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HomeMy WebLinkAbout110624 - 2.1 STUDY STUDY SESSION MEMORANDUM 2.1 TO: Mayor and Town Council November 6, 2024 SUBJECT: Fiscal Year 2023/24 Annual Comprehensive Financial Report for the Town of Danville BACKGROUND The Pun Group, LLP, has completed its examination of the financial statements for the Town of Danville and has approved the draft financial reports, including unqualified opinions as to their accuracy. The draft audit is attached to this report and the Town Council is now being asked to accept the FY 2023/24 Annual Comprehensive Financial Report (ACFR). FORMAT OF THE TOWN’S FINANCIAL REPORT The ACFR is presented in compliance with standards established by the Governmental Accounting Standards Board (GASB). GASB established standards to communicate information about the financial condition of the reporting entity, in this case, the Town. These standards are expressed through GASB Statements 31, 34, 40, 44 and 54. The ACFR is intended to provide the Town Council and other users with the information needed to make decisions about how well the Town is managing its resources. The ACFR is composed of three sections: Introductory, Financial and Statistical. • The Introductory Section familiarizes the reader with the Town and includes the Transmittal Letter, the Town’s organizational chart and a directory of public officials. • The Financial Section includes the Independent Auditor’s Report, Management’s Discussion and Analysis, Basic Financial Statements, Notes to the Financial Statements, Required Supplementary Information and Supplemental Information. • The Statistical Section includes Financial Trends, Revenue and Debt Capacity, Demographic and Economic Information and Operating Information. GASB 34 presents financial information from two perspectives. The first perspective, the Government-Wide Financial Statements, located at the beginning of the Financial Section, groups the Town’s funds into major and non-major funds and presents them in this condensed format. The value of the Town’s long-term debt and the Town’s infrastructure, net of depreciation, is included in the Government-Wide Statement of Net FY 2023/24 Audited ACFR 2 November 6, 2024 Assets and the Statement of Activities and Changes in Net Assets. The second perspective, the Fund Financial Statements, includes the Governmental Funds Balance Sheet and the Statement of Revenues, Expenditures and Changes in Fund Balance, but omits long-term debt and the value of infrastructure. Reconciliation of the Government- Wide Financial Statements and the Fund Financial Statements are presented after each of the Fund Financial Statements. Based on GASB criteria, the Town’s major funds are the General Fund, and the Capital Improvement Project Fund. The Town has also chosen to present the Lighting and Landscape Special Revenue Fund and the Regional Traffic Impact Fees Special Revenue Fund as major funds. The Statistical Section schedules are designed to show trends in five areas: financial, revenue capacity, debt capacity, demographic and economic information and operating information. Highlights of the Town’s accomplishments and fiscal activities are presented in the Transmittal Letter and Management Discussion and Analysis. ECONOMIC CONDITION OF DANVILLE’S GENERAL FUND General Fund The General Fund realized a net increase in fund balance of $7,957,096 (year over year 2022/23 to 2023/24). Revenues exceeded expenditures by $11,649,793 with net operating transfers to other funds of $3,692,697. Actual revenues exceeded final budgeted revenues by $6,980,841. General Fund expenditures were below budget by $2,132,852 with cost savings in most departments. These savings were largely attributable to the timing of filling for several vacancies position. Note 11 of the Notes to Basic Financial Statements details the reserves and designations against the June 30, 2024 Fund Balance. The recommended designated reserves, described in detail below, were reviewed by the Town Council Finance Committee on November 6, 2024, and require approval and appropriation by the full Town Council. TOWN FUND BALANCE It is recommended that the Town Council approve the following adjustments to fund balance reserves, which are reflected in the FY 2023/24 ACFR. FY 2023/24 Audited ACFR 3 November 6, 2024 Compensated Absences/Personnel The recommended transfer of $750,000 will increase the reserves for Compensated Absences/Personnel to ensure that sufficient funds are set aside to cover currently accumulated employee general leave hours. Contingency Fund The recommended transfer of $500,000 to the Contingency Fund is to replenish the fund for future use. 500 La Gonda The recommended transfer of $300,000 will assist with the cost of replacing the roof for 500 La Gonda Way. Asset Replacement The recommended transfer of $1,000,000 to the Asset Replacement Fund will assist with the replacement of obsolete capital assets including vehicles, equipment, furnishings, and technology. Capital Improvement Projects Fund The recommended transfer of $4,997,432 to the Capital Improvement Projects Fund will assist with the funding of future projects as determined by the Town Council. Other Reserves Against Fund Balance In addition to the above-designated reserves that require Town Council action to implement, a number of other reserves and designations have either been approved by the Town Council in prior years or are statutorily restricted and do not require further action. These include: 1) $16,009,768 for Operating Reserves; 2) $ 1,759,401 as a non-spendable receivable from the former CDA for the Cooperative Agreement Loan; 3) $ 1,465,232 for Compensated Absences; 4) $ 848,843 for the Reserve for Debt Service; 5) $ 510,470 for the Contingency Fund; 6) $ 877,166 for encumbrances and carryover expenditures; FY 2023/24 Audited ACFR 4 November 6, 2024 7) $ 1,985,327 Emergency Reserved 7) $ 1,516,413 for future use of the rental proceeds from the property at 500 La Gonda Way; 8) $ 10,000 for the Reward Fund When the operating transfers are combined with the above reserves and the designations requiring Town Council action, the entire excess of revenues and other sources over expenditures and other uses in the General Fund for the 2023/24 fiscal year will have been designated for specific purposes. Prepared by: Lani Ha Finance Director/Treasurer Reviewed by: Joseph A. Calabrigo Town Manager Attachment: A - General Fund Balance Analysis as of June 30, 2024 TOWN OF DANVILLE GENERAL FUND BALANCE ANALYSIS AS OF JUNE 30, 2024 Presented to Finance Committee on 11/06/24 June 30, 2024 June 30, 2023 TOTAL PRE-AUDIT FUND BALANCE AT 6/30/24 36,897,760$ 28,878,517$ Adjust for unrealized market value reported per GASB 31 requirement (3,762,414)$ (3,114,469)$ Adjust for unrealized leased income/loss reported per GASB 86/87 requirement (605,294)$ (721,576)$ FUND BALANCE without UNREALIZED MARKET value 32,530,052$ 25,042,472$ Less Reserves/Designations Against Fund Balance for: Operating Reserve 16,009,768$ 13,809,768$ Receivable from CDA 1,759,401$ 2,859,401$ Compensated Absences/Personnel 1,465,232$ 1,465,232$ Reserved for Debt Service 848,843$ 827,765$ Contingency 510,470$ 782,066$ Encumbrances 877,166$ 822,879$ Emergency Reserved 1,985,327$ -$ 500 La Gonda Way reserved 1,516,413$ 1,516,413$ Reward Fund 10,000$ 10,000$ Total Reserves/Designations Against Fund Balance 24,982,620$ 22,093,524$ CURRENT UNRESERVED/UNDESIGNATED FUND BALANCE AT 6/30/24 7,547,432$ 2,948,948$ Less funds recommended to be designated Compensated Absences 750,000$ -$ Contingency 500,000$ -$ 500 La Gonda (Roof)300,000$ -$ Asset Replacement 1,000,000$ -$ RECOMMENDED UNRESERVED/UNDESIGNATED FUND BALANCE AT 6/30/24 4,997,432$ 2,948,948$ TOWN OF DANVILLE FUND BALANCE OPTIONS June 30, 2024 CIP - General Purpose 4,997,432$ -$ Emergency Reserve Fund -$ 2,948,948 Optional Use of Recommended Available Fund Balance at 6/30/24 4,997,432 2,948,948 ATTACHMENT A Town of Danville, California Town Council Karen Stepper, Mayor • David Fong, Vice Mayor • Newell Arnerich, Councilmember Renée Morgan, Councilmember • Robert Storer, Councilmember Town Staff Joseph A. Calabrigo, Town Manager • Lani Ha, Finance Director/Treasurer for the Fiscal Year ended June 30, 2024 Annual Comprehensive Financial Report DRAF T 10.30. 2 0 2 4 DRAF T 10.30. 2 0 2 4 TOWN OF DANVILLE, CALIFORNIA ANNUAL COMPREHENSIVE FINANCIAL REPORT For the Fiscal Year Ended June 30, 2024 TOWN COUNCIL Karen Stepper, Mayor David Fong, Vice Mayor Newell Arnerich, Councilmember Renee Morgan, Councilmember Robert Storer, Councilmember TOWN MANAGER Joseph A. Calabrigo Prepared by the Finance Division Lani Ha, Finance Director/Treasurer Danville, CA DRAF T 10.30. 2 0 2 4 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Town of Danville Annual Comprehensive Financial Report For the Year Ended June 30, 2024 Table of Contents Page INTRODUCTORY SECTION (Unaudited) Letter of Transmittal .......................................................................................................................................................... i Organizational Chart .................................................................................................................................................... xvii Directory of Public Officials ...................................................................................................................................... xviii Certificate of Achievement for Excellence in Financial Reporting – Government Finance Officers Association ................................................................................................................ xix Statement of Purpose ...................................................................................................................................................... xx FINANCIAL SECTION Independent Auditors’ Report on Financial Statements ............................................................................................. 1 Management’s Discussion and Analysis (Required Supplementary Information) (Unaudited) ............................. 5 Basic Financial Statements: Government-Wide Financial Statements: Statement of Net Position ........................................................................................................................... 19 Statement of Activities ................................................................................................................................ 20 Fund Financial Statements: Governmental Fund Financial Statements: Balance Sheet ............................................................................................................................................. 26 Reconciliation of Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position ............................................................................. 29 Statement of Revenues, Expenditures and Changes in Fund Balances ....................................................... 30 Reconciliation of the Governmental Funds Statement of Revenues, Expenditures and Changes in Fund Balances to Government-Wide Statement of Activities ......................................................................................................................... 32 Fiduciary Fund Financial Statements: Statement of Fiduciary Net Position ............................................................................................................ 37 Statement of Changes in Fiduciary Net Position ......................................................................................... 38 Index to Notes to the Basic Financial Statements .................................................................................................... 41 Notes to the Basic Financial Statements................................................................................................................... 43 DRAF T 10.30. 2 0 2 4 Town of Danville Annual Comprehensive Financial Report For the Year Ended June 30, 2024 Table of Contents (Continued) Page FINANCIAL SECTION (Continued) Required Supplementary Information (Unaudited): Budgetary Information ............................................................................................................................................. 77 Budgetary Comparison Schedules: General Fund ............................................................................................................................................... 78 Lighting and Landscape Special Revenue Fund .......................................................................................... 80 Regional Traffic Impact Fees Special Revenue Fund ................................................................................. 81 American Rescue Plan Act Special Revenue Fund ..................................................................................... 82 Modified Approach for Town Street Infrastructure Capital Assets .......................................................................... 83 Supplementary Information: Non-Major Governmental Funds: Combining Balance Sheet .................................................................................................................................. 91 Combining Schedule of Revenues, Expenditures and Changes in Fund Balances ............................................ 96 Schedule of Revenues, Expenditures and Changes in Fund Balance – Budget and Actual: PEG Special Revenue Fund....................................................................................................................... 101 Gas Tax Special Revenue Fund ................................................................................................................ 102 Building and Planning Special Revenue Fund .......................................................................................... 103 Development Engineering Special Revenue Fund .................................................................................... 104 Child Care Special Revenue Fund ............................................................................................................. 105 Stormwater Pollution Control Program (SPCP) Special Revenue Fund ................................................... 106 Measure C/J Special Revenue Fund .......................................................................................................... 107 Donations and Contributions Special Revenue Fund ................................................................................ 108 General Development Impact Fees Special Revenue Fund ....................................................................... 109 Public Safety Special Revenue Fund ......................................................................................................... 110 Old Town Parking In-Lieu Special Revenue Fund ................................................................................... 111 Solid Waste Vehicle Impact Fee Special Revenue Fund .......................................................................... 112 Low and Moderate Income Housing Special Revenue Fund .................................................................... 113 DRAF T 10.30. 2 0 2 4 Town of Danville Annual Comprehensive Financial Report For the Year Ended June 30, 2024 Table of Contents (Continued) Page STATISTICAL SECTION (Unaudited) Financial Trends: Net Position by Component ............................................................................................................................... 118 Changes in Net Position ..................................................................................................................................... 120 Fund Balances of Governmental Funds ............................................................................................................. 124 Changes in Fund Balances of Governmental Funds .......................................................................................... 126 Revenue Capacity Governmental Activities Tax Revenues by Source ............................................................................................ 130 Assessed Value ................................................................................................................................................... 131 Direct and Overlapping Property Tax Rates ....................................................................................................... 132 Property Tax Levies and Collections ................................................................................................................. 133 Principal Property Taxpayers .............................................................................................................................. 134 Debt Capacity: Ratios of Outstanding Debt by Type .................................................................................................................. 136 Ratios of General Bonded Debt Outstanding ...................................................................................................... 137 Direct and Overlapping Governmental Activities Debt ...................................................................................... 139 Legal Debt Margin Information ......................................................................................................................... 140 Pledged-Revenue Coverage ................................................................................................................................ 142 Demographic and Economic Information: Demographic and Economic Statistics .............................................................................................................. 144 Principal Employers in the Town of Danville .................................................................................................... 145 Operating Information: Full-Time Equivalent Town Government Employees by Function ................................................................... 148 Operating Indicators by Function ...................................................................................................................... 149 Capital Asset Statistics by Function.................................................................................................................... 150 Independent Auditors’ Report on Internal Control Over Financial Reporting and on Compliance and Other Matters Based on an Audit of Financial Statements Performed in Accordance with Government Auditing Standards ........................................................................ 151 DRAF T 10.30. 2 0 2 4 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 INTRODUCTORY SECTION (Unaudited) DRAF T 10.30. 2 0 2 4 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 “Small Town Atmosphere Outstanding Quality of Life” 5 1 0 L A G O N D A W A Y , D A N V I L L E , C A L I F O R N I A 9 4 5 2 6 Administration Building Engineering & Planning Transportation Maintenance Police Parks and Recreation (925) 314-3388 (925) 314-3330 (925) 314-3310 (925) 314-3320 (925) 314-3450 (925) 314-3700 (925) 314-3400 November 19, 2024 Mayor and Town Council Town of Danville Subject: Fiscal Year 2023/24 Annual Comprehensive Financial Report The Annual Comprehensive Financial Report (ACFR) of the Town of Danville, California (Town) for the fiscal year (FY) ended June 30, 2024, is submitted in compliance with laws of the State of California and as prescribed by the Government Accounting Standards Board (GASB) Statement 34. This report was prepared by the Town of Danville Finance Division, and the responsibility for the accuracy of the data and the completeness and fairness of the presentation, including all disclosures, rests with the Town. To the best of our knowledge, the data included in the report is accurate in all material respects and is reported in a manner designed to present fairly the financial position and results of operations of the various funds of the Town. All disclosures necessary to enable the reader to gain an understanding of the Town's financial activities have been included. The ACFR represents the culmination of all budgeting and accounting activities of the Town during FY 2023/24. GENERAL INFORMATION ABOUT THE TOWN OF DANVILLE Incorporated in 1982, Danville is located in southern Contra Costa County, approximately 30 miles east of San Francisco and lies in the center of the San Ramon Valley. The Town comprises an area of 18.5 square miles and has 42,567 residents. Danville began as a small rural village during the 1850s. The first post office was established in 1860. Although the Town is suburban, it still retains its small-town character. Older well- maintained neighborhoods coexist with newer subdivisions and their modern amenities. The community enjoys natural creeks, hiking and biking trails, and dedicated open space. Mt. Diablo, at an elevation of 3,849 feet, rises to the east and Las Trampas Regional Wilderness, elevation 2,049 feet, creates the Town's western boundary. Danville's primary commercial district lies in the center of the community and offers resident-serving commercial businesses, boutique shopping, and fine dining. The Old Town area is the historical center of the Town. It is a source of pride to our residents and is the site of many holiday and special events which attract visitors throughout the year from around the Bay Area. DRAF T 10.30. 2 0 2 4 ii While Danville has remained predominantly residential, neighboring cities have developed job centers including major business parks located within minutes from the Town. The Town operates under the Council-Manager form of government, governed by a five- member Town Council elected at large and serving staggered four-year terms. Council elections are held in November of even-numbered years. The Town Manager and the City Attorney are appointed by the Town Council. The Town Manager appoints all Department Heads and through them all other employees of the Town. Areas of service delivery for the Town include General Government, Police Services, Administrative Services, Development Services, Maintenance Services and Recreation, Arts and Community Services. The Town contracts with the Contra Costa County Sheriff’s Office to provide police services. Additional services are provided by other agencies: fire service by the San Ramon Valley Fire Protection District, water service by the East Bay Municipal Utility District, wastewater service by the Central Contra Costa Sanitary District, and primary and secondary education by the San Ramon Valley Unified School District. The Town also contracts with private companies and individuals to provide certain building inspection, recreation and maintenance services. REPORTING ENTITY A preliminary step in preparing the ACFR for the Town was the identification of the reporting entity. In accordance with Government Accounting Standards Board Statement No. 14, related governmental entities were evaluated to determine if the Town was financially accountable for its operations. This report includes all fund types and account groups of the Town of Danville. The former Community Development Agency (CDA) of the Town was dissolved by AB x1 26 on January 31, 2012. As a result, all assets and debt liabilities of the former CDA were transferred to a Fiduciary Trust Fund, the Successor Agency (SA) to the former Community Development Agency of the Town of Danville, in FY 2011/12. On June 27, 2012, AB 1484 was passed and directed that the Low and Moderate Income Housing assets be transferred from the SA to the Town. The SA does not meet the definition of a "component unit," and its financial activities and assets are therefore not included in the Town’s financial statements. Although the SA is legally a separate entity, the governing board of the SA has the same membership as the Town Council. The Town is responsible for day-to-day activities, including the ability to appoint, hire, reassign or dismiss management. An Oversight Board consisting of seven members was appointed to the SA for the purpose of overseeing the dissolution of the CDA. The Town of Danville Financing Authority (a joint powers authority of the Town of Danville and the former CDA) is not included as a component unit since it is financially independent. In April 2017, the State Department of Finance approved the Last and Final Recognized Obligation Payment Schedule (ROPS) for the SA. This approval established the precise amount of each Redevelopment Property Tax Trust Fund (RPTTF) payment due to the SA until all of its obligations are retired in 2035. DRAF T 10.30. 2 0 2 4 iii The SA also completed disposition of all assets in 2017. Taken together, these steps eliminated the need for the Oversight Board and the preparation of any further ROPS. ECONOMIC CONDITION AND OUTLOOK Current Economic Condition As of June 30, 2024, the Town of Danville's financial condition continues to be sound. An indicator of the Town’s financial condition is the level of fund balance, reserved and unreserved, in its Governmental Funds, which include General, Special Revenue, Debt Service and Capital Projects. The Town has a policy of retaining a minimum of 20% of the coming year’s operating expenditures as an operating reserve against the General Fund fund balance. As of June 30, 2024, $16,009,768 or 41.3% is designated for this purpose. Additional reserves against the General Fund include various future operating costs, including General Fund purchase order encumbrance carryovers; reserves for Certificate of Participation debt issued by the Town in 2001 and 2005; a contingency for unforeseen expenditures; compensated absences/personnel; reward funds to help recover Town property; a reserve for the receivable for the funds loaned to the former CDA and funds to be used for maintenance of Town’s rental property. An additional $1,262,480 has been designated as a transfer to the Capital Improvement Program Project Fund. The Town’s conservative Investment Policy and practices continue to protect the principal of the Town’s investment portfolio. The Town’s portfolio is invested in U.S. Treasury bonds; U.S. Agency bonds; the State of California’s pooled fund; LAIF; and U.S. Corporate Notes with ratings of AA- or higher. The total General Fund fund balance of $36,897,758 represents 137.66% of total FY 2023/24 General Fund operating expenditures and 95.07% of operating expenditures from all funds. Additionally, the Town has $41,302,151 of Special Revenue funds, and $33,951,008 in Capital Projects funds. The Town’s five largest revenue sources account for 83.23% of all Town revenues. These include Property Tax providing 34.38% of revenues; Sales Tax providing 11.74%; Other Taxes and Intergovernmental providing 19.30%; Special Assessments providing 6.27% and Use of Money and Property providing 11.54% of revenues. Property Tax increased by $967,851 (5.11%) compared to FY 22-23, as assessed values were increased. Revenue trends from the past four years illustrate strong growth in assessed valuation. December 31, 2015 marked the sunset of the Sales Tax for Property Tax swap known as “the triple flip” that was enacted by the passage of Proposition 57 in 2004. Charges for Services increased by $206,995 (6.60%), as Recreation classes and programs increased. Recreation Fees and Charges, Building and Planning fees and Development Engineering fees all increased compared to prior year. DRAF T 10.30. 