyos Fund - This fund is used to account for funds received from South County Housing to support future homebuyers in the Los Arroyos neighborhood. CalHome Funds - This fund is used to account funds received from South County Housing to support future homebuyers. CAPITAL PROJECTS FUNDS These funds account for resources intended to be used primarily for major capital facilities (other than those financed by revenues of proprietary funds). Capital Projects Fund -This fund is used to account for major capital projects other than those financed by revenues of proprietary funds, including projects that are partially funded from other sources such as grants or fuel tax. Community Development Block Grant Fund - This fund is used to account for Housing and Urban Development grants used to operate the Community Development Grant Program. Rehabilitation Loans Fund - This fund is used to account for loan proceeds used from the state for housing projects. Housing Trust Fund - This fund is used to account for local funds used to address affordable housing and homelessness, for both capital projects and services provided to homebuyers regarding down payment assistance and administrative oversight. Community Facilities District Fund - This fund is used to account for funds from special landscape assessment districts used to maintain improvements of a public nature that provide benefits to the property owner. Vehicle License Fee Fund - This fund is used to account for vehicle license fees received from Santa Clara County to be used for pavement maintenance, operations, signals, signs, and markings. Measure B Fund - This fund is used to account for street and road maintenance and repair projects. Traffic Impact Fund - This fund is used to finance the construction of streets, bridges, interchanges, and traffic signals within the City as described in the City of Gilroy’s Circulation Element. Improvements and expansions of the City’s traffic circulation system are needed to accommodate development of new residential, commercial and industrial uses with the City. The traffic impact fee is used to expand system capacity to accommodate new development. Storm Drains Fund - This fund is used finance the construction of drainage collection and distribution systems within the City as described in the City of Gilroy’s Storm Drain Master Plan. Improvements and expansions of the City’s storm drain system are needed to accommodate development of new residential, commercial and industrial uses within the City. The storm drain development fee is used to expand system capacity to accommodate new development. 114 11.6 p. 369 of 478 These funds account for resources accumulated for the payment of principal and interest (other than that for proprietary fund debt). NONMAJOR GOVERNMENTAL FUNDS (Continued) CAPITAL PROJECTS FUNDS (Continued) Stormwater Management Fund-established to set aside funds to implement State required trash capture device provisions in the Stormwater system. Water Development Fund - This fund is used to account for the construction of water transmission, distribution and storage systems within Pressure Zone 1 of the City’s water system as described in the City of Gilroy’s Water Master Plan. Improvements and expansions of the City’s water system are needed to accommodate development of new residential, commercial and industrial uses within the City. The water development fee is used to expand capacity to accommodate new development. Downtown Beautification Fund –The purpose of this fund is to finance the design and construction improvements along Gourmet Alley and Railroad Alley. These improvements are funded by a $3.9M grant from Caltrans' Clean California Local Grant Program. Interest is allocated. PERMANENT FUNDS Museum Trust Fund -This fund was established by the sale of a vase by the Gilroy Museum. The purpose in selling the vase was to create an endowment for the museum. This would generate interest income for the museum. Henry Miller Fund -This fund is used to account for a donation from Henry Miller. The annual interest earned on the original donation of $15,000 is the amount donated to the poor of Gilroy each Christmas season. Lease Revenue Bonds Series 2020A Fund - This fund is used to account for the payments of debt service of principal and interest for the PFFA Lease Revenue 2020A Bonds. Street Trees Development Fund - This fund is used to account for the collection of a front footage fee to plant trees in new developments. Sewer Development Fund - This fund is used to account for the construction of sewer collection and conveyance systems within the City as described in the City of Gilroy’s Sewer Master Plan. Improvements and expansions of the City’s sewer system are needed to accommodate development of new residential, commercial and industrial uses within the City. The sewer development fee is used to expand system capacity to accommodate new development. CA Energy Commission Loan Fund -This fund is used to account for the payments of debt service of principal and interest for the loan agreement between the CA Energy Commission (CEC) and the City for the Wide LED streetlight replacement project. Gilroy Community Library Fund -This fund is used to account for payments of the indebtedness of the refinanced 2019 series A and B General Obligation Bonds for the Gilroy Community Library. 2013 Refunding Bond Fund -This fund is used to account for the payments of debt service of principal and interest for the 2013 Lease Revenue Refunding Bonds. Gilroy Community Library Fund - This fund is used to account for the acquisition, construction and improvement of facilities to be used as a public library within the City. Funding was provided by issuance of general obligation bonds. Interest earned on specific LAIF account will be recorded directly to the Library fund. DEBT SERVICE FUNDS 115 11.6 p. 370 of 478 Public Pavement Safety Prop 172 Gas Tax Management Grants Sales Tax ASSETS Cash and investments 6,723,909$ 231,734$ 612,766$ 127,050$ Receivables: Accounts 120,124 - 172,467 - Due from other governments 132,089 - 91,257 58,364 Interest - - - - Loans - - - - Advances from other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total assets 6,976,122$ 231,734$ 876,490$ 185,414$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable 377,839$ -$ 85,836$ 10,637$ Accrued liabilities - - 34,971 - Deposits payable - - - - Unearned revenue - - - - Due to other funds - - - - Total liabilities 377,839 - 120,807 10,637 Deferred inflows of resources: Unavailable revenues - - - - Total deferred inflows of resources - - - - Fund balances: Restricted 6,598,283 231,734 755,683 174,777 Assigned - - - - Unassigned (deficit)- - - - Total fund balances (deficit)6,598,283 231,734 755,683 174,777 Total liabilities, deferred inflows of resources, and fund balances 6,976,122$ 231,734$ 876,490$ 185,414$ (Continued) Special Revenue Funds City of Gilroy Combining Balance Sheet Nonmajor Governmental Funds June 30, 2023 116 11.6 p. 371 of 478 Community Housing Community Development Rehabilitation Trust Facilities Block Grant Loans Fund District ASSETS Cash and investments 403,644$ 235$ 1,126,721$ 1,671,445$ Receivables: Accounts 300 - 1,378 - Due from other governments 131,782 - - 2,194 Interest 465,501 - 388,252 - Loans 1,646,375 - 1,216,663 - Advances from other funds - - - - Land held for resale - - 706,754 - Restricted assets: Cash and investments with fiscal agents - - - - Total assets 2,647,602$ 235$ 3,439,768$ 1,673,639$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable 97,489$ -$ 482$ 11,150$ Accrued liabilities 3,492 - 4,580 - Deposits payable - - - - Unearned revenue - - - - Due to other funds - - - - Total liabilities 100,981 - 5,062 11,150 Deferred inflows of resources: Unavailable revenues 471,853 - 388,252 - Total deferred inflows of resources 471,853 - 388,252 - Fund balances: Restricted 2,074,768 235 3,046,454 1,662,489 Assigned - - - - Unassigned (deficit)- - - - Total fund balances (deficit)2,074,768 235 3,046,454 1,662,489 Total liabilities, deferred inflows of resources, and fund balances 2,647,602$ 235$ 3,439,768$ 1,673,639$ (Continued) Special Revenue Funds City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds June 30, 2023 117 11.6 p. 372 of 478 Vehicle License Los Arroyos CalHome Measure B Fee Fund Funds ASSETS Cash and investments 4,115,694$ 1,355,119$ 633,774$ 367,186$ Receivables: Accounts - - - - Due from other governments - - - - Interest - - - 68,601 Loans - - - 180,600 Advances from other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total assets 4,115,694$ 1,355,119$ 633,774$ 616,387$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable -$ -$ 1,879$ -$ Accrued liabilities - - - - Deposits payable - - - - Unearned revenue - - - 249,201 Due to other funds - - - - Total liabilities - - 1,879 249,201 Deferred inflows of resources: Unavailable revenues - - - - Total deferred inflows of resources - - - - Fund balances: Restricted 4,115,694 1,355,119 631,895 367,186 Assigned - - - - Unassigned (deficit)- - - - Total fund balances (deficit)4,115,694 1,355,119 631,895 367,186 Total liabilities, deferred inflows of resources, and fund balances 4,115,694$ 1,355,119$ 633,774$ 616,387$ (Continued) Special Revenue Funds City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds June 30, 2023 118 11.6 p. 373 of 478 Special Revenue Funds Opioid Settlement Capital Traffic Fund Projects Impact ASSETS Cash and investments 46,551$ 3,674,177$ 17,305,015$ Receivables: Accounts - - - Due from other governments - - - Interest - - - Loans - - - Advances from other funds - - - Land held for resale - - - Restricted assets: Cash and investments with fiscal agents - - - Total assets 46,551$ 3,674,177$ 17,305,015$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable -$ 116,786$ 40,081$ Accrued liabilities - - - Deposits payable - - - Unearned revenue - - - Due to other funds - - - Total liabilities - 116,786 40,081 Deferred inflows of resources: Unavailable revenues - - - Total deferred inflows of resources - - - Fund balances: Restricted - - 17,264,934 Assigned 46,551 3,557,391 - Unassigned (deficit)- - - Total fund balances (deficit)46,551 3,557,391 17,264,934 Total liabilities, deferred inflows of resources, and fund balances 46,551$ 3,674,177$ 17,305,015$ Capital Projects Funds City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds June 30, 2023 119 11.6 p. 374 of 478 Street Storm Trees Sewer Water Drains Development Development Development ASSETS Cash and investments 1,362,657$ 150,453$ 15,166,621$ 6,185,116$ Receivables: Accounts - - - - Due from other governments - - - - Interest - - - - Loans - - - - Advances from other funds 794,277 - 728,945 - Land held for resale - - - - Restricted assets: Cash and investments with fiscal agents - - - - Total assets 2,156,934$ 150,453$ 15,895,566$ 6,185,116$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable 108$ -$ 108$ 108$ Accrued liabilities - - - 16,230 Deposits payable - - - - Unearned revenue - - - - Due to other funds - - - - Total liabilities 108 - 108 16,338 Deferred inflows of resources: Unavailable revenues - - - - Total deferred inflows of resources - - - - Fund balances: Restricted 2,156,826 150,453 15,895,458 6,168,778 Assigned - - - - Unassigned (deficit)- - - - Total fund balances (deficit)2,156,826 150,453 15,895,458 6,168,778 Total liabilities, deferred inflows of resources, and fund balances 2,156,934$ 150,453$ 15,895,566$ 6,185,116$ (Continued) Capital Projects Funds City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds June 30, 2023 120 11.6 p. 375 of 478 Gilroy Community Downtown Stormwater Library Beautification Management ASSETS Cash and investments 5,288,979$ 47,248$ 794,089$ Receivables: Accounts - - - Due from other governments 41,927 - - Interest - - - Loans - - - Advances from other funds - - - Land held for resale - - - Restricted assets: Cash and investments with fiscal agents - - - Total assets 5,330,906$ 47,248$ 794,089$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable -$ 47,248$ -$ Accrued liabilities - - - Deposits payable - - - Unearned revenue - - - Due to other funds - 155,324 - Total liabilities - 202,572 - Deferred inflows of resources: Unavailable revenues - - - Total deferred inflows of resources - - - Fund balances: Restricted 5,330,906 - 794,089 Assigned - - - Unassigned (deficit)- (155,324) - Total fund balances (deficit)5,330,906 (155,324) 794,089 Total liabilities, deferred inflows of resources, and fund balances 5,330,906$ 47,248$ 794,089$ (Continued) City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds Capital Projects Funds June 30, 2023 121 11.6 p. 376 of 478 2013 Gilroy CA Energy Lease Revenue Refunding Community Commission Bond Series Bond Library Loan 2020A ASSETS Cash and investments 228,642$ 1,401,327$ 20,690$ 677,445$ Receivables: Accounts - 9,235 - - Due from other governments - - - - Interest - - - - Loans - - - - Advances from other funds - - - - Land held for resale - - - - Restricted assets: Cash and investments with fiscal agents 1,827 - - 1,313 Total assets 230,469$ 1,410,562$ 20,690$ 678,758$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable -$ -$ -$ -$ Accrued liabilities - - - - Deposits payable - - - - Unearned revenue - - - - Due to other funds - - - - Total liabilities - - - - Deferred inflows of resources: Unavailable revenues - - - - Total deferred inflows of resources - - - - Fund balances: Restricted 230,469 1,410,562 20,690 678,758 Assigned - - - - Unassigned (deficit)- - - - Total fund balances (deficit)230,469 1,410,562 20,690 678,758 Total liabilities, deferred inflows of resources, and fund balances 230,469$ 1,410,562$ 20,690$ 678,758$ Debt Service Funds City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds June 30, 2023 122 11.6 p. 377 of 478 Total Nonmajor Henry Museum Governmental Miller Trust Funds ASSETS Cash and investments 15,399$ 44,213$ 69,777,899$ Receivables: Accounts - - 303,504 Due from other governments - - 457,613 Interest - - 922,354 Loans - - 3,043,638 Advances from other funds - - 1,523,222 Land held for resale - - 706,754 Restricted assets: Cash and investments with fiscal agents - - 3,140 Total assets 15,399$ 44,213$ 76,738,124$ LIABILITIES, DEFERRED INFLOWS OF RESOURCES, AND FUND BALANCES Liabilities: Accounts payable -$ -$ 789,751$ Accrued liabilities - - 59,273 Deposits payable - 35,299 35,299 Unearned revenue - - 249,201 Due to other funds - - 155,324 Total liabilities - 35,299 1,288,848 Deferred inflows of resources: Unavailable revenues - - 860,105 Total deferred inflows of resources - - 860,105 Fund balances: Restricted 15,399 8,914 71,140,553 Assigned - - 3,603,942 Unassigned (deficit)- - (155,324) Total fund balances (deficit)15,399 8,914 74,589,171 Total liabilities, deferred inflows of resources, and fund balances 15,399$ 44,213$ 76,738,124$ (Concluded) Permanent Funds City of Gilroy Combining Balance Sheet (Continued) Nonmajor Governmental Funds June 30, 2023 123 11.6 p. 378 of 478 Public Pavement Safety Prop 172 Gas Tax Management Grants Sales Tax Revenues: Taxes -$ -$ -$ 301,913$ Intergovernmental 2,867,350 - 1,030,992 - Developer impact fees - - - - Investment income (loss)129,736 3,748 7,002 1,353 Miscellaneous - - 120,678 - Total revenues 2,997,086 3,748 1,158,672 303,266 Expenditures: Current: General government - - - - Public safety - - 866,352 293,959 Community development - - - - Public works 382,799 - - - Capital outlay 2,675,426 - 10,861 - Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Bond issuance cost - - - - Total expenditures 