2 0 2 4 iv Sales Tax decreased by $668,661 -(8.95%) as online sales activity and brick and mortar businesses (restaurant and retail) has leveled off. Other Taxes and intergovernmental Fund Revenues increased by a net of $456,815 (4.26%), reflecting higher revenues from Gas Tax. Measure J funds and SPCP Special Assessments. LLAD Special Assessments increased slightly due to new construction added. Danville’s jobless rate as of September 2024 was 4.4% as compared to 4.1% nationwide, 5.3% in California, and 4.8% in Contra Costa County. Outlook for the Future The Town uses a multi-year financial planning process that includes estimates of future revenue and operating expenditure growth as well as capital needs to be financed from all funds over the next 10 years. The annual update of this model, the 2024/25 Operating Budget and Capital Improvement Program, was completed in April 2024 and adopted on June 4, 2024. General Fund revenues are projected to increase 3.90% from FY 2023/24 to FY 2024/25, largely attributable to a 5.30% increase in Property Tax Revenue, 1.5% increase in sales tax revenue, 21.70% increase in Franchise Solid Waste and 3.50% increase in Recreation Fees and Charges. Special Purpose revenues are projected to increase 7.20%, mostly due to increase of 28.70% in Building and Planning revenue, 2.50% in Gas Tax revenue, 2.50% in Measure J revenue, 3.00% in Solid Waste VIF revenue, and slight to no increases in other Special Revenues funds. Looking forward 10 years, General Purpose revenues are projected to increase 3.90% in FY 2024/25 and an average of 1.38% thereafter. Special Purpose revenues are projected to increase 7.20% in FY 2024/25, and an average of 1.00% through FY 2033/34. The 10-year projection includes cost increases that average 2.14% annually, reflecting anticipated adjustments to service demands as well as changes in the Consumer Price Index. The Town continues to evaluate the impact of current decisions on the long-term fiscal stability of the Town. By FY 2026/27, all four zones in the Lighting and Landscape Assessment District will require further General Fund subsidies, or an increase in assessments, in order to maintain current service levels. Despite the passage of Senate Bill 1 – The Road Repair and Accountability Act of 2017, which significantly increased the local streets and roads funds allocated back to Danville, Gas Tax revenues alone will not support all of the costs associated with maintaining the Town's street system over the next 10 years. Additional General Purpose and Special Purpose revenue resources, will continue to be needed to maintain the current Pavement Condition Index (PCI) and street maintenance service levels. Furthermore, the Town’s Capital Improvement Program will continue to require an annual infusion from the General Fund and other available resources in order to maintain the Town’s practice of paying cash for capital projects. DRAF T 10.30. 2 0 2 4 v The Town’s current funding of service delivery, capital projects, local streets and roads and long-term fiscal health depends on continued growth of the economy and avoidance of further negative fiscal actions by the State or voters. The dissolution of the former Community Development Agency continues to have a major negative impact on the Town by eliminating a major annual funding source for downtown improvements. While the Town will be repaid $1.76 million in funds owed by the former Community Development Agency through annual payments, further action from the State could adversely affect the Town’s fiscal condition. Additional financial information on the Town of Danville is provided in The Management Discussion and Analysis (MD&A). The Transmittal letter and MD&A are intended to provide complementary information to each other. MAJOR ACCOMPLISHMENTS AND INITIATIVES For Fiscal Year 2023/24 During FY 2023/24, the Town made substantial progress on key initiatives that will have lasting effects on community safety, infrastructure, and quality of life: 1. Major CIP Project - Downtown Master Plan Catalyst Project Completed engineering design on schedule and initiated construction on the $4.9 million project aimed at improving pedestrian safety and accessibility in Downtown Danville. Once complete, this project will add approximately 11,675 square feet of new public gathering space (Prospect Park Plaza, Village Theatre Plaza, and E. Linda Mesa Avenue seating area), artistic lighting elements, 18 new streetlights, three intersections with augmented bulb outs, and two raised intersections for traffic calming. 2. Major CIP Project – Diablo Vista Park Playground & Multi-Use Skate Park Completed engineering design and bid package for this project. As a result of the bidding process, this project was subsequently separated into two separate CIP projects, each with its own cost projections, engineering designs, plans, and specifications with the goal of re-bidding these projects in FY 2024/25. 3. Major CIP Project – Diablo Road Multi-Purpose Trail The December 31, 2022, winter storms significantly eroded the creek bank and altered the terrain upon which the future trail alignment depended. Consequently, much of the preliminary engineering efforts required updating. This included a new survey of the creekbank and adjacent roadway, re-design of the schematic project plans, and update to the hydrology study in response to State regulatory agencies’ conditions of approval. Updated plans and studies were submitted to the California Department of Fish and Wildlife and the San Francisco Regional Water Quality Control Board, and are awaiting final approval. DRAF T 10.30. 2 0 2 4 vi 4. Major CIP Project – Town Green Master Plan Completed discussions with the Parks, Recreation & Arts Commission and Arts Advisory Board regarding project component priorities, which led to a focus on the Town Studio (Maker Space) and Pavilion on the Town Green as project priorities. 5. Capital Maintenance - Parks and Athletic Facilities  Completed the replacement of 5 acres of synthetic turf at Sycamore Valley Park, extending the field’s usable life by another 8-10 years.  Completed renovation of Oak Hill Park playground replacement project.  Completed renovations of the turf in the large dog park at Hap Magee Ranch Park, rated best in the area by Diablo Magazine.  Resurfaced two Town-maintained tennis courts at Monte Vista High School. 6. Capital Maintenance - Community Buildings  Renovated the children’s reading area in the Danville Library, including new flooring, paint and furniture.  Initiated design of the Town Meeting Hall audio/visual renovation and replacement effort. 7. Capital Maintenance – Public Works Infrastructure  Completed construction of the Camino Ramon Improvements project.  Completed construction of the El Pintado Loop Drainage and Pavement Improvements.  Completed construction of the Loch Lomond, Starview, and Westridge Trash Rack projects.  Completed a drainage improvement project on Van Patten Drive was completed, alleviating chronic flooding across 500 feet of roadway.  Secured the authorization to proceed from Caltrans to construct the San Ramon Valley Boulevard Improvements project in the upcoming fiscal year, subsequent to the installation of fiber optic infrastructure along the same road alignment.  Continued design work for the $6 million project to replace the La Gonda Way bridge at Danville Boulevard.  Managed the street sweeping services contract, covering over 210 miles of streets, to ensure clean roadways and prevent pollutants from entering the Town’s 34 miles of creeks.  Completed installation of upgraded electric vehicle (EV) charging stations at four municipal parking lots downtown including the Clocktower parking lot, Railroad Avenue Parking Lot, Village Theatre Parking Lot and the Danville Library and Community Center Parking Lot.  Completed the annual creek cleaning program to reduce flood risks across the Town’s water system through in-house and contract efforts. DRAF T 10.30. 2 0 2 4 vii 8. Capital Maintenance – Long Range Fiscal Planning Initiated a feasibility study to consider updates to the Town-wide Lighting and Landscape Assessment District which supports ongoing maintenance of Town parks, buildings, roadside landscaping and street lighting, and contributes to the Town’s overall quality of life and property values. 9. Emergency Response and Recovery  Continued to work with the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (Cal OES) to recover up to $4.5 million in public assistance related to emergency repair and recovery costs attributable to the declared local emergency associated with the December 31, 2022, winter storms.  Completed emergency repairs and reconstruction of 300 linear feet of the San Ramon Creek creekbank and Front Street north of Diablo Road.  Completed emergency storm drain pipeline replacement on East Linda Mesa Avenue. 10. Community Events and Economic Development  Approved 11 Business Promotion Grants totaling $30,000, providing assistance to over 200 local businesses. This represents a 4.48% increase in grant dollars awarded over the prior year.  Promoted 36 local businesses and reached over 55,000 people through regional holiday shopping marketing efforts. Developed and distributed a survey to participants to gather feedback as part of an ongoing effort to improve program effectiveness.  Refocused the Business Resources webpage to enhance its interface to be more user- friendly and accessible. This includes launching the “Danville Prospector” tool for site selection to make it easier for businesses to find the right location in Danville.  Developed and implemented the "Open in Danville" program to welcome new businesses to Danville and introduce them to Town resources. The goal of the program is to help new businesses get started and succeed in Danville. 17 new businesses have been introduced.  Hosted 10 community events, drawing over 53,000 attendees in total, including the Kiwanis Danville July 4th Parade (35,000 attendees) and the Lighting of the Old Oak Tree (8,000 attendees).  Supported local community-based organizations, such as the Danville Area Chamber of Commerce, in their efforts to host community events including: Fall Rock N’ Stroll (300 attendees), Health & Wellness Day on the Green (900 attendees), Spring Sip n’ Stroll (475 attendees) and Summer Arts Fling (250 attendees). 11. Communications  Created marketing materials for 168 programs, events, and projects.  Ensured consistent and near-constant communication with downtown businesses owners over the first 3 months of the Downtown Catalyst Project construction through in person visits and 500 fliers, updates through weekly business-direct DRAF T 10.30. 2 0 2 4 viii emails, as well as daily contact with the project management team and Economic Development staff.  Posted weekly updates and traffic advisories to the Town’s social media about the Downtown Master Plan Catalyst Project, as well as general posts about Downtown businesses open during construction. The 12 posts in the first 3 months of the project yielded 11,000 impressions.  Launched a new email marketing platform as well as a new youth-focused recreation activities email. Total subscriptions on the platform are more than 15,000.  Relaunched the Danville Police Department’s Instagram account. Utilize the account to share public safety-related news and updates as well as to build continue the strong connection between the community and its police department. Doubled followers from around 600 to more than 1,200 in this fiscal year, the first full year of activity.  Town social media account followers at fiscal year-end: 10,163 Instagram, 10,095 Facebook. 12. Housing and Private Development  Secured State certification on the Town’s 2023–2031 Housing Element on April 9, 2024, the culmination of a 14-month effort responding to questions and modifications required by the California State Department of Housing and Community Development.  Reviewed and processed 161 planning applications ranging from variances and land use permits to subdivisions and development plans.  Revised and approved 943 building permits (71.8% of which were received online), conducting 686 plan checks and 3,199 building inspections.  Reviewed and processed 500 encroachment permits for private or utility-related construction activity within the public right-of-way.  Opened and facilitated the resolution of 416 code enforcement cases, a 37% increase from the prior year. 13. Legislative Advocacy: Continued working with Tri-Valley Cities Coalition and state legislators to advocate for changes to legislation in a manner that benefits Danville. The coalition tracked and provided input on 23 state bills, 3 federal bills, and 3 state measures. 14. Public Safety  Engaged in a collaborative initiative with mental health response units A3 (Anyone, Anywhere, Anytime) and MHET (Mental Health Evaluation Team) to implement alternative strategies for addressing mental health crises. This effort resulted in a reduction of involuntary mental health commitments to 72 for the year, a decrease from the 10-year average of 91.4 commitments.  Continued the Police Chief's weekly "10-8" live video podcast, which experienced viewership figures between 50 to 400 per episode on both Facebook and YouTube platforms. DRAF T 10.30. 2 0 2 4 ix  Attained an 83% success rate in the juvenile diversion program, with five juveniles successfully completing the program.  Handled a total of 22,658 service calls, marking an increase from 19,337, primarily attributed to enhanced proactive community policing initiatives.  Escalated traffic enforcement efforts in response to increased collision rates and public complaints regarding driving conduct, resulting in an increase in citations issued from 1,922 to 3,850.  Maintained a case closure rate for violent crimes (Homicide, Rape, Robbery, and Aggravated Assault) that is more than double the national average. 15. Recreation  5,285 households served though 1,649 recreation classes which had a total of 20,753 participants. Of this total, 6,188 were senior participants.  Provided social connections with 1,554 volunteers for various Town programs throughout Town.  Facilitated 540 facility rentals, comprised of 530 picnic and 35 bocce court rentals. 16. Technology and Cyber Security  Continued design of the Townwide Fiber Optic Interconnect project, incorporating and installing conduit within street segments under construction (such as Hartz Avenue and San Ramon Valley Boulevard).  Implemented new and refined technologies and network infrastructure in the Town Offices. Improved bandwidth to the various Town sites and the Internet. Updated audio/video systems at various sites.  Continued to implement additional security measures and monitor cybersecurity issues to protect the Town from these ongoing types of attacks.  Deployed monthly email phishing tests to all users and provide yearly cyber security awareness training.  Implemented new PCI compliant payment terminals at Permit Center and Recreation department for taking secure credit card payments. 17. Transportation and Traffic Safety  Completed design and construction of the Paraiso Drive (west of Brookside Drive), Orange Blossom, and Greenbrook Neighborhood Traffic Management Program (NTMP) projects.  Continued implementing the Townwide Bicycle Facility Improvements project including Camino Ramon Improvements and design of new bicycle facility for San Ramon Valley Blvd Improvements (to be implemented during construction).  Completed design for three Iron Horse Trail Crossings (Love Lane, Del Amigo Road, West Linda Mesa) and one School Crossing Safety Improvements (Stone Valley Road at Monte Sereno) and currently awaiting authorization to proceed with construction from Caltrans.  Continued design of additional improvements along the Iron Horse Trail Crossings at Greenbrook Drive, Paraiso Drive, and El Capitan Drive. DRAF T 10.30. 2 0 2 4 x  Received Transportation Development Act (TDA) funds to acquire the Rectangular Rapid Flashing Beacon (RRFB) equipment needed to complete the Iron Horse Trail network (including Hartford Road and West Prospect Avenues).  Continued to work with regional and subregional agencies such as the Contra Costa Transportation Authority (CCTA) and Tri-Valley Transportation Council (TVTC) to implement regional improvements to intraregional travel and minimize cut-through traffic in Danville.  Continued to actively participate in the TRAFFIX Joint Powers Authority (JPA) and completed re-negotiation of a new contract for the school bus operator. 18. Public Recognition:  Received the outstanding financial reporting for the Annual Comprehensive Financial Report from the Government Finance Officers Association for 20 consecutive years.  Danville has been recognized as the safest city in California by multiple sources, such as Property Club and ADT. This distinction is based on comprehensive evaluations of crime statistics, community facilities, and overall quality of life, focusing on cities with populations over 30,000. This achievement marks the seventh consecutive year that Danville has been awarded this prestigious title by at least one online publication. (https://propertyclub.nyc/article/safest-cities-in-california - https://www.adt.com/resources/safest-cities-california) For Fiscal Year 2024/25 The Town will continue its momentum into FY 2024/25 with the following key projects and initiatives: 1. Major CIP Project - Downtown Master Plan Catalyst Project: Complete construction of this downtown safety project which would add approximately 11,675 square feet of new public gathering space (8,500 SF at the Village Theatre Plaza, 2,800 SF at Prospect Park Plaza, and 375 SF at E. Linda Mesa Avenue), artistic lighting elements, 18 new streetlights, three intersections with augmented bulb outs, and two raised intersections for traffic calming. 2. Major CIP Project – Diablo Vista Park Playground & Multi-Use Skate Park: Complete construction of one or more park components. 3. Major CIP Project – Diablo Road Multi-Purpose Trail: Secure regulatory permits from CDFW and RWQCB and begin construction. 4. Major CIP Project – Town Green Master Plan: Complete the engineering design phase for the Town Green Master Plan, focusing on the Town Studio and Pavilion on the Town Green. DRAF T 10.30. 2 0 2 4 xi 5. Capital Maintenance - Parks and Athletic Facilities:  Resurface the two tennis courts at Diablo Vista Park.  Resurface the basketball court and two tennis courts at Diablo Vista Park.  Renovate the turf in the large dog park at Hap Magee Ranch Park, rated the best dog park in the area by Diablo Magazine 6. Capital Maintenance – Public Works Infrastructure  Award new contracts for roadside landscape maintenance services.  Continue to manage street sweeping services contract, covering over 210 miles of streets, to ensure clean roadways and prevent pollutants from entering the Town’s 34 miles of creeks.  Complete the annual creek cleaning program to reduce flood risks across the town’s water system through in-house and contract efforts.  Complete installation of the fiber optic cable interconnect along Hartz Avenue and San Ramon Valley Boulevard  Complete the Camino Tassajara/Sycamore Valley Road Soundwall repairs  Continue with design work for the $6 million project to replace the La Gonda Way bridge at Danville Boulevard.  Begin engineering design of the Sycamore Valley Road Improvement Project  Initiate next phase of Storm Drain Master Plan development (Phase 2) 7. Capital Maintenance – Long Range Fiscal Planning: Conduct a Proposition 218 ballot proceeding, asking Danville property owners to vote on an increase in Lighting and Landscape Assessments. 8. Emergency Response and Recovery  Continue to work with the Federal Emergency Management Agency (FEMA) and the California Office of Emergency Services (Cal OES) to recover up to $2 million in public assistance related to emergency repair and recovery costs attributable to the declared state or a local emergency due to the December 31, 2022, storms.  Complete one (1) EOC table-top exercise.  Update equipment/supplies staged for the EOC.  Complete and adopt the new Local Hazard Mitigation Plan.  Complete and adopt the updated Emergency Operations Plan. 9. Community Events and Economic Development  Launch the Town’s first Oktoberfest celebration, bringing back a family event to Downtown in the fall.  Launch a mobile Discover Danville walking tour app, with historic sites as well as dining and retail.  Launch a townwide email newsletter for businesses, providing updates and resources.  Initiate a regular meeting of Downtown business owners to foster collaboration and growth. DRAF T 10.30. 2 0 2 4 xii  Initiate programming for the new Prospect Park Plaza performance space in tandem with “shop local” holiday programs. 10. Communications  Launch an arts and culture email newsletter.  Support educational efforts for the Lighting and Landscape Assessment District ballot.  Launch a fully in-house holiday marketing campaign. 11. Housing and Private Development Consistent with the Danville 2030 General Plan, the Town’s 2023-2031 Housing Element certified by the State of California and State housing legislation:  Review and process a 167-unit mixed Townhouse and apartment multifamily development on a 10-acre site is located at 3020 Fostoria Way. This project was approved by the Planning Commission on January 23, 2024 with 43 apartment units will be restricted to low and very low-income households.  Review and process a 99-unit four-story senior condominium development located on 3.17-acre site at 425 El Pintado Road.  Review and process an 18-unit single family development on 19.5-acre site located at 2570 Camino Tassajara and 45 Sherburne Hills Road, with all 18 residences to include Accessory Dwelling Units (ADUs).  Review and process an application for a 105-unit assistant living facility on the 2.68- acre Sloat Garden Center site at 828 Diablo Road.  Review and process an Environmental Impact Report (EIR) for a 19-unit single family development application on the 100-acre Elworthy East property accessible via Como Way. 12. Legislative Advocacy: Continue to work with the Tri-Valley Cities Coalition and state legislators to advocate for changes to legislation in a manner that benefits Danville. 13. Public Safety  Data-Driven Policing: Employ advanced data analytics to optimize the deployment of officers' proactive efforts, ensuring that policing strategies are informed and adjusted based on quality data and analysis.  Expanding Collaborative Programs: Deepen partnerships with mental health professionals to ensure that police officers are equipped with the latest training in de- escalation techniques, crisis intervention, and mental health awareness.  Neighborhood Watch Expansion: Encourage and organize more neighborhood watch groups that actively involve community members in local safety, fostering a partnership between police and residents.  Mental Health Support System: Establish or enhance a comprehensive mental health support system for officers, including regular check-ins, access to counseling, and stress management workshops. This initiative supports not just the officer’s well- DRAF T 10.30. 2 0 2 4 xiii being but also indirectly impacts the quality of community interactions by having mentally healthy officers on duty. 14. Recreation: Continue to work with the Parks, Recreation and Arts Commission and Arts Advisory Board toward the implementation and expansion of the strategies and recommendations of the Plan Update, focusing on the Town Green, Town Studio, Art Integration (Visual and Performing Arts), Community Outreach, Transportation, Park Facilities, and Social Vision 15. Technology and Cyber Security  Configure and deploy a new Capital Improvement Program (CIP) planning and budgeting software to collect, prioritize, and evaluate capital investment projects in one system to understand long-term fiscal impacts to the operating budget.  Deploy a new solution for the Police Department to accept credit card payments at the Police Front Counter.  Complete installation of a new state-of-the-art audio/visual system at the Town Meeting Hall, including a high-definition video wall, wireless conference microphones, personal viewing monitors, HD camera, new assistive listening system and all new backend hardware.  Continue collaborating with Development Services to design a Townwide Fiber Optic Interconnect project, incorporating and installing conduit within street segments under construction (such as Hartz Avenue and San Ramon Valley Boulevard) to avoid re-opening the pavement for fiber optic installation in the future.  Continue updating audio/video systems at Town sites.  Continue to implement additional security measures and monitor cybersecurity issues to protect the Town from these ongoing types of attacks.  Continue deploying monthly email phishing tests to all users and provide yearly cyber security awareness training. 16. Transportation and Traffic Safety  Begin engineering design of the CCTA “Smart Signals” project funded through the OBAG III grant with final recommendations targeted for early 2025.  Begin engineering design of the Signal Modernization Project funded through a federal earmark with final design recommendations targeted for early 2025.  Begin engineering design of the Signal Safety Corridor Project.  Complete design of the HAWK signal for the Diablo Road Trail crossing at Fairway Drive, connecting to the Barbara Haile Trail. FINANCIAL CONTROLS AND INFORMATION The Town's financial records for general governmental operations are maintained on a modified accrual basis with revenues recorded when available and measurable and expenditures recorded when the services or goods are received and the liability incurred. DRAF T 10.30. 