3,058,225 - 877,213 293,959 Revenues over (under) expenditures (61,139) 3,748 281,459 9,307 Other financing sources (uses): Issuance of debt - - - - Payment to refunded bond escrow - - - - Transfers in - - 163,672 - Transfers out (107,363) - (115,271) - Total other financing sources (uses)(107,363) - 48,401 - Net change in fund balances (168,502) 3,748 329,860 9,307 Fund balances (deficit): Beginning of year 6,766,785 227,986 425,823 165,470 End of year 6,598,283$ 231,734$ 755,683$ 174,777$ (Continued) Special Revenue Funds City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances Nonmajor Governmental Funds For the Year Ended June 30, 2023 124 11.6 p. 379 of 478 Community Housing Community Development Rehabilitation Trust Facilities Block Grant Loans Fund District Revenues: Taxes -$ -$ -$ 507,823$ Intergovernmental 1,002,854 - - - Developer impact fees - - - - Investment income (loss)7,313 5 25,173 25,397 Miscellaneous 6,346 - 537,534 - Total revenues 1,016,513 5 562,707 533,220 Expenditures: Current: General government - - - - Public safety - - - - Community development 532,454 - 325,293 - Public works - - - 347,071 Capital outlay 203,394 - - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Bond issuance cost - - - - Total expenditures 735,848 - 325,293 347,071 Revenues over (under) expenditures 280,665 5 237,414 186,149 Other financing sources (uses): Issuance of debt - - - - Payment to refunded bond escrow - - - - Transfers in - - 169,224 - Transfers out (58,104) - (1,402) - Total other financing sources (uses)(58,104) - 167,822 - Net change in fund balances 222,561 5 405,236 186,149 Fund balances (deficit): Beginning of year 1,852,207 230 2,641,218 1,476,340 End of year 2,074,768$ 235$ 3,046,454$ 1,662,489$ (Continued) Special Revenue Funds City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds For the Year Ended June 30, 2023 125 11.6 p. 380 of 478 Vehicle License Los Arroyos CalHome Measure B Fee Fund Funds Revenues: Taxes -$ -$ -$ -$ Intergovernmental 2,968,901 341,769 137,127 - Developer impact fees - - - - Investment income (loss)32,683 21,120 9,387 5,938 Miscellaneous - - - - Total revenues 3,001,584 362,889 146,514 5,938 Expenditures: Current: General government - - - - Public safety - - - - Community development - - 128,866 - Public works 300 6,934 - - Capital outlay 947,500 12,620 - - Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Bond issuance cost - - - - Total expenditures 947,800 19,554 128,866 - Revenues over (under) expenditures 2,053,784 343,335 17,648 5,938 Other financing sources (uses): Issuance of debt - - - - Payment to refunded bond escrow - - - - Transfers in - - - - Transfers out - - - - Total other financing sources (uses)- - - - Net change in fund balances 2,053,784 343,335 17,648 5,938 Fund balances (deficit): Beginning of year 2,061,910 1,011,784 614,247 361,248 End of year 4,115,694$ 1,355,119$ 631,895$ 367,186$ (Continued) Special Revenue Funds For the Year Ended June 30, 2023 City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds 126 11.6 p. 381 of 478 Special Revenue Funds Opioid Settlement Capital Traffic Fund Projects Impact Revenues: Taxes -$ -$ -$ Intergovernmental - - - Developer impact fees - - 3,465,903 Investment income (loss)420 109,091 302,563 Miscellaneous 46,131 - - Total revenues 46,551 109,091 3,768,466 Expenditures: Current: General government - - - Public safety - - - Community development - - - Public works - - 5,616 Capital outlay - 2,045,998 4,034,756 Debt service: Principal retirement - - - Interest and fiscal charges - - - Bond issuance cost - - - Total expenditures - 2,045,998 4,040,372 Revenues over (under) expenditures 46,551 (1,936,907) (271,906) Other financing sources (uses): Issuance of debt - - - Payment to refunded bond escrow - - - Transfers in - - 48,769 Transfers out - - - Total other financing sources (uses)- - 48,769 Net change in fund balances 46,551 (1,936,907) (223,137) Fund balances (deficit): Beginning of year - 5,494,298 17,488,071 End of year 46,551$ 3,557,391$ 17,264,934$ (Continued) For the Year Ended June 30, 2023 Capital Projects Funds City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds 127 11.6 p. 382 of 478 Street Storm Trees Sewer Water Drains Development Development Development Revenues: Taxes -$ -$ -$ -$ Intergovernmental - - - - Developer impact fees 34,005 8,008 1,122,624 317,576 Investment income (loss)32,679 2,365 244,628 100,028 Miscellaneous - - - - Total revenues 66,684 10,373 1,367,252 417,604 Expenditures: Current: General government - - - - Public safety - - - - Community development - - - - Public works 2,740 - 19,551 3,150 Capital outlay - - - 304,913 Debt service: Principal retirement - - - - Interest and fiscal charges - - - - Bond issuance cost - - - - Total expenditures 2,740 - 19,551 308,063 Revenues over (under) expenditures 63,944 10,373 1,347,701 109,541 Other financing sources (uses): Issuance of debt - - - - Payment to refunded bond escrow - - - - Transfers in 1,196 27 28,351 5,893 Transfers out - - (1,543,668) - Total other financing sources (uses)1,196 27 (1,515,317) 5,893 Net change in fund balances 65,140 10,400 (167,616) 115,434 Fund balances (deficit): Beginning of year 2,091,686 140,053 16,063,074 6,053,344 End of year 2,156,826$ 150,453$ 15,895,458$ 6,168,778$ (Continued) Capital Projects Funds For the Year Ended June 30, 2023 City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds 128 11.6 p. 383 of 478 Gilroy Community Downtown Stormwater Library Beautification Management Revenues: Taxes -$ -$ -$ Intergovernmental - 181,530 - Developer impact fees - - - Investment income (loss)109,700 - 10,413 Miscellaneous - - 783,676 Total revenues 109,700 181,530 794,089 Expenditures: Current: General government - - - Public safety - - - Community development - - - Public works - 477 - Capital outlay - 336,377 - Debt service: Principal retirement - - - Interest and fiscal charges - - - Bond issuance cost - - - Total expenditures - 336,854 - Revenues over (under) expenditures 109,700 (155,324) 794,089 Other financing sources (uses): Issuance of debt - - - Payment to refunded bond escrow - - - Transfers in - - - Transfers out - - - Total other financing sources (uses)- - - Net change in fund balances 109,700 (155,324) 794,089 Fund balances (deficit): Beginning of year 5,221,206 - - End of year 5,330,906$ (155,324)$ 794,089$ (Continued) Capital Projects Funds Nonmajor Governmental Funds For the Year Ended June 30, 2023 City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) 129 11.6 p. 384 of 478 2013 Gilroy CA Energy Lease Revenue Refunding Community Commission Bond Series Bond Library Loan 2020A Revenues: Taxes -$ 1,927,859$ -$ -$ Intergovernmental - - - - Developer impact fees - - - - Investment income (loss)17,956 12,594 590 9,504 Miscellaneous - - - - Total revenues 17,956 1,940,453 590 9,504 Expenditures: Current: General government 3,623 5,490 - 4,300 Public safety - - - - Community development - - - - Public works - - - - Capital outlay - - - - Debt service: Principal retirement 1,035,000 1,055,605 93,359 755,000 Interest and fiscal charges 659,003 779,906 6,503 592,875 Bond issuance cost 169,268 - - - Total expenditures 1,866,894 1,841,001 99,862 1,352,175 Revenues over (under) expenditures (1,848,938) 99,452 (99,272) (1,342,671) Other financing sources (uses): Issuance of debt 14,587,831 - - - Payment to refunded bond escrow (15,352,976) - - - Transfers in 1,840,156 - 99,863 1,347,875 Transfers out - - - - Total other financing sources (uses)1,075,011 - 99,863 1,347,875 Net change in fund balances (773,927) 99,452 591 5,204 Fund balances (deficit): Beginning of year 1,004,396 1,311,110 20,099 673,554 End of year 230,469$ 1,410,562$ 20,690$ 678,758$ Debt Service Funds For the Year Ended June 30, 2023 City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Nonmajor Governmental Funds 130 11.6 p. 385 of 478 Total Nonmajor Henry Museum Governmental Miller Trust Funds Revenues: Taxes -$ -$ 2,737,595$ Intergovernmental - - 8,530,523 Developer impact fees - - 4,948,116 Investment income (loss)346 (1,578) 1,220,154 Miscellaneous - - 1,494,365 Total revenues 346 (1,578) 18,930,753 Expenditures: Current: General government - - 13,413 Public safety - - 1,160,311 Community development - - 986,613 Public works - - 768,638 Capital outlay - - 10,571,845 Debt service: Principal retirement - - 2,938,964 Interest and fiscal charges - - 2,038,287 Bond issuance cost - - 169,268 Total expenditures - - 18,647,339 Revenues over (under) expenditures 346 (1,578) 283,414 Other financing sources (uses): Issuance of debt - - 14,587,831 Payment to refunded bond escrow - - (15,352,976) Transfers in - - 3,705,026 Transfers out - - (1,825,808) Total other financing sources (uses)- - 1,114,073 Net change in fund balances 346 (1,578) 1,397,487 Fund balances (deficit): Beginning of year 15,053 10,492 73,191,684 End of year 15,399$ 8,914$ 74,589,171$ (Concluded) Nonmajor Governmental Funds For the Year Ended June 30, 2023 City of Gilroy Combining Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) Permanent Funds 131 11.6 p. 386 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental 3,479,081$ 2,579,081$ 2,867,350$ 288,269$ Investment income 63,759 49,691 129,736 80,045 Total revenues 3,542,840 2,628,772 2,997,086 368,314 Expenditures: Current: Public works 1,053,598 705,889 382,799 323,090 Capital outlay 3,005,738 8,050,646 2,675,426 5,375,220 Total expenditures 4,059,336 8,756,535 3,058,225 5,698,310 REVENUE OVER (UNDER) EXPENDITURES (516,496) (6,127,763) (61,139) 6,066,624 Other Financing Sources (Uses): Transfers out (107,363) (107,363) (107,363) - Total other financing sources (uses)(107,363) (107,363) (107,363) - NET CHANGE IN FUND BALANCE (623,859)$ (6,235,126)$ (168,502) 6,066,624$ FUND BALANCE: Beginning of Year 6,766,785 End of Year 6,598,283$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual For the Year Ended June 30, 2023 Budgeted Amounts Gas Tax Special Revenue Fund 132 11.6 p. 387 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental 1,788,500$ 1,788,500$ -$ (1,788,500)$ Investment income - - 3,748 3,748 Total revenues 1,788,500 1,788,500 3,748 (1,784,752) Expenditures: Capital outlay 1,788,500 1,788,500 - 1,788,500 Total expenditures 1,788,500 1,788,500 - 1,788,500 REVENUE OVER (UNDER) EXPENDITURES - - 3,748 3,748 NET CHANGE IN FUND BALANCE -$ -$ 3,748 3,748$ FUND BALANCE: Beginning of Year 227,986 End of Year 231,734$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Pavement Management Special Revenue Fund For the Year Ended June 30, 2023 Budgeted Amounts 133 11.6 p. 388 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental 256,688$ 1,427,552$ 1,030,992$ (396,560)$ Investment income 3,261 3,261 7,002 3,741 Miscellaneous - - 120,678 120,678 Total revenues 259,949 1,430,813 1,158,672 (272,141) Expenditures: Current: Public safety 266,673 1,617,557 866,352 751,205 Capital outlay - - 10,861 (10,861) Total expenditures 266,673 1,617,557 877,213 740,344 REVENUE OVER (UNDER) EXPENDITURES (6,724) (186,744) 281,459 468,203 Other Financing Sources (Uses): Transfers in 163,672 163,672 163,672 - Transfers out (154,388) (154,388) (115,271) 39,117 Total other financing sources (uses)9,284 9,284 48,401 39,117 NET CHANGE IN FUND BALANCE 2,560$ (177,460)$ 329,860 507,320$ FUND BALANCE: Beginning of Year 425,823 End of Year 755,683$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Public Safety Grants Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 134 11.6 p. 389 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Taxes 301,000$ 301,000$ 301,913$ 913$ Investment income 135 135 1,353 1,218 Total revenues 301,135 301,135 303,266 2,131 Expenditures: Current: Public safety 310,188 310,188 293,959 16,229 Total expenditures 310,188 310,188 293,959 16,229 REVENUE OVER (UNDER) EXPENDITURES (9,053) (9,053) 9,307 18,360 NET CHANGE IN FUND BALANCE (9,053)$ (9,053)$ 9,307 18,360$ FUND BALANCE: Beginning of Year 165,470 End of Year 174,777$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Prop 172 Sales Tax Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 135 11.6 p. 390 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental 439,371$ 779,247$ 1,002,854$ 223,607$ Investment income 2,115 2,115 7,313 5,198 Miscellaneous - - 6,346 6,346 Total revenues 441,486 781,362 1,016,513 235,151 Expenditures: Current: Community development 174,183 698,055 532,454 165,601 Capital outlay - 196,099 203,394 (7,295) Total expenditures 174,183 894,154 735,848 158,306 REVENUE OVER (UNDER) EXPENDITURES 267,303 (112,792) 280,665 393,457 Other Financing Sources (Uses): Transfers out - (38,452) (58,104) (19,652) Total other financing sources (uses)- (38,452) (58,104) (19,652) NET CHANGE IN FUND BALANCE 267,303$ (151,244)$ 222,561 373,805$ FUND BALANCE: Beginning of Year 1,852,207 End of Year 2,074,768$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Development Block Grant Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 136 11.6 p. 391 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income 2$ 2$ 5$ 3$ Total revenues 2 2 5 3 NET CHANGE IN FUND BALANCE 2$ 2$ 5 3$ FUND BALANCE: Beginning of year 230 End of year 235$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Rehabilitation Loans Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 137 11.6 p. 392 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income 10,816$ 10,816$ 25,173$ 14,357$ Miscellaneous 251,000 251,000 537,534 286,534 Total revenues 261,816 261,816 562,707 300,891 Expenditures: Current: Community development 563,353 1,125,656 325,293 800,363 Total expenditures 563,353 1,125,656 325,293 800,363 Revenues over (under) expenditures (301,537) (863,840) 237,414 1,101,254 Other financing sources (uses): Transfers in - 249,052 169,224 (79,828) Total other financing sources (uses)- 249,052 167,822 (81,230) NET CHANGE IN FUND BALANCE (301,537)$ (614,788)$ 405,236 1,020,024$ FUND BALANCE: Beginning of year 2,641,218 End of year 3,046,454$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Housing Trust Fund Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 138 11.6 p. 393 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Taxes 453,167$ 453,167$ 507,823$ 54,656$ Investment income 7,568 7,568 25,397 17,829 Total revenues 460,735 460,735 533,220 72,485 Expenditures: Current: Public works 419,702 423,278 347,071 76,207 Total expenditures 419,702 423,278 347,071 76,207 NET CHANGE IN FUND BALANCE 41,033$ 37,457$ 186,149 148,692$ FUND BALANCE: Beginning of year 1,476,340 End of year 1,662,489$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Community Facilities District Special Revenue Fund For the Year Ended June 30, 2023 139 11.6 p. 394 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental -$ 900,000$ 2,968,901$ 2,068,901$ Investment income - 14,068 32,683 18,615 Total revenues - 914,068 3,001,584 2,087,516 Expenditures: Current: Public works - 10,000 300 9,700 Capital outlay - 1,800,000 947,500 852,500 Total expenditures - 1,810,000 947,800 862,200 NET CHANGE IN FUND BALANCE -$ (895,932)$ 2,053,784 2,949,716$ FUND BALANCE: Beginning of year 2,061,910 End of year 4,115,694$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Measure B Special Revenue Fund For the Year Ended June 30, 2023 140 11.6 p. 395 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental 389,944$ 389,944$ 341,769$ (48,175)$ Investment income 9,761 9,761 21,120 11,359 Total revenues 399,705 399,705 362,889 (36,816) Expenditures: Current: Public works 25,000 25,000 6,934 18,066 Capital outlay 998,338 1,036,498 12,620 1,023,878 Total expenditures 1,023,338 1,061,498 