2 0 2 4 xiv Town Management is responsible for establishing and maintaining an internal control structure designed to ensure that assets are protected from loss and theft or misuse; and for compiling accounting data which is adequate for the preparation of financial statements in conformity with generally accepted accounting principles. The internal control structure is designed to provide reasonable, but not absolute, assurance that these objectives are met. The concept of reasonable assurance recognizes that: (1) the cost of a control should not exceed the benefits likely to be derived and (2) the valuation of costs and benefits requires estimates and judgments by management. Budgeting Controls The Town maintains budgetary controls. The objective of these budgetary controls is to ensure compliance with legal provisions embodied in the annual appropriated budget approved by the Town Council. Activities of all governmental type funds are included in the annual appropriated budget. For FY 2023/24, the budgetary level of control (that is the level at which expenditures cannot legally exceed the appropriated amount) for the operating budget was at the fund level. For the capital improvement budget, the level of control was the individual capital improvement project. The Town also utilizes the encumbrance system as a management control technique to assist in controlling expenditures. All appropriations lapse at year-end. However, encumbrances and appropriations for unfinished capital and other projects are reviewed and, when warranted, are reappropriated ("carried over") as part of the following year's budget. Risk Management The Town is a member of the Municipal Pooling Authority (MPA), a consortium of 20 California cities, including 17 in Contra Costa County, one in San Mateo County, one in Santa Clara County and one in San Joaquin County. The Risk Management Authority is a risk-sharing, self-insured pool providing insurance benefits to its members. Insurance activities are financed by charges to member cities, and no long-term debt has been incurred by the Authority. The Town participates in the Authority's self-insured general and auto liability programs and purchases commercial property and earthquake insurance through MPA. Annual premiums are determined based on an actuarial study using a retrospective method. During FY 2023/24, the Town was responsible for the first $5,000 of general liability costs and $2,000 and $3,000 for Town and police auto liability respectively, for each of its own claims. The Town’s limits of coverage per claim are $29 million for general liability and $250,000 for auto liability. The Town has set aside $65,243 in the General Fund to offset a liability and finance anticipated settlement of claims. DRAF T 10.30. 2 0 2 4 xv The Town is also a member of the Authority's workers' compensation pool. The Authority is responsible for the first $500,000, per claim. This program carries excess insurance above $500,000 per claim. The Town has implemented various risk control techniques and loss prevention and reduction programs, including employee training and education. OTHER INFORMATION Independent Audit It is the policy of the Town of Danville to have an audit performed annually by an independent certified public accountant. The independent audit of the June 30, 2024 financial statements was performed by The Pun Group, LLP. Their opinion is included with the general purpose financial statements. Acknowledgments The development of this report would not have been possible without the dedication and efforts of the entire Finance Division team. We would like to express our appreciation to all staff members of the Town and our independent auditing firm who made this report possible. The Town’s prudent fiscal management policies and practices are guided by the leadership and support of the Danville Town Council. We appreciate the Town Council’s support and continued leadership. Respectfully submitted, Joseph A. Calabrigo Lani Ha Town Manager Finance Director/Treasurer DRAF T 10.30. 2 0 2 4 xvi DRAF T 10.30. 2 0 2 4 Town of Danville Organizational Chart xvii DRAF T 10.30. 2 0 2 4 Town of Danville Directory of Public Officials xviii TOWN COUNCIL Karen Stepper Mayor David Fong Vice Mayor Newell Arnerich Councilmember Renee Morgan Councilmember Robert Storer Councilmember TOWN STAFF Joseph A. Calabrigo Town Manager Robert Ewing City Attorney Marie Sunseri City Clerk Tai Williams Assistant Town Manager Allan Shields Chief of Police Lani Ha Finance Director/Treasurer Dave Casteel Maintenance Services Director Diane Friedmann Development Services Director Henry Perezalonso Recreation, Arts & Community Services Director DRAF T 10.30. 2 0 2 4 Town of Danville Certificate of Achievement for Excellence in Financial Reporting – Government Finance Officers Association xix DRAF T 10.30. 2 0 2 4 Town of Danville Statement of Purpose xx DANVILLE IS A COMMUNITY DEDICATED TO PROVIDING AN EXCEPTIONAL QUALITY OF LIFE FOR ITS CITIZENS To achieve this level of excellence, Danville will:  Value and enhance its heritage and natural environment;  Build innovative processes for citizen involvement and stimulate active participation in local government decision making;  Foster personal responsibility, ethical standards and commitment among citizens;  Achieve high quality development in scale with the natural surroundings;  Deliver superior municipal and educational services;  Encourage the arts, cultural and recreation activities, and community celebrations; and  Exercise strong leadership in regional issues. These goals enhance a sense of positive “small town” values related to the family, neighborhood, and community. DRAF T 10.30. 2 0 2 4 FINANCIAL SECTION DRAF T 10.30. 2 0 2 4 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 INDEPENDENT AUDITORS’ REPORT To the Mayor and Members of the Town Council of the Town of Danville Danville, California Report on the Financial Statements Opinions We have audited the accompanying financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Danville, California (the “Town”), as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the Town’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, each major fund, and the aggregate remaining fund information of the Town, as of June 30, 2024, and the respective changes in financial position 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 (“GAAS”) and the standards applicable to financial audits contained in Government Auditing Standards issued by the Comptroller General of the United States (“Government Auditing Standards”). 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 Town, and to meet our other ethical responsibilities, in accordance with the relevant ethical requirements relating to our audit. We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for our audit opinions. Responsibilities of Management for the Financial Statements Management is responsible for the preparation and fair presentation of the financial statements in accordance with accounting principles generally accepted in the United States of America, and for the design, implementation, and maintenance of internal control relevant to the preparation and fair presentation of financial statements that are free from material misstatement, whether due to fraud or error. In preparing the financial statements, management is required to evaluate whether there are conditions or events, considered in the aggregate, that raise substantial doubt about the Town’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. DRAF T 10.30. 2 0 2 4 To the Mayor and Members of the Town Council of the Town of Danville Danville, California Page 2 2 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 GAAS and Government Auditing Standards will always detect a material misstatement when it exists. The risk of not detecting a material misstatement resulting from fraud is higher than for one resulting from error, as fraud may involve collusion, forgery, intentional omissions, misrepresentations, or the override of internal control. Misstatements are considered material if there is a substantial likelihood that, individually or in the aggregate, they would influence the judgment made by a reasonable user based on the financial statements. In performing an audit in accordance with GAAS and Government Auditing Standards, we:  Exercise professional judgment and maintain professional skepticism throughout the audit.  Identify and assess the risks of material misstatement of the financial statements, whether due to fraud or error, and design and perform audit procedures responsive to those risks. Such procedures include examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements.  Obtain an understanding of internal control relevant to the audit in order to design audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Town’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 Town’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. Other Matters Required Supplementary Information Accounting principles generally accepted in the United States of America require that the Management’s Discussion and Analysis, Budgetary Information, Budgetary Comparison Schedules for General Fund, Lighting and Landscaping Special Revenue Fund, Regional Traffic Impact Fee Special Revenue Fund, and American Rescue Plan Act Special Revenue Fund, and Modified Approach for Town Street Infrastructure Capital Assets be presented to supplement the basic financial statements. Such information, 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. DRAF T 10.30. 2 0 2 4 To the Mayor and Members of the Town Council of the Town of Danville Danville, California Page 3 3 Supplementary Information Our audit was conducted for the purpose of forming opinions on the financial statements that collectively comprise the Town’s basic financial statements. The combining and individual nonmajor fund financial statements 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 GAAS and Government Auditing Standards. In our opinion, the combining and individual nonmajor fund financial statements 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 audits of the basic financial statements, our responsibility is to read the other information and consider whether a material inconsistency exists between the other information and the basic financial statements, or the other information otherwise appears to be materially misstated. If, based on the work performed, we conclude that an uncorrected material misstatement of the other information exists, we are required to describe it in our report. Other Reporting Required by Government Auditing Standards In accordance with Government Auditing Standards, we have also issued our report dated November 19, 2024, on our consideration of the Town’s internal control over financial reporting and on our tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements and other matters. The purpose of that report is to describe the scope of our testing of internal control over financial reporting and compliance and the results of that testing, and not to provide an opinion on internal control over financial reporting or on compliance. That report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the Town’s internal control over financial reporting and compliance. Walnut Creek, California November 19, 2024 DRAF T 10.30. 2 0 2 4 4 This page intentionally left blank DRAF T 10.30. 2 0 2 4 5 MANAGEMENT’S DISCUSSION AND ANALYSIS (UNAUDITED) The Town of Danville’s (Town) Financial Statements are issued in the format prescribed by the provisions of Government Accounting Standards Board Statement 34 (GASB No. 34). This discussion and analysis of the Town’s financial performance provides an overview of the Town’s financial activities for the fiscal year ended June 30, 2023. Please read it in conjunction with the accompanying transmittal letter, the Basic Financial Statements and the accompanying notes to those financial statements. FINANCIAL HIGHLIGHTS  The Town’s net position as of June 30, 2024 increased $8,521,551 or 2.9% from $290,971,462 to $299,493,013.  Total assets were $322,519,782 and total liabilities were $19,596,774, leaving net position of $299,493,013. Of this amount $71,129,133 is classified as unrestricted and with the future receipt of $1,759,401 of loan receivable from the former Community Development Agency (CDA), may be used to provide ongoing services and capital projects to residents and creditors.  Governmental funds for the Town have combined fund balances of $112,150,917. Of this amount $39,255,625 is restricted by external parties, $67,758,647 is committed for ongoing and future activities, $846,011 is classified as nonspendable, and $881,914 is unassigned, reflecting the future of receiving the loan proceeds from the cooperative agreement to the former Community Development Agency and fund received for services that has not been rendered by the Town, and $3,408,720 has been assigned for ongoing operations.  The Town's General Fund fund balance increased 27.5% from $28,940,662 to $36,897,758. The fund balance includes funds reserved or designated for debt service, future capital projects, ongoing operations, and an operating reserve of $16,009,768 (41.3%) of FY 23/24 operating expenditures. Sacramento County Superior Court issued a ruling on September 5, 2014, concluding that the reentered Cooperative Agreement between the Successor Agency and the Town of Danville was an enforceable obligation. The State appealed the Superior Court decision, and in May 2015, the State dismissed its appeal. At the same time, the Department of Finance accepted the Agreement as an enforceable obligation. The Town has decided to retain the amount that was approved by the Department of Finance, $1,759,401 as a loan receivable on its books, and reserve an offsetting amount in fund balance. OVERVIEW OF THE FINANCIAL STATEMENTS This discussion and analysis is intended to serve as an introduction to the Town's basic financial statements, which consists of three components: 1) Government-wide Financial Statements, 2) Governmental Fund Financial Statements and 3) Notes to the Basic Financial Statements. This report also contains supplementary information in addition to the basic financial statements. DRAF T 10.30. 2 0 2 4 6 Reporting the Town as a Whole - Government-Wide Financial Statements The Government-Wide Financial Statements provide a longer-term view of the financial position of the Town as a whole, including all capital assets and long–term liabilities on the full accrual basis. This presentation is similar to that of a private-sector business. Over time, increases or decreases in the Town’s net position may serve as one useful indicator of the Town’s overall financial health. Other factors to consider are changes in the Town’s property tax base and the condition of the Town’s roads. The Statement of Activities and Changes in Net Position provides information on how the Town's net position changed during the fiscal year. All changes in net position are reported as soon as the underlying event giving rise to the change occurs, regardless of the timing of the related cash flows. Therefore, revenues and expenses are reported in this statement for some items that will only result in cash flows in future fiscal periods (for example, long term debt payments due and capital asset depreciation). There is an emphasis on measuring net revenues and expenses of each of the Town’s programs. The Fiduciary Fund Financial Statements provide financial information about activities for which the Town acts solely as a trustee or agent for the benefit of those outside of the government. Fiduciary funds reported in the Annual Comprehensive Financial Report (ACFR) for Danville include the Deposits fund and the Successor Agency Trust Fund. In the Statement of Net Position and the Statement of Activities and Changes in Net Position, the Town's activities are separated as follows: Governmental Activities: All of the Town’s basic services are considered to be governmental activities, including general government, police, maintenance, development, transportation and recreation services. Governmental activities are generally supported by taxes and intergovernmental revenues. Reporting the Town’s Most Significant Funds - Governmental Fund Financial Statements The Fund Financial Statements provide detailed information about the most significant funds and group the remaining funds together under the column heading, "Non-Major Governmental Funds.” Some funds are required to be established by State law and by bond covenants. In addition, the Town Council may establish other funds to help it control and manage money for particular purposes or to show that it is meeting legal responsibilities for using certain taxes, grants, and other money.  Governmental Funds—Most of the Town’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 financial assets that can readily be converted to cash. The Governmental Fund Statements provide a detailed short-term view of the Town’s general government operations and the basic services it provides. Governmental funds information help determine whether there are more or fewer financial resources that can be spent in the near future to finance the Town’s programs. Capital assets and other long-lived assets, along with long-term liabilities, are not presented in the Governmental Fund Financial Statements. The relationship (or differences) between governmental activities (reported in the Statement of Net Position and the Statement of Activities and Changes in Net Position) and Governmental Funds Financial Statements are explained in a reconciliation schedule following each Governmental Fund Financial Statement. DRAF T 10.30. 2 0 2 4 7 Reporting the Town’s Fiduciary Responsibilities The Town is the trustee, or fiduciary, for certain amounts held on behalf of developers, property owners, assessment district bond holders, the Successor Agency and others. The Town’s fiduciary activities are reported in separate Statements of Fiduciary Net Position and Changes in Fiduciary Net Position. The Town provides a Defined Contribution Pension Plan for all qualified employees. We exclude these activities from the Town’s other financial statements because the Town cannot use these assets to finance its operations. The Town is responsible for ensuring that the assets reported in these funds are used for their intended purposes. Notes to the Financial Statements The Notes provide additional information that is essential to a full understanding of the data provided in the Government-Wide and Governmental Fund Financial Statements. Other Information In addition to the Basic Financial Statements and accompanying notes, this report also presents certain Required Supplementary Information concerning the Town’s funding of its obligation to provide pension benefits to its employees, budgetary comparison schedules for the General Fund, each major Special Revenue Fund and schedules and disclosure of the modified approach for reporting the Town’s infrastructure. THE TOWN AS A WHOLE - GOVERNMENT-WIDE FINANCIAL ANALYSIS The Town’s combined net position for fiscal year ended June 30, 2024 and 2023 was: Table 1 Net Position Governmental Activities Increase 2024 2023 (Decrease) Current and other assets 129,997,756$ 122,315,458$ 7,682,298$ Capital assets, net 192,522,026 192,929,870 (407,844) Total assets 322,519,782 315,245,328 7,274,454 Current liabilities 14,891,125 15,402,556 (511,431) Long-term liabilities 4,705,649 5,255,224 (549,575) Total liabilities 19,596,774 20,657,780 (1,061,006) Deferred inflows of resources 3,429,995 3,616,086 (186,091) Net position: Net investment in capital assets 188,179,513 188,058,533 120,980 Restricted for: Debt service 1,777,459 1,641,685 135,774 Special projects 38,406,783 34,859,241 3,547,542 Unrestricted 71,129,258 66,412,003 4,717,255 Total net position 299,493,013$ 290,971,462$ 8,521,551$ DRAF T 10.30. 2 0 2 4 8 The Town’s Net Positions from Governmental Activities increased 2.9% from $290,971,462 to 299,493,013. This increase of $8,521,551 comes from the change in net position as recorded in the Statement of Activities and flows through the Statement of Net Position. Program expenses by function, general revenues by major source, excess and/or deficiency of revenues over expenses before contributions to permanent fund principal, special, and extraordinary items, and total assets are presented in the Statement of Activities and Changes in Net Position. The following is an explanation of the changes between fiscal years as shown in Table 1: Total assets increased $7,274,454:  Current and other assets increased $7,682,298 reflecting an increase in cash and investments. Capital assets, net of depreciation, decreased $(407,844) reflecting expenditures for capital projects during the year. Total liabilities decreased $(1,061,006):  Current liabilities decreased by a net of $(511,431), due largely to decrease in accounts payable, wages payable, retention (for capital projects), and deposit payable.  Non-current liabilities decreased a net of $(549,575) reflecting payment of long-term debt principal of $580,000 that was paid according to schedule, an increase of $114,489 in compensated absences, and a decrease in Subscription liability of $(71,855). Net Position:  Restricted net assets increased a net of $3,683,316. Special Revenue funds were spent for capital projects as budgeted. Debt Service funds increased by $135,774 reflecting the net change in annual RPTTF funds received for scheduled debt service payments of the Town's COPs and the increase in the reserved fund for debt service. Special Projects funds increased by $3,547,542 as funds were needed for operations or appropriated for capital expenditures.  Unrestricted net position, which are designated by Council for specific future capital improvements or economic stability, increased by $4,717,130, reflecting solid revenues and controlled costs, which enabled the transfer of $4.86 million of General Fund funds to be transferred to Capital Improvement funds for future capital projects and Asset Replacement funds and LLAD funds for its operating expenses and Operating Reserve fund. Capital improvements include park improvements, road maintenance, traffic control measures and general Town improvements. DRAF T 10.30. 2 0 2 4 9 Government Activities Table 2 presents the gross revenues and expenditures for the Town as whole. Table 2 Revenues and Expenses Governmental Activities Increase 2024 2023 (Decrease) Revenues - Governmental Activities Program revenues: Charges for services 10,511,778$ 10,205,661$ 306,117$ Operating grants and contributions 3,876,515 2,367,059 1,509,456 Capital grants and contributions 3,759,810 5,050,477 (1,290,667) Total program revenues 18,148,103 17,623,197 524,906 General revenues: Taxes: Property 19,905,678 18,937,827 967,851 Sales 6,799,187 7,467,848 (668,661) Motor vehicle 53,934 44,757 9,177 Franchise 3,502,709 3,383,163 119,546 Other 360,676 341,405 19,271 Investment earnings (loss)5,392,910 998,731 4,394,179 Miscellaneous 2,879,111 2,501,924 377,187 Reimbursement from Successor Agency 867,219 825,175 42,044 Total general revenues 39,761,424 34,500,830 5,260,594 Total revenues 57,909,527 52,124,027 5,785,500 Expenses - Governmental Activities General government 2,432,702 2,999,255 (566,553) Police services 11,971,294 10,594,467 1,376,827 Maintenance services and Lighting and landscape 10,525,094 11,973,823 (1,448,729) Development services 15,427,297 6,931,034 8,496,263 Administrative services 4,468,171 3,798,969 669,202 Recreation, arts, & community services 4,359,029 4,096,414 262,615 Interest on long-term debt 204,389 234,055 (29,666) Total expenses 49,387,976 40,628,017 8,759,959 Changes in Net Position 8,521,551$ 11,496,010$ (2,974,459)$ Net Position: Beginning of year 290,971,462 279,475,452 11,496,010 End of year 299,493,013$ 290,971,462$ 8,521,551$ DRAF T 10.30. 2 0 2 4 10 Variances shown above are reflected in the net numbers of Table 3 and are discussed following Table 3. Table 3 presents each program’s net cost (total cost less revenues generated by the activities). The net cost shows the financial burden that was placed on the Town’s taxpayers by each of these functions. The net cost of programs decreased by $2,974,459 reflecting higher change in expenses and higher change in revenues. Table 3 Cost of Services Governmental Activities Increase 2024 2023 (Decrease) Revenues: General revenues 39,761,424$ 34,500,830$ 5,260,594$ Total general revenues 39,761,424 34,500,830 5,260,594 Net Expenses: General government (2,210,206) (2,914,844) 704,638 Police services (11,556,873) (10,230,182) (1,326,691) Maintenance services and Lighting and landscape (6,881,818) (8,334,239) 1,452,421 Development services (3,733,185) 4,585,384 (8,318,569) Administrative services (4,170,618) (3,501,416) (669,202) Recreation, arts, & community services (2,482,784) (2,375,468) (107,316) Interest on long-term debt (204,389) (234,055) 29,666 Total net expenses (31,239,873) (23,004,820) (8,235,053) Net Cost of Services 8,521,551$ 11,496,010$ (2,974,459)$ Variances shown above are reflected in the net numbers of Tables 2 and 3 and are discussed following Table 3.  Program revenues increased by $524,906. An increase of $306,117 in Charges for Services was due to increase in Recreations classes, increased activity in Police Services, and increase in the Development Services activity. Operating Grants increased a net of $1,509,456 as grants for Police and Development Services increased, as there were more state grants for the Planning division. Capital Grants and Contributions decreased a net of $- (1,290,667) as grant for capital projects decreased as last fiscal year’s grant included the funding from CLFRF (Coronavirus Local Fiscal Recovery Funds) from the federal (American Rescue Plan Act).  General revenues increased $5,260,594 reflecting the net reported increase $967,851 in property tax revenues, increased $119,549 in franchise fees, increased $4,394,179 in investment earning, and increased $377,187 in miscellaneous, net with a decrease in net reported $(668,661) in sales tax revenues. The Net Direct Cost of Program Services indicates that the overall cost of government is well below the available general revenues and transfers. This shows that the Town's ongoing revenues cover its operational and capital expenditures. The services provided by the Town are provided in an cost effective manner and the Town is efficient in recovering the cost of these services with program revenues from user fees and other contributions. See the Statement of Activities for further detail on program revenues and general revenues. DRAF T 10.30. 