19,554 1,041,944 Revenues over (under) expenditures (623,633) (661,793) 343,335 1,005,128 NET CHANGE IN FUND BALANCE (623,633)$ (661,793)$ 343,335 1,005,128$ FUND BALANCE: Beginning of year 1,011,784 End of year 1,355,119$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Vehicle License Fee Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 141 11.6 p. 396 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Intergovernmental -$ -$ 137,127$ 137,127$ Investment income 2,783 2,783 9,387 6,604 Total revenues 2,783 2,783 146,514 143,731 Expenditures: Current: Community development - 101,000 128,866 (27,866) Total expenditures - 101,000 128,866 (27,866) Revenues over (under) expenditures 2,783 (98,217) 17,648 115,865 NET CHANGE IN FUND BALANCE 2,783$ (98,217)$ 17,648 115,865$ FUND BALANCE: Beginning of year 614,247 End of year 631,895$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Los Arroyos Fund Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 142 11.6 p. 397 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income 1,568$ 1,568$ 5,938$ 4,370$ Miscellaneous - - - - Total revenues 1,568 1,568 5,938 4,370 NET CHANGE IN FUND BALANCE 1,568$ 1,568$ 5,938 4,370$ FUND BALANCE: Beginning of year 361,248 End of year 367,186$ City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual CalHome Funds Special Revenue Fund Budgeted Amounts For the Year Ended June 30, 2023 143 11.6 p. 398 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income -$ -$ 420$ 420$ Miscellaneous - - 46,131 46,131 Total revenues - - 46,551 46,551 NET CHANGE IN FUND BALANCE -$ -$ 46,551 46,551$ FUND BALANCE: Beginning of year - End of year 46,551$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Opioid Settlement Special Revenue Fund For the Year Ended June 30, 2023 144 11.6 p. 399 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income 35,694$ 35,694$ 109,091$ 73,397$ Total revenues 35,694 35,694 109,091 73,397 Expenditures: Capital outlay 300,000 2,804,346 2,045,998 758,348 Total expenditures 300,000 2,804,346 2,045,998 758,348 Revenues over (under) expenditures (264,306) (2,768,652) (1,936,907) 831,745 NET CHANGE IN FUND BALANCE (264,306)$ (2,768,652)$ (1,936,907) 831,745$ FUND BALANCE: Beginning of year 5,494,298 End of year 3,557,391$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Capital Projects Fund For the Year Ended June 30, 2023 145 11.6 p. 400 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Charges for services 4,938,950$ 4,938,950$ 3,465,903$ (1,473,047)$ Investment income 86,452 86,452 302,563 216,111 Total revenues 5,025,402 5,025,402 3,768,466 (1,256,936) Expenditures: Current: Public works 10,451 407,100 5,616 401,484 Capital outlay 2,613,273 3,548,505 4,034,756 (486,251) Total expenditures 2,623,724 3,955,605 4,040,372 (84,767) Revenues over (under) expenditures 2,401,678 1,069,797 (271,906) (1,341,703) Other financing sources (uses): Transfers in 48,769 48,769 48,769 - Total other financing sources (uses)48,769 48,769 48,769 - NET CHANGE IN FUND BALANCE 2,450,447$ 1,118,566$ (223,137) (1,341,703)$ FUND BALANCE: Beginning of year 17,488,071 End of year 17,264,934$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Traffic Impact Capital Projects Fund For the Year Ended June 30, 2023 146 11.6 p. 401 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Charges for services 66,697$ 66,697$ 34,005$ (32,692)$ Investment income 18,962 18,962 32,679 13,717 Total revenues 85,659 85,659 66,684 (18,975) Expenditures: Current: Public works 5,194 5,194 2,740 2,454 Total expenditures 5,194 5,194 2,740 2,454 Revenues over (under) expenditures 80,465 80,465 63,944 (16,521) Other financing sources (uses): Transfers in 75,395 75,395 1,196 (74,199) Total other financing sources (uses)75,395 75,395 1,196 (74,199) NET CHANGE IN FUND BALANCE 155,860$ 155,860$ 65,140 (90,720)$ FUND BALANCE: Beginning of year 2,091,686 End of year 2,156,826$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Storm Drains Capital Projects Fund For the Year Ended June 30, 2023 147 11.6 p. 402 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Charges for services 2,000$ 2,000$ 8,008$ 6,008$ Investment income 943 943 2,365 1,422 Total revenues 2,943 2,943 10,373 7,430 Other financing sources (uses): Transfers in 27 27 27 - Total other financing sources (uses)27 27 27 - NET CHANGE IN FUND BALANCE 2,970$ 2,970$ 10,400 7,430$ FUND BALANCE: Beginning of year 140,053 End of year 150,453$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Street Trees Development Capital Projects Fund For the Year Ended June 30, 2023 148 11.6 p. 403 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Charges for services 2,849,798$ 2,849,798$ 1,122,624$ (1,727,174)$ Investment income 92,854 92,854 244,628 151,774 Total revenues 2,942,652 2,942,652 1,367,252 (1,575,400) Expenditures: Current: Public works 24,818 24,818 19,551 5,267 Total expenditures 24,818 24,818 19,551 5,267 Revenues over (under) expenditures 2,917,834 2,917,834 1,347,701 (1,570,133) Other financing sources (uses): Transfers in 386,083 386,083 28,351 (357,732) Transfers out (2,556,800) (2,556,800) (1,543,668) 1,013,132 Total other financing sources (uses)(2,170,717) (2,170,717) (1,515,317) 655,400 NET CHANGE IN FUND BALANCE 747,117$ 747,117$ (167,616) (914,733)$ FUND BALANCE: Beginning of year 16,063,074 End of year 15,895,458$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Sewer Development Capital Projects Fund For the Year Ended June 30, 2023 149 11.6 p. 404 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Charges for services 950,336$ 950,336$ 317,576$ (632,760)$ Investment income 32,895 32,895 100,028 67,133 Total revenues 983,231 983,231 417,604 (565,627) Expenditures: Current: Public works 2,673,406 8,106 3,150 4,956 Capital outlay - 3,193,029 304,913 2,888,116 Total expenditures 2,673,406 3,201,135 308,063 2,893,072 Revenues over (under) expenditures (1,690,175) (2,217,904) 109,541 2,327,445 Other financing sources (uses): Transfers in 5,893 5,893 5,893 - Total other financing sources (uses)5,893 5,893 5,893 - NET CHANGE IN FUND BALANCE (1,684,282)$ (2,212,011)$ 115,434 2,327,445$ FUND BALANCE: Beginning of year 6,053,344 End of year 6,168,778$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Water Development Capital Projects Fund For the Year Ended June 30, 2023 150 11.6 p. 405 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income (loss)66$ 66$ 109,700$ 109,634$ Total revenues 66 66 109,700 109,634 Revenues over (under) expenditures 66 66 109,700 109,634 NET CHANGE IN FUND BALANCE 66$ 66$ 109,700 109,634$ FUND BALANCE: Beginning of year 5,221,206 End of year 5,330,906$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Gilroy Community Library Capital Projects Fund For the Year Ended June 30, 2023 151 11.6 p. 406 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Taxes -$ -$ -$ -$ Intergovernmental - 3,960,765 181,530 (3,779,235) Total revenues - 3,960,765 181,530 (3,779,235) Expenditures: Current: Public works - 201,600 477 201,123 Capital outlay - 3,759,165 336,377 3,422,788 Total expenditures - 3,960,765 336,854 3,623,911 Revenues over (under) expenditures - - (155,324) (155,324) NET CHANGE IN FUND BALANCE -$ -$ (155,324) (155,324)$ FUND BALANCE(DEFICIT): Beginning of year - End of year (155,324)$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Downtown Beautification Capital Projects Fund For the Year Ended June 30, 2023 152 11.6 p. 407 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income -$ -$ 10,413$ 10,413$ Miscellaneous - - 783,676 783,676 Total revenues - - 794,089 794,089 Revenues over (under) expenditures - - 794,089 794,089 NET CHANGE IN FUND BALANCE -$ -$ 794,089 794,089$ FUND BALANCE: Beginning of year - End of year 794,089$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Stormwater Management Capital Projects Fund For the Year Ended June 30, 2023 153 11.6 p. 408 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income 920$ 920$ 17,956$ 17,036$ Total revenues 920 920 17,956 17,036 Expenditures: Current: General government 8,600 8,600 3,623 4,977 Debt service: Principal retirement 1,035,000 1,035,000 1,035,000 - Interest and fiscal charges 805,156 805,156 659,003 146,153 Bond issuance cost - - 169,268 (169,268) Total expenditures 1,848,756 1,848,756 1,866,894 (18,138) Revenues over (under) expenditures (1,847,836) (1,847,836) (1,848,938) (1,102) Other financing sources (uses): Issuance of debt - - 14,587,831 (14,587,831) Payment to refunded bond escrow - - (15,352,976) 15,352,976 Transfers in 1,840,156 1,840,156 1,840,156 - Total other financing sources (uses)1,840,156 1,840,156 1,075,011 765,145 NET CHANGE IN FUND BALANCE (7,680)$ (7,680)$ (773,927) (766,247)$ FUND BALANCE: Beginning of year 1,004,396 End of year 230,469$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual 2013 Refunding Bond Debt Service Fund For the Year Ended June 30, 2023 154 11.6 p. 409 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Taxes 2,019,504$ 2,019,504$ 1,927,859$ (91,645)$ Investment income 5,296 5,296 12,594 7,298 Total revenues 2,024,800 2,024,800 1,940,453 (84,347) Expenditures: Current: General government 600 600 5,490 (4,890) Debt service: Principal retirement 1,055,605 1,055,605 1,055,605 - Interest and fiscal charges 779,906 779,906 779,906 - Total expenditures 1,836,111 1,836,111 1,841,001 (4,890) NET CHANGE IN FUND BALANCE 188,689$ 188,689$ 99,452 (89,237)$ FUND BALANCE: Beginning of year 1,311,110 End of year 1,410,562$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Gilroy Community Library Debt Service Fund For the Year Ended June 30, 2023 155 11.6 p. 410 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income 250$ 250$ 590$ 340$ Total revenues 250 250 590 340 Expenditures: Debt service: Principal retirement 93,359 93,359 93,359 - Interest and fiscal charges 6,503 6,503 6,503 - Total expenditures 99,862 99,862 99,862 - Revenues over (under) expenditures (99,612) (99,612) (99,272) 340 Other financing sources (uses): Transfers in 99,863 99,863 99,863 - Total other financing sources (uses)99,863 99,863 99,863 - NET CHANGE IN FUND BALANCE 251$ 251$ 591 340$ FUND BALANCE: Beginning of year 20,099 End of year 20,690$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual CA Energy Commission Loan Debt Service Fund For the Year Ended June 30, 2023 156 11.6 p. 411 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income -$ -$ 9,504$ 9,504$ Total revenues - - 9,504 9,504 Expenditures: Current: General government 8,600 8,600 4,300 4,300 Debt service: Principal retirement 755,000 755,000 755,000 - Interest and fiscal charges 592,875 592,875 592,875 - Total expenditures 1,356,475 1,356,475 1,352,175 4,300 Revenues over (under) expenditures (1,356,475) (1,356,475) (1,342,671) 13,804 Other financing sources (uses): Transfers in 1,347,875 1,347,875 1,347,875 - Total other financing sources (uses)1,347,875 1,347,875 1,347,875 - NET CHANGE IN FUND BALANCE (8,600)$ (8,600)$ 5,204 13,804$ FUND BALANCE: Beginning of year 673,554 End of year 678,758$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Lease Revenue Bonds Series 2020A Fund For the Year Ended June 30, 2023 157 11.6 p. 412 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income -$ -$ 346$ 346$ Total revenues - - 346 346 Revenues over (under) expenditures - - 346 346 NET CHANGE IN FUND BALANCE -$ -$ 346 346$ FUND BALANCE: Beginning of year 15,053 End of year 15,399$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Henry Miller Fund For the Year Ended June 30, 2023 158 11.6 p. 413 of 478 Variance with Final Budget Actual Positive Original Final Amounts (Negative) Revenues: Investment income (loss)-$ -$ (1,578)$ (1,578)$ Total revenues - - (1,578) (1,578) Revenues over (under) expenditures - - (1,578) (1,578) NET CHANGE IN FUND BALANCE -$ -$ (1,578) (1,578)$ FUND BALANCE: Beginning of year 10,492 End of year 8,914$ Budgeted Amounts City of Gilroy Schedule of Revenues, Expenditures, and Changes in Fund Balance - Budget and Actual Museum Trust Fund For the Year Ended June 30, 2023 159 11.6 p. 414 of 478 160 11.6 p. 415 of 478 Facility Services -This fund is used to account for all expenses relating to the operation and maintenance of City facilities. The costs are recovered through an annual “user fee” which is charged to all departments/funds that have facilities. Information Technologies -This fund is used to account for all expenses relating to computer hardware, software, maintenance, capital purchasing and other service charges. The costs are recovered through an annual “user fee” which is charged to all departments/funds that have computer equipment. Personnel Benefits -This fund is used for City paid benefits which are charged. Examples include medical, dental, disability, unemployment, life insurance and retirement including PERS and PARS. These benefit costs are allocated to the funds based on budget for three quarters and then reconciled to actual in the fourth quarter. General Liability -This fund is used to account for all expenses relating to the City’s general liability insurance. The costs are recovered through an annual “user fee” which is charged to various funds. INTERNAL SERVICE FUNDS These funds account for goods or services provided to other departments of the City where the intent of the City is that the costs of these goods or services are to be recovered through interdepartmental charges at the time that the goods are delivered or the services rendered to those departments. Fleet Services -This fund is used to account for the operations required to maintain the City’s vehicles. The costs are recovered through an annual “user fee” which is charged to all departments/funds that have vehicle use. This fund also provides funding for replacement of all the City’s vehicles on an “as needed” basis. Equipment Outlay -This fund is used to allocate resources intended for the purchase of General Fund equipment costing more than $1,000. Workers’ Compensation - This fund is used to account for all expenses relating to workers’ compensation (i.e., injury claims, insurance premiums, etc.). The costs are recovered through an annual “user fee” which is charged to all departments/funds that have employees. 161 11.6 p. 416 of 478 Fleet Equipment Workers' General Services Outlay Compensation Liability ASSETS Current assets: Cash and investments 3,683,422$ 3,834,109$ 4,595,296$ 2,444,912$ Accounts receivable - - - 3,116 Interest receivable - - - - Lease receivable - current - - - - Prepaid items - - - - Total current assets 3,683,422 3,834,109 4,595,296 2,448,028 Noncurrent assets: Interfund loans receivable 2,496,513 - - - Lease receivable -noncurrent - - - - Capital assets: Nondepreciable 62,694 - - - Depreciable and amortizable, net 4,033,822 511,871 - - Total capital assets 4,096,516 511,871 - - Total noncurrent assets 6,593,029 511,871 - - Total assets 10,276,451 4,345,980 4,595,296 2,448,028 LIABILITIES Current Liabilities: Accounts payable 92,072 10,495 - 13,313 Accrued liabilities 49,070 - - 350 Interest payable - - - - Deposit payable - - - - Compensated absences, current portion 1,285 - - - Long term debt, current portion - - - - Claims payable, current portion - - 965,000 717,152 Total current liabilities 142,427 10,495 965,000 730,815 Noncurrent liabilities: Compensated absences, noncurrent portion 11,564 - - - Long term debt, noncurrent portion - - - - Claims payable - - 5,398,000 1,566,768 Total noncurrent liabilities 11,564 - 5,398,000 1,566,768 Total liabilities 153,991 10,495 6,363,000 2,297,583 DEFERRED INFLOW OF RESOURCES Deferred inflow of resources related to leases - - - - Total deferred inflows of resources - - - - NET POSITION: Net investment in capital assets 4,096,516 511,871 - - Unrestricted (deficit) 6,025,944 3,823,614 (1,767,704) 150,445 Total net position 10,122,460$ 4,335,485$ (1,767,704)$ 150,445$ (Continued) City of Gilroy Combining Statement of Net Position Internal Service Funds June 30, 2023 162 11.6 p. 417 of 478 Facility Information Personnel Services Technologies Benefits Total ASSETS Current assets: Cash and investments 1,441,123$ 2,177,169 1,621,759$ 19,797,790$ Accounts receivable 51,057 - - 54,173 Interest receivable 1,462 - - 1,462 Lease receivable - current 96,347 - - 96,347 Prepaid items - 110,601 - 110,601 Total current assets 1,589,989 2,287,770 1,621,759 20,060,373 Noncurrent assets: Interfund loans receivable - - - 2,496,513 Lease receivable -noncurrent 654,102 - - 654,102 Capital assets: Nondepreciable 368,739 2,468,301 - 2,899,734 Depreciable and amortizable, net - 1,946,724 - 6,492,417 Total capital assets 368,739 4,415,025 - 9,392,151 Total noncurrent assets 1,022,841 4,415,025 - 12,542,766 Total assets 2,612,830 6,702,795 1,621,759 32,603,139 LIABILITIES Current Liabilities: Accounts payable 149,643 301,567 16,888 583,978 Accrued liabilities 44,725 42,256 1,462,409 1,598,810 Interest payable - 5,447 - 5,447 Deposit payable 4,277 - - 4,277 Compensated absences, current portion 3,544 2,969 - 7,798 Long term debt, current portion - 311,213 - 311,213 Claims payable, current portion - - - 1,682,152 Total current liabilities 202,189 663,452 1,479,297 4,193,675 Noncurrent liabilities: Compensated absences, noncurrent portion 31,900 26,721 - 70,185 Long term debt, noncurrent portion - 313,880 - 313,880 Claims payable - - - 6,964,768 Total noncurrent liabilities 31,900 340,601 - 7,348,833 Total liabilities 234,089 1,004,053 1,479,297 11,542,508 DEFERRED INFLOW OF RESOURCES Deferred inflow of resources related to leases 694,822 - - 694,822 Total deferred inflows of resources 694,822 - - 694,822 NET POSITION: Net investment in capital assets 368,739 4,415,025 - 9,392,151 Unrestricted (deficit) 1,315,180 1,283,717 142,462 10,973,658 Total net position 1,683,919$ 5,698,742$ 142,462$ 20,365,809$ (Concluded) City of Gilroy Combining Statement of Net Position (Continued) Internal Service Funds June 30, 2023 163 11.6 p. 418 of 478 Fleet Equipment Workers' General Services Outlay Compensation Liability OPERATING REVENUES: Charges for services 2,422,110$ 685,718$ 1,500,000$ 1,380,224$ Miscellaneous 18,354 - - 153,876 Total operating revenues 2,440,464 685,718 1,500,000 1,534,100 OPERATING EXPENSES: Current: Operations 1,772,050 - 17,260 - Depreciation/Amortization expense 530,385 112,032 - - Administration 75,069 - 129,581 20,447 Claims and judgments - - 195,641 384,127 Insurance premiums - - 323,582 1,989,613 Total operating expenses 2,377,504 112,032 666,064 2,394,187 OPERATING INCOME (LOSS)62,960 573,686 833,936 (860,087) NONOPERATING REVENUES: Investment income 101,127 59,871 65,505 29,318 Interest expense - - - - Loss on disposal of capital assets (47) (4,404) - - Total nonoperating revenues 101,080 55,467 65,505 29,318 INCOME (LOSS) BEFORE TRANSFERS 164,040 629,153 899,441 (830,769) CHANGES IN NET POSITION 164,040 629,153 899,441 (830,769) NET POSITION(DEFICIT): Beginning of year, as restated 9,958,420 3,706,332 (2,667,145) 981,214 End of year 10,122,460$ 4,335,485$ (1,767,704)$ 150,445$ (Continued) Internal Service Funds For the Year Ended June 30, 2023 City of Gilroy Combining Statement of Revenues, Expenses, and Changes in Net Position 164 11.6 p. 419 of 478 Facility Information Personnel Services Technologies Benefits Total OPERATING REVENUES: Charges for services 2,292,307$ 2,912,645$ 374,756$ 11,567,760$ Miscellaneous 348,237 - - 520,467 Total operating revenues 2,640,544 2,912,645 374,756 12,088,227 OPERATING EXPENSES: Current: Operations 3,092,180 2,625,194 232,598 7,739,282 Depreciation/Amortization expense - 557,288 - 1,199,705 Administration 7,637 13,463 - 246,197 Claims and judgments 17,881 - - 597,649 Insurance premiums - - - 2,313,195 Total operating expenses 3,117,698 3,195,945 232,598 12,096,028 OPERATING INCOME (LOSS)(477,154) (283,300) 142,158 (7,801) NONOPERATING REVENUES: Investment income 40,494 47,781 - 344,096 Interest expense - (15,419) - (15,419) Loss on disposal of capital assets - - - (4,451) Total nonoperating revenues 40,494 32,362 - 324,226 INCOME (LOSS) BEFORE TRANSFERS (436,660) (250,938) 142,158 316,425 CHANGES IN NET POSITION (436,660) (250,938) 142,158 316,425 NET POSITION(DEFICIT): Beginning of year, as restated 2,120,579 5,949,680 304 20,049,384 End of year 1,683,919$ 5,698,742$ 142,462$ 20,365,809$ (Concluded) City of Gilroy Combining Statement of Revenues, Expenses, and Changes in Net Position (Continued) For the Year Ended June 30, 2023 Internal Service Funds 165 11.6 p. 420 of 478 Fleet Equipment Workers' General Services Outlay Compensation Liability CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers and users 2,440,464$ 685,718$ 1,500,000$ 1,531,014$ Cash paid to suppliers for goods and services (1,744,899) - (147,406) (403,739) Cash paid to employees for services (13,986) - - - Cash paid for insurance claims - - (825,223) (1,727,977) Net cash provided by (used in) operating activities 681,579 685,718 527,371 (600,702) CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Cash received from other funds 252,117 - - - Net cash provided by noncapital financing activities 252,117 - - - CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets (1,053,238) - - - Proceeds from sale of capital assets 46,453 - - - Issuance of new subscription - - - - Principal paid - - - - Interest paid - - - - Net cash (used in) capital and related financing activities (1,006,785) - - - CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 101,127 59,871 65,505 29,318 Net cash provided by investing activities 101,127 59,871 65,505 29,318 Net change in cash and cash equivalents 28,038 745,589 592,876 (571,384) RECONCILIATION OF CASH AND CASH EQUIVALENTS TO STATEMENT OF NET POSITION: Beginning of year 3,655,384 3,088,520 4,002,420 3,016,296 End of year 3,683,422$ 3,834,109$ 4,595,296$ 2,444,912$ CASH AND CASH EQUIVALENTS: Cash and investments 3,683,422$ 3,834,109$ 4,595,296$ 2,444,912$ Total cash and cash equivalents 3,683,422$ 3,834,109$ 4,595,296$ 2,444,912$ Reconciliation of Operating Income (Loss) to to Net Cash Provided by (used in) Operating Activities: Operating income (loss)62,960$ 573,686$ 833,936$ (860,087)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization expense 530,385 112,032 - - Changes in assets and liabilities: (Increase)/decrease in accounts receivables - - - (3,116) (Increase)/decrease in lease receivables - - - - (Increase)/decrease in inventory - - - - (Increase)/decrease in prepaid items - - - - Increase/(decrease) in accounts payable 87,322 - (565) 835 Increase/(decrease) in accrued liabilities 10,182 - - 30 Increase/(decrease) in deposit payable - - - - Increase/(decrease) in compensated absences (9,270) - - - Increase/(decrease) in claims payable - - (306,000) 261,636 Increase/(decrease) in deferred inflows of resources lease related - - - - Net cash provided by (used in) operating activities 681,579$ 685,718$ 527,371$ (600,702)$ (Continued) City of Gilroy Combining Statement of Cash Flows Internal Service Funds For the Year Ended June 30, 2023 166 11.6 p. 421 of 478 Facility Information Personnel Services Technologies Benefits Total CASH FLOWS FROM OPERATING ACTIVITIES Cash received from customers and users 2,588,118$ 2,912,645$ 374,765$ 12,032,724$ Cash paid to suppliers for goods and services (3,106,767) (2,620,113) (109,606) (8,132,530) Cash paid to employees for services (118,314) (1,167) - (133,467) Cash paid for insurance claims (17,881) - - (2,571,081) Net cash provided by (used in) operating activities (654,844) 291,365 265,159 1,195,646 CASH FLOWS FROM NONCAPITAL FINANCING ACTIVITIES: Cash received from other funds - - - 252,117 Net cash provided by noncapital financing activities - - - 252,117 CASH FLOWS FROM CAPITAL AND RELATED FINANCING ACTIVITIES: Acquisition of capital assets (23,529) (1,124,189) - (2,200,956) Proceeds from sale of capital assets - - - 46,453 Issuance of new subscription - 165,908 - 165,908 Principal paid - (408,524) - (408,524) Interest paid - (9,972) - (9,972) Net cash (used in) capital and related financing activities (23,529) (1,376,777) - (2,407,091) CASH FLOWS FROM INVESTING ACTIVITIES: Interest received 39,778 47,781 - 343,380 Net cash provided by investing activities 39,778 47,781 - 343,380 Net change in cash and cash equivalents (638,595) (1,037,631) 265,159 (615,948) RECONCILIATION OF CASH AND CASH EQUIVALENTS TO STATEMENT OF NET POSITION: Beginning of year 2,079,718 3,214,800 1,356,600 20,413,738 End of year 1,441,123$ 2,177,169$ 1,621,759$ 19,797,790$ CASH AND CASH EQUIVALENTS: Cash and investments 1,441,123$ 2,177,169$ 1,621,759$ 19,797,790$ Total cash and cash equivalents 1,441,123$ 2,177,169$ 1,621,759$ 19,797,790$ Reconciliation of Operating Income (Loss) to to Net Cash Provided by (used in) Operating Activities: Operating income (loss)(477,154)$ (283,300)$ 142,158$ (7,801)$ Adjustments to reconcile operating income (loss) to net cash provided by (used in) operating activities: Depreciation and amortization expense - 557,288 - 1,199,705 Changes in assets and liabilities: (Increase)/decrease in accounts receivables (27,484) - 9 (30,591) (Increase)/decrease in lease receivables 49,370 49,370 (Increase)/decrease in inventory - - - - (Increase)/decrease in prepaid items - (24,926) - (24,926) Increase/(decrease) in accounts payable (60,768) 43,470 1,117 71,411 Increase/(decrease) in accrued liabilities (60,863) 2,028 121,875 73,252 Increase/(decrease) in deposit payable 1 - - 1 Increase/(decrease) in compensated absences (3,633) (3,195) - (16,098) Increase/(decrease) in claims payable - - - (44,364) Increase/(decrease) in deferred inflows of resources lease related (74,313) - - (74,313) Net cash provided by (used in) operating activities (654,844)$ 291,365$ 265,159$ 1,195,646$ (Concluded) City of Gilroy Combining Statement of Cash Flows (Continued) Internal Service Funds For the Year Ended June 30, 2023 167 11.6 p. 422 of 478 168 11.6 p. 423 of 478 These funds account for assets held by the City on behalf of other organizations. Fiduciary Funds Senior Advisory Board - This fund is used to account for revenues that come from fundraising and donations. The funds are used to buy equipment for the Senior Center. Highway 152 Series 2018 - This fund is used to account for special assessments collected and pay the bonded indebtedness for the Highway 152 Series 2018 Bonds. Custodial Funds 169 11.6 p. 424 of 478 170 11.6 p. 425 of 478 Senior Advisory Highway 152 Board Series 2018 Total Assets: Cash and investments 9,090$ 831,309$ 840,399$ Cash and investments with fiscal agent - 299,364 299,364 Account receivables - 9,549 9,549 Total Assets 9,090 1,140,222 1,149,312 Net Position: Restricted for: Individuals, organizations, and other governments 9,090 1,140,222 1,149,312 Total Net Position 9,090$ 1,140,222$ 1,149,312$ Custodial Funds City of Gilroy Combining Statement of Fiduciary Net Position Fiduciary Funds June 30, 2023 171 11.6 p. 426 of 478 Senior Advisory Highway 152 Board Series 2018 Total ADDITIONS: Taxes -$ 932,693$ 932,693$ Investment income 146 15,127 15,273 Other income 58 - 58 Total additions 204 947,820 948,024 DEDUCTIONS General administration - 43,453 43,453 Payments on conduit bonds - principal - 701,610 701,610 Payments on conduit bonds - interest - 184,083 184,083 Total deductions - 929,146 929,146 CHANGE IN NET POSITION 204 18,674 18,878 NET POSITION: Beginning of year 8,886 1,121,548 1,130,434 End of year 9,090$ 1,140,222$ 1,149,312$ For the Year Ended June 30, 2023 Custodial Funds City of Gilroy Combining Statement of Changes in Fiduciary Net Position Fiduciary Funds 172 11.6 p. 427 of 478 STATISTICAL SECTION 11.6 p. 428 of 478 11.6 p. 429 of 478 Contents Page Financial Trends 174-183 Revenue Capacity 184-195 Debt Capacity 196-203 Demographic and Economic Information 205-206 Operating Information 207-211 STATISTICAL SECTION (Unaudited) This part of the City of Gilroy'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 overall financial health. These tables contain trend information to help the reader understand how the City's financial performance and well-being have changed over time. Sources: Unless otherwise noted, the information in these tables is derived from the comprehensive annual financial reports for the relevant year. These tables contain information to help the reader assess the City's most significant local revenue source, the property tax. These tables 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. These tables offer demographic and economic indicators to help the reader understand the environment within which the City's financial activities take place. These tables contain service and infrastructure data to help the reader understand how the information in the City's financial report relates to the services the City provides and the activities it performs. 173 11.6 p. 430 of 478 2014 2015 2016 2017 2018 Governmental Activities: Net investment in capital assets 162,950,296$ 167,625,947$ 159,684,128$ 154,863,285$ 159,069,886$ Restricted 24,277,233 22,320,085.00 35,564,991 41,636,040 48,731,281 Unrestricted (deficit) 28,892,199 (26,524,001) (25,032,197) (25,229,815) (36,193,491) Total governmental activities net position 216,119,728 163,422,031 170,216,922 171,269,510 171,607,676 Business-type Activities: Net investment in capital assets 88,728,174 90,335,349 90,917,108 88,183,287 87,336,604 Restricted - - - - - Unrestricted 85,736,094 84,832,390 88,668,400 93,612,020 98,375,675 Total business-type activities net position 174,464,268 175,167,739 179,585,508 181,795,307 185,712,279 Primary Government: Net investment in capital assets 251,678,470 257,961,296 250,601,236 243,046,572 246,406,490 Restricted 24,277,233 22,320,085 35,564,991 41,636,040 48,731,281 Unrestricted 114,628,293 58,308,389 63,636,203 68,382,205 62,182,184 Total primary government net position 390,583,996$ 338,589,770$ 349,802,430$ 353,064,817$ 357,319,955$ Fiscal Year City of Gilroy Net Position By Component Last Ten Fiscal Years (accrual basis of accounting) 174 11.6 p. 431 of 478 2019 2020 2021 2022 2023 Governmental Activities: Net investment in capital assets 156,750,373$ 151,904,792$ 149,891,568$ 147,079,194$ 149,484,869$ Restricted 49,688,804 57,137,761 57,570,568 71,627,654 2,696,317 Unrestricted (deficit) (37,759,850) (42,674,183) (42,545,831) (28,023,535) 9,788,254 Total governmental activities net position 168,679,327 166,368,370 164,916,305 190,683,313 161,969,440 Business-type Activities: Net investment in capital assets 91,134,932 86,503,324 83,119,598 73,389,328 56,102,435 Restricted - - - - - Unrestricted 100,053,259 97,543,664 99,198,302 109,250,688 130,281,582 Total business-type activities net position 191,188,191 184,046,988 182,317,900 182,640,016 186,384,017 Primary Government: Net investment in capital assets 247,885,305 238,408,116 233,011,166 220,468,522 205,587,304 Restricted 49,688,804 57,137,761 57,570,568 71,627,654 75,520,059 Unrestricted 62,293,409 54,869,481 56,652,471 81,227,153 100,734,373 Total primary government net position 359,867,518$ 350,415,358$ 347,234,205$ 373,323,329$ 381,841,736$ Fiscal Year City of Gilroy Net Position By Component (Continued) Last Ten Fiscal Years (accrual basis of accounting) 175 11.6 p. 432 of 478 2014 2015 2016 2017 