2 0 2 4 11 FINANCIAL ANALYSIS OF THE TOWN’S FUNDS At year-end, the fund balance for the Town’s General Fund was $36,897,758 a net increase of $7,957,096 over last year. Revenues exceeded expenses by $11,649,793 and transfers out of $(3,692,697) were made for future capital projects and additional funding for parks and building maintenance in the Lighting and Landscape Assessment District ($1,350,000). Major revenue sources that exceeded budget include property and transfer taxes of $2,453,678, sales taxes of $159,187, Other taxes of $295,878, charges for Services of $1,963,085, intergovernmental of $182,228 and uses of money and property of $2,556,854 which reported rental revenues, and Investment earning, which also reflects actual earning and unrealized market adjustments and the effect of discounts and premiums recognized in the year. These were offset by Fine and forfeitures $(5,342) and Miscellaneous $(663,632). Across the board, cost containment resulted in operating expenditures below budget in all programs. Budget to actual cost savings totaled $2,132,852. Capital outlay for operations was budgeted within each program and is broken out for year-end reporting on a separate line. Compared to last fiscal year, property and transfer tax revenues increased by $967,851. This was attributable to continued strong growth in assessed valuation. Sales tax showed a decrease of $668,661. The online sales activity has leveled off, with brick and mortar businesses (restaurant and retail) has reached their recovery compare to last year. Other taxes increased by $101,472, with motor vehicle receipts and franchise fees reflecting the increase in solid waste revenues per contract with the authority. Charges for services increased by $13,192 as Recreation classes and activities and in-person operation returned to the pre pandemic level of service. Fines and forfeitures increased slightly $38,929, again reflected higher traffic and parking volumes. Uses of money increased by $3,830,342 due to increase in rental from Town facilities and higher market value of the Town’s investments as of June 30, 2024. Additional detail comparing the budgeted and actual amounts for the General Fund can be found in the Required Supplementary Information, Budgetary Comparison Schedule, General Fund. The Lighting and Landscape Special Revenue Fund decreased by $(187,802) which compares favorably to the planned and previously projected higher reduction in this fund balance. Cost containment efforts and a budgeted transfer in from the General Fund of $1,350,000 account for this increase in fund balance. The Regional Traffic Impact Fees fund balance is reported higher by $57,819 reflecting the increase in revenues, and decrease in expenditures. The American Rescue Plan Act fund balance decreased by $(219,016) as expenditures outpaced revenue recognition. The fund balance in the Capital Improvement Projects Fund decreased by a net of $(1,889,930) reflecting capital expenditures and a net transfer in of $1,880,217, helping to offset appropriated capital expenditures in excess of revenues. Non-major Special Revenue Funds increased by a net of $3,772,099, reflecting normal revenues and use of these funds for the operational or capital projects to which they are restricted. Non-major Special Revenue funds with major changes include: increased of Gas Tax Fund increase by $754,489 due to higher revenues, resulting from the increase of demand for gasoline and the gasoline price and less expenditures, compared to prior year; increase of the Building and Planning Fund by $1,399,064 due to higher revenues resulting from more building and planning activities and additional state grant and less expenditures; increase of Development Engineering Fund by $283,682 due to higher revenues resulting from higher volume of engineering services; increase of Child Care Fund by $23,012 due to the increase in building and planning activities; increased of Measure J Fund by $631,534 due to higher revenues received from Contra Costa County Transportation and lowerer expenditures for CIP projects; increase if the General Development Impact Fee Fund by $55,496 as expenditures were lower resulting from less expenses for CIP projects. Low and Moderate Income Housing increase by $37,693 from interest income; and the Solid Waste Vehicle Impact Fees Fund increase by $736,253 due to higher revenues and fund transferred to the Capital Improvement Program (CIP) has not been expended; offset by the increase of PEG Fund by $(33,575) as a result of transfer of fund to Asset Replacement and the subscribers from the cable services remain the same; decreased in Stormwater Pollution Control Program Fund by $(115,400) due to less revenues from assessment fees and higher expenditures due to more use of consulting services; and Public Safety Fund decrease by $(28,479) due to less revenues received from the Contra Costa County and higher expenditures;. DRAF T 10.30. 2 0 2 4 12 The Non-Major Capital Improvement Funds, decreased by a net of $(1,114,104), due to an increase of $39,416 in the Civic Facilities fund due to the transfer in from General Fund and less expenditures; offset by a decrease of $(112,079) in the Asset Replacement General Fund as a result from higher expenditures from the purchase of vehicles, despite the transfer of $175,000 from General and other funds; and a decrease of $(1,023,303) in the Park Facilities Fund due to higher expenses for various CIP projects. All activity in the above funds reflects anticipated revenues and appropriated transfers and expenditures for these funds. General Fund Budgetary Highlights Actual revenues over expenses exceeded the final budget by $4,847,989. This is primarily due to very conservative revenue projections, the absence of State raids on local revenues, steady sales tax, and actual 5% increase in average local property values. Final expenses for the General Fund at year end were less than budgeted by $2,32,852. The budget to actual variance in appropriations reflects conservation efforts, leaving postponement of some operational activities by management. These proactive fiscal measures enabled the Town to transfer $3,692,697 (including $1,350,000 to LLAD) to fund future capital projects throughout the Town. CAPITAL ASSET AND DEBT ADMINISTRATION Capital Assets At the end of FY 2023, the Town had a book value of $192,522,206 invested in a broad range of capital assets, including land, buildings, furniture and equipment, park improvements and infrastructure. (See tables 4 and 5 below.) This amount represents a decrease of $(407,844) net of additions, retirements and depreciation, resulting in a .21% decrease over last year. Changes reflect construction of capital assets, offset by depreciation expenses. Depreciation and amortization on capital assets is recognized in the Government-Wide Financial Statements. The Town has elected to use the modified approach for their streets and roads, wherein the value is not depreciated but rather pavement condition and maintenance expenses are tracked. The pavement condition as of June 30, 2024 was 78, an increase from last year’s pavement condition of 77. This rating compares favorably with the target rating of 70. The average expense to maintain the streets is estimated by management to be a minimum of $3,000,000 per year for the next three years. Further detail may be found in Note 1F to the Financial Statements and in the Required Supplementary Information. Table 4 Capital Assets at June 30, 2024 (net of depreciation and amortization) Accumulated Depreciation/ Original Cost Amortization Book Value Land 31,821,867$ -$ 31,821,867$ Buildings and parking lots 64,393,897 (16,671,579) 47,722,318 Park improvements 24,267,438 (22,973,368) 1,294,070 Furniture and equipment 5,730,828 (4,186,326) 1,544,502 Subscription assets 331,124 (204,429) 126,695 Construction in progress 11,767,848 - 11,767,848 Infrastructure 168,916,511 (70,671,785) 98,244,726 Total 307,229,513$ (114,707,487)$ 192,522,026$ DRAF T 10.30. 2 0 2 4 13 Table 5 Comparative Capital Assets at June 30, 2024 vs. June 30, 2023 (net of depreciation and amortization) Governmental Activities Increase 2024 2023 (Decrease) Land 31,821,867$ 31,821,867$ -$ Buildings and parking lots 47,722,318 25,729,144 21,993,174 Park improvements 1,294,070 1,541,809 (247,739) Furniture and equipment 1,544,502 1,449,716 94,786 Subscription assets 126,695 221,377 (94,682) Construction in progress 11,767,848 33,610,738 (21,842,890) Infrastructure 98,244,726 98,555,219 (310,493) Total 192,522,026$ 192,929,870$ (407,844)$ The Town’s five-year Capital Improvement Plan projects will cost $31,536,894 through FY 2027/28. No debt financing is required for these projects. Funding will come from current fund balances and projected revenues over the next five years. The most significant projects include town-wide park renovations and enhancements with an emphasis on Downtown Master Plan Improvements, Camino Ramon and San Ramon Valley Boulevard Improvement, Town Green Master Plan and Diablo Road Trail project, and infrastructure maintenance including $17,957,910 for pavement management. Additional details can be found in the Town's 2023/24 Operating Budget and Capital Improvement Program document available at www.danville.ca.gov/Council_and_Government/Departments/Finance/. Debt At year end, the Town had $5,489,743 in Certificates of Participation (COPs) and Subscription Liabilities and Compensated Absences outstanding versus $6,027,109 last year, a net decrease of $(537,366), as shown in Table 6 below. Table 6 Outstanding Debt June 30, 2024 vs June 30, 2023 Increase 2024 2023 (Decrease) 2001 & 2005 Certificates of Participation 4,110,000$ 4,690,000$ (580,000)$ Subscription liabilities 74,094 145,949 (71,855) Compensated absences 1,305,649 1,191,160 114,489 Total 5,489,743$ 6,027,109$ (537,366)$ The $(580,000) decrease in the COP amount is due to scheduled debt service payments, decrease of $(71,855) in the Subscription liabilities, and the $114,489 increase in Compensated Absences is due to higher cost of personnel compare to last year, and personnel earning more leaves hours than used. Additional information on outstanding debt is presented in Note 9 to the Basic Financial Statements. ECONOMIC FACTORS Economic recovery from the Coronavirus pandemic has been aided by strong property values that continue to increase the Town share of property taxes. Sales tax, which acts as a benchmark for local business performance, reached an all- time high level by the end of 2022, before dropping off in 2023. Sales continue to outperform pre-pandemic levels and sales tax revenue continues to exceed the Town’s budget forecasts. DRAF T 10.30. 2 0 2 4 14 New fiscal challenges are expected to be driven by a variety of factors. Inflation, interest rates, oil prices and stock market volatility continue to affect the nation’s economy. Recent economic data suggests positive but slower growth this year fueled by consumer spending. Inflationary trends are subsiding, but core levels remain above targets set by the Federal Reserve. The cumulative effects of restrictive monetary policy and tighter financial conditions suggest that the economy will gradually soften, and the Fed will continue to lower rates at a measured pace through this year with the ability to move more aggressively should employment data warrant. As of June 30, 2024, the Town's financial condition continues to be sound. An indicator of the Town’s financial condition is the level of fund balance, reserved and unreserved, in its Governmental Funds, which include General, Special Revenue, Debt Service and Capital Projects. NEXT YEAR’S BUDGET The 2025/26 Budget will continue to focus on the Town’s highest priorities while reserving funding for capital projects and maintaining strong reserves. The Town will continue to rely upon a combination of General Fund and Special Revenues to provide ongoing service. The Town’s five largest revenue sources are Property Tax, Sales Tax, Other Taxes and Intergovernmental, Special Assessments and Use of Money and Property. These sources will continue account for more than 83% of all Town revenues. From a service delivery standpoint, current service levels will be carried forward into 2025/26. The economy will continue to impact availability and costs for utilities, materials and supplies, contracted services and personnel. This will require the Town to evaluate Lighting and Landscape (LLAD) operations and seek an increase in assessments in 2025. Current LLAD assessments have been set at a fixed rate with no escalator since 2003. CONTACTING THE TOWN’S FINANCIAL MANAGEMENT This financial report is designed to provide our citizens, taxpayers, customers, investors, and creditors with a general overview of the Town’s finances and to show the Town’s accountability for the money it receives. If you have questions about this report or need additional financial information, contact the Town’s Finance Department at the Town of Danville, 510 La Gonda Way, Danville, California 94526-1740 DRAF T 10.30. 2 0 2 4 15 BASIC FINANCIAL STATEMENTS DRAF T 10.30. 2 0 2 4 16 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 17 GOVERNMENT-WIDE FINANCIAL STATEMENTS DRAF T 10.30. 2 0 2 4 18 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Governmental Activities ASSETSCurrent assets: Cash and investments (Note 3)82,334,792$ Receivables (net of allowances): Accounts 4,064,980 Due from Successor Agency within one year (Note 7)1,100,000 Leases (Note 4)538,966 Interest 699,929 Total receivables 6,403,875 Prepaid items 186,610 Total current assets 88,925,277 Noncurrent assets: Restricted cash and investments (Note 3): Held with fiscal agents 1,777,459 Held by the Town 35,628,391 Total restricted cash and investments 37,405,850 Due from Successor Agency in more than one year (Note 7)659,401 Leases receivable (Note 4)3,007,228 Capital assets (Note 5): Nondepreciable 136,665,600 Depreciable/amortizable, net 55,856,426 Total capital assets, net 192,522,026 Total noncurrent assets 233,594,505 Total assets 322,519,782 LIABILITIESCurrent liabilities: Accounts payable 7,503,527 Accrued wages payable 296,163 Retention payable 158,419 Deposits payable 212,377 Interest payable 54,806 Claims liabilities (Note 12)65,243 Unearned revenue (Note 8)5,816,496 Long-term debt - due within one year (Note 9)784,094 Total current liabilities 14,891,125 Noncurrent liabilities: Long-term debt - due in more than one year: (Note 9) Certificates of participation 3,510,000 Compensated absences 1,195,649 Total noncurrent liabilities 4,705,649 Total liabilities 19,596,774 DEFERRED INFLOWS OF RESOURCESLease-related deferred inflows of resources (Note 4)3,429,995 Total deferred inflows of resources 3,429,995 NET POSITIONNet investment in capital assets (Note 11)188,179,513 Restricted for: Capital projects 6,155,870 Debt service 1,777,459 Assessment districts 1,525,693Transportation14,688,310 Public safety 655,333 Housing 1,961,486 Community development 390,060 Public works 12,731,681 Other programs 298,350 Total restricted 40,184,242 Unrestricted 71,129,258 Total net position 299,493,013$ Town of Danville Statement of Net Position June 30, 2024 See accompanying Notes to the Basic Financial Statements. 19 DRAF T 10.30. 2 0 2 4 Net (Expense) Revenue and Changes in Net Position Operating Capital Charges for Grants and Grants and Governmental Functions/Programs Expenses Services Contributions Contributions Activities Governmental activities: General government 2,432,702$ 23,184$ 199,312$ -$ (2,210,206)$ Police services 11,971,294 189,558 224,863 - (11,556,873) Maintenance services and lighting and landscape 10,525,094 3,641,347 1,929 - (6,881,818) Development services 15,427,297 4,484,293 3,450,009 3,759,810 (3,733,185) Administrative services 4,468,171 297,553 - - (4,170,618) Recreation, arts, & community services 4,359,029 1,875,843 402 - (2,482,784) Interest expense 204,389 - - - (204,389) Total governmental activities 49,387,976$ 10,511,778$ 3,876,515$ 3,759,810$ (31,239,873) General revenues: Taxes: Property 19,905,678 Sales 6,799,187 Motor vehicle license fee 53,934 Franchise 3,502,709 Other 360,676 Total taxes 30,622,184 Investment earnings (Note 3)5,392,910 Miscellaneous 2,879,111 Reimbursement from Successor Agency (Note 7)867,219 Total general revenues 39,761,424 Change in net position 8,521,551 Net position - beginning of year 290,971,462 Net position - end of year 299,493,013$ Program Revenues Town of Danville Statement of Activities For the Year Ended June 30, 2024 See accompanying Notes to the Basic Financial Statements. 20 DRAF T 10.30. 2 0 2 4 21 FUND FINANCIAL STATEMENTS DRAF T 10.30. 2 0 2 4 22 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 23 GOVERNMENTAL FUND FINANCIAL STATEMENTS DRAF T 10.30. 2 0 2 4 24 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Town of Danville Governmental Fund Financial Statements 25 General Fund The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. The major revenue sources for this fund are property taxes, sales taxes, unrestricted revenues from the State, fines and forfeitures and interest income. Expenditures are made for administration, legislation, public safety, parks and recreation and other services. Lighting and Landscaping Special Revenue Fund Assessments paid by property owners who receive street lighting services and assessments paid by all property owners for landscape and park maintenance are received into this Fund. The income is used to pay energy costs for the street lighting system, community roadside, median and park landscape costs. Regional Traffic Impact Fees Fund Development impact fees are collected for local, sub-regional and regional traffic improvements. Sub-regional and regional fees are collected on behalf of other agencies and distributed to the lead agency for project construction. American Rescue Plan Act Special Revenue Fund This fund is used to track the revenues and expenditures of the American Rescue Plan Act funding received by the Town. Capital Improvement Capital Projects Fund This Fund receives contributions from the General Fund for future capital improvements, in accordance with the Town's Capital Improvement Program. DRAF T 10.30. 2 0 2 4 Lighting and Regional Traffic American Rescue Landscape Impact Fees Plan Act Special Revenue Special Revenue Special Revenue General Fund Fund Fund Fund ASSETS Cash and investments $ 38,882,137 $ 5,103,370 $ 4,555,554 $ 5,087,704 Cash and investments with fiscal agents 848,842 - - - Receivables (net of allowances): Accounts 1,816,614 39,225 6,737 - Leases 3,546,194 - - - Due from Successor Agency of former CDA 1,759,401 - - - Interest 411,335 26,895 16,477 - Prepaid items 186,610 - - - Total assets $ 47,451,133 $ 5,169,490 $ 4,578,768 $ 5,087,704 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 5,282,639 $ 438,768 $ 66,608 $ 622,736 Accrued wages payable 203,398 31,841 - - Retention payable - - - - Deposits payable 169,707 - - - Claims liabilities 65,243 - - - Unearned revenue 1,037,774 59,734 - 4,683,054 Total liabilities 6,758,761 530,343 66,608 5,305,790 Deferred Inflows of Resources: Unavailable revenue 364,619 - - - Lease-related deferred inflows of resources 3,429,995 - - - Total deferred inflows of resources 3,794,614 - - - Fund Balances: Nonspendable 846,011 - - - Restricted 848,842 1,525,693 4,512,160 - Committed 33,807,639 - - - Assigned 295,266 3,113,454 - - Unassigned (deficit) 1,100,000 - - (218,086) Total fund balances 36,897,758 4,639,147 4,512,160 (218,086) Total liabilities, deferred inflows of resources and fund balances $ 47,451,133 $ 5,169,490 $ 4,578,768 $ 5,087,704 (Continued) Major Funds Town of Danville Governmental Funds Balance Sheet June 30, 2024 See accompanying Notes to the Basic Financial Statements. 26 DRAF T 10.30. 2 0 2 4 Major Funds Capital Improvement Non-Major Total Capital Projects Governmental Governmental Fund Funds Funds ASSETS Cash and investments $ 24,949,730 $ 39,384,688 $ 117,963,183 Cash and investments with fiscal agents - 928,617 1,777,459 Receivables (net of allowances): Accounts 1,289,827 912,577 4,064,980 Leases - - 3,546,194 Due from Successor Agency of former CDA - - 1,759,401 Interest 118,417 126,805 699,929 Prepaid items - - 186,610 Total assets $ 26,357,974 $ 41,352,687 $ 129,997,756 LIABILITIES, DEFERRED INFLOWS OF RESOURCES AND FUND BALANCES Liabilities: Accounts payable $ 312,637 $ 780,139 $ 7,503,527 Accrued wages payable 1,727 59,197 296,163 Retention payable 158,239 180 158,419 Deposits payable - 42,670 212,377 Claims liabilities - - 65,243 Unearned revenue - 35,934 5,816,496 Total liabilities 472,603 918,120 14,052,225 Deferred Inflows of Resources: Unavailable revenue - - 364,619 Lease-related deferred inflows of resources - - 3,429,995 Total deferred inflows of resources - - 3,794,614 Fund Balances: Nonspendable - - 846,011 Restricted - 32,368,930 39,255,625 Committed 25,885,371 8,065,637 67,758,647 Assigned - - 3,408,720 Unassigned (deficit) - - 881,914 Total fund balances 25,885,371 40,434,567 112,150,917 Total liabilities, deferred inflows of resources and fund balances $ 26,357,974 $ 41,352,687 $ 129,997,756 (Concluded) June 30, 2024 Balance Sheet (Continued) Governmental Funds Town of Danville See accompanying Notes to the Basic Financial Statements. 27 DRAF T 10.30. 2 0 2 4 28 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Total Fund Balances - Total Governmental Funds $ 112,150,917 Amounts reported for governmental activities in the Statement of Net Position are different because: Capital assets used in governmental activities are not current financial resources and therefore are not reported in the Governmental Funds Balance Sheet. Non-depreciable capital assets 136,665,600 Depreciable/amortizable capital assets, net 55,856,426 Total capital assets 192,522,026 Interest payable on long-term debt does not require current financial resources. Therefore, interest payable is not reported as a liability in the Governmental Funds Balance Sheet. (54,806) Unavailable revenues recorded in Governmental Fund Financial Statements resulting from activities in which revenues were earned but were not available are reclassified as revenues in the Government-Wide Financial Statements. 364,619 Long-term liabilities are not due and payable in the current period and therefore they are not reported in the Governmental Funds Balance Sheet. Long-term debt due within one year (784,094) Long-term liabilities - due in more than one year: - Certificates of participation (3,510,000) - Compensated absences payable (1,195,649) Total long-term debt (5,489,743) Net Position of Governmental Activities 299,493,013$ Town of Danville Reconciliation of Governmental Funds Balance Sheet to the Government-Wide Statement of Net Position June 30, 2024 See accompanying Notes to the Basic Financial Statements. 29 DRAF T 10.30. 2 0 2 4 Lighting and Regional Traffic American Rescue Landscape Impact Fees Plan Act Special Revenue Special Revenue Special Revenue General Fund Fund Fund Fund REVENUES: Property taxes $ 19,905,678 $ - $ - $ - Sales taxes 6,799,187 - - - Special assessments - 3,050,957 - - Other taxes 2,584,666 - - - Charges for services 2,030,638 - - - Licenses and permits 388,935 - - - Development fees - - 123,530 - Intergovernmental 204,173 - 111,885 1,162,776 Fines and forfeitures 144,658 - - - Use of money and property 5,042,345 121,935 66,350 - Reimbursement from Successor Agency 867,219 - - - Miscellaneous 468,222 135,570 - - Total revenues 38,435,721 3,308,462 301,765 1,162,776 EXPENDITURES: Current: General government 2,388,580 - - - Police services 11,105,059 - - - Maintenance services 3,146,660 179,653 - - Lighting and landscape - 4,306,195 - - Development services 1,185,604 15,599 137,578 1,363,842 Administrative services 4,033,608 295,495 2,085 - Recreation, arts, & community services 4,053,053 - - - Capital outlay 6,145 49,322 104,283 17,950 Debt service: Principal 651,855 - - - Interest 215,364 - - - Total expenditures 26,785,928 4,846,264 243,946 1,381,792 REVENUES OVER (UNDER) EXPENDITURES 11,649,793 (1,537,802) 57,819 (219,016) OTHER FINANCING SOURCES (USES): Transfers in (Note 6) - 1,350,000 - - Transfers out (Note 6) (3,692,697) - - - Total financing sources (uses) (3,692,697) 1,350,000 - - NET CHANGE IN FUND BALANCES 7,957,096 (187,802) 57,819 (219,016) FUND BALANCES (DEFICIT): Beginning of year 28,940,662 4,826,949 4,454,341 930 End of year $ 36,897,758 $ 4,639,147 $ 4,512,160 $ (218,086) (Continued) Major Funds Town of Danville Statement of Revenues, Expenditures, and Changes in Fund Balances For the Year Ended June 30, 2024 See accompanying Notes to the Basic Financial Statements. 30 DRAF T 10.30. 2 0 2 4 Major Funds Capital Improvement Non-Major Total Capital Projects Governmental Governmental Fund Funds Funds REVENUES: Property taxes $ - $ - $ 19,905,678 Sales taxes - - 6,799,187 Special assessments - 579,341 3,630,298 Other taxes - 3,318,227 5,902,893 Charges for services - 1,312,758 3,343,396 Licenses and permits - 5,676 394,611 Development fees - 3,017,917 3,141,447 Intergovernmental 1,845,959 1,950,285 5,275,078 Fines and forfeitures - - 144,658 Use of money and property 676,517 777,246 6,684,393 Reimbursement from Successor Agency - - 867,219 Miscellaneous 1,170,709 41,276 1,815,777 Total revenues 3,693,185 11,002,726 57,904,635 EXPENDITURES: Current: General government - 25,106 2,413,686 Police services 66,424 497,147 11,668,630 Maintenance services 583,068 1,133,284 5,042,665 Lighting and landscape - - 4,306,195 Development services 2,151,523 5,236,730 10,090,876 Administrative services - 15,523 4,346,711 Recreation, arts, & community services - 44,918 4,097,971 Capital outlay 4,662,317 1,854,503 6,694,520 Debt service: Principal - - 651,855 Interest - - 215,364 Total expenditures 7,463,332 8,807,211 49,528,473 REVENUES OVER (UNDER) EXPENDITURES (3,770,147) 2,195,515 8,376,162 OTHER FINANCING SOURCES (USES): Transfers in (Note 6) 1,880,217 587,480 3,817,697 Transfers out (Note 6) - (125,000) (3,817,697) Total financing sources (uses) 1,880,217 462,480 - NET CHANGE IN FUND BALANCES (1,889,930) 2,657,995 8,376,162 FUND BALANCES (DEFICIT): Beginning of year 27,775,301 37,776,572 103,774,755 End of year $ 25,885,371 $ 40,434,567 $ 112,150,917 (Concluded) Town of Danville Statement of Revenues, Expenditures, and Changes in Fund Balances (Continued) For the Year Ended June 30, 2024 See accompanying Notes to the Basic Financial Statements. 31 DRAF T 10.30. 2 0 2 4 Net Change in Fund Balances - Total Governmental Funds 8,376,162$ Amounts reported for governmental activities in the Statement of Activities are different because: Governmental Funds report capital outlay as expenditures. However, in the Government-Wide Statement of Activities the cost of those assets is allocated over their estimated useful lives as depreciation/amortization expense. This is the amount of capital assets recorded in the current period.1,597,824 Depreciation/amortization expense on capital assets is reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, depreciation/amortization expense is not reported as expenditures in Governmental Funds. (2,005,668) Revenues that have not met the revenue recognition criteria in the Fund Financial Statements are recognized as revenue in the Government-Wide Financial Statements.4,892 Long-term compensated absences are reported in the Government-Wide Statement of Activities, but they do not require the use of current financial resources. Therefore, long-term compensated absences are not reported as expenditures in Governmental Funds. The following amount represents the change in long-term compensated absences from the prior year. (114,489) Repayment of bond principal reduces long-term liabilities in the Government-Wide Statement of Net Position. Long-term debt repayments: - Certificates of participation 580,000 - Subscription liablity 71,855 Interest expense on long-term debt is reported in the Government-Wide Statement of Activities but they do not require the use of current financial resources. Therefore, interest expense is not reported as expenditures in Governmental Funds. The following amount represents the change in accrued interest from the prior year.10,975 Change in Net Position of Governmental Activities 8,521,551$ Town of Danville Reconciliation of the Governmental Funds Statement of Revenues, Expenditures, and Changes in Fund Balances to Government-Wide Statement of Activities For the Year Ended June 30, 2024 See accompanying Notes to the Basic Financial Statements. 32 DRAF T 10.30. 2 0 2 4 33 FIDUCIARY FUND FINANCIAL STATEMENTS DRAF T 10.30. 