2018 Expenses: Governmental activities: General government 3,795,033$ 3,619,582$ 3,900,226$ 6,437,408$ 7,315,065$ Public safety 29,696,344 30,273,444 31,020,245 33,393,829 35,591,790 Community development 14,824,460 15,901,215 21,413,283 19,167,193 19,211,323 Public works 7,726,938 7,807,765 8,217,318 8,978,597 9,654,957 Recreation services - - - - - Interest and other charges 3,744,396 3,406,855 3,327,992 3,256,733 3,147,606 Total governmental activities expenses 59,787,171 61,008,861 67,879,064 71,233,760 74,920,741 Business-type activities Sewer 9,929,622 9,806,990 12,298,662 12,060,236 11,538,388 Water 8,642,660 8,329,710 8,370,320 9,197,426 9,937,768 Total business-type activities expenses 18,572,282 18,136,700 20,668,982 21,257,662 21,476,156 Total primary government expenses 78,359,453$ 79,145,561$ 88,548,046$ 92,491,422$ 96,396,897$ Program revenues: Governmental activities: Charges for services: General government 1,415,106$ 2,096,137$ 1,651,713$ 3,087,335$ 3,280,977$ Public safety 897,059 1,030,410 1,146,593 1,439,418 959,277 Community development 5,434,764 7,385,391 6,145,791 5,207,571 6,430,321 Public works 810,503 886,988 978,780 986,582 977,834 Recreation services - - - - - Operating grants and contributions 15,057,119 13,109,933 22,838,535 15,860,767 19,389,757 Capital grants and contributions 3,157,642 8,999,636 3,820,892 5,438,560 10,319,300 Total governmental activities program revenues 26,772,193 33,508,495 36,582,304 32,020,233 41,357,466 Business-type activities: Charges for services: Sewer 10,359,334 - 11,984,798 12,833,030 12,961,285 Water 8,640,784 - 7,330,300 9,156,082 11,343,036 Operating grants and contributions - - - - - Capital grants and contributions 179,707 - 5,086,464 1,172,844 2,330,335 Total business-type activities program revenues 19,179,825 - 24,401,562 23,161,956 26,634,656 Total primary government program revenues 45,952,018$ 33,508,495$ 60,983,866$ 55,182,189$ 67,992,122$ Net revenue (expense): Governmental activities (33,014,978)$ (27,500,366)$ (31,296,760)$ (39,213,527)$ (33,563,275)$ Business-type activities 607,543 (18,136,700) 3,732,580 1,904,294 5,158,500 Total primary government net expense (32,407,435)$ (45,637,066)$ (27,564,180)$ (37,309,233)$ (28,404,775)$ City of Gilroy Fiscal Year Changes in Net Position Last Ten Fiscal Years (accrual basis of accounting) 176 11.6 p. 433 of 478 2019 2020 2021 2022 2023 Expenses: Governmental activities: General government 7,696,445$ 6,131,791$ 7,315,868$ 2,696,317$ 10,440,465$ Public safety 37,837,438 40,088,865 40,797,962 9,788,254 42,789,395 Community development 18,348,409 8,556,959 7,147,532 7,689,175 6,999,373 Public works 9,526,627 23,525,423 16,862,660 13,840,272 17,285,317 Recreation services - - 1,779,121 1,600,210 1,755,454 Interest and other charges 3,226,849 2,431,588 2,081,420 2,089,473 2,199,547 Total governmental activities expenses 76,635,768 80,734,626 75,984,563 37,703,701 81,469,551 Business-type activities Sewer 14,044,716 14,668,434 15,820,944 12,678,990 12,134,168 Water 11,777,220 12,603,780 16,435,598 10,930,989 11,574,875 Total business-type activities expenses 25,821,936 27,272,214 32,256,542 23,609,979 23,709,043 Total primary government expenses 102,457,704$ 108,006,840$ 108,241,105$ 61,313,680$ 105,178,594$ Program revenues: Governmental activities: Charges for services: General government 3,726,486$ 3,550,758$ 2,815,647$ 4,595,133$ 4,645,730$ Public safety 1,234,017 1,188,951 1,242,281 476,918 713,565 Community development 6,624,477 3,909,360 4,185,811 3,346,864 3,513,190 Public works 1,009,235 715,299 3,593,959 1,317,695 1,122,432 Recreation services - - 223,154 599,265 561,859 Operating grants and contributions 13,146,274 14,247,635 16,482,904 15,464,192 8,683,432 Capital grants and contributions 2,649,021 1,931,458 2,000,357 18,227,036 7,203,431 Total governmental activities program revenues 28,389,510 25,543,461 30,544,113 44,027,103 26,443,639 Business-type activities: Charges for services: Sewer 12,904,657 12,872,189 12,702,398 12,912,113 13,037,892 Water 12,294,119 14,590,973 14,830,153 13,959,847 13,286,485 Operating grants and contributions - - - 414,952 47,697 Capital grants and contributions 4,160,510 2,439,117 2,511,059 566,140 561,591 Total business-type activities program revenues 29,359,286 29,902,279 30,043,610 27,853,052 26,933,665 Total primary government program revenues 57,748,796$ 55,445,740$ 60,587,723$ 71,880,155$ 53,377,304$ Net revenue (expense): Governmental activities (48,246,258)$ (55,191,165)$ (45,440,450)$ 6,323,402$ (55,025,912)$ Business-type activities 3,537,350 2,630,065 (2,212,932) 4,243,073 3,224,622 Total primary government net expense (44,708,908)$ (52,561,100)$ (47,653,382)$ 10,566,475$ (51,801,290)$ City of Gilroy Changes in Net Position (Continued) Last Ten Fiscal Years Fiscal Year (accrual basis of accounting) 177 11.6 p. 434 of 478 2014 2015 2016 2017 2018 General revenues and other changes in net position: Governmental Activities: Taxes: Property taxes 9,728,458$ 10,862,568$ 11,468,510$ 12,278,553$ 13,161,002$ Sales tax 14,423,130 15,858,910 17,884,735 17,768,469 18,827,189 Transient occupancy taxes 1,234,798 1,501,837 1,676,691 1,709,332 1,722,355 Franchise tax 1,408,045 1,463,770 1,569,059 1,623,951 1,713,690 Other taxes 4,759,067 4,905,868 5,116,588 5,264,486 5,192,899 Investment income 630,095 619,139 647,057 900,622 1,190,732 State motor vehicle in lieu 22,072 21,479 21,385 24,715 29,444 Other 632,113 164,321 392,815 15,188 571,340 Transfers (678,707) (689,011) (685,189) (305,505) 1,241,528 Total governmental activities 32,159,071 34,708,881 38,091,651 39,279,811 43,650,179 Business-type activities: Investment and rental income - - - - - Other - - - - - Transfers 678,707 689,011 685,189 305,505 (1,241,528) Total business-type activities 678,707 689,011 685,189 305,505 (1,241,528) Total primary government 32,837,778$ 35,397,892$ 38,776,840$ 39,585,316$ 42,408,651$ Changes in net position: Governmental activities (855,907)$ 7,208,515$ 6,794,891$ 66,284$ 10,086,904$ Business-type activities 1,286,250 3,800,429 4,417,769 2,209,799 3,916,972 Total primary government 430,343$ 11,008,944$ 11,212,660$ 2,276,083$ 14,003,876$ Net Position (Net Assets), Beginning Beginning Fund Balance Restatement (1)390,153,653 327,580,826 338,589,770 348,802,430 343,316,059 Changes in Net Position (Net Assets) 430,343 11,008,944 11,212,660 2,276,083 14,003,876 Net Position (Net Assets), Ending 390,583,996$ 338,589,770$ 349,802,430$ 351,078,513$ 357,319,935$ (1)Net Position, as restated in FY2023, 2020, 2018, and 2015 Fiscal Year City of Gilroy Changes in Net Position (Continued) Last Ten Fiscal Years (accrual basis of accounting) 178 11.6 p. 435 of 478 2019 2020 2021 2022 2023 General revenues and other changes in net position: Governmental Activities: Taxes:2,696,317 Property taxes 14,476,481$ 15,595,639$ 17,016,855$ 9,788,254$ 21,600,130$ Sales tax 20,186,105 17,233,882 18,584,534 23,216,109 22,936,208 Transient occupancy taxes 1,771,882 1,237,812 1,105,300 1,545,721 1,754,615 Franchise tax 1,669,817 1,855,622 1,732,613 1,874,046 2,198,150 Other taxes 5,093,813 5,667,201 5,030,153 6,107,309 6,955,492 Investment income 2,567,147 2,039,471 502,770 (418,588) 3,438,121 State motor vehicle in lieu 26,695 - - - - Other 166,316 127,479 644,291 3,345,996 1,417,790 Transfers (640,347) (447,847) (641,121) (74,279) (878,113) Total governmental activities 45,317,909 43,309,259 43,975,395 45,384,568 59,422,393 Business-type activities: Investment and rental income 1,298,215 1,169,133 (157,277) (4,011,115) (365,320) Other - - - 15,879 6,586 Transfers 640,347 447,847 641,121 74,279 878,113 Total business-type activities 1,938,562 1,616,980 483,844 (3,920,957) 519,379 Total primary government 47,256,471$ 44,926,239$ 44,459,239$ 41,463,611$ 59,941,772$ Changes in net position: Governmental activities (3,209,094)$ (11,881,906)$ (1,465,055)$ 51,707,970$ 4,396,481$ Business-type activities 5,475,912 4,247,045 (1,729,088) 322,116 3,744,001 Total primary government 2,266,818$ (7,634,861)$ (3,194,143)$ 52,030,086$ 8,140,482$ Net Position (Net Assets), Beginning Beginning Fund Balance Restatement (1)357,319,955 358,050,219 350,428,348 347,234,205 373,701,254 Changes in Net Position (Net Assets) 2,266,818 (7,634,861) (3,194,143) 52,030,086 8,140,482 Net Position (Net Assets), Ending 359,586,773$ 350,415,358$ 347,234,205$ 399,264,291$ 381,841,736$ (1)Net Position, as restated in FY2023, 2020, 2018, and 2015 Fiscal Year City of Gilroy Changes in Net Position (Continued) Last Ten Fiscal Years (accrual basis of accounting) 179 11.6 p. 436 of 478 2014 2015 2016 2017 2018 General fund: Nonspendable 52,592$ 74,622$ 84,923$ 74,217$ 126,965$ Restricted - - - - - Committed - - - - - Assigned - - - - - Unassigned 22,291,553 21,316,940 22,202,316 24,354,609 25,475,105 Total general fund 22,344,145$ 21,391,562$ 22,287,239$ 24,428,826$ 25,602,070$ All other governmental funds: Nonspendable 9,265$ 9,265$ 8,670$ 9,470$ 25,570$ Restricted 41,474,238 40,117,010 44,922,496 50,775,875 55,248,281 Assigned 576,889 544,284 2,827,521 1,588,907 1,448,954 Unassigned (deficit) (11,866,882) (12,884,818) (7,883,587) (5,761,804) (2,841,776) Total all other governmental funds 30,193,510$ 27,785,741$ 39,875,100$ 46,612,448$ 53,881,029$ Fiscal Year City of Gilroy Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 180 11.6 p. 437 of 478 2019 2020 2021 2022 2023 General fund: Nonspendable 76,000$ 126,915$ 47,874$ 739$ 23,750$ Restricted - - - 1,983,396 2,696,317 Committed - - - 5,572,376 9,788,254 Assigned - - - - - Unassigned 27,683,870 14,731,555 19,585,369 30,349,205 33,190,870 Total general fund 27,759,870$ 14,858,470$ 19,633,243$ 37,905,716$ 45,699,191$ All other governmental funds: Nonspendable 1,000$ 706,754$ -$ -$ -$ Restricted 57,445,219 57,421,683 58,391,239 67,727,936 71,140,553 Assigned 1,483,818 5,368,008 5,276,579 5,494,298 3,603,942 Unassigned (deficit) (4,206,362) (6,380,638) (5,397,542) - (1,205,740) Total all other governmental funds 54,723,675$ 57,115,807$ 58,270,276$ 73,222,234$ 73,538,755$ Fiscal Year City of Gilroy Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years (modified accrual basis of accounting) 181 11.6 p. 438 of 478 2014 2015 2016 2017 2018 Revenues: Taxes 33,902,225$ 37,190,336$ 40,177,903$ 41,350,739$ 43,512,402$ Licenses and permits 2,088,024 2,847,912 3,720,755 2,713,733 2,751,137 Intergovernmental 5,235,608 3,260,688 4,291,272 3,748,000 4,047,728 Charges for services 17,081,714 17,396,590 24,960,535 18,973,863 22,820,605 Developer impact fees - - - - - Fines 226,220 281,580 266,163 293,899 208,305 Investment income (loss) 697,612 600,960 608,641 762,671 1,084,408 Miscellaneous 1,464,470 2,128,737 2,059,106 1,604,397 1,635,888 Total revenues 60,695,873 63,706,803 76,084,375 69,447,302 76,060,473 Expenditures: General government 4,073,708 4,025,604 4,532,241 4,906,824 5,103,946 Public safety 27,448,432 28,845,371 29,867,361 30,830,873 31,781,515 Public works 6,072,624 6,322,864 6,764,060 7,231,274 7,723,166 Recreation services - - - - - Community development 10,031,035 16,393,573 14,675,204 11,052,313 14,993,509 Capital outlay - - - - - Debt service: Principal retirement 25,745,000 2,215,000 2,305,000 2,459,619 2,558,818 Interest 3,525,898 3,557,829 3,479,710 3,410,441 3,302,252 Bond issuance costs 275,515 2,582 - - - Total expenditures 77,172,212 61,362,823 61,623,576 59,891,344 65,463,206 Excess of revenues over (under) expenditures (16,476,339) 2,343,980 14,460,799 9,555,958 10,597,267 Other Financing Sources (Uses): Transfers in 3,574,115 4,318,330 6,803,782 4,233,745 4,503,781 Transfers out (7,154,454) (11,012,940) (8,521,471) (4,910,768) (6,659,253) Issuance of loan/notes - 959,229 241,926 - - Issuance of bonds 23,120,000 - - - - Payment to refunded bond escrow - - - - - Payment to bond escrow agent - - - - - Premium on bonds 1,138,052 - - - - Total other financing sources (uses) 20,677,713 (5,735,381) (1,475,763) (677,023) (2,155,472) Net Change in fund balances 4,201,374$ (3,391,401)$ 12,985,036$ 8,878,935$ 8,441,795$ Fund balances - July 1 48,336,281 52,568,704 49,177,303 62,162,339 71,041,274 Fund balances - June 30 52,537,655$ 49,177,303$ 62,162,339$ 71,041,274$ 79,483,069$ Debt service as a percentage of noncapital expenditures 39.37% 10.81% 9.52% 9.97% 9.58% Fiscal Year City of Gilroy Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years (modified accrual basis of accounting) 182 11.6 p. 439 of 478 2019 2020 2021 2022 2023 Revenues: Taxes 51,483,855$ 44,269,937$ 45,916,497$ 53,037,707$ 53,901,735$ Licenses and permits 3,487,338 1,776,651 2,278,304 2,672,186 2,696,317 Intergovernmental 3,913,484 5,473,529 6,612,274 14,805,279 9,788,254 Charges for services 11,501,828 13,951,822 17,484,867 7,380,631 7,621,129 Developer impact fees - - - 18,227,036 7,021,901 Fines 239,873 282,535 231,688 262,403 255,359 Investment income (loss) 1,247,543 1,884,149 358,452 (541,243) 3,094,097 Miscellaneous 1,990,459 1,348,130 2,867,269 4,023,213 2,395,534 Total revenues 73,864,380 68,986,753 75,749,351 99,867,212 86,774,326 Expenditures: General government 5,760,831 6,361,042 5,931,022 7,949,662 9,335,054 Public safety 34,062,421 36,867,887 35,856,183 37,687,794 40,547,210 Public works 7,831,193 7,897,645 7,231,722 6,094,830 6,073,851 Recreation services - - 1,702,666 1,463,448 1,755,215 Community development 15,421,483 19,143,243 5,523,912 5,535,526 5,682,180 Capital outlay - - 6,243,057 2,639,733 12,146,904 Debt service: Principal retirement 2,654,708 2,986,212 2,817,325 2,820,129 2,961,464 Interest 3,448,556 3,011,707 2,784,374 2,377,338 2,097,145 Bond issuance costs 112,903 - - - 169,268 Total expenditures 69,292,095 76,267,736 68,090,261 66,568,460 80,768,291 Excess of revenues over (under) expenditures 4,572,285 (7,280,983) 7,659,090 33,298,752 6,006,035 Other Financing Sources (Uses): Transfers in 4,236,075 8,937,984 24,306,099 6,603,536 6,325,297 Transfers out (5,876,422) (12,905,997) (24,953,804) (6,677,815) (7,203,410) Issuance of loan/notes - - - - - Issuance of bonds - 19,087,551 16,459,825 - 14,587,831 Payment to refunded bond escrow - (19,350,000) (17,555,000) - (15,352,976) Payment to bond escrow agent (8,565,000) - - - - Premium on bonds 8,633,538 - - - - Total other financing sources (uses) (1,571,809) (4,230,462) (1,742,880) (74,279) (1,643,258) Net Change in fund balances 3,000,476$ (11,511,445)$ 5,916,210$ 33,224,473$ 4,362,777$ Fund balances - July 1 79,483,069 83,485,722 71,987,267 77,903,477 111,127,950 Fund balances - June 30 82,483,545$ 71,974,277$ 77,903,477$ 111,127,950$ 115,490,727$ Debt service as a percentage of noncapital expenditures 8.99% 8.67% 8.79% 8.15% 7.01% (modified accrual basis of accounting) Fiscal Year City of Gilroy Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years 183 11.6 p. 440 of 478 Fiscal Year CATEGORY 2011 2014 2015 2016 2017 2018 Outlet Center $2,552,694 2,867,431$ 2,899,778$ 2,747,030$ 2,669,216$ 2,571,713$ Newman Development 2,070,313 2,230,855 2,332,215 2,426,698 2,500,961 2,529,804 Regency Center 923,509 946,073 965,112 999,738 968,005 987,417 Downtown Core 191,131 296,354 316,595 356,687 398,344 385,497 General Retail 5,737,647 6,340,713 6,513,700 6,530,153 6,536,526 6,474,431 Auto Dealers 871,311 1,649,758 2,136,541 2,633,013 3,224,719 3,691,038 Service Stations 1,355,605 1,442,888 1,292,736 1,094,398 1,064,232 1,290,582 Transportation 2,226,916 3,092,646 3,429,277 3,727,411 4,288,951 4,981,620 Others 3,234,205 3,697,010 3,695,108 4,018,337 4,263,541 4,632,323 Allocation from State and County 1,621,404 1,292,761 2,220,825 3,608,834 2,679,451 2,152,877 TOTALS:$12,820,172 14,423,130$ 15,858,910$ 17,884,735$ 17,768,469$ 18,241,251$ Population 49,316 52,413 53,000 55,170 55,936 55,615 Sales Tax Per Capita 240 275 299 324 318 328 City of Gilroy Sales Tax by Category Last Eleven Fiscal Years Source: MBIA MuniServices Company State of California, Department of Finance, Population Estimates for California Cities Fiscal Year 0 50 100 150 200 250 300 350 400 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 0 5,000 10,000 15,000 20,000 25,000 Others State/County Gen. Retail Transportation Per Capita 184 11.6 p. 441 of 478 CATEGORY 2019 2020 2021 2022 2023 Outlet Center 2,464,617$ 1,739,806$ 1,869,275$ 2,042,775$ 2,009,201$ Newman Development 2,743,665 2,643,207 2,955,455 3,251,290 3,243,837 Regency Center 1,004,376 896,599 1,000,140 1,028,435 1,032,918 Downtown Core 505,600 472,427 512,427 547,587 502,300 General Retail 6,718,258 5,752,039 6,337,297 6,870,087 6,788,256 Auto Dealers 3,855,166 3,056,022 2,446,254 3,609,865 3,890,947 Service Stations 1,298,298 1,129,189 1,085,319 1,572,748 1,527,970 Transportation 5,153,464 4,185,211 3,531,573 5,182,613 5,418,917 Others 4,418,367 4,294,454 4,580,258 5,317,890 4,929,974 Allocation from State and County 3,896,016 3,002,179 3,867,949 4,238,018 3,892,813 TOTALS:20,186,105$ 17,233,883$ 18,317,077$ 21,608,608$ 21,029,959$ Population 55,928 57,084 59,920 59,269 60,078 Sales Tax Per Capita 361 302 306 365 350 City of Gilroy Sales Tax by Category (Continued) Last Eleven Fiscal Years Source: MBIA MuniServices Company State of California, Department of Finance, Population Estimates for California Cities Fiscal Year 185 11.6 p. 442 of 478 186 11.6 p. 443 of 478 Agency 2011 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 7.250% 6.500% 6.500% 6.250% 6.000% 6.000% 6.000% 6.000% 6.000% 6.000% 6.000% 0.250% 0.250% 0.250% 0.250% 0.250% 0.250% 0.250% 0.250% 0.250% 0.250% 0.250% 0.750% 0.750% 0.750% 1.000% 1.000% 1.000% 1.000% 1.000% 1.000% 1.000% 269631700.000% -0.125% 0.125% 0.125% 0.125% 0.125%0.125% 0.125% 0.125% 0.125% 978825400.000% - 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% -0.125% 0.125% 0.125% 0.125% 0.125%0.125% 0.125% 0.125% 0.125% 0.125% -0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 0.500% 2020 Peninsula Corridor JPB Retail Transactions and Use Tax 0.125% 0.125% Total 9.250% 8.750% 8.750% 8.750% 9.000%9.000% 9.000% 9.000%9.000% 9.125% 1248457108.000% Source: California Department of Tax and Fee Administration FISCAL YEAR City of Gilroy Sales Tax Rates Last Ten Fiscal Years SCC Transit District SCC Valley Transportation Authority SCC VTA Bay Area Rapid Transit Silicon Valley Transportation Solutions Tax State of California Santa Clara County (SCC) Transportation Funds City of Gilroy SCC Retail Transactions and Use Tax SCC Transactions and Use Tax 0.00%200000000.00%400000000.00%600000000.00%800000000.00%1000000000.00%1200000000.00%1400000000.00% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Total Gilroy 187 11.6 p. 444 of 478 Taxpayer Business Type Taxpayer Business Type Arco AM/PM Mini Marts Service Stations Arco AM/PM Mini Marts Service Stations Best Buy Stores Furniture/Appliance Best Buy Stores Furniture/Appliance Chevron Service Stations Service Stations Calvin Klein Apparel Stores Costco Wholesale Department Stores Chevron Service Stations Service Stations Freeway Toyota Of Gilroy Auto Sales - New Coach Stores Apparel Stores Gilroy Buick GMC Auto Sales - New Costco Wholesale Department Stores Gilroy Chevrolet Cadillac Auto Sales - New Gilroy Chevrolet Cadillac Auto Sales - New Gilroy Chrysler Dodge Jeep Ram Auto Sales - New Gilroy Gas & Mini-Mart Service Stations Gilroy Motorcycle Center Misc. Vehicle Sales Gilroy Toyota Auto Sales - New Happy Daze RV's Misc. Vehicle Sales Home Depot Bldg.Matls-Retail Home Depot Bldg.Matls-Retail JN Abbott Distributor Energy Sales Hyundai of Gilroy Auto Sales - New Kohl's Department Stores Department Stores Lowe's Home Centers Bldg.Matls-Retail Lowe's Home Centers Bldg.Matls-Retail McDonald's Restaurants Restaurants McDonald's Restaurants Restaurants Nike Factory Store Apparel Stores Nike Factory Store Apparel Stores Pape Machinery Heavy Industry Polo Ralph Lauren Apparel Stores Ross Stores Apparel Stores Rotten Robbie Service Stations Service Stations Rotten Robbie Service Stations Service Stations See Grins RV Misc. Vehicle Sales See Grins RV Misc. Vehicle Sales South County Chrysler-Jeep-Dodge Auto Sales - New Shell Service Stations Service Stations South County Nissan Auto Sales - New Target Stores Department Stores Target Stores Department Stores Tesla Auto Sales - New The Garlic Farm Travel Center Service Stations Union 76 Service Stations Service Stations TV's Gas & Foodmart Service Stations Vans Apparel Stores Union 76 Service Stations Service Stations Wal Mart Stores Department Stores Wal Mart Stores Department Stores Source: MuniServices, LLC / Avenu Insights & Analytics City of Gilroy Principal Sales Tax Producers Last Fiscal Year and Nine Years Ago 2023 2014 188 11.6 p. 445 of 478 Fiscal Year End Local Secured* Homeowner Exempt Valuation Net Local Secured Net Utility Net Unsecured Net Taxable Assessed Value Total Direct Tax Rate (1) Estimated Actual Taxable Value (2) Factor of Taxable Assessed Value (2) Assessed Value as a Percentage of Actual Value 2013-14 5,913,805,270 46,463,200 5,867,342,070 64,186,470 260,981,844 6,192,510,384 0.902963 - - - 2014-15 6,395,754,046 46,050,200 6,349,703,846 52,530,836 265,879,967 6,668,114,649 0.902963 - - - 2015-16 6,798,621,370 45,871,000 6,752,750,370 47,030,836 268,445,327 7,068,226,533 0.902963 - - - 2016-17 7,385,130,561 46,578,000 7,338,552,561 42,130,836 273,713,487 7,654,396,884 0.902963 - - - 2017-18 7,872,947,886 47,244,400 7,825,703,486 39,330,836 263,667,226 8,128,701,548 0.097037 10,250,699,087 1.261050 79.30% 2018-19 8,445,397,378 48,090,000 8,397,307,378 38,939,704 256,724,279 8,692,971,361 0.097037 11,893,042,148 1.368122 73.09% 2019-20 9,001,686,593 47,874,400 8,953,812,193 32,539,704 257,410,089 9,243,761,986 0.097037 16,306,012,109 1.764002 56.69% 2020-21 9,557,360,668 47,341,000 9,510,019,668 29,739,704 267,854,749 9,807,614,121 0.097037 11,688,408,441 1.191769 83.91% 2021-22 9,968,898,669 46,512,200 9,922,386,469 27,039,704 293,294,693 10,242,720,866 0.097037 14,183,999,567 1.384788 72.21% 2022-23 10,644,717,775 45,712,800 10,599,004,975 39,839,704 289,253,563 10,928,098,242 0.097037 17,373,962,605 1.589843 62.90% Source: Santa Clara County Assessor data, MuniServices, LLC / Avenu Insights & Analytics Source: 2021-22 and prior, previously published ACFR. *Local Secured is net of other exemptions. 1.) Total direct tax rate is the city share of the 1% Proposition 13 tax only for TRA 02-000. City of Gilroy Citywide Assessed Value and Estimated Actual Value of Taxable Property Last Ten Fiscal Years 2.) Estimated Actual Value is derived from a series of calculations comparing median assessed values from 1940 to current median sale prices. Based on these calculations a multiplier value was extrapolated and applied to current assessed values. 189 11.6 p. 446 of 478 190 11.6 p. 447 of 478 Category 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Residential 6,316,795,853$ 6,846,995,669$ 7,292,373,081$ 7,766,498,649$ 8,150,395,267$ 8,690,685,653$ Commercial 848,468,930 899,654,270 931,059,983 989,793,738 1,013,695,555 1,051,729,768 Industrial 483,919,877 479,091,993 538,635,466 667,191,707 638,120,876 667,277,047 Vacant 162,759,148 - 216,844,260 163,403,099 192,863,417 262,155,390 Professional 101,593,308 17,961,578 108,709,436 110,337,229 116,626,048 111,984,310 Institutional 109,350,727 112,041,055 111,348,784 65,615,240 90,554,109 91,711,842 Agriculture 55,688,053 47,135,427 52,895,647 38,226,087 38,372,143 47,049,922 Unitary 39,330,836 38,939,704 32,539,704 29,739,704 27,039,704 39,839,704 Public 17,729,263 104,675,187 23,763,391 31,201,356 37,443,425 37,469,354 Transportation 2,107,545 193,663,876 28,585,319 28,569,765 27,777,083 29,389,066 Recreational 16,969,672 22,525,565 23,001,970 22,973,251 23,200,859 26,346,641 Social 18,281,904 18,604,008 19,463,964 19,888,529 20,081,552 20,568,947 Forestry 1,773,940 6,830,161 6,966,865 7,106,317 7,180,104 7,323,632 Unknown - 2,149,694 - - - - Gross Secured Value 8,174,769,056$ 8,790,268,187$ 9,386,187,870$ 9,940,544,671$ 10,383,350,142$ 11,083,531,276$ Unsecured Value 265,619,082 260,824,323 261,877,511 272,030,637 297,421,158 289,253,563 Less Exemptions 311,686,590 358,121,149 404,303,395 404,961,187 438,050,434 444,686,597 Net Taxable Value 8,128,701,548$ 8,692,971,361$ 9,243,761,986$ 9,807,614,121$ 10,242,720,866$ 10,928,098,242$ Source: Santa Clara County Assessor data, MuniServices, LLC / Avenu Insights & Analytics Use code categories are based on Santa Clara County Assessor's data City of Gilroy Assessed Value of Property by Use Code Last Five Fiscal Year 191 11.6 p. 448 of 478 2008-09 2009-10 2010-11 2011-12 2012-13 2013-14 2014-15 2015-16 Basic City and County Levy City Direct Rate 0.097037 0.097037 0.097037 0.097037 0.097037 0.097037 0.097037 0.097037 All others 0.902963 0.902963 0.902963 0.902963 0.902963 0.902963 0.902963 0.902963 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 Override Assessments County Retire Levy 0.038800 0.038800 0.038800 0.038800 0.038800 0.038800 0.038800 0.038800 County Library 0.002400 0.002400 0.002400 0.002400 0.002400 0.002400 0.002400 0.002400 VMC 2008 0.000000 0.012200 0.009500 0.004700 0.005100 0.003500 0.009100 0.008800 County Housing Bond 2016 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 Gilroy City Bond 2008 0.000000 0.011600 0.037500 0.036500 0.036500 0.034000 0.034000 0.029000 Gilroy Unified School 2002 0.037500 0.047200 0.054500 0.054500 0.057100 0.058000 0.056600 0.052200 Gilroy Unified 11/2008 0.000000 0.000000 0.000000 0.047900 0.047200 0.056400 0.059900 0.054900 Gilroy Unified 2016 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 Gavilan Community College 04 0.013800 0.016300 0.019900 0.021700 0.025700 0.024800 0.023900 0.022600 Gavilan Jt CCD 2018 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 Lease Debt-Gilroy Unified 0.000000 0.070500 0.070500 0.000000 0.000000 0.000000 0.000000 0.000000 Lease Debt-Gilroy Unified Priorye 0.000000 0.035200 0.035200 0.000000 0.000000 0.000000 0.000000 0.000000 SCVWD-State Water Project 0.005900 0.007100 0.007000 0.006300 0.006900 0.007000 0.006500 0.005700 0.098400 0.241300 0.275300 0.212800 0.219700 0.224900 0.231200 0.214400 TOTAL TAX RATE 1.098400 1.241300 1.275300 1.212800 1.219700 1.224900 1.231200 1.214400 Source: Santa Clara County Auditor data, MuniServices, LLC / Avenu Insights & Analytics Source: 2021-22 and prior: previously published ACFR City of Gilroy Direct and Overlapping Property Tax Rates Last Ten Fiscal Years 192 11.6 p. 449 of 478 2016-17 2017-18 2018-19 2019-20 2020-21 2021-22 2022-23 Basic City and County Levy City Direct Rate 0.097037 0.097037 0.097037 0.097037 0.097037 0.097037 0.097037 All others 0.902963 0.902963 0.902963 0.902963 0.902963 0.902963 0.902963 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 1.000000 Override Assessments County Retire Levy 0.038800 0.038800 0.038800 0.038800 0.038800 0.038800 0.038800 County Library 0.002400 0.002400 0.002400 0.002400 0.002400 0.002400 0.002400 VMC 2008 0.008600 0.008200 0.007200 0.006900 0.006900 0.006100 0.006300 County Housing Bond 2016 0.000000 0.012660 0.010500 0.010000 0.000000 0.012660 0.010800 Gilroy City Bond 2008 0.027200 0.026000 0.025000 0.020000 0.019000 0.017500 0.017000 Gilroy Unified School 2002 0.050100 0.047800 0.046700 0.044400 0.042800 0.037000 0.028000 Gilroy Unified 11/2008 0.051300 0.049100 0.046300 0.054400 0.054100 0.052700 0.050900 Gilroy Unified 2016 0.060000 0.055900 0.015400 0.053400 0.055000 0.050900 0.047300 Gavilan Community College 04 0.021600 0.020000 0.019200 0.018700 0.018400 0.017900 0.016800 Gavilan Jt CCD 2018 0.000000 0.000000 0.000000 0.024400 0.023200 0.024100 0.022600 Lease Debt-Gilroy Unified 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 Lease Debt-Gilroy Unified Priorye 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 0.000000 SCVWD-State Water Project 0.008600 0.006200 0.004200 0.004100 0.003700 0.005100 0.004400 0.268600 0.267060 0.215700 0.277500 0.264300 0.265160 0.245300 TOTAL TAX RATE 1.268600 1.267060 1.215700 1.277500 1.264300 1.265160 1.245300 Source: Santa Clara County Auditor data, MuniServices, LLC / Avenu Insights & Analytics Source: 2021-22 and prior: previously published ACFR City of Gilroy Direct and Overlapping Property Tax Rates (Continued) Last Ten Fiscal Years 193 11.6 p. 450 of 478 Taxpayer Taxable Value ($) Percent of Total City Taxable Value (%) Taxable Value ($) Percent of Total City Taxable Value (%) Simon Property Group 227,843,480$ 2.08% 196,348,594$ 3.17% Joule Gilroy Crossing Owner Llc 81,764,854 0.75% Olam West Coast Inc 77,388,624 0.71% 75,722,026 1.22% United Natural Foods West Inc 70,129,548 0.64% Amazon.Com Services Llc 63,114,624 0.58% Mg At Gilroy Lp 57,355,620 0.52% Mabury Vineyards Llc Et Al 56,027,400 0.51% Performance Food Group Inc 49,319,325 0.45% Pulmuone Foods Usa Inc 39,004,584 0.36% Wal Mart Real Est Bus Trt 36,377,311 0.33% 30,988,806 0.50% International Paper Company 32,110,574 0.29% E P & G South Valley Plaza Llc 28,949,454 0.26% Calpine Gilroy Cogen L P 27,084,173 0.25% Nebbiolo Ii-Gilroy Lp 27,000,000 0.25% Central Valley Coalition 26,652,017 0.24% Towman Cadena Llc 26,569,854 0.24% Costco Wholesale Corp A Ws Corp 24,789,905 0.23% 20,388,972 0.33% Avery Cypress Pointe Lp 22,704,883 0.21% 13,226,061 0.21% Canciamilla Anthony Trustee & Et Al 22,672,474 0.21% Kb Home South Bay Inc 22,407,081 0.21% Target Corporation 20,247,071 0.19% 15,998,545 0.26% Sterigenics U S Llc 18,880,113 0.17% 13,822,020 0.22% First Street Gilroy I Llc 18,549,094 0.17% Blue Diamond Hospitality Llc 18,352,434 0.17% Ehj9 Property Llc 18,156,000 0.17% Excel Gilroy Llc 83,789,014 1.35% Inland Western Gilroy I Llc 47,188,989 0.76% 7610 Isabella Way Llc 36,536,830 0.59% South Valley Apts Llc 34,006,124 0.55% Shapell Industries Inc 32,471,346 0.52% Monterey Gourmet Foods 24,672,603 0.40% Cp6Sv Llc 21,696,489 0.35% Tin Inc.21,663,005 0.35% Kb Home So Bay Inc 21,000,000 0.34% Chinatown Llc 20,098,198 0.32% Land Department 19,829,500 0.32% Lowes Hiw Inc A Ws Corp 15,912,860 0.26% Mission Park Gilroy Llc 15,112,484 0.24% Hd Development Of Maryland,Inc 15,009,688 0.24% Gilroy Village Shopping Center 14,086,997 0.23% Town Place Llc 13,013,590 0.21% Berry Alexander Street Llc 11,697,284 0.19% Southpoint Business Park Assoc 11,617,675 0.19% Total Top 25 Taxpayers 1,113,450,497$ 10.19% 825,897,700$ 13.34% Total Taxable Value 10,928,098,242$ 100.00% 6,192,510,384$ 100.00% Source: Santa Clara County Assessor data, MuniServices, LLC / Avenu Insights & Analytics City of Gilroy Principal Property Taxpayers Last Fiscal Year and Nine Years Ago 2022-23 2013-14 194 11.6 p. 451 of 478 Fiscal Year Tax Levied for the Fiscal Year Amount Collected Percent (%) of Levy 2013-14 6,054,088$ 6,029,696$ 99.60% 2014-15 6,515,197 6,547,657 100.50% 2015-16 6,903,278 6,963,327 100.87% 2016-17 7,472,764 7,487,528 100.20% 2017-18 7,941,242 7,941,242 100.00% 2018-19 8,521,868 8,521,868 100.00% 2019-20 9,060,136 9,060,136 100.00% 2020-21 9,598,648 9,598,648 100.00% 2021-22 9,990,898 9,990,898 100.00% 2022-23 10,734,341 10,734,341 100.00% Source: MuniServices, LLC / Avenu Insights & Analytics Source: County Auditor-Controller City of Gilroy Property Tax Levies, Tax Collections and Delinquency Last Ten Fiscal Years 195 11.6 p. 452 of 478 General Tax