2 0 2 4 34 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Town of Danville Fiduciary Fund Financial Statements 35 TRUST FUND Successor Agency Trust Fund The Successor Agency to the former Community Development Agency (CDA) of the Town of Danville was established as a result of the passage of Assembly Bill x1 26, which dissolved all Redevelopment Agencies in the State of California effective February 1, 2012. On January 10, 2012, pursuant to Health and Safety Code Section 34173, the Town Council declared that the Town of Danville would act in a special limited capacity as Successor Agency for the dissolved Community Development Agency of the Town of Danville, effective February 1, 2012. The Successor Agency is responsible for day to day administration of the former CDA, including identification and payment of enforceable and recognized obligations of the former CDA, and disbursement of available assets. An Oversight board, consisting of 7 members, was appointed to supervise the Successor Agency's wind down of the former CDA. CUSTODIAL FUNDS Custodial Fund This Fund is comprised of assets that are not held in a trust or equivalent arrangement that are held temporarily by the Town on behalf of others. DRAF T 10.30. 2 0 2 4 36 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Successor Agency Private Purpose Trust Fund Custodial Fund ASSETS Cash and investments (Note 3)851,803$ 1,957,891$ Cash and investments with fiscal agents (Note 3) 403,854 330,512 Total assets 1,255,657 2,288,403 LIABILITIES Accounts payable - 183,065 Loan payable to Town (Note 7)1,759,401 - Loan payable, due within one year (Note 9) 250,000 - Loan payable, due in more than one year (Note 9) 1,220,000 - Interest payable 623,348 - Deposits - 871,734 Total liabilities 3,852,749 1,054,799 NET POSITION (DEFICIT) Restricted for individuals, organizations, and other governments - 1,233,604 Unrestricted (deficit)(2,597,092) - Total net position (deficit)(2,597,092)$ 1,233,604$ Town of Danville Fiduciary Activities Statement of Fiduciary Net Position June 30, 2024 See accompanying Notes to the Basic Financial Statements. 37 DRAF T 10.30. 2 0 2 4 Successor Agency Private Purpose Trust Fund Custodial Fund ADDITIONS: Property tax receipts 2,292,850$ -$ Miscellaneous 18,537 670,220 Total additions 2,311,387 670,220 DEDUCTIONS: Amount allocated to General Fund for principal payment 810,000 - Amount allocated to General Fund for interest payment 57,219 - Interest 290,506 - Other 23,269 771,847 Total deductions 1,180,994 771,847 Changes in net position 1,130,393 (101,627) NET POSITION (deficit): Beginning of year (3,727,485) 1,335,231 End of year (2,597,092)$ 1,233,604$ Town of Danville Fiduciary Activities Statement of Changes in Fiduciary Net Position For the Year Ended June 30, 2024 See accompanying Notes to the Basic Financial Statements. 38 DRAF T 10.30. 2 0 2 4 39 NOTES TO THE BASIC FINANCIAL STATEMENTS DRAF T 10.30. 2 0 2 4 40 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Town of Danville Index to Notes to the Basic Financial Statements For the Year Ended June 30, 2024 41 Page Note 1 – Reporting Entity……………………………… .................................................................................... 43 Note 2 – Summary of Significant Accounting Policies ...................................................................................... 44 A. Basis of Presentation, Basis of Accounting, and Measurement Focus ..................................................... 44 B. Cash and Investments ................................................................................................................................ 46 C. Cash and Investments with Fiscal Agent .................................................................................................. 47 D. Prepaid items ............................................................................................................................................. 47 E. Leases Receivable ..................................................................................................................................... 47 F. Capital Assets ............................................................................................................................................ 48 G. Unearned Revenues ................................................................................................................................... 50 H. Compensated Absences ............................................................................................................................. 50 I. Long-Term Debt ....................................................................................................................................... 50 J. Subscription-Based Information Technology Arrangements (SBITAs) ................................................... 50 K. Fund Balance ............................................................................................................................................ 51 L. Net Position ............................................................................................................................................... 52 M. Spending Policies ...................................................................................................................................... 52 N. Property Taxes .......................................................................................................................................... 52 O. Use of Accounting Estimates .................................................................................................................... 52 P. Implementation of New GASB Pronouncements ..................................................................................... 53 Q. Upcoming Government Accounting Standards Implementation .............................................................. 53 Note 3 – Cash and Investments ........................................................................................................................... 53 A. Demand Deposits ...................................................................................................................................... 54 B. Investments ............................................................................................................................................... 55 C. External Investment Pool .......................................................................................................................... 56 D. Restricted Cash and Investments Held with Fiscal Agent ........................................................................ 57 E. Risk Disclosures ........................................................................................................................................ 57 Note 4 – Leases Receivable and Lease-Related Deferred Inflows of Resources ............................................. 60 Note 5 – Capital Assets ........................................................................................................................................ 61 A. Governmental Activities ........................................................................................................................... 61 Note 6 – Interfund Transactions ......................................................................................................................... 63 A. Transfers In/Out ........................................................................................................................................ 63 Note 7 – Loans Receivable from Successor Agency to the Former Community Development Agency .......................................................................................................................... 63 A. Successor Agency (SA) Cooperative Agreement Loan Receivable ......................................................... 64 Note 8 – Unearned Revenue ................................................................................................................................ 64 Note 9 – Long-Term Obligations ........................................................................................................................ 65 A. Governmental Activities ........................................................................................................................... 65 B. Fiduciary Fund Financial Statements ........................................................................................................ 67 DRAF T 10.30. 2 0 2 4 Town of Danville Index to Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 42 Page Note 10 – Defined Contribution Pension Plan .................................................................................................. 68 A. Section 401(a) Qualified Defined Contribution Pension Plan .................................................................. 68 B. Section 415(m) Benefit Restoration Plan ................................................................................................. 68 Note 11 – Fund Balance Classification and Net Position ................................................................................. 69 Note 12 – Risk Management ............................................................................................................................... 70 Note 13 – Commitments and Contingencies ...................................................................................................... 71 Note 14 – Other Required Disclosures ............................................................................................................... 72 A. Expenditures Exceeding Appropriations .................................................................................................. 72 B. Deficit Net Position/Fund Balance ........................................................................................................... 73 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements For the Year Ended June 30, 2024 43 Note 1 – Reporting Entity The Town of Danville, California (the “Town”) is a largely residential community located in the San Ramon Valley area of Contra Costa County, California. The Town was incorporated as a municipal corporation in 1982, and encompasses eighteen square miles with a population of 42,567. The Town operates under the Council-Manager form of government, with five elected Council members served by a full-time Town Manager and staff. The Town’s staff of 128 employees, as well as 30 County Sheriff’s Department employees under contract with the Town, are responsible for the following Town services:  Public Safety – The Town provides round-the-clock police services from a central station, using trained personnel provided under contract with the County Sheriff’s Department.  Streets and Roads – The Town builds and maintains its streets, curbs, gutters and related public property using Town employees. Major projects may be contracted to reduce costs.  Parks and recreation, public improvements, planning, zoning and other services are provided by Town employees.  Maintenance – In addition to Town staff, the Town employs varying numbers of seasonal personnel for maintenance and recreation services. The accompanying financial statements include the financial activities of the Town (the primary government) and its component units. The component units discussed below are included in the Town’s reporting entity because of the significance of their operational or financial relationships with the Town, including the Town Council, which acts as the governing board. In addition, Town staff performs all administrative and accounting functions for these entities, and these entities provide their services entirely to the Town. These blended component units, although legally separate entities, are, in substance, part of the Town’s operations. Town of Danville Financing Authority - The Town of Danville Financing Authority (the “Authority”) is a joint powers authority that was organized by the Town and the former Danville Community Development Agency of the Town of Danville (“CDA”) on December 7, 1993, under the laws of the State of California. The Authority was organized to provide financial assistance to the Town and former CDA for public improvements for the benefit of the residents of the Town and the surrounding areas. Administrative and related normal business expenditures incurred in the day-to-day operations of the Authority are provided by the Town. Town of Danville Lighting and Landscaping Assessment District - The Lighting and Landscape Assessment District Fund (the “District”) of the Town was formed in 1983 to provide a funding source for the operation, maintenance and servicing of landscaping, street lighting and Town park facilities within the District. The District is responsible for Town improvements including future improvements located within incorporated limits of the Town. Because of varying degrees of operation and maintenance for each improvement type, the District is separated into four zones: landscaping improvements (Zones A and B), street lighting (Zone C) and Town parks (Zone D). The Town created a special revenue fund to account for each zone’s assessment revenues and expenditures. The District is fully integrated within the Town, which performs all maintenance, administrative and accounting functions. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 44 Note 2 – Summary of Significant Accounting Policies A. Basis of Presentation, Basis of Accounting, and Measurement Focus The basic financial statements of the Town have been prepared in conformity with accounting principles generally accepted of 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 accounts of the Town are organized on the basis of funds, each of which is considered a separate accounting entity. The operations of each fund are accounted for with a separate set of self-balancing accounts that comprise its assets, liabilities, fund equity, revenues, and expenditures or expenses, as appropriate. Governmental resources are allocated to and accounted for in individual funds based upon the purposes for which they are to be spent and the means by which spending activities are controlled. The Statement of Net Position/Balance Sheet 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 apply to future periods and that, therefore, will not be recognized as an expense until that time. Deferred Inflows of Resources represent inflows of resources (acquisition of net assets) that apply to future periods and that, therefore, are not recognized as revenue until that time. Government – Wide Financial Statements The Town’s Government-Wide Financial Statements include a Statement of Net Position and a Statement of Activities. These statements present summaries of governmental activities for the Town. Fiduciary activities of the Town are not included in these statements. These financial statements are presented on an “economic resources” measurement focus and the accrual basis of accounting. Accordingly, all of the Town’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 Town 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. The following interfund activities have been eliminated:  Due To/From Other Funds  Transfers In/Out DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 45 Note 2 – Summary of Significant Accounting Policies (Continued) A. Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Governmental Fund Financial Statements 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 as soon as enough thereafter to pay liabilities of the current period. For this purpose, the Town 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 Town, 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. The Town reports the following major Governmental Funds: General Fund - The General Fund is the general operating fund of the Town. It is used to account for all financial resources except those required to be accounted for in another fund. The major revenue sources for this fund are property taxes, sales taxes, unrestricted revenues from the State, licenses and permits, fines and forfeitures and interest income. Expenditures are made for administration, legislation, public safety, parks and recreation and other services. Lighting and Landscaping Special Revenue Fund - Assessments paid by property owners who receive street lighting services and assessments paid by all property owners for landscape and park maintenance are received into this Fund. The income is used to pay energy costs for the street lighting system and community roadside, median and park landscape costs. Regional Traffic Impact Fees Special Revenue Fund – This fund is used to account for development impact fees that are collected to support infrastructure improvements that mitigate the impacts of new development on the local transportation system. American Rescue Plan Act Special Revenue Fund - This fund is used to record the revenues and expenditures of proceeds from the American Rescue Plan Act. Capital Improvement Capital Projects Fund - This Fund receives contributions from the General Fund for future capital improvements, in accordance with the Town’s Capital Improvement Program. Fiduciary Fund Financial Statements Fiduciary Fund Financial Statements include a Statement of Fiduciary Net Position and a Statement of Changes in Fiduciary Net Position. The Town’s Fiduciary Funds represent a Private Purpose Trust Fund and a Custodial Fund. The Fiduciary Funds are accounted for using the full accrual and economic resources measurement focus basis of accounting. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 46 Note 2 – Summary of Significant Accounting Policies (Continued) A. Basis of Presentation, Basis of Accounting, and Measurement Focus (Continued) Fiduciary Fund Financial Statements (Continued) The Town reports the following Private Purpose Trust Fund: Successor Agency Trust Fund - The Successor Agency to the former Community Development Agency (“CDA”) of the Town was established as a result of the passage of Assembly Bill x1 26, which dissolved all Redevelopment Agencies in the State of California effective February 1, 2012. On January 10, 2012 pursuant to Health and Safety Code Section 34173, the Town Council declared that the Town would act in a special limited capacity as Successor Agency for the dissolved CDA, effective February 1, 2012. The Successor Agency is responsible for day to day administration of the former CDA, including identification and payment of enforceable and recognized obligations of the former CDA, and disbursement of available assets. An Oversight board, consisting of seven members, was appointed to supervise the Successor Agency’s wind down of the former CDA. The Town reports the following Custodial Fund: Custodial Fund - This Fund is comprised of assets that are not held in a trust or equivalent arrangement that are held temporarily by the Town on behalf of others. B. Cash and Investments The Town pools its available cash for investment purposes. The Town’s cash and cash equivalents are considered to be cash on hand, demand deposits, and short-term investments with original maturity of three months or less from the date of acquisition. Cash and cash equivalents are combined with investments and displayed as cash and investments. Certain disclosure requirements for deposits and investment risks were made in the following areas:  Interest rate risk  Credit risk  Overall  Custodial credit risk  Concentrations of credit risk In addition, other disclosures are specified including use of certain methods to present deposits and investments, highly sensitive investments, credit quality at year-end and other disclosures. 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. Market value is used as fair value for those securities for which market quotations are readily available. 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, are categorized based upon the level of judgment associated with the inputs used to measure their fair value. Levels of inputs are as follows: Level 1 – Inputs are unadjusted, quoted prices for identical the asset or liability in active markets at the measurement date. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 47 Note 2 – Summary of Significant Accounting Policies (Continued) B. Cash and Investments (Continued) Level 2 – Inputs, other than quoted prices included in Level 1, that are observable for the asset or liability 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 asset or liability at the measurement date. The Town maintains a cash and investment pool, which includes cash balances and authorized investments of all funds, which the Town Treasurer invests to enhance interest earnings. The pooled interest earned is allocated to each fund based on its average monthly cash and investment balances. The Town participates in an investment pool managed by the State of California titled Local Agency Investment Fund (“LAIF”), which has invested a portion of the pool funds in structured notes and asset-backed securities. LAIF’s investments are subject to credit risk with the full faith and credit of the State of California collateralizing these investments. In addition, these structured notes and asset-backed securities are subject to market risk with changes in interest rates. C. Cash and Investments with Fiscal Agents Certain restricted cash and investments are held by fiscal agents for the redemption of bonded debt and for acquisition and construction of capital projects. D. Prepaid Items Certain payments applicable to future accounting periods are recorded as prepaid items. Prepaid items are reported under the consumption method, which recognizes the expenditure/expense in the period associated with the goods consumed or the services rendered. Prepaid items do not reflect current appropriable resources and, thus, an equivalent portion of fund balance is reported as nonspendable in governmental funds. E. Leases Receivable The Town is a lessor for leases of buildings and land and recognizes leases receivable and lease-related 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 net 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 Town determines (1) the discount rate it uses to discount the expected lease receipts to present value, (2) lease term, and (3) lease receipts.  The Town uses the average of the LAIF rate and the incremental borrowing rate (IBR) provided by the Town’s financial institution at July 1, 2021 for existing leases or the current rate at the time a new lease is executed. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 48 Note 2 – Summary of Significant Accounting Policies (Continued) E. Leases Receivable (Continued)  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 are composed of fixed payments from the lessee. The Town monitors changes in circumstances that would require a remeasurement of its lease receivables 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. F. Capital Assets Capital assets, which include lands, buildings, improvements, furniture, equipment and infrastructure assets (e.g., roads, bridges, signal systems and similar items) are reported in the applicable governmental activities in the Government-Wide Financial Statements. The Town defines infrastructure as the primary physical assets that allow the Town to conduct its business. The Town's infrastructure assets include:  Street system  Street signal system  Park and recreation lands and improvement systems  Storm water conveyance system  Bridges  Buildings combined with site amenities such as parking and landscaped areas Each major infrastructure system can be divided into subsystems. For example, the street system can be subdivided into the following:  Pavement  Medians  Curb and gutters  Landscaping and land The detail of these subsystems is not presented in the basic financial statements. However, the operating departments maintain information regarding the subsystems. Capital assets are recorded at historical cost or estimated historical cost if actual cost was not available. Donated assets are valued at their estimated acquisition value on the date donated. Town policy has set the capitalization thresholds for reporting capital assets at the following:  All buildings (no threshold)  $20,000 for roads and bridges/box culverts  $10,000 for traffic signals and storm drain pipes  $5,000 for furniture, fixtures, equipment, catch basins and manholes DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 49 Note 2 – Summary of Significant Accounting Policies (Continued) F. Capital Assets (Continued) Depreciation is recorded on a straight-line basis over the useful lives of all other assets, except for infrastructure, as follows: Building and parking lots 40 years Park improvements 5 years Furnitures and equipment 3 - 10 years Infrastructure 30 - 50 years The Town elected to use the Modified Approach as defined by GASB Statement No. 34 for infrastructure reporting of its streets, concrete and asphalt pavements. This condition assessment will be performed every three years. Each homogeneous segment of Town-owned street was assigned a physical condition based on potential defects. A Pavement Condition Index (PCI) was assigned to each street segment. The PCI is expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned to segments of street that have the physical characteristics of a new street. The following conditions were defined: Very good condition 70 - 100 Good condition 50 - 69 Poor condition 26 - 49 Very poor condition 0 - 25 The Town's policy relative to maintaining the street assets is to achieve an average rating of 65-70 for all street segments. This acceptable rating allows minor cracking and raveling of the pavement along with minor roughness that could be noticeable to drivers traveling at the posted speeds. For all other infrastructure systems, the Town elected to use the Basic Approach as defined by GASB Statement No. 34. The Town appraised its own infrastructure as of July 1, 2001 and has completed an internal update for June 30, 2024. The 2001 appraisal determined the original cost, which is defined as the actual cost to acquire new property in accordance with market prices at the time of first construction/acquisition. Original costs were developed in one of three ways: 1. Historical records; 2. Standard unit costs appropriate for the construction/acquisition date; 3. Present cost indexed by a reciprocal factor of the price increase from the construction/acquisition date to the current date. The accumulated depreciation from the date of construction/acquisition to the current date was computed using industry accepted life expectancies for each infrastructure subsystem. The book value was then computed by deducting the accumulated depreciation from the original cost. G. Unearned Revenues For the Government-wide Financial Statements, unearned revenue is recognized in connection with a transaction before the earnings process is completed. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 50 Note 2 – Summary of Significant Accounting Policies (Continued) G. Unearned Revenues (Continued) For the Governmental Fund Financial Statements, unearned revenues arise when potential revenues do not meet both the "measurable" and "available" criteria for recognition in the current period. Unearned revenues also arise when the government receives resources before it has a legal claim to them, as when grant monies are received prior to incurring qualifying expenditures. In subsequent periods, when both revenue recognition criteria are met or when the government has a legal claim to the resources, unearned revenues are removed from the combined balance sheet and revenue is recognized. H. Compensated Absences Compensated absences include general leave, which covers vacations up to the cap amount based on years of services and hire date, and is accounted for in accordance with U.S. GAAP. It is the policy of the Town to pay when an employee retires or terminates. This amount is funded at a level that recognizes each employee’s ability to request leave during employment and is included as a liability in the Government-wide Financial Statements. Compensated absences liabilities of governmental activities are generally liquidated by the General Fund (80%), Building and Planning Special Revenue Fund (10%), and Other Special Revenue Funds (10%). I. Long-Term Debt In the Government-wide Financial Statements, long-term debt is reported as liabilities. Bonds payable are reported net of the applicable bond premium or discount. For Governmental Fund Financial Statements, bond premiums and discounts, as well as bond issuance costs, are recognized during the current period. Bond proceeds are reported as other financing sources net of the applicable premium or discount. Issuance costs, whether or not withheld from the actual net proceeds received, are reported as debt service expenditures. J. Subscription-Based Information Technology Arrangements (SBITAs) The Town has a policy to recognize a SBITA liability and a right‐to‐use subscription asset (SBITA asset) in our financial statements with an initial, individual value of $10,000 or more with a subscription term greater than one year. At the commencement of a subscription, when the subscription asset is placed into service, the SBITA liability is measured at the present value of payments expected to be made during the subscription term. Future subscription payments are discounted using the Town's incremental borrowing rate and the Town recognizes amortization of the discount on the subscription liability as interest expense in subsequent financial reporting periods. SBITA assets are measured as the sum of the initial subscription liability, payments made to the SBITA vendor before the commencement of the lease term, and capitalizable implementation costs less any incentives received from the SBITA vendor at or before the commencement of the subscription term. Subscription assets are amortized using the straight-line method over the subscription term. Key estimates and judgments related to SBITAs include how the Town determines (1) the discount rate it uses to discount the expected subscription payments to present value, (2) subscription term, and (3) subscription payments.  The Town 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 Town generally uses its estimated incremental borrowing rate as the discount rate for SBITAs. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 51 Note 2 – Summary of Significant Accounting Policies (Continued) J. Subscription-Based Information Technology Arrangements (SBITAs) (Continued)  The subscription term includes the period during which the Town has a noncancelable right to use the underlying IT asset. The subscription term also includes periods covered by an option to extend if it is reasonably certain to be exercised.  Subscription payments included in the measurement of the subscription liability are composed of fixed payments and purchase option years that the Town is reasonably certain to exercise. The Town monitors changes in circumstances that would require a remeasurement of a subscription and will remeasure any subscription asset and liability if certain changes occur that are expected to significantly affect the amount of the subscription liability. Right-to-use subscription assets are reported along with other capital assets and subscription liabilities are reported on the statement of net position. K. Fund Balance In the Governmental Fund Financial Statements, fund balances are classified in the following categories: Nonspendable – Items cannot be spent because they are not in spendable form, such as prepaid items and inventories, items that are legally or contractually required to be maintained intact, such as principal of an endowment or revolving loan funds. Restricted – Restricted fund balances encompass the portion of net fund resources subject to externally enforceable legal restrictions. This includes externally imposed restrictions by creditors, such as through debt covenants, grantors, contributors, laws or regulations of other governments, as well as restrictions imposed by law through constitutional provisions or enabling legislation. Committed – Committed fund balances encompass the portion of net fund resources, the use of which is constrained by limitations that the government imposes upon itself at its highest level of decision making (normally the governing body) and that remain binding unless removed in the same manner. The Town Council is considered the highest authority for the Town. A Town resolution is required to have fund balance committed. Assigned – Assigned fund balances encompass the portion of net fund resources reflecting the government’s intended use of resources. Assignment of resources can be done by the highest level of decision making or by a committee or official designated for that purpose. The Town Council has authorized the Town Manager and the Finance Manager/Treasurer for that purpose. Unassigned – This category is for any balances that have no restrictions placed upon them. 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 the General Fund, if expenditures incurred for specific purposes exceed the amounts that are restricted, committed, or assigned to those purposes, it may be necessary to report a negative unassigned fund balance in that fund. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 52 Note 2 – Summary of Significant Accounting Policies (Continued) L. Net Position For the Government-Wide Financial Statements, net position is classified in the following categories: Net Investment in Capital Assets component of net position consists of capital assets net of accumulated depreciation/amortization, reduced by the outstanding balances of bonds, mortgages, notes, subscription liabilities, or other borrowings that are attributable to the acquisition, construction, or improvement of those assets. Restricted component of net position consists of restricted assets reduced by liabilities and deferred inflows of resources related to those assets. Unrestricted 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. M. Spending Policies For Government-Wide Financial Statements, when an expense is incurred for purposes for which both restricted and unrestricted net position are available, the Town’s policy is to apply restricted net position first. For Governmental Fund Financial Statements, the Town’s policy is to spend restricted fund balances first, before spending unrestricted fund balances, for expenditures incurred for purposes for which both restricted and unrestricted fund balances are available, except for instances wherein a Town ordinance or resolution specifies the funding source or a fund balance to use. The Town’s policy is that committed and assigned fund balances are considered to have been spent first before unassigned fund balances have been spent, when expenditures are incurred for purposes for which amounts in any of those unrestricted fund balance classifications could be used, except for instances wherein a Town ordinance specifies the fund balance to use. N. Property Taxes Revenue is recognized in the fiscal year for which the tax and assessment is levied. The County of Contra Costa levies, bills and collects property taxes and special assessments for the Town and remits the full assessment regardless of the amounts received under a Teeter plan arrangement. Property Tax Secured Unsecured Lien Date January 1 January 1 (Preceding fiscal year) (Preceding fiscal year) Due Date November 1 & February 1 August 31 Delinquent Date December 10 & April 10 September 1 O. Use of Accounting Estimates The preparation of financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions. These estimates and assumptions affect the reported amounts of assets and liabilities and the disclosure of contingent assets and liabilities. In addition, estimates affect the reported amount of expenses. Actual results could differ from these estimates and assumptions. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 53 Note 2 – Summary of Significant Accounting Policies (Continued) P. Implementation of New GASB Pronouncements During fiscal year ended June 30, 2024, the Town has implemented the following new GASB statements: GASB Statement No. 100 – 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 did not have a significant effect on the Town’s financial reporting for the fiscal year end June 30, 2024. Q. Upcoming Government Accounting Standards Implementation The Town is currently evaluating its accounting practices to determine the potential impact on the financial statements for the following GASB statements: GASB Statement No. 101 – 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 Town’s fiscal year ending June 30, 2025. GASB Statement No. 102 - 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 which may limit a government's ability to acquire resources or control spending. Application of this statement is effective for the Town’s fiscal year ending June 30, 2025. GASB Statement No. 103 – In December 2023, GASB issued Statement No. Financial Reporting Model Improvements. The objective of this Statement is to improve key components of the financial reporting model to enhance its effectiveness in providing information that is essential for decision making and assessing a government’s accountability. Application of this statement is effective for the Town’s fiscal year ending June 30, 2026. Note 3 – Cash and Investments The following is a summary of pooled cash and investments, including restricted cash and investments held by the Town, and cash and investments held by fiscal agents, at June 30, 2024: Primary Government Fiduciary Governmental Fund Financial Activities Statements Total Cash and investments 82,334,792$ 2,809,694$ 85,144,486$ Restricted cash and investments: Held by Town 35,628,391 - 35,628,391 Subtotal held by Town 117,963,183 2,809,694 120,772,877 Held by fiscal agents 1,777,459 734,366 2,511,825 Total cash and investments 119,740,642$ 3,544,060$ 123,284,702$ DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 54 Note 3 – Cash and Investments (Continued) At June 30, 2024, cash and investments, excluding restricted cash and investments held by fiscal agent, are reported at fair value based on quoted market prices. The following table presents the fair value measurements of investments recognized in the accompanying Statement of Net Position measured at fair value on a recurring basis and the level within GASB 72 fair value hierarchy in which the fair value measurements fall at June 30, 2024: Percentage of Measurement Investment Type Fair Value Investments Input Demand deposits 5,891,741$ N/A N/A Investments: U.S. Securities: U.S. Treasury 42,305,144 36.04% Level 2 Federal Securities 21,243,581 18.10% Level 2 Asset Backed Securities 4,284,515 3.65% Level 2 Collateralized Mortgage Obligations 6,565,748 5.59% Level 2 Supranational: Inter-American Dev Bank Note 2,228,844 1.90% Level 2 Int'l Bank Recon & Development 1,445,311 1.23% Level 2 International Finance Corp Note 1,906,677 1.62% Level 2 U.S. Corporate Notes/FDIC: Apple Inc. Callable 1,211,495 1.03% Level 2 Bank of America NA Callable Note 1,007,100 0.86% Level 2 Caterpillar Financial Service Note 1,000,616 0.85% Level 2 Cisco Systems, Inc. 997,296 0.85% Level 2 Colgate Palmolive Co. Note 459,832 0.39% Level 2 Honeywell International Callable Note 945,131 0.81% Level 2 John Deere Capital Corp Note 990,047 0.84% Level 2 JP Morgan Chase & Co. Callable Note 404,935 0.34% Level 2 MasterCard Inc. Callable Note 978,054 0.83% Level 2 Microsoft Callable Note 975,205 0.83% Level 2 Morgan Stanley Bank NA Callable Note 445,427 0.38% Level 2 Paccar Financial Corp. Note 897,490 0.76% Level 2 Pepsico Inc. Callable Note 361,582 0.31% Level 2 State Street Bank Callable Note 258,570 0.22% Level 2 State Street Corp Callable Note 1,063,712 0.91% Level 2 Toyota Motor Credit Corp 926,075 0.79% Level 2 Wal-Mart Stores Callable Note 689,953 0.59% Level 2 Local Agency Investment Fund (LAIF) 21,103,867 17.98% N/A Money Market Funds 2,696,754 2.30% N/A Total investments 117,392,961 100.00% Total cash and investments 123,284,702$ Investments securities classified in Level 2 of the fair value hierarchy are valued using prices determined by the use of matrix pricing techniques maintained by the pricining vendors for these securities. Matrix pricing is used to value securities based on the securities’ relationship to benchmark quoted prices. Investments in LAIF are uncategorized as deposits and withdrawls are made on the basis of $1 and not fair value. A. Demand Deposits The carrying amounts of the Town's cash deposits were $5,891,741 at June 30, 2024. Bank balances as of June 30, 2024, were $5,981,070 which were fully insured and collateralized with securities held by the pledging financial institutions in the Town’s name as discussed in the following. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 55 Note 3 – Cash and Investments (Continued) A. Demand Deposits (Continued) The California Government Code (Code) requires California banks and savings and loan associations to secure the Town'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 Town's name. The market value of pledged securities must equal at least 110% of the Town's cash deposits. California law also allows institutions to secure Town deposits by pledging first trust deed mortgage notes having a value of 150% of the Town's total cash deposits. The Town has waived collateral requirements for cash deposits that are fully insured up to $250,000 by the Federal Deposit Insurance Corporation. B. Investments The Town reviews and refines its Investment Policy (Policy) annually, with the most recent revision approved by the Town Council on October 17, 2023. The Policy states that the primary investment objective is safety with investments being legally permitted and sufficiently liquid to meet forecasted needs. Maximization of interest earnings is a secondary objective. Further, the Policy states that the Town Treasurer has the ultimate responsibility to protect, preserve and maintain cash and investments. The Policy also established internal controls and reporting requirements and stipulates "Permitted Investments and Limitation on Investments". The Town is authorized by State statutes (California Government Code 53601) and in accordance with the Town's Policy to invest in the following:  U.S. Treasury Securities  U.S. Government Federal Agencies  Certificates of Deposit  Bankers Acceptances  Commercial Paper (Corporations)  Medium-Term Corporate Notes  Repurchase Agreements collateralized by U.S. Securities or U.S. Government Federal Agencies  California Local Agency Investment Fund (LAIF)  U.S. Government Mortgage Pass-Through Securities  Collateralized Mortgage Obligations (CMOs)  Asset-Backed Securities (ABS)  Money Market Mutual Funds  Passbook Savings and Demand Deposits Accounts Additionally, the Town's Policy specifies the maximum percentage of the total investment portfolio that may be held in each of the aforementioned securities. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 56 Note 3 – Cash and Investments (Continued) B. Investments (Continued) In addition to State statutes, the Town establishes that funds on deposit in banks must be federally insured or collateralized and investments shall: (1) have maximum maturity not to exceed five years; (2) be laddered and based on cash flow forecasts; and (3) be subject to limitations to a certain percent of the portfolio for each of the authorized investments. Investments were stated at fair value using the aggregate method in all funds and component units, resulting in the following investment earnings in all funds and component units: Interest earnings 2,682,853$ Unrealized gain (loss) on changes in fair value of investments 2,710,057 Total investment earnings 5,392,910$ The Town’s investment practices are in compliance with California Government Code 53601 et seq., and the Town’s Policy. Securities that are purchased and maintain their rating are held to maturity with no exception. Therefore, while GASB Statement No. 31 requires that investments be stated as “fair value” for annual financial reporting purposes, the Town cannot realize either gains or losses in this valuation of the investments. C. External Investment Pool The Town invests in the Local Agency Investment Fund (LAIF), a State of California external investment pool. The LAIF determines fair value on its investment portfolio based on market quotations for those securities where market quotations are readily available and based on amortized cost or best estimate for those securities where market value is not readily available. The Town’s investments with LAIF at June 30, 2024, include a portion of the pool funds invested in Structured Notes and Asset-Backed Securities. These investments may include the following: Structured Notes which are debt securities (other than asset-backed securities) with cash flow characteristics (coupon rate, redemption amount, or stated maturity) that depend upon one or more indices and/or that have embedded forwards or options. Asset-Backed Securities, the bulk of which are mortgage-backed securities, entitle its 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 (such as CMO’s) or credit card receivables. As of June 30, 2024, the Town had $21,103,867 invested in LAIF, which had invested 1.40% of the pool investment funds in structured notes and asset-backed securities. The fair value of the Town’s position in the LAIF pool is the same as the value of the pool shares. The Pooled Money Investment Board provides oversight to the State Treasurer’s pooled investment program. The purpose of the board is to design and administer an effective cash management and investment program, using all monies flowing through the State Treasurer’s Office bank accounts and keeping all available funds invested in a manner consistent with the goals of safety, liquidity, and yield. The Pooled Money Investment Board is comprised of the State Treasurer as chair, the State Controller, and the Director of Finance. The investment program is not registered with the Securities and Exchange Commission as an investment company. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 57 Note 3 – Cash and Investments (Continued) C. External Investment Pool (Continued) The State Treasurer’s Office reports its investments at fair value. The fair value of securities in the State Treasurer’s pooled investment program generally is based off of quoted market prices. The value of deposits in the State Treasurer’s pooled investment program, including the Local Agency Investment Fund, is equal to the dollars deposited in the program. Certain funds have elected to participate in the pooled investment program even though they have the authority to make their own investments. Others may be required by legislation to participate in the program; as a result, the deposits of these funds or accounts may be considered voluntary. However, these funds or accounts are part of the State’s reporting entity. The remaining participation in the pool, the Local Agency Investment Fund, is voluntary. D. Restricted Cash and Investments Held with Fiscal Agent Restricted cash and investments with fiscal agents, which can be only used for specific capital outlays, payment of certain long-term debt and maintaining required reserves, consists of $1,777,459 in the Governmental-wide Statement of Net Position and Balance Sheet – Governmental Funds and $734,366 in the Statement of Fiduciary Net Position. These funds have been invested only as permitted by specific State statutes governing these investments or by applicable Town ordinance, resolution or bond indenture. E. Risk Disclosures Interest Rate Risk As a means of limiting its exposure to fair value losses arising from rising interest rates, the Town’s Policy provides that final maturities of securities limits as follows: Maturity Maximum Investment Up to six months 25% Six months to five years 75% DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 58 Note 3 – Cash and Investments (Continued) E. Risk Disclosures (Continued) Interest Rate Risk (Continued) Specific maturities of investments depend on liquidity needs. At June 30, 2024, the Town's pooled cash and investments had the following maturities: Investment Type Fair Value 1 year or less 1-2 years 2-3 years 3-4 years 4-5 years Demand deposits 5,891,741$ 5,891,741$ -$ -$ -$ -$ Investments: U.S. Securities: U.S. Treasury 42,305,144 17,520,178 11,715,299 6,690,537 4,669,903 1,709,227 Federal Securities 21,243,581 5,628,229 2,933,989 3,492,436 7,682,624 1,506,303 Asset Backed Securities 4,284,515 - 737,189 1,221,814 175,548 2,149,964 Collateralized Mortgage Obligations 6,565,748 - - 1,914,963 2,720,571 1,930,214 Supranational: Inter-American Dev Bank Note 2,228,844 1,236,020 - 992,824 - - Int'l Bank Recon & Development 1,445,311 - - - - 1,445,311 International Finance Corp Note 1,906,677 988,260 - 918,417 - - U.S. Corporate Notes/FDIC: Apple Inc. Callable 1,211,495 482,522 728,973 - - - Bank of America NA Callable Note 1,007,100 - - 1,007,100 - - Caterpillar Financial Service Note 1,000,616 - - 1,000,616 - - Cisco Systems, Inc.997,296 - - 997,296 - - Colgate Palmolive Co. Note 459,832 - 459,832 - - - Honeywell International Callable Note 945,131 - - 945,131 - - John Deere Capital Corp Note 990,047 - - 990,047 - - JP Morgan Chase & Co. Callable Note 404,935 - - 404,935 - - MasterCard Inc. Callable Note 978,054 978,054 - - - - Microsoft Callable Note 975,205 - 975,205 - - - Morgan Stanley Bank NA Callable Note 445,427 - - 445,427 - - Paccar Financial Corp. Note 897,490 383,018 - 514,472 - - Pepsico Inc. Callable Note 361,582 - - 361,582 - - State Street Bank Callable Note 258,570 - 258,570 - - - State Street Corp Callable Note 1,063,712 - - 1,063,712 - - Toyota Motor Credit Corp 926,075 - 926,075 - - - Wal-Mart Stores Callable Note 689,953 - 689,953 - - - Local Agency Investment Fund (LAIF) 21,103,867 21,103,867 - - - - Money Market Funds 2,696,754 2,696,754 - - - - Total investments 117,392,961 51,016,902 19,425,085 22,961,309 15,248,646 8,741,019 Total cash and investments 123,284,702$ 56,908,643$ 19,425,085$ 22,961,309$ 15,248,646$ 8,741,019$ Maturities (in years) Credit Risk Credit risk is the risk that a security or a portfolio will lose some or all of its value due to a real or perceived change in the ability of the issuer to repay its debt. According to the Town’s Policy, no more than 5% of the total portfolio may be invested in securities of any single issuer, other than the U.S. Government, its agencies and instrumentalities and LAIF. If a security (other than LAIF) is downgraded by either Moody’s or S&P to a level below the minimum quality required by the Town, the Town will determine whether to retain or liquidate the security based upon criteria set forth in the Town’s Policy. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 59 Note 3 – Cash and Investments (Continued) E. Risk Disclosures (Continued) Credit Risk (Continued) At June 30, 2024, the Town's investments are rated as follows: Moody's S&P Investments: U.S. Securities: U.S. Treasury Aaa AA+ Federal Securities Aaa AA+ Asset Backed Securities Aaa AAA Collateralized Mortgage Obligations Aaa AA+ Supranational: Inter-American Dev Bank Note Aaa AAA Int'l Bank Recon & Development Aaa AAA International Finance Corp Note Aaa AAA U.S. Corporate Notes/FDIC: Apple Inc. Callable Aaa AA+ Bank of America NA Callable Note Aa1 A+ Caterpillar Financial Service Note A2 A Cisco Systems, Inc.A1 AA- Colgate Palmolive Co. Note Aa3 AA- Honeywell International Callable Note A2 A John Deere Capital Corp Note A1 A JP Morgan Chase & Co. Callable Note Aa2 A+ MasterCard Inc. Callable Note Aa3 A+ Microsoft Callable Note Aaa AAA Morgan Stanley Bank NA Callable Note Aa3 A+ Paccar Financial Corp. Note A1 A+ Pepsico Inc. Callable Note A1 A+ State Street Bank Callable Note A1 A State Street Corp Callable Note A1 A Toyota Motor Credit Corp Not Rated A+ Wal-Mart Stores Callable Note Aa2 AA Local Agency Investment Fund (LAIF) Not Rated Not Rated Money Market Funds Aaa AAA Credit Quality Rating Custodial Credit Risk For an investment, custodial credit risk is the risk that, in the event of the failure of the counterparty, the Town will not be able to recover the value of its investments or collateral securities that are in the possession of an outside party. The Town does not have any custodial credit risk. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 60 Note 4 – Leases Receivable and Lease-Related Deferred Inflows of Resources The Town leases various types of property including land, buildings and easements. Leases receivable consist of agreements with other entities for the “right–to–use” the underlying assets at various locations owned by the Town. The remaining terms of the agreements range from 5 to 30 years. The Town applies an implied interest rate to the total scheduled lease payments to calculate the net present value of the lease receivable. The interest rates used by the Town to calculate the net present value of the lease receivable vary depending on the length of the lease. For the fiscal year ended June 30, 2024, the Town recognized $605,294 in lease revenue and $114,248 in interest revenue, and the outstanding net present value of the lease receivable amount is $3,546,194. A summary of changes in lease receivable for the fiscal year ended June 30, 2024 is as follows: Amounts Amounts Balance Balance due within due in more July 1, 2023 Additions Reductions June 30, 2024 one year than one year 3,751,081$ -$ (204,887)$ 3,546,194$ 538,966$ 3,007,228$ As of June 30, 2024, the required payments for these leases, including interest, are: NPV Total Year Ending Leases Lease June 30 Receivable Interest Payments 2025 538,966$ 98,389$ 637,355$ 2026 514,476 82,192 596,668 2027 418,594 68,206 486,800 2028 329,226 57,347 386,573 2029 345,829 47,311 393,140 2030-2034 992,850 125,092 1,117,942 2035-2039 389,392 27,467 416,859 2040-2042 16,861 105 16,966 Total 3,546,194$ 506,109$ 4,052,303$ As of June 30, 2024, the amounts reported as deferred inflows of resources related to leases will be recognized as lease revenue as follows: Year Ending June 30 Total 2025 605,294$ 2026 558,109 2027 437,645 2028 324,721 2029 324,721 2030-2034 883,347 2035-2039 286,171 2040-2042 9,987 Total 3,429,995$ DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 61 Note 5 – Capital Assets A. Governmental Activities Summary of changes in capital assets for the year ended June 30, 2024 was as follows: Balance Transfers/ Balance July 1, 2023 Additions Retirements Reclassifications June 30, 2024 Governmental Activities: Capital assets, not being depreciated/amortized: Land 31,821,867$ -$ -$ -$ 31,821,867$ Construction in progress 33,610,738 1,142,238 - (22,985,128) 11,767,848 Infrastructure - streets, concrete & asphalt pavements 93,075,885 - - - 93,075,885 Total capital assets not being depreciated/amortized 158,508,490 1,142,238 - (22,985,128) 136,665,600 Capital assets being depreciated/amortized: Buildings and parking lots/street 41,408,769 - - 22,985,128 64,393,897 Park improvements 24,267,438 - - - 24,267,438 Furniture and equipment 6,033,822 455,586 (758,580) - 5,730,828 Subscription assets 331,124 - - - 331,124 Infrastructure: Drainage system 56,689,603 - - - 56,689,603 Bridges 12,153,067 - - - 12,153,067 Signal system 6,997,956 - - - 6,997,956 Total capital assets being depreciated/amortized 147,881,779 455,586 (758,580) 22,985,128 170,563,913 Accumulated depreciation/amortization: Buildings and parking lots (15,679,625) (991,954) - - (16,671,579) Park improvements (22,725,629) (247,739) - - (22,973,368) Furniture and equipment (4,584,106) (360,800) 758,580 - (4,186,326) Subscription assets (109,747) (94,682) - - (204,429) Infrastructure: Drainage system (56,280,395) (23,728) - - (56,304,123) Bridges (8,121,673) (180,493) - - (8,302,166) Signal system (5,959,224) (106,272) - - (6,065,496) Total accumulated depreciation/amortization (113,460,399) (2,005,668) 758,580 - (114,707,487) Total capital assets, being depreciated/amortized, net 34,421,380 (1,550,082) - 22,985,128 55,856,426 Governmental activities capital assets, net 192,929,870$ (407,844)$ -$ -$ 192,522,026$ DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 62 Note 5 – Capital Assets (Continued) A. Governmental Activities (Continued) Depreciation/amortization expenses by program for capital assets for the year ended June 30, 2024, were as follows: Police Services Building $ 19,250 Furniture & equipment (vehicle) 281,482 Subtotal 300,732 Maintenance Services Building 537,843 Parking lots 307,158 Park improvements 244,881 Furniture & equipment (vehicle) 55,448 Subtotal 1,145,330 Development Services Furniture & equipment (vehicle) 6,255 Infrastructure - drainage 23,728 Infrastructure - bridge 180,493 Subtotal 210,476 Transportation (Community) Services Furniture & equipment (vehicle) 1,248 Infrastructure - signal 106,272 Subtotal 107,520 Administrative Services Building 1,212 Furniture & equipment (vehicle) 9,562 Subscription assets 94,682 Subtotal 105,456 Parks and Recreation Services Building 126,491 Park improvements 2,859 Furniture & equipment (vehicle) 6,804 Subtotal 136,154 Total depreciation/amortization expense $ 2,005,668 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 63 Note 6 – Interfund Transactions A. Transfers In/Out Transfers in/out for the year ended June 30, 2024, were as follows: Lighting Capital Landscape Improvement Special Capital Non-Major Revenue Projects Governmental Fund Fund Funds Transfers Out (1) (1) (2) Total General Fund 1,350,000$ 1,880,217$ 462,480$ 3,692,697$ Non-Major Governmental Funds - - 125,000 125,000 Total 1,350,000$ 1,880,217$ 587,480$ 3,817,697$ Transfers In The following are explanations for the transfers in and out: (1) Transfers in to the Capital Improvement Capital Projects Fund and Lighting and Landscape Special Revenue Fund were to fund various capital projects. (2) Transfers in to the Non-Major Governmental Funds from other Non-Major Governmental Funds were to fund various capital projects. Note 7 – Loans Receivable from Successor Agency to the Former Community Development Agency In the fiscal year 2012, the Successor Agency Trust Fund was established to replace the Town's Community Development Agency. Below are the accounts and transactions as of and for the year ended June 30, 2024: Government-Wide Financial Statements Loans Receivable Cooperative Loan Agreement $ 1,759,401 Total $ 1,759,401 Reimbursements from Successor Agency $ 867,219 Funds Financial Statements General Fund Due from Successor Agency of Former Community Development Agency 1,759,401$ Total 1,759,401$ DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 64 Note 7 – Loans Receivable from Successor Agency to the Former Community Development Agency (Continued) A. Successor Agency (SA) Cooperative Agreement Loan Receivable Prior to the State of California's (State) dissolution of all redevelopment agencies, the Town of Danville and the former Community Development Agency (CDA) had entered into a Cooperation Agreement (Agreement), under which the Town advanced funds to the former CDA that were subject to later repayment by the former CDA. The Successor Agency to the former CDA and the Successor Agency's Oversight Board approved re-entry into the Agreement, as provided for in AB 1X 26 (the Dissolution Act). The State Department of Finance determined that the Agreement was not an enforceable obligation, leading the Town to file a lawsuit in the Sacramento County Superior Court (Superior Court) against the State challenging that determination. The Town won its suit in Superior Court, leading to an appeal by the State. In May 2015, the State dismissed its appeal, and at the same time, the Department of Finance accepted the Agreement as an enforceable obligation. As a result, the Town received its first payment in June 2015 under the Agreement. The Agreement incorporated the following payment schedule, which the Successor Agency and the Town will follow when preparing future Recognized Obligation Payment Schedule (ROPS) statements. However, due to the fact that the State refused to allow payment for the first several years post-dissolution, those amounts will be paid in years subsequent to those shown in the Agreement. Therefore, an additional $3,195,604 was approved in addition to the original amount and was recognized as special item in the basic financial statements. Fiscal Year Amount 2025 1,100,000$ 2026 659,401 Total 1,759,401$ Note 8 – Unearned Revenue Unearned revenue in Government-Wide Financial Statements and governmental funds statements represents amounts for which revenues have not been earned. At June 30, 2024, unearned revenues in the Government-Wide Financial Statements and governmental funds statements were as follows: Governmental Activities American Rescue Plan Act unspent funds $ 4,683,054 Recreation program registration 841,634 Business licenses 201,954 Other - gas tax 89,854 Total $ 5,816,496 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 65 Note 9 – Long-Term Obligations A. Governmental Activities A summary of changes in long-term debt for the year ended June 30, 2024 is as follows: Due Due in Balance Balance Within More than Description July 1, 2023 Additions Retirements June 30, 2024 One Year One Year Publicly offered COPs: 2001 issue 1,625,000$ -$ (380,000)$ 1,245,000$ 395,000$ 850,000$ 2005 issue 3,065,000 - (200,000) 2,865,000 205,000 2,660,000 Subscription liability 145,949 - (71,855) 74,094 74,094 - Compensated absences 1,191,160 918,804 (804,315) 1,305,649 110,000 1,195,649 Total 6,027,109$ 918,804$ (1,456,170)$ 5,489,743$ 784,094$ 4,705,649$ Classification Certificates of Participation – 2001 Issue The Town issued $6,700,000 principal amount of 2001 Certificates of Participation (2001 COPs) on October 1, 2001. The purpose of the 2001 COPs was to provide funds to refund the outstanding 1992 Certificates of Participation, to defease the 1994 Tax Allocation Bonds, and to provide funds for the lease of certain real property and improvements. The 2001 COPs in the amount of $3,745,000 matured on September 1, 2018, and bore interest rates ranging from 3.50% to 4.625%. The 2001 COPs in the amount of $635,000 mature through September 1, 2020, and bear interest at the rate of 4.75% per annum. The 2001 COPs in the amount of $2,320,000 mature through September 1, 2026, and bear interest at the rate of 5.00% per annum. In the event of default, there is no acceleration clause. The Town will only be liable for lease payments on an annual basis as they come due and the trustee woud be required to seek separate judgments for the annual lease payments. The 2001 COPs are payable semiannually on each March 1 and September 1, commencing March 1, 2002 and are subject to optional and mandatory early redemption provisions. The annual debt service requirements for the 2001 COPs outstanding at June 30, 2024 are as follows: For the Years Ending June 30, Principal Interest Total 2025 $ 395,000 $ 52,375 $ 447,375 2026 415,000 32,125 447,125 2027 435,000 10,875 445,875 Total $ 1,245,000 $ 95,375 $ 1,340,375 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 66 Note 9 – Long-Term Obligations (Continued) A. Governmental Activities (Continued) Certificates of Participation – 2005 Issue The Town issued $5,600,000 principal amount of 2005 Certificates of Participation (2005 COPs) on March 1, 2005. The purpose of the 2005 COPs was to provide funds to finance the acquisition and improvement of certain property for use as a public parking facility and other capital improvements with the Town. The 2005 COPs in the amount of $3,155,000 mature through March 1, 2026, and bear interest rates ranging from 4.000% to 4.625%. The 2005 COPs in the amount of $965,000 mature through March 1, 2030, and bear interest at the rate of 4.625% per annum. In the event of default, there is no acceleration clause, however, the Town may be forced to relinquish possession and use of the property until the curing of such default. The 2005 COPs in the amount of $1,480,000 mature through March 1, 2035, and bear interest at the rate of 4.625% per annum. The 2005 COPs are payable semiannually on each March 1 and September 1, commencing September 1, 2005. The 2005 COPs are subject to optional and mandatory early redemption provisions. The annual debt service requirements for the 2005 COPs outstanding at June 30, 2024, are as follows: June 30,Principal Interest Total 2025 $ 205,000 $ 132,250 $ 337,250 2026 215,000 123,025 338,025 2027 225,000 113,082 338,082 2028 235,000 102,675 337,675 2029 245,000 91,806 336,806 2030-2034 1,415,000 277,269 1,692,269 2035 325,000 15,031 340,031 Total $ 2,865,000 $ 855,138 $ 3,720,138 In accordance with the final Recognized Obligation Payment Schedule (ROPS) approved for the Successor Agency to the the former Community Development Agency by the State Department of Finance, the Town receives annual repayments from the Successor Agency in an amount equivalent to the annual principal and interest payments for the 2001 and 2005 COPs. Subscription Liability The Town entered into various subscription-based IT arrangements and has recorded a liability to offset the right- to-use assets. These are calculated using the Town’s incremental borrowing rate of 3.0%. Future minimum payments on SBITA liabilities are as follows: June 30,Principal Interest Total 2024 $ 74,094 $ 185 $ 74,279 Total $ 74,094 $ 185 $ 74,279 Compensated Absences The Town's liability for vested and unpaid compensated absences (accrued vacation and sick pay) has been accrued and amounts to $1,305,649 at June 30, 2024. It is estimated that $110,000 will be needed to cover employees who leave employment within one year. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 67 Note 9 – Long-Term Obligations (Continued) B. Fiduciary Fund Financial Statements Summary of changes in long-term obligations for the year ended June 30, 2024 was as follows: Due Due in Balance Balance Within More than Description July 1, 2023 Additions Retirements June 30, 2024 One Year One Year Loans payable 1,700,000$ -$ (230,000)$ 1,470,000$ 250,000$ 1,220,000$ Total 1,700,000$ -$ (230,000)$ 1,470,000$ 250,000$ 1,220,000$ Loan Payable The Authority issued $3,570,000 principal amount of Taxable Revenue Bonds, 2001 Series A (Bonds) on December 1, 2001. The proceeds of the Bonds were loaned to the former CDA pursuant to a Loan Agreement, dated as of December 1, 2001 and used to finance low and moderate income housing project within the project area. The Bonds in the amount of $35,000 matured through August 1, 2006, and bore interest at the rate of 6.15% per annum. The Bonds in the amount of $260,000 mature through August 1, 2011, and bear interest at the rate of 7.25% per annum. The Bonds in the amount of $1,170,000 mature through August 1, 2020, and bear interest at the rate of 8.15% per annum. The Bonds in the amount of $2,105,000 mature through August 1, 2028, and bear interest at the rate of 8.50% per annum. The Bonds are payable seminannually on each February 1 and August 1, commencing August 1, 2002. The Bonds are subject to optional and mandatory early redemption provisions. The Bonds are special obligations of the Authority payable from and secured by loan payments made by the former CDA under the Loan Agreement and certain other amounts on deposit in the funds and accounts established under the Indenture. The Loan Agreement is secured by the tax increment revenues of the former CDA. This loan has been transferred to the Successor Agency Trust Fund. The annual debt service requirements for the Bonds outstanding at June 30, 2024 are as follows: For the Years Ending June 30, Principal Interest Total 2025 $ 250,000 $ 114,325 $ 364,325 2026 270,000 92,225 362,225 2027 290,000 68,425 358,425 2028 315,000 42,713 357,713 2029 345,000 14,663 359,663 Total $ 1,470,000 $ 332,351 $ 1,802,351 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 68 Note 10 – Defined Contribution Pension Plan A. Section 401(a) Qualified Defined Contribution Pension Plan All qualified Town employees participate in the Section 401(a) qualified defined contribution pension plan as allowed under the Internal Revenue Code. The plan type sponsored by the Town is the Money Purchase Plan (Plan), which was last amended on July 1, 2010. The Plan is a defined contribution retirement plan in which the employer's contribution is nondiscretionary and is based on a formula that is not related to profits. The Plan sponsor guarantees no benefit and bears no investment risk while the Plan participants bear all investment risk and have no guaranteed level of benefits. An administrative committee comprised of Town personnel governs the Plan. The Town Council has the authority to establish or amend the Plan's provisions. The Plan's provisions and contribution requirements are established and may be amended by Town Council resolution. Eligible employees begin participating the first day of the month following their employment date of work. The Plan is entirely funded by Town contributions of 15% of the participants' gross pay for employees who contribute 5% of their salary to the deferred compensation plan. The Town's contributions vest at 20% per plan year of uninterrupted employment. Participants are eligible to begin receiving benefits at age 55 and are required to begin receiving benefits no later than April after age 70-1/2. The employees may also roll their funds to another retirement plan upon separation of service. The Town's payroll for employees covered by the Plan for the year ended June 30, 2024, was $10,316,669. Total employee contributions paid by the Town amounted to $1,404,446 or 13.61% of covered payroll and of total payroll. The Plan's assets are invested with Lincoln National Life, a mutual fund company that offers participants multiple mutual fund category selections from which they can choose. As of June 30, 2024, the Plan had 175 participants and the market value of the Plan amounted to $27,992,207. B. Section 415(m) Benefit Restoration Plan Qualified Town employees may participate in a Section 415(m) benefit restoration plan (415 Plan) as allowed under the Internal Revenue Code. The 415 Plan is a qualified governmental excess benefit arrangement for employees who are not able to receive their entire contribution to the Section 401(a) Plan because of the application of Internal Revenue Code Section 415. The 415 Plan is a defined contribution retirement plan in which the employer's contribution is nondiscretionary and is based on a formula that is not related to profits. The Plan sponsor guarantees no benefit and bears no investment risk while the Plan participants bear all investment risk and have no guaranteed level of benefits. Participants are eligible to begin receiving benefits at age 55 and are required to begin receiving benefits no later than April after age 70-1/2. The Plan's assets are invested with a mutual fund company that offers participants multiple mutual fund category selections from which they can choose. Total employee contributions paid by the Town amounted to $55,207. As of June 30, 2024, the Plan had two participants and the market value of the Plan amounted to $534,799. The Defined Contribution Pension Plan and the Benefit Restoration Plan are not included in the accompanying financial statements. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 69 Note 11 – Fund Balance Classification and Net Position At June 30, 2024, fund balances are classified as follows: Regional Traffic Lighting Impact Fee ARPA Capital and Special Special Improvement Non-Major General Landscape Revenue Revenue Project Governmental Fund Fund Fund Fund Fund Funds Total Fund Balances: Nonspendable Due from Successor Agency of Former CDA $ 659,401 $ - $ - $ - $ - $ - $ 659,401 Prepaid items 186,610 - - - - - 186,610 Total nonspendable 846,011 - - - - - 846,011 Restricted Special revenue - 1,525,693 4,512,160 - - 32,368,930 38,406,783 Debt service 848,842 - - - - - 848,842 Total restricted 848,842 1,525,693 4,512,160 - - 32,368,930 39,255,625 Committed Capital projects 14,562,169 - - - 25,885,371 8,065,637 48,513,177 Operating reserve 16,009,768 - - - - - 16,009,768 Contingency 1,010,470 - - - - - 1,010,470 Reward fund 10,000 - - - - - 10,000 Compensated absences/personnel 2,215,232 - - - - - 2,215,232 Total committed 33,807,639 - - - 25,885,371 8,065,637 67,758,647 Assigned Townwide bonus program 26,000 - - - - - 26,000 Town Council 5,000 - - - - - 5,000 Emergency preparedness COVID-19 78,256 - - - - - 78,256 Finance consulting services 10,000 - - - - - 10,000 Information technology consulting services 15,000 - - - - - 15,000 Information technology equipment 20,000 - - - - - 20,000 Human resources consulting services 60,000 - - - - - 60,000 Internal services software 11,000 - - - - - 11,000 Internal services equipment 10,010 - - - - - 10,010 Economic development consultant 10,000 - - - - - 10,000 Maintenance equipment maintenance 50,000 - - - - - 50,000 Lighting and landscaping - 3,113,454 - - - - 3,113,454 Total assigned 295,266 3,113,454 - - - - 3,408,720 Unassigned (deficit)1,100,000 - - (218,086) - - 881,914 Total fund balance (deficit)36,897,758$ 4,639,147$ 4,512,160$ (218,086)$ 25,885,371$ 40,434,567$ 112,150,917$ Major Funds Operating Reserve The Town maintains a minimum operating reserve of 20% of the fiscal year operating budget, which may only be used in the event of a financial emergency, subject to Town Council authorization. Town Resolution No. 35-98 defines the purpose and uses of the General Fund operating reserve. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 70 Note 11 – Fund Balance Classification and Net Position (Continued) Net Investment in Capital Assets The details of net investment in capital assets in the Statement of Net Position as of June 30, 2024, are presented below: Governmental Activities Capital assets, not being depreciated 136,665,600$ Capital assets, net of depreciation and amortization 55,856,426 Less: debt related to capital assets 2001 COPs (1,245,000) 2005 COPs (2,865,000) Subscription liability (74,094) Less: retentions payable (158,419) Net investment in capital assets 188,179,513$ Note 12 – Risk Management The Town participates in the Municipal Pooling Authority (MPA), a joint powers agreement between 19 cities, which provides insurance coverage for liability, auto, property and workers' compensation claims. Claim liabilities are accrued when it is probable that a loss has occurred and the amount of that loss can be reasonably estimated. The MPA covers claims in an amount up to $29,000,001. The Town has a deductible of $5,000 per claim for liability cases and up to these pay for workers' compensation claims. The MPA is self-insured up to $1,000,000 per claim and has excess coverage to a maximum of $29,000,000. The MPA is governed by a board consisting of representatives from each member municipality. The Board, which controls the operations of the MPA, including the selection of management and the approval of operating budgets, is independent of any influence by member municipalities beyond their representation on the Board. The Town's net general liability premium payments to the MPA in the amount of $994,667 for fiscal year 2023/2024 are in accordance with formulas established by the MPA. Actual surpluses or losses are shared according to a formula developed from overall loss costs and spread to member entities on a percentage basis after a retrospective rating. Estimates of deductibles for incurred, but not reported, (IBNR) liability claims are included in the Town's claims estimates and are based upon historical experiences as calculated by the MPA. During the year, the Town did not receive a dividend from the MPA based on the results of prior years' actitivites. The following provides a reconciliation of the amount accrued for estimated out of pocket amounts to be paid for IBNR deductibles: Beginning Claims and Payments for End of Year Changes in Current and of Year Fiscal Year Liability Estimates Prior Years Liability 2021-2022 56,514$ 18,323$ (29,623)$ 45,214$ 2022-2023 45,214 7,934 (21,339) 31,809 2023-2024 31,809 75,395 (41,961) 65,243 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 71 Note 12 – Risk Management (Continued) The Town has had no settlements that exceeded insurance coverage in the last three fiscal years, and no changes in insurance coverage from the prior year. Because dividends cannot be guaranteed and may fluctuate significantly, these types of results should not be used to forecast future years' results. Insurance cost 994,667$ Less: dividend received - Net insurance cost 994,667$ The MPA's audited condensed financial information as of and for the year ended June 30, 2023, are as follows: Total assets 89,015,003$ Total deferred outflows of resources 1,999,852$ Total liabilities 66,355,741$ Total deferred inflows of resources 395,382$ Total net position 24,263,732$ Total operating revenues 47,399,643$ Total operating expenses 47,558,867$ Net operating (loss)(159,224)$ Non-operating revenues (expenses)1,158,446$ Change in net position 999,222$ Detailed financial information may be obtained from the Municipal Pooling Authority (MPA) in Walnut Creek, California. Note 13 – Commitments and Contingencies Lawsuits The Town is a defendant in a number of lawsuits which have arisen in the normal course of business. While substantial damages are alleged in some of these actions, their outcome cannot be predicted with certainty. In the opinion of the Town Attorney, these actions, when finally adjudicated, will not have a material adverse effect on the financial position of the Town. Annual Appropriations Under Article XIIIB of the California Constitution (the Gann Spending Limitation Initiative), the Town is restricted as to the amount of annual appropriations, and if certain proceeds of taxes exceed allowed appropriations, the excess must either be refunded to the State Controller or refunded to the taxpayers through revised tax rates or revised fee schedules. For the fiscal year ended June 30, 2024, the Town’s appropriations limit totals $51,850,346 and the Town’s appropriations subject to limitation were $25,270,077. DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 72 Note 13 – Commitments and Contingencies (Continued) 2024 Appropriation Limit Proposition 4, passed by the voters in 1978, requires that the Town Council adopt an annual appropriation limit for proceeds of taxes. This limit fixes the amount of general tax revenue that can be appropriated in a given fiscal year. Any excess must be returned to the taxpayers. The limit is adjusted each year by established adjustment factors. Proposition 111, passed by the voters in June 1990, allows each local agency's governing body to annually choose which adjustment factors are to be used. The Town Council has the discretion to choose one of two inflation factors: (1) population growth in California per capita income or (2) growth in nonresidential assessed valuation from new construction within the Town. Additionally, the Town Council may choose from one of two population adjustment factors: population growth within the Town or population growth within Contra Costa County. The Town chose to use the population growith within Contra Costa County. The chosen population adjustment factor is multiplied by the growth in California per capita income. Construction Commitments The Town has several outstanding or planned construction projects as of June 30, 2024. These projects are evidenced by contractual commitments with contractors. As of June 30, 2024, the Town's outstanding contractual commitments amount were $2,844,030. Note 14 – Other Required Disclosures A. Expenditures Exceeding Appropriations For the year ended June 30, 2024, the following funds had excess expenditures over appropriations, which are expected to be covered with existing fund balance or had sufficient available revenue: Excess Expenditures Fund Function over Appropriations General Fund Maintenance services 373,344$ General Fund Capital outlay 6,145 Lighting and Landscaping Special Revenue Fund Maintenance services 21,210 Lighting and Landscaping Special Revenue Fund Administrative services 292,879 Lighting and Landscaping Special Revenue Fund Capital outlay 49,322 American Rescue Plan Act Special Revenue Fund Capital outlay 17,950 Gas Tax Special Revenue Fund Administrative services 1,239 Child Care Special Revenue Fund Administrative services 608 Stormwater Pollution Control Program Special Revenue Fund Development services 174,854 Measure C/J Special Revenue Fund Administrative services 46 Measure C/J Special Revenue Fund Capital outlay 91,074 Donations and Contributions Special Revenue Fund Maintenance services 5,558 Public Safety Special Revenue Fund Police services 2 Public Safety Special Revenue Fund Administrative services 189 DRAF T 10.30. 2 0 2 4 Town of Danville Notes to the Basic Financial Statements (Continued) For the Year Ended June 30, 2024 73 Note 14 – Other Required Disclosures (Continued) B. Deficit Net Position/Fund Balance The following funds have deficit fund balance or net position at June 30, 2024: Fund Balance American Rescue Plan Act Special Revenue Fund (218,086)$ Successor Agency Private Purpose Trust Fund (2,597,092) Deficit balances in governmental funds are expected to be covered by future revenues. The deficit fund balance in the Successor Agency private-purpose trust fund is expected to be covered by receipt of tax increment funding. DRAF T 10.30. 2 0 2 4 74 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 75 REQUIRED SUPPLEMENTARY INFORMATION (UNAUDITED) DRAF T 10.30. 2 0 2 4 76 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) For the Year Ended June 30, 2024 77 Note 1 – Budgetary Information The Town follows these procedures in establishing the budgetary data for all governmental funds except for capital projects funds:  Town Council determines community needs, priorities and opportunities for the upcoming year commencing July 1.  By June 30, the Town Manager submits to the Town Council a proposed operating budget for the year commencing July 1. The operating budget includes proposed expenditures and the means of financing them.  Public hearings are conducted to obtain taxpayer comments.  