Lease Special Fiscal Obligation Allocation Notes & Revenue Assessment Subscrption Year Bonds (5)(6)Bonds Loans Bonds (4)Bonds Payable 2014 31,820,000$ -$ -$ 47,797,103$ -$ -$ 2015 31,095,000 - 959,229 46,174,118 - - 2016 30,335,000 - 1,201,155 44,496,134 - - 2017 29,550,000 - 1,126,536 42,763,150 - - 2018 28,745,000 - 1,037,719 40,965,166 - - 2019 19,350,000 - 948,011 39,097,182 - - 2020 26,630,459 - 857,428 36,713,218 - - 2021 25,639,646 - 765,913 33,337,681 - - 2022 24,616,950 - 673,484 31,366,561 - - 2023 23,561,345 - 580,125 28,177,439 - 625,094 Note: Details regarding the outstanding debt can be found in the notes to the basic financial statements. Source: (1) Finance Department, City of Gilroy (2) Finance Department, County of Santa Clara (3) In 2010, the City issued revenue refunding bonds to refinance an existing installment payment obligation. (5) GO Bonds Series 2009 refinanced on June 1, 2019 to Series 2019 A. (6) GO Bonds Series 2010 refinanced on November 5, 2019 to Series 2019 B. (7) 2021 Wastewater Revenue Bonds Series A issued June 2021. City of Gilroy Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities 196 11.6 p. 453 of 478 Wastewater Total % of Fiscal Subscription Revenue Primary Property Net Debt Year Payable Bonds (3) (7)Government (1)Assessed Value (2)per Capita 2014 -$ 20,477,068$ 100,094,171$ 1.62% 1,910 2015 - 18,519,310 96,747,657 1.45% 1,825 2016 - 16,491,551 92,523,840 1.31% 1,677 2017 - 14,393,793 87,833,479 1.15% 1,570 2018 - 12,206,034 82,953,919 1.02% 1,484 2019 - 9,928,275 69,323,468 0.90% 1,391 2020 - 7,545,517 71,746,622 0.78% 1,257 2021 - 57,865,509 117,608,749 1.20% 1,963 2022 22,500 55,093,508 111,773,003 1.09% 1,878 2023 - 52,494,265 105,438,268 1.07% 1,755 Note: Details regarding the outstanding debt can be found in the notes to the basic financial statements. Source: (1) Finance Department, City of Gilroy (2) Finance Department, County of Santa Clara (3) In 2010, the City issued revenue refunding bonds to refinance an existing installment payment obligation. (5) GO Bonds Series 2009 refinanced on June 1, 2019 to Series 2019 A. (6) GO Bonds Series 2010 refinanced on November 5, 2019 to Series 2019 B. (7) 2021 Wastewater Revenue Bonds Series A issued June 2021. City of Gilroy Ratios of Outstanding Debt by Type (Continued) Last Ten Fiscal Years Business-Type Activities 197 11.6 p. 454 of 478 Ratio of General Tax Net General Bonded General Fiscal Obligation Allocation Assessed Debt to Net Bonded Debt Year Bonds Bonds Total (1)Value (2)Population (1)Assessed Value Per Capita 2014 32,434,743$ 32,434,743$ 6,192,510,384$ 52,413 0.524% 619 2015 31,681,616 31,681,616 6,668,114,649 53,000 0.475% 598 2016 30,893,489 30,893,489 7,068,226,533 55,170 0.437% 560 2017 30,080,362 30,080,362 7,654,396,884 55,936 0.393% 538 2018 29,247,235 29,247,235 8,128,701,548 55,615 0.360% 526 2019 28,305,209 28,305,209 8,692,971,361 55,928 0.326% 506 2020 26,630,459 26,630,459 9,243,761,986 57,084 0.288% 467 2021 25,639,646 25,639,646 9,807,614,121 59,920 0.261% 428 2022 24,616,950 24,616,950 10,242,720,866 59,520 0.240% 414 2023 23,561,345 23,561,345 10,928,098,242 60,078 0.216% 392 Source: (1) State of California, Finance Department. (2) This is the amount restricted for the COP debt service principal payments. City of Gilroy OUTSTANDING GENERAL BONDED DEBT Last Ten Fiscal Years Ratio of General Bonded Debt Outstanding 52 53 55 56 56 56 57 58 59 60 0.000% 0.100% 0.200% 0.300% 0.400% 0.500% 0.600% 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 48 50 52 54 56 58 60 62 198 11.6 p. 455 of 478 2022-23 Assessed Valuation : $10,973,811,042 Total Debt City’s Share of DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT: 6/30/2023 % Applicable (1)Debt 6/30/23 Santa Clara County 1,041,125,000$ 1.773% 18,459,146$ Gavilan Joint Community College District 195,600,000 25.641% 50,153,796 Gilroy Unified School District 346,262,495 82.189% 284,589,682 City of Gilroy 23,561,345 100.000% 23,561,345 City of Gilroy Community Facilities District No. 2000-1 5,181,734 100.000% 5,181,734 Santa Clara Valley Water District Benefit Assessment District 38,900,000 1.773% 689,697 TOTAL DIRECT AND OVERLAPPING TAX AND ASSESSMENT DEBT 382,635,400$ DIRECT AND OVERLAPPING GENERAL FUND DEBT: Santa Clara County General Fund Obligations 1,120,404,570$ 1.773% 19,864,773$ Santa Clara County Pension Obligation Bonds 329,741,844 1.773% 5,846,323 Santa Clara County Board of Education Certificates of Participation 935,000 1.773% 16,578 Gavilan Joint Community College District General Fund Obligations 6,135,000 25.641% 1,573,075 Gilroy Unified School District Certificates of Participation 21,495,000 82.189% 17,666,526 City of Gilroy General Fund Obligations (Lease Revenue Bonds) 28,177,439 100.000% 28,177,439 Subscriptions Obligations 625,094 100.000% 625,094 City of Gilroy Loans Payable 580,125 100.000% 580,125 Santa Clara County Vector Control Certificates of Participation 1,230,000 1.773% 21,808 TOTAL GROSS DIRECT AND OVERLAPPING GENERAL FUND DEBT 74,371,741$ Less: Santa Clara County supported obligations 186,523 TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 74,185,218$ TOTAL DIRECT DEBT 52,318,909$ TOTAL GROSS OVERLAPPING DEBT 404,688,232$ TOTAL NET OVERLAPPING DEBT 404,501,709$ GROSS COMBINED TOTAL DEBT 457,007,141$ (2) NET COMBINED TOTAL DEBT 456,820,618$ Ratios to 2022-23 Assessed Valuation :10,973,811,042$ Direct Debt ($23,561,345) 0.21% Total Direct and Overlapping Tax and Assessment Debt 3.49% Total Direct Debt ($52,318,909) 0.48% Gross Combined Total Debt 4.16% Net Combined Total Debt 4.16% Source: Avenu Insights & Analytics, California Municipal Statistics, Inc. City of Gilroy (2) Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue and non-bonded capital lease obligations. (1) The percentage of overlapping debt applicable to the city is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the city divided by the district's total taxable assessed value. June 30, 2023 Schedule of Direct and Overlapping Bonded Debt 199 11.6 p. 456 of 478 Fiscal Year 2011 2014 2015 2016 2017 2018 Assessed valuation 5,829,162,100$ 6,238,973,584$ 6,714,164,849$ 7,114,097,533$ 7,700,974,884$ 8,175,945,948$ Debt Limit Rate (1)15%15%15%15%15%15% Debt limit 874,374,315 935,846,038 1,007,124,727 1,067,114,630 1,155,146,233 1,226,391,892 Total net debt applicable to limit: General obligation bonds 33,830,000 31,820,000 31,095,000 30,335,000 29,550,000 28,745,000 Legal debt margin 840,544,315$ 904,026,038$ 976,029,727$ 1,036,779,630$ 1,125,596,233$ 1,197,646,892$ Total debt applicable to the limit 4.0%3.5%3.2%2.9%2.6%2.4% Continued Section 1108 of the City of Gilroy Charter limits the general obligation bonds of the City to 15% of total assessed value of real and personal property within the City. Source: County of Santa Clara, Department of Finance City of Gilroy Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year as a percentage of debt limit 200 11.6 p. 457 of 478 2019 2020 2021 2022 2023 Assessed valuation 8,741,061,361$ 9,291,636,386$ 9,807,614,121$ 10,242,720,866$ 10,928,098,242$ Debt Limit Rate (1)15%15%15%15%15% Debt limit 1,311,159,204 1,393,745,458 1,471,142,118 1,536,408,130 1,639,214,736 Total net debt applicable to limit: General obligation bonds 27,983,538 27,087,578 25,639,646 24,616,950 23,561,345 Legal debt margin 1,283,175,666$ 1,366,657,880$ 1,445,502,472$ 1,511,791,180$ 1,615,653,391$ Total debt applicable to the limit as a percentage of debt limit 2.2%2.0%1.8%1.6%1.5% Concluded Section 1108 of the City of Gilroy Charter limits the general obligation bonds of the City to 15% of total assessed value of real and personal property within the City. Source: County of Santa Clara, Department of Finance City of Gilroy Legal Debt Margin Information (Continued) Last Ten Fiscal Years Fiscal Year 201 11.6 p. 458 of 478 2016 2017 2018 2019 2020 Gross revenues: Charges for services 11,773,938$ 12,644,730$ 12,720,141$ 12,904,657$ 12,872,189$ Investment income (loss) 301,481 284,297 410,172 934,590 828,615 Developer impact fees* 4,452,590 3,098,889 2,483,414 2,234,082 1,608,755 Total gross revenues 16,528,010 16,027,916 15,613,727 16,073,329 15,309,559 Operating expenses: Operations 7,314,113 7,454,202 7,466,650 8,339,489 8,411,647 Billing 612,551 594,654 618,400 668,982 730,892 Administration 500,398 472,465 558,846 706,101 667,733 Total operating expenses 8,427,062 8,521,321 8,643,896 9,714,572 9,810,272 Net Revenues 8,100,948 7,506,595 6,969,831 6,358,757 5,499,287 Debt 2010 Sewer revenue bonds (net debt service) 2,566,550$ 2,558,688$ 2,562,738$ 2,557,625$ 2,557,750$ 2021A Sewer revenue bonds - - - - - Total net debt service 2,566,550$ 2,558,688$ 2,562,738$ 2,557,625$ 2,557,750$ Debt service coverage (1.20x requirement) 3.16 2.93 2.72 2.49 2.15 *Developer impact fees for sewer is reported in a capital projects fund Fiscal Year City of Gilroy Wastewater System - Historical Debt Service Coverage Last Seven Fiscal Years 202 11.6 p. 459 of 478 2021 2022 2023 Gross revenues: Charges for services 12,702,398$ 12,912,113$ 13,037,892$ Investment income (loss)51,203 64,441 825,083 Developer impact fees*1,764,901 3,552,755 1,122,624 Total gross revenues 14,518,502 16,529,309 14,985,599 Operating expenses: Operations 9,323,262 8,969,702 7,535,006 Billing 678,651 63,021 924,907 Administration 720,726 789,602 775,649 Total operating expenses 10,722,639 9,822,325 9,235,562 Net Revenues 3,795,863 6,706,984 5,750,037 Debt 2010 Sewer revenue bonds (net debt service) 2,510,417$ 2,561,500$ -$ 2021A Sewer revenue bonds - - 1,533,500 Total net debt service 2,510,417$ 2,561,500$ 1,533,500$ Debt service coverage (1.20x requirement) 1.51 2.62 3.75 *Developer impact fees for sewer is reported in a capital projects fund Fiscal Year City of Gilroy Last Seven Fiscal Years Wastewater System - Historical Debt Service Coverage (Continued) 203 11.6 p. 460 of 478 204 11.6 p. 461 of 478 Fiscal Year Population (1) Net Taxable Assessed Values Per Capita Taxable Property Values Personal Income Per Capita Income City Unemployment Rate (%) (2) County Population (1) Public School Enrollment (3) 2013-14 52,413 6,192,510,384$ 118,148$ 1,512,219,876$ 28,852$ 8.6% - - 2014-15 53,000 6,668,114,649 125,813 1,566,627,000 29,559 6.9% - - 2015-16 55,170 7,068,226,533 128,117 1,648,534,770 29,881 5.7% - - 2016-17 55,936 7,654,396,884 136,842 1,720,759,168 30,763 4.9% - - 2017-18 55,615 8,128,701,548 146,160 1,817,498,200 32,680 3.7% 1,956,598 11,834 2018-19 55,928 8,692,971,361 155,431 1,927,859,413 34,470 2.5% 1,954,282 11,652 2019-20 57,084 9,243,761,986 161,933 2,046,518,484 35,851 13.9% 1,961,969 11,672 2020-21 56,599 9,807,614,121 173,282 2,190,227,917 38,697 8.6% 1,934,171 10,248 2021-22 59,269 10,242,720,866 172,818 2,634,388,512 44,448 2.7% 1,894,783 10,064 2022-23 60,078 10,928,098,242 181,899 3,114,690,441 51,844 3.4% 1,886,079 10,972 Source: Santa Clara County Assessor data, MuniServices, LLC / Avenu Insights & Analytics Source: 2021-22 and prior: previously published ACFR Report ( - ) Data unavailable. 1.) Population Projections are provided by the California Department of Finance Projections. 2.) Unemployment and Labor Force Data are provided by the EDD's Labor Market Information Division. City of Gilroy Demographic and Economic Statistics Last Ten Fiscal Years 3.) Student Enrollment reflects the total number of students enrolled in the Gilroy Unified School District. Any other school districts within the City are not accounted for in this statistic. 205 11.6 p. 462 of 478 Business Name Number of Employees Rank Percent of Total Employment (%) Number of Employees Rank Percent of Total Employment (%) Gilroy Unified School District* 1,078 1 3.77% Christopher Ranch LLC 716 2 2.50% 800 1 4.08% Saint Louise Regional Hospital 522 3 1.83% 550 2 2.81% Olam International (Formerly ConAgra-Gilroy Foods) 450 4 1.57% 500 4 2.55% Community Solutions 365 5 1.28% - - Costco Wholesale 350 6 1.22% 220 7 1.12% Walmart Supercenter 312 7 1.09% 395 5 2.01% City of Gilroy 258 8 0.90% - - Gavilan College 214 9 0.75% - - Gilroy Health Care and Rehabilitation 167 10 0.58% - - Head Start Nursery - - - 180 9 0.92% Gilroy Gardens Theme Park (formerly Bonfante) - - - 500 3 2.55% Monterey Gourmet Foods - - - 225 6 1.15% Kaiser Permanente - - - 200 8 1.02% International Paper - - - 180 10 0.92% Total Top 10 Employers 4,432 15.50% 3,750 19.13% Total City Labor Force (1) 28,600 19,607 Source: MuniServices, LLC / Avenu Insights & Analytics Source: 2014 previously published ACFR. Results based on direct correspondence with city’s local businesses. (1) Total City Labor Force provided by EDD Labor Force Data. * Includes FTE & PTE. City of Gilroy Principal Employers Last Fiscal Year and Eight Years Ago 2023 2014 206 11.6 p. 463 of 478 Department 2011 2012 2014 2015 2016 2017 2018 2019 2020 2021 2022 2023 Administration 5 6 5 4 5 5 6 6 7 7 8 8 City Council and Mayor 7 7 7 7 7 7 7 7 7 7 7 7 Community Development 17 18 20 21 21 18 18 21 23 20 23 21 Finance 13 14 13 13 13 11 13 14 14 11 13 12 Fire 43 39 39 40 39 35 36 37 37 43 44 40 Fleet and Facilities 9 10 10 10 10 10 10 10 10 7 10 8 Human Resources 3 3 4 4 4 4 4 4 5 4 4 4 Information Technology 3 2 4 2 2 3 3 4 3 4 4 4 Police 87 87 88 93 94 87 92 94 96 98 99 90 Public Works 34 34 36 38 43 40 42 54 57 48 49 45 Recreation 9 11 11 11 12 10 11 11 11 4 4 4 Total 230 231 237 243 250 230 242 262 270 253 265 243 noted represent budgeted positions. (a) Beginning in fiscal year 2013-2014, the amount represents the number of filled positions by departments. Prior to fiscal year 2013-14, the amounts Last Ten Fiscal Years By Function/Program Full-Time Equivalent City Employees City of Gilroy 207 11.6 p. 464 of 478 Fiscal Year Function 2011 2014 2015 2016 2017 2018 General Gvoernement Number of Business Licenses Issued 2,967 2,615 3,034 2,685 3,166 3,800 Total Volunteer Service Hours 29,668 35,439 32,598 34,723 33,855 31,505 Total City-Wide Training Hours Provided 1,538 1,245 1,957 2,356 3,112 3,200 Total Vehicle Work Orders Generated 1,631 2,739 3,146 2,629 2,478 1,428 Total Facilities Work Orders Generated 1,576 1,613 1,542 1,445 1,317 1,428 Public Safety Police Number of 911 Calls Received 21,206 27,753 28,498 21,044 23,744 23,484 Number of Police Calls for Service 59,177 58,112 62,200 62,071 63,887 63,073 Number of Investigations Assigned to Detectives 816 727 821 913 845 815 Number of Case Reports Processed 10,780 11,926 13,566 12,621 12,320 12,478 Fire Total Calls for Service 3,746 4,557 5,131 5,007 5,441 5,374 Total Fire Calls 179 182 179 223 223 265 Total Emergency Medical Aid Calls 2,340 2,802 3,341 3,323 3,735 3,707 Community Development Number of Building Inspections Completed 9,378 14,101 21,592 24,500 23,623 17,991 Number of Building Permits Processed 1,212 1,706 2,042 2,197 1,903 1,970 Number of Fire Code Permits Issued 525 567 819 839 476 1,060 Public Works 10,000 930,000 90,000 274,479 712,504 533,397 Linear Feet of Preventive Cleaning 600,000 600,000 716,900 785,288 707,379 854,304 Million Gallons of Wastewater Treated per Day 6.76 6.05 5.99 5.97 7.60 6.16 Million Gallons of Municipal Water Produced per Day 7.31 7.87 6.79 5.94 6.46 7.07 Million Gallons of Wastewater Flow per Day (COG) 3.91 3.45 3.50 3.59 4.84 3.87 Number of Utility Billing Customers 12,958 13,716 13,865 14,300 14,549 14,870 Recreation Number of Registrations Processed 4,166 5,500 6,378 5,856 5,807 4,952 Number of Meals Provided to Seniors Annually 18,392 19,549 20,031 21,351 22,566 23,815 Source: City of Gilroy, Various City Departments * Statistic not available Square Feet of Chip/Cape/Slurry Seal Completed