The budget is legally enacted through passage of a resolution during a Town Council meeting in the month of June.  The legal level of budgetary control is at the program leve. The Town Manager is authorized to transfer budgeted amounts within an activity, for example, within a program (legal, finance, etc.). The Town Manager is able to authorize the purchase of office equipment instead of the original budgeted for expense to pay for consultants, for example. However, any revisions that alter the total expenditures (increase/decrease budget for a program) must be approved by the Town Council.  Formal budgeting is employed as a management control device during the year.  Budgets are adopted on a basis consistent with accounting principles generally accepted in the United States of America (U.S. GAAP). Budgeted amounts are as originally adopted or as amended by the Town Council. Individual amendments were not material in relation to the original appropriations. DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules For the Year Ended June 30, 2024 78 Budgetary Comparison Schedules General Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Property taxes $ 17,452,000 $ 17,452,000 $ 19,905,678 $ 2,453,678 Sales taxes 6,640,000 6,640,000 6,799,187 159,187 Other taxes 2,288,788 2,288,788 2,584,666 295,878 Charges for services 67,553 67,553 2,030,638 1,963,085 Licenses and permits 350,000 350,000 388,935 38,935 Intergovernmental 1,010 21,945 204,173 182,228 Fines and forfeitures 150,000 150,000 144,658 (5,342) Use of money and property 2,485,491 2,485,491 5,042,345 2,556,854 Reimbursement from Successor Agency 867,249 867,249 867,219 (30) Miscellaneous 1,131,854 1,131,854 468,222 (663,632) Total re ve n ue s 31,433,945 31,454,880 38,435,721 6,980,841 EXPENDITURES: Current: General government Town Council 253,651 258,651 194,729 63,922 Town Manager 845,683 871,683 712,736 158,947 Town Attorney 458,257 579,110 542,758 36,352 Town Clerk 283,022 287,314 251,803 35,511 Community outreach 401,021 427,478 284,652 142,826 Economic development 468,501 496,781 401,902 94,879 Total general government 2,710,135 2,921,017 2,388,580 532,437 Police services Administration 1,845,765 2,138,120 2,015,715 122,405 Patrol 6,303,841 6,402,344 6,056,747 345,597 Traffic 1,273,741 1,276,518 1,228,646 47,872 Investigations 1,051,156 1,063,588 1,038,754 24,834 PS Youth Services 571,927 571,927 480,807 91,120 Emergency preparedness 137,189 422,101 284,390 137,711 Total police services 11,183,619 11,874,598 11,105,059 769,539 Maintenance services Management 450,516 480,516 410,537 69,979 Building maintenance 490,073 501,793 1,134,997 (633,204) Park maintenance 1,372,231 1,437,086 1,248,486 188,600 Equipment maintenance 393,900 423,900 352,640 71,260 Total maintenance services 2,706,720 2,843,295 3,146,660 (373,344) Development services Management 333,307 333,307 271,725 61,582 Planning 239,594 239,594 179,316 60,278 Engineering 146,207 146,207 124,716 21,491 Capital project management 633,699 633,699 609,847 23,852 Transportation - 17,000 - 17,000 Total development services 1,352,807 1,369,807 1,185,604 184,203 (Continued) DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules (Continued) For the Year Ended June 30, 2024 79 Budgetary Comparison Schedules (Continued) General Fund (Continued) Variance Original Final From Final Budget Budget Actual Budget EXPENDITURES (Continued): Current (Continued): Administrative services Management 364,110 364,110 334,490 29,620 Finance 766,511 822,954 680,678 142,276 Information technology 879,639 927,858 684,673 243,185 Animal control 394,936 394,936 382,985 11,951 Human resources 471,708 539,243 360,863 178,380 Risk management 1,185,152 1,185,239 1,212,558 (27,319) Internal services 292,012 375,448 220,849 154,599 Library services 180,204 180,204 156,512 23,692 Total administrative services 4,534,272 4,789,992 4,033,608 756,384 Recreation, arts, and community services Management 389,231 389,231 373,743 15,488 Sports and fitness 704,441 711,353 674,310 37,043 Facilities management 580,947 580,947 571,249 9,698 Culture arts 762,591 762,591 712,430 50,161 Youth services 547,792 547,792 547,705 87 Teen services 421,069 426,800 375,703 51,097 Adult services 173,776 173,776 131,171 42,605 Senior services 398,231 398,231 374,005 24,226 Special events 338,585 347,598 292,737 54,861 Total recreation, arts, and community services 4,316,663 4,338,319 4,053,053 269,778 Capital outlay - - 6,145 (6,145) Debt service: Principal 651,855 651,855 651,855 - Interest 225,394 215,364 215,364 - Total expenditures 27,681,465 29,004,247 26,785,928 2,132,852 REVENUES OVER (UNDER) EXPENDITURES 3,752,480 2,450,633 11,649,793 4,847,989 OTHER FINANCING SOURCES (USES): Transfers out (4,726,594) (8,076,594) (3,692,697) 4,383,897 Total other financing sources (uses) (4,726,594) (8,076,594) (3,692,697) 4,383,897 NET CHANGE IN FUND BALANCE $ (974,114) $ (5,625,961) 7,957,096 $ 9,231,886 FUND BALANCE: Beginning of year 28,940,662 End of year $ 36,897,758 (Concluded) DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules (Continued) For the Year Ended June 30, 2024 80 Budgetary Comparison Schedules (Continued) Lighting and Landscape Special Revenue Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Special assessments $ 3,031,853 $ 3,031,853 $ 3,050,957 $ 19,104 Use of money and property 8,999 8,999 121,935 112,936 Miscellaneous 90,000 90,000 135,570 45,570 Total revenues 3,130,852 3,130,852 3,308,462 177,610 EXPENDITURES: Current: Maintenance services Capital project management 130,939 130,939 179,653 (48,714) Building maintenance 27,504 27,504 - 27,504 Total maintenance services 158,443 158,443 179,653 (21,210) Development services Engineering 404,700 404,700 15,599 389,101 Total development services 404,700 404,700 15,599 389,101 Lighting and landscape Building maintenance 490,072 501,792 303,050 198,742 Park maintenance 1,372,791 1,437,646 1,248,051 189,595 Roadside maintenance 2,206,601 2,365,366 1,939,590 425,776 Street light maintenance 794,034 915,050 815,504 99,546 Total lighting and landscape 4,863,498 5,219,854 4,306,195 913,659 Administrative services Finance 2,616 2,616 295,495 (292,879) Total administrative services 2,616 2,616 295,495 (292,879) Capital outlay - - 49,322 (49,322) Total expenditures 5,429,257 5,785,613 4,846,264 939,349 REVENUES OVER (UNDER) EXPENDITURES (2,298,405) (2,654,761) (1,537,802) 1,116,959 OTHER FINANCING SOURCES (USES) Transfers in - - 1,350,000 1,350,000 Total other financing sources (uses) - - 1,350,000 1,350,000 NET CHANGE IN FUND BALANCE $ (2,298,405) $ (2,654,761) (187,802) $ 2,466,959 FUND BALANCE: Beginning of year 4,826,949 End of year $ 4,639,147 DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules (Continued) For the Year Ended June 30, 2024 81 Budgetary Comparison Schedules (Continued) Regional Traffic Impact Fees Special Revenue Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Development fees -$ -$ 123,530$ 123,530$ Intergovernmental 111,885 111,885 111,885 - Use of money and property - - 66,350 66,350 Miscellaneous 1,310 1,310 - (1,310) Total revenues 113,195 113,195 301,765 188,570 EXPENDITURES: Current: Development services Capital project management 1,606,411 1,606,411 137,578 1,468,833 Total development services 1,606,411 1,606,411 137,578 1,468,833 Administrative services Finance 11,437 11,437 2,085 9,352 Total administrative services 11,437 11,437 2,085 9,352 Capital outlay 111,885 111,885 104,283 7,602 Total expenditures 1,729,733 1,729,733 243,946 1,485,787 NET CHANGE IN FUND BALANCE (1,616,538)$ (1,616,538)$ 57,819 1,674,357$ FUND BALANCE: Beginning of year 4,454,341 End of year 4,512,160$ DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Budgetary Comparison Schedules (Continued) For the Year Ended June 30, 2024 82 Budgetary Comparison Schedules (Continued) American Rescue Plan Act Special Revenue Fund Variance Original Final From Final Budget Budget Actual Budget REVENUES: Intergovernmental -$ -$ 1,162,776$ 1,162,776$ Total revenues - - 1,162,776 1,162,776 EXPENDITURES: Current: Development services Capital project management 5,846,614 5,846,614 1,363,842 4,482,772 Total development services 5,846,614 5,846,614 1,363,842 4,482,772 Capital outlay - - 17,950 (17,950) Total expenditures 5,846,614 5,846,614 1,381,792 4,464,822 NET CHANGE IN FUND BALANCE (5,846,614)$ (5,846,614)$ (219,016) 5,627,598$ FUND BALANCE (DEFICIT): Beginning of year 930 End of year (218,086)$ DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Modified Approach for Town Street Infrastructure Assets For the Year Ended June 30, 2024 83 Modified Approach for Town Street Infrastructure Assets The Town defines infrastructure as the basic physical assets including the street system; traffic control improvements; park and recreation lands and improvement system; storm water conveyance systems; and site amenities such as parking and landscaped areas used by the Town in the conduct of its business. Each major infrastructure system can be divided into subsystems. For example, the street system can be divided into asphalt pavements, concrete curb and gutters, medians, traffic control devices (signs, signals and pavement markings), landscaping and land. Subsystem detail is not presented in these Basic Financial Statements; however, the Town maintains detailed information on these subsystems. The Town has elected to use the "Modified Approach" for infrastructure reporting for its Streets Pavement System. Eligible infrastructure capital assets are not required to be depreciated under the following requirements:  The Town manages the eligible infrastructure capital assets using an asset management system with characteristics of: (1) an up-to-date inventory; (2) perform condition assessments and summarize the results using a measurement scale; and (3) estimate annual amount to maintain and preserve at the established condition assessment level.  The Town documents that the eligible infrastructure capital assets are being preserved approximately at or above the established and disclosed condition assessment level. In April 2024, the Town commissioned a study to update the physical condition assessment of the arterials and collector for residential streets. The prior assessment study was completed in September 2023. The streets, primarily asphalt pavements, were defined as all physical features associated with the operation of motorized vehicles that exist within the limits of right of way. Town owned streets are classified based on land use, access and traffic utilization into the following four classifications: arterial/major, secondary, collector and local. This condition assessment will be performed at least every three years. Street assessments have historically been funded with grants and performed approximately every three years. Each street was assigned a physical condition based on potential defects. A Pavement Condition Index (PCI), a nationally recognized index, was assigned to each street and expressed in a continuous scale from 0 to 100, where 0 is assigned to the least acceptable physical condition and 100 is assigned to the physical characteristics of a new street. The following conditions were defined: PCI Conditions PCI Rating Very Good 70-100 Good 50-69 Poor 26-49 Very Poor 0-25 DRAF T 10.30. 2 0 2 4 Town of Danville Required Supplementary Information (Unaudited) (Continued) Modified Approach for Town Street Infrastructure Assets (Continued) For the Year Ended June 30, 2024 84 Modified Approach for Town Street Infrastructure Assets (Continued) The Town's policy is to achieve a minimum average rating of 70 for all streets, which is a "very good" rating. As of June 30, 2024, the Town’s street system was rated at a PCI index of 77 on the average with the detail condition as follows: Street Condition % of Streets Very Good (PCI 70-100)78% Good (PCI 50-69)18% Poor (PCI 26-49)4% Very Poor (PCI 0-25)0% 100% The Town’s streets are constantly deteriorating as a result of following four factors: (1) traffic using the streets; (2) the sun’s ultra-violet rays drying out and breaking down the top layer of pavement; (3) utility company/private development interests trenching operations; and (4) water damage from natural precipitation and other urban runoff. The Town is continuously taking actions to arrest the deterioration through short-term maintenance activities such as pothole patching, street sweeping, and sidewalk repairs. The Town expended $3,720,080 of the General Fund monies on street maintenance for the fiscal year ended June 30, 2024. These expenditures delayed deterioration. The Town has estimated that the amount of annual expenditures required to maintain the Town’s streets at the average PCI rating of 70 through the year 2024 is a minimum of $3,000,000. A schedule of estimated annual amount calculated to maintain and preserve its streets at the current level compared to actual expenditures for street maintenance for the last ten years is presented below. The availability and use of other funds has enabled the Town to maintain the underlying drainage, associated curbs and gutters and to repair small but costly pavement areas needing complete replacement. Other Funds Total PCI Fiscal Year Final Budget Actual Actual Actual Rating 2014-15 $ 3,000,000 $ 2,800,816 $ 1,359,695 $ 4,160,511 74 2015-16 3,000,000 684,250 708,280 1,392,530 76 2016-17 3,000,000 1,417,001 2,986,762 4,403,763 75 2017-18 3,000,000 6,184,143 1,906,277 8,090,420 80 2018-19 3,000,000 3,629,281 3,865,363 7,494,644 78 2019-20 3,000,000 966,845 140,711 1,107,556 81 2020-21 - 1,792,695 256,185 2,048,880 81 2021-22 250,000 294,363 2,103,352 2,397,715 80 2022-23 900,000 2,649,980 523,839 3,173,875 77 2023-24 5,086,541 3,720,080 4,138,251 7,858,331 78 General Fund The Town also has an on-going street rehabilitation program funded in the Capital Improvement Program that is intended to improve the condition rating of Town streets. The rehabilitation program is formulated based on deficiencies identified as a part of its Pavement Management System. As of June 30, 2024, approximately 22% of the Town's streets were rated below the average standard of 70. The Town will continue to rehabilitate these segments of the streets. Total deficiencies (deferred maintenance) identified in the Pavement Management System amounted to approximately $20,000,000 for all streets. DRAF T 10.30. 2 0 2 4 85 SUPPLEMENTARY INFORMATION DRAF T 10.30. 2 0 2 4 86 This page intentionally left blank. DRAF T 10.30. 2 0 2 4 87 NON-MAJOR GOVERNMENTAL FUNDS DRAF T 10.30. 2 0 2 4 Town of Danville Non-Major Governmental Funds 88 SPECIAL REVENUE FUNDS PEG Fund Any state video franchisee offering service within the Town pays sixty cents ($0.60) per month per subscriber to support Public, Educational and Governmental ("PEG") channel facilities. This fund is restricted to capital expenditures allowing the Town to provide PEG programming to residents. Gas Tax Fund This fund is used to account for the portion of the taxes paid on the purchase of gasoline, which the Town receives from the State of California. Use of the fund is restricted to street and related improvements and maintenance costs. Building/Planning Fund This fund receives fees for planning applications and permits and building inspection and plan review fees collected during the building permit process. Use of this fund is restricted to offsetting the costs of providing building and planning services to permittees. Development Engineering Fund This fund receives fees for permits and plan review for engineering and subdivision applications. Use of this fund is restricted to offsetting the costs of providing these services. Child Care Fund This Fund receives child care fees paid by new developments. All funds are restricted to the development or promotion of child care facilities within Danville. Stormwater Pollution Control Program (SPCP) Fund This Fund is used to account for National Pollution Discharge Elimination Services (NPDES) assessments paid by property owners for administration, inspection and maintenance of storm drain systems, including street sweeping, necessary to comply with the stormwater pollution permits issued by the Regional Water Quality Control Board. Measure C/J Fund Since 1988, Contra Costa County voters have paid a one-half cent sales tax for transportation purposes to be collected through 2034. Eighteen percent of the funds collected throughout the County are distributed back to each local jurisdiction on the basis of population and road miles. Receipt of these funds is tied to compliance with the Town’s General Plan Growth Management Element. Use of this fund is restricted to street and pavement management and transportation planning. Donations and Contributions Fund The Town receives donations and contributions for selected programs such as the police K-9 program and downtown beautification. Use of these funds is restricted to the specific terms of the individual donation. General Development Impact Fees Fund The Town levies a number of development impact fees to mitigate the impacts of new development, primarily transportation impact fees. The use of these funds is limited by the specific purpose of the individual fee and the impact to be mitigated. DRAF T 10.30. 2 0 2 4 Town of Danville Non-Major Governmental Funds (Continued) 89 SPECIAL REVENUE FUNDS Public Safety Fund Special revenues for police programs are reported in this fund. Included are Supplemental Law Enforcement Services Funds (SLESF) funds provided by the State, Abandoned Vehicle and Asset Seizure revenues. The use of these funds is limited to use by the Police Department by the specific purpose of the fee. Old Town Parking In-Lieu Fund A development impact mitigation fee imposed on new developments in the Downtown Business District which rely, at least in part, on off-site public parking. Use of the Fund is restricted to the provision of additional Town-owned parking. Solid Waste Vehicle Impact Fee Fund This fund receives impact fees collected through the solid waste franchise to partially offset the impacts associated with solid waste, recycling and yard waste refuse vehicles using Town streets. The use of this Fund is restricted to street and pavement rehabilitation. Low and Moderate Income Housing Fund Prior to the State of California’s dissolution of redevelopment agencies in 2011, the Town’s Community Development Agency (CDA) maintained a Low and Moderate-Income Housing Fund as required by the law. Upon dissolution, the Town opted to create a Successor Housing Agency to assume all of the housing assets and liabilities of the former CDA. The use of this Fund is restricted to the creation, rehabilitation or addition of low or moderate- income housing within the Town. CAPITAL PROJECTS FUNDS Asset Replacement General Fund Contributions are made into this Fund from the General Fund for the eventual replacement and refurbishment of fixed assets. Asset Replacement Library Fund Contributions are made into this Fund from private donations and the General Fund for the eventual replacement and refurbishment of Library equipment. Civic Facilities Capital Projects Fund This Fund receives contributions from the General Fund and is used to account for the construction of community facilities such as the Danville Library, Community Center, Town Offices, Oak Hill Park Community Center and future new park and recreation facilities. Park Facilities Fund Contributions are made into this Fund from the General Fund for the construction and renovation of parks within the Town. Northeast Road Improvements Assessment District Fund During the period from 1985 to 1990, the Northeast Road Improvements Assessment District (NERIAD) were formed within the Town of Danville to construct improvements in these areas. DRAF T 10.30. 2 0 2 4 Town of Danville Non-Major Governmental Funds (Continued) 90 Tassajara Road Improvements Assessment District Fund Assessment District formed for the Tassajara Ranch developments to fund the development of Diablo Vista Park, traffic improvements to mitigate project related impacts, and maintenance of existing improvements for the benefit of district properties. Sycamore Valley Assessment District Fund Development impact fees are collected on residential units in excess of the original 278 units located within the Sycamore Valley Benefit District. Funds are used for traffic mitigation, projects and maintenance of existing improvements for the benefit of the benefit district properties. Technology Fund This Fund was created in FY 2011/12 and receives contributions from the General Fund for the implementation of the Town's five-year Technology Master Plan. DRAF T 10.30. 2 0 2 4 Building/ Development PEG Gas Tax Planning Engineering Child Care ASSETS Cash and investments $ 287,094 $ 5,946,964 $ 7,140,903 $ 2,987,008 $ 388,196 Cash and investments with fiscal agent - - - - - Receivables (net of allowances): Accounts 14,457 124,105 100 - - Interest 1,497 29,435 - - 1,922 Total assets $ 303,048 $ 6,100,504 $ 7,141,003 $ 2,987,008 $ 390,118 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 46 201,151 92,249 30,056 58 Accrued wages - 16,365 35,492 205 - Retention payable - - - - - Deposits payable - - - 42,670 - Unearned revenue - 30,120 5,814 - - Total liabilities 46 247,636 133,555 72,931 58 Fund Balances: Restricted 303,002 5,852,868 7,007,448 2,914,077 390,060 Committed - - - - - Total fund balances 303,002 5,852,868 7,007,448 2,914,077 390,060 Total liabilities and fund balances $ 303,048 $ 6,100,504 $ 7,141,003 $ 2,987,008 $ 390,118 (Continued) Town of Danville Non-Major Governmental Funds Combining Balance Sheet June 30, 2024 Special Revenue 91 DRAF T 10.30. 2 0 2 4 Stormwater Pollution Donation General Control and Development Public Program Measure C/J Contributions Impact Fees Safety ASSETS Cash and investments $ 2,155,061 $ 2,895,499 $ 296,932 $ 3,002,911 $ 653,214 Cash and investments with fiscal agent - - - - - Receivables (net of allowances): Accounts 138,161 635,754 - - - Interest 10,760 14,425 1,467 13,451 3,684 Total assets $ 2,303,982 $ 3,545,678 $ 298,399 $ 3,016,362 $ 656,898 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 126,512 188,112 49 407 113 Accrued wages 2,530 3,153 - - 1,452 Retention payable - - - - - Deposits payable - - - - - Unearned revenue - - - - - Total liabilities 129,042 191,265 49 407 1,565 Fund Balances: Restricted 2,174,940 3,354,413 298,350 3,015,955 655,333 Committed - - - - - Total fund balances 2,174,940 3,354,413 298,350 3,015,955 655,333 Total liabilities and fund balances $ 2,303,982 $ 3,545,678 $ 298,399 $ 3,016,362 $ 656,898 (Continued) Special Revenue Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2024 92 DRAF T 10.30. 2 0 2 4 Low and Old Town Solid Waste Moderate Asset Asset Parking In- Vehicle Impact Income Replacement Replacement Lieu Fees Housing General Library ASSETS Cash and investments $ 632,316 $ 3,914,876 $ 1,951,353 $ 3,086,922 $ 809,411 Cash and investments with fiscal agent - - - - - Receivables (net of allowances): Accounts - - - - - Interest 2,991 - 10,452 13,437 3,178 Total assets $ 635,307 $ 3,914,876 $ 1,961,805 $ 3,100,359 $ 812,589 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 91 109,094 319 20,712 97 Accrued wages - - - - - Retention payable - - - - - Deposits payable - - - - - Unearned revenue - - - - - Total liabilities 91 109,094 319 20,712 97 Fund Balances: Restricted 635,216 3,805,782 1,961,486 - - Committed - - - 3,079,647 812,492 Total fund balances 635,216 3,805,782 1,961,486 3,079,647 812,492 Total liabilities and fund balances $ 635,307 $ 3,914,876 $ 1,961,805 $ 3,100,359 $ 812,589 (Continued) Special Revenue Capital Projects Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2024 93 DRAF T 10.30. 2 0 2 4 Northeast Road Tassajara Sycamore Improvements Ranch Valley Civic Park Special Assessment Assessment Facilities Facilities Assessment District District ASSETS Cash and investments $ 367,464 $ 2,430,840 $ 230,795 $ 21,041 $ 17,108 Cash and investments with fiscal agent - - 928,617 - - Receivables (net of allowances): Accounts - - - - - Interest 2,037 11,030 6,888 104 47 Total assets $ 369,501 $ 2,441,870 $ 1,166,300 $ 21,145 $ 17,155 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable 64 5,017 5,991 - 1 Accrued wages - - - - - Retention payable 180 - - - - Deposits payable - - - - - Unearned revenue - - - - - Total liabilities 244 5,017 5,991 - 1 Fund Balances: Restricted - - - - - Committed 369,257 2,436,853 1,160,309 21,145 17,154 Total fund balances 369,257 2,436,853 1,160,309 21,145 17,154 Total liabilities and fund balances $ 369,501 $ 2,441,870 $ 1,166,300 $ 21,145 $ 17,155 (Continued) Capital Projects Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2024 94 DRAF T 10.30. 2 0 2 4 Capital Projects Total Non-Major Technology Governmental Fund Funds ASSETS Cash and investments $ 168,780 $ 39,384,688 Cash and investments with fiscal agent - 928,617 Receivables (net of allowances): Accounts - 912,577 Interest - 126,805 Total assets $ 168,780 $ 41,352,687 LIABILITIES AND FUND BALANCES Liabilities: Accounts payable - 780,139 Accrued wages - 59,197 Retention payable - 180 Deposits payable - 42,670 Unearned revenue - 35,934 Total liabilities - 918,120 Fund Balances: Restricted - 32,368,930 Committed 168,780 8,065,637 Total fund balances 168,780 40,434,567 Total liabilities and fund balances $ 168,780 $ 41,352,687 (Concluded) Town of Danville Non-Major Governmental Funds Combining Balance Sheet (Continued) June 30, 2024 95 DRAF T 10.30. 2 0 2 4 Building/ Development PEG Gas Tax Planning Engineering Child Care REVENUES: Special assessments -$ -$ -$ -$ -$ Other taxes 60,576 2,291,551 - - - Charges for services - - 642,616 667,516 - License and permits - - 5,676 - - Development fees - - 2,761,194 4,152 16,690 Intergovernmental - - 150,000 - - Use of money and property 5,650 122,437 - - 7,154 Miscellaneous - - - - - Total revenues 66,226 2,413,988 3,559,486 671,668 23,844 EXPENDITURES: Current: General government 24,606 - - - - Police services - - - - - Maintenance services - 859,801 - - - Development services - 793,134 2,110,422 387,986 - Administrative services 195 6,564 - - 832 Recreation, arts & community services - - - - - Capital outlay - - - - - Total expenditures 24,801 1,659,499 2,110,422 387,986 832 REVENUES OVER (UNDER) EXPENDITURES 41,425 754,489 1,449,064 283,682 23,012 OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out (75,000) - (50,000) - - Total other financing sources (uses)(75,000) - (50,000) - - NET CHANGE IN FUND BALANCES (33,575) 754,489 1,399,064 283,682 23,012 FUND BALANCES: Beginning of year 336,577 5,098,379 5,608,384 2,630,395 367,048 End of year 303,002$ 5,852,868$ 7,007,448$ 2,914,077$ 390,060$ (Continued) Special Revenue Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances For the Year Ended June 30, 2024 96 DRAF T 10.30. 2 0 2 4 Stormwater Pollution Donation General Control Measure and Development Public Program C/J Contributions Impact Fees Safety REVENUES: Special assessments 579,341$ -$ -$ -$ -$ Other taxes - 54,699 - - - Charges for services 2,626 - - - - License and permits - - - - - Development fees - - - 235,881 - Intergovernmental 3,436 1,589,513 - - 207,336 Use of money and property 46,594 69,135 5,597 92,826 14,318 Miscellaneous - 1,200 20,767 19,309 - Total revenues 631,997 1,714,547 26,364 348,016 221,654 EXPENDITURES: Current