City of Gilroy Operating Indicators By Function / Program Last Ten Fiscal Years Fiscal Year 208 11.6 p. 465 of 478 Function 2019 2020 2021 2022 2023 General Gvoernement Number of Business Licenses Issued 3,965 3,160 4,319 3,673 3,335 Total Volunteer Service Hours 28,460 18,465 2,521 12,886 17,588 Total City-Wide Training Hours Provided 2,688 2,892 1,038 1,173 1,262 Total Vehicle Work Orders Generated 1,327 1,514 1,904 1,880 1,686 Total Facilities Work Orders Generated 1,411 1,488 1,405 1,416 1,381 Public Safety Police Number of 911 Calls Received 22,235 23,578 22,740 24,837 25,536 Number of Police Calls for Service 64,134 58,354 44,016 62,323 65,459 Number of Investigations Assigned to Detectives 986 1,023 971 1,101 745 Number of Case Reports Processed 11,075 11,020 10,095 9,771 8,205 Fire Total Calls for Service 5,555 6,243 6,299 7,092 7,117 Total Fire Calls 282 336 381 435 273 Total Emergency Medical Aid Calls 3,739 4,065 4,089 4,866 5,027 - Community Development Number of Building Inspections Completed 17,450 14,618 15,652 16,056 15,578 Number of Building Permits Processed 2,050 1,300 1,361 1,784 1,843 Number of Fire Code Permits Issued 1,230 885 474 695 475 Public Works Square Feet of Chip/Cape/Slurry Seal Completed 1,430,477 1,547,477 1,451,239 3,118,472 3,354,152 Linear Feet of Preventive Cleaning 897,479 849,228 632,280 692,143 716,194 Million Gallons of Wastewater Treated per Day 6.66 6.18 6.14 6.03 7.00 Million Gallons of Municipal Water Produced per Day 6.80 7.20 7.60 6.74 6.24 Million Gallons of Wastewater Flow per Day (COG) 4.13 3.73 3.49 3.16 3.86 Number of Utility Billing Customers 15,133 15,218 15,311 15,483 15,555 Recreation Number of Registrations Processed 4,737 4,232 2,380 6,875 9,224 Number of Meals Provided to Seniors Annually 25,103 21,979 19,525 22,570 22,961 Source: City of Gilroy, Various City Departments * Statistic not available Fiscal Year City of Gilroy Operating Indicators By Function / Program (Continued) Last Ten Fiscal Years 209 11.6 p. 466 of 478 2011 2014 2015 2016 2017 2018 General Government City Buildings 55 55 55 55 55 57 Public Safety Police Police Sattions 1 1 1 1 1 1 Police Vehicles 69 76 79 86 87 83 Fire Fire Stations 3 3 3 3 3 3 Fire Vehicles 20 20 20 20 21 20 Public Works Park sites 16 16 16 16 16 19 Centerline Miles of Streets 146 118 120 119 126 151 Number of Streetlights 3,659 4,150 4,150 4,773 4,794 4,841 Miles of Storm Trunk Mains* 30 31 31 31 37 39 Miles of Sewer Mains 101 110 111 111 151 160 Treatment Plant Dry Weather Flow Capacity (MGD) 9 9 9 9 9 9 Water Meters in Municipal Service Area 12,905 13,831 14,127 14,669 14,783 14,450 Miles of Water Mains 108 121 152 152 204 205 Number of Fire Hydrants 1,815 2,048 2,150 2,265 2,290 1,948 * Note that the increase in "Miles of Storm Trunk Mains" is due to the accurate tracking of data in the Cityworks GIS system. Source: City of Gilroy, Various City Departments. Function City of Gilroy Capital Assets By Function Last Ten Fiscal Years Fiscal Year Source: Finance Division, City of Cerritos 210 11.6 p. 467 of 478 2019 2020 2021 2022 2023 General Government City Buildings 57 57 57 57 57 Public Safety Police Police Sattions 1 1 1 1 1 Police Vehicles 103 109 109 113 117 Fire Fire Stations 3 3 3 3 3 Fire Vehicles 19 19 20 20 21 Public Works Park sites 19 20 21 21 21 Centerline Miles of Streets 166 166 166 168 125 Number of Streetlights 4,861 4,885 4,295 4,315 4,320 Miles of Storm Trunk Mains* 40 40 40 131 131 Miles of Sewer Mains 161 163 162 168 168 Treatment Plant Dry Weather Flow Capacity (MGD) 9 9 9 9 9 Water Meters in Municipal Service Area 15,133 15,220 15,266 15,595 15,553 Miles of Water Mains 210 205 219 209 213 Number of Fire Hydrants 2,229 2,187 2,293 2,317 2,321 * Note that the increase in "Miles of Storm Trunk Mains" is due to the accurate tracking of data in the Cityworks GIS system. Source: City of Gilroy, Various City Departments Fiscal Year Function City of Gilroy Capital Assets By Function (Continued) Last Ten Fiscal Years Source: Finance Division, City of Cerritos 211 11.6 p. 468 of 478 212 11.6 p. 469 of 478 CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. From:Council Member Zachary Hilton To:Public Comments Cc:City Clerk Subject:Fw: Gilroy - Santa Teresa District - Fire and Emergency Services Date:Tuesday, September 26, 2023 8:00:20 AM City Clerk, Please include this as public comment for Item #14.1 Closed Session. Zach Hilton Gilroy City Council Member www.zachhilton.com #HiltonForCouncil @zachhilton_ca From: Sent: Monday, September 25, 2023 1:43 PM To: Mayor Marie Blankley <Marie.Blankley@ci.gilroy.ca.us>; Council Member Dion Bracco <Dion.Bracco@ci.gilroy.ca.us>; Council Member Tom Cline <Tom.Cline@ci.gilroy.ca.us>; Council Member Zachary Hilton <Zachary.Hilton@ci.gilroy.ca.us>; Council Member Carol Marques <Carol.Marques@ci.gilroy.ca.us>; Council Member Fred Tovar <Fred.Tovar@ci.gilroy.ca.us>; Council Member Rebeca Armendariz <Rebeca.Armendariz@ci.gilroy.ca.us> Cc: Subject: EXTERNAL - Gilroy - Santa Teresa District - Fire and Emergency Services Dear Gilroy City Counsel, I want to voice my concern about two issues: 1.) The short staffing at the Santa Teresa Fire Station. I live in the Mesa Ridge community near Miller Ave. and Thomas Rd., in west Gilroy. Recently several of my neighbors have been denied homeowner’s fire insurance renewals due to a perception of high fire risk in the area. With all the many new homes built in west Gilroy we urgently need a fully-staffed fire and emergency medical response capability on this rapidly expanding side of Gilroy. I read in the Mayor’s update that $3M in funding has been allocated in the future budget to modernize the fire stations and add modular buildings to the Santa Teresa fire station to provide a 24-hour staffing capability. But where in the budget are we allocating funds to hire the additional firefighters that will be needed? Home values and the desirability of living here may decline if the danger of fire and our ability to effectively mitigate the risk is not robustly defended. Please vote to provide the necessary staffing and infrastructure to support adequate, full- 14.1 p. 470 of 478 time fire and emergency medical in my home town section of west Gilroy. 2.) Please find a way to fund the Tenth Street Bridge and get it built! This bridge was originally promised to be built by the developer as specified in the Glen Loma Ranch Development Agreement. But that was contingent on the City being able to fund the construction costs, either with Federal grant funds or with other municipal funds. Now I’m learning that the recent $27M Federal grant application to fund the bridge has been denied and the City doesn’t have the money to fund the bridge construction otherwise. Forgive my armchair semi-informed critical analysis, but this whole bridge project seems like a SNAFU. The original deal with the developer was a concession to influence and affect planning approvals. Those approvals allowed building too many densely packed homes with inadequate traffic and infrastructure provisions. Instead City planners made a contingent deal for a bridge with only faint dreams of someday funding it, and no consequences to the developers for the resulting delays. Every year that the bridge is delayed puts our homes at increased risk by adding to the travel distance for emergency responders and increased traffic congestion. The promise of the bridge has been delayed for almost decade. The eroding bridge plans are now whittling down the width of the bridge from four lanes to two, and eliminating other useful bike friendly features. Now it honestly seems to me like the bridge may never be built at all. Please understand the scope of these issues involve life saving priorities. Respectfully, -David Bartholomew gilroyca.iqm2.com ___________________________ David Bartholomew 14.1 p. 471 of 478 14.1 p. 472 of 478 CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. From:Frank Parker To:Public Comments Subject:EXTERNAL - Fire safety Date:Wednesday, September 27, 2023 4:12:35 PM Very concerned about staffing the Santa Teresa fire station. As a long time resident of Gilroy, I would hope our fire depart will be fully staffed to protect all of us. Please make this a priority. 14.1 p. 473 of 478 From:Council Member Zachary Hilton To:Public Comments Cc:City Clerk Subject:Fw: EXTERNAL - Staffing at Santa Teresa Fire Station Date:Wednesday, September 27, 2023 2:15:53 PM City Clerk, Please add this to public comment for Item #14.1. Zach Hilton Gilroy City Council Member www.zachhilton.com #HiltonForCouncil @zachhilton_ca From: Kathleen Kammann <kmdk44@charter.net> Sent: Wednesday, September 27, 2023 10:49 AM To: Mayor Marie Blankley <Marie.Blankley@ci.gilroy.ca.us>; Council Member Rebeca Armendariz <Rebeca.Armendariz@ci.gilroy.ca.us>; Council Member Dion Bracco <Dion.Bracco@ci.gilroy.ca.us>; Council Member Tom Cline <Tom.Cline@ci.gilroy.ca.us>; Council Member Zachary Hilton <Zachary.Hilton@ci.gilroy.ca.us>; Council Member Carol Marques <Carol.Marques@ci.gilroy.ca.us>; Council Member Fred Tovar <Fred.Tovar@ci.gilroy.ca.us> Subject: EXTERNAL - Staffing at Santa Teresa Fire Station CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. I am very concerned about the issue of staffing at the Santa Teresa Fire Station. I believe we need to increase the daily minimum staffing at this station. It worries me when I see all the continued building in my area and no adequate staffing at our closest station. I hope you will listen carefully to the Gilroy Firefighters Association when they present their case on October 2. Thank you. Sent from my iPhone 14.1 p. 474 of 478 From:Council Member Zachary Hilton To:Public Comments Cc:City Clerk Subject:Fw: EXTERNAL - Gilroy Firefighter Staffing Concern Date:Wednesday, September 27, 2023 2:13:30 PM City Clerk, Please add this to public comment for Item #14.1. Zach Hilton Gilroy City Council Member www.zachhilton.com #HiltonForCouncil @zachhilton_ca From: Nigel Johnson <nigelpcj@me.com> Sent: Wednesday, September 27, 2023 11:19 AM To: Local2805@comcast.net <Local2805@comcast.net>; Mayor Marie Blankley <Marie.Blankley@ci.gilroy.ca.us> Cc: Council Member Rebeca Armendariz <Rebeca.Armendariz@ci.gilroy.ca.us>; Council Member Dion Bracco <Dion.Bracco@ci.gilroy.ca.us>; Council Member Tom Cline <Tom.Cline@ci.gilroy.ca.us>; Council Member Zachary Hilton <Zachary.Hilton@ci.gilroy.ca.us>; Council Member Carol Marques <Carol.Marques@ci.gilroy.ca.us>; Council Member Fred Tovar <Fred.Tovar@ci.gilroy.ca.us> Subject: EXTERNAL - Gilroy Firefighter Staffing Concern CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. To You All Firefighter Staffing for our 'rapidly growing' Community - 'Mission Critical' We are Gilroy Citizens and live in the LIONS CREEK community area by Luigi Aprea Elementary school writing to show our support for this effort to provide needed investment for our Firefighters and to help save this temporary location in such a prime response location!! Many days/evenings I visit the Ascension Solarsano Middle School (close to the Fire Station) location; park my truck and take my dog for walks all around Debell Park and Uvas Creek areas close to the Temporary Fire Station. It is a comfort and confidence feeling to wave to the Firefighters when they head out on a response or return or just to see the small engine (sometime large) parked by the station ready to respond to Community safety and security issues!! SAVE THAT STATION AND MAKE FIREFIGHTER SUPPORT A VERY TOP PRIORITY for our Rapidly Growing Communities and our priority Tax Dollars investments please. Thank You for your support! 14.1 p. 475 of 478 Nigel and Violet Johnson nigelpcj@me.com 408 398 9371 14.1 p. 476 of 478 From:Council Member Zachary Hilton To:Public Comments Cc:City Clerk Subject:Fw: EXTERNAL - Fire Fighter Staffing Date:Wednesday, September 27, 2023 2:17:02 PM City Clerk, Please add this to public comment for Item #14.1. Zach Hilton Gilroy City Council Member www.zachhilton.com #HiltonForCouncil @zachhilton_ca From: Christopher Cobillas <cmcobillas@yahoo.com> Sent: Wednesday, September 27, 2023 10:43 AM To: Mayor Marie Blankley <Marie.Blankley@ci.gilroy.ca.us>; Council Member Rebeca Armendariz <Rebeca.Armendariz@ci.gilroy.ca.us>; Council Member Dion Bracco <Dion.Bracco@ci.gilroy.ca.us>; Council Member Tom Cline <Tom.Cline@ci.gilroy.ca.us>; Council Member Zachary Hilton <Zachary.Hilton@ci.gilroy.ca.us>; Council Member Carol Marques <Carol.Marques@ci.gilroy.ca.us>; Council Member Fred Tovar <Fred.Tovar@ci.gilroy.ca.us> Subject: EXTERNAL - Fire Fighter Staffing CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. My City Council, My name is Christopher Cobillas and I live at 713 Carignane Dr. I am distraught by the lack of fire protection and emergency medical services provided to my neighborhood. As the city has grown, basic city services has not. It is shameful to put my family and neighbors safety at risk by not staffing the fire department. Is a residents life justified by budget dollar savings? We all know that it is a matter of time until we will need to utilize public safety in some capacity. I can include a laundry list of communities that have been decimated and taken off the map due to fires but, we all know them. Having our fire fighters staffed and ready to respond is the only way that our city does not end up in the news for lack of preparation. If it’s predictable, I can be preventable. I urge you all to consider my neighborhoods safety and remind you all that we voted to put you in these position of leadership to protect us all! Thank you for your time and constant effort, Christopher Cobillas 14.1 p. 477 of 478 From:Council Member Zachary Hilton To:Public Comments Cc:City Clerk Subject:Fw: - Firefighter staffing Date:Wednesday, September 27, 2023 8:00:27 AM City Clerk, Please include this as public comment for Item #14.1. Zach Hilton Gilroy City Council Member www.zachhilton.com #HiltonForCouncil @zachhilton_ca From: Raul Mayorga <truckermayorga@gmail.com> Sent: Tuesday, September 26, 2023 5:52 PM To: Mayor Marie Blankley <Marie.Blankley@ci.gilroy.ca.us>; Council Member Rebeca Armendariz <Rebeca.Armendariz@ci.gilroy.ca.us>; Council Member Dion Bracco <Dion.Bracco@ci.gilroy.ca.us>; Council Member Tom Cline <Tom.Cline@ci.gilroy.ca.us>; Council Member Zachary Hilton <Zachary.Hilton@ci.gilroy.ca.us>; Council Member Carol Marques <Carol.Marques@ci.gilroy.ca.us>; Council Member Fred Tovar <Fred.Tovar@ci.gilroy.ca.us> Subject: EXTERNAL - Firefighter staffing CAUTION: This email originated from an External Source. Please use proper judgment and caution when opening attachments, clicking links, or responding to this email. Hello, I reside off Mesa street and I’ve witnessed the delayed response from the fire department to a witnessed seizure call I saw on my way to work early morning of a 13 year old child on the front lawn. I sat with the patient and waited 18 minutes for response to said home on Mesa. That is unacceptable for the department to be so thin that it delayed treatment and transport of the patient. I pay taxes to the city and deserve the same response times as the folks on 3rd street or other areas like Mantelli or Club drive. This incident I witnessed and stopped for was around 730 am. And Statistics show most fires happen at night and when this happens victims have seconds not minutes. Please consider building more firehouses as was originally planned when Glen Loma was being developed. This is a fast growing city and you need to keep up. Regards, Tax payer Raul Mayorga 14.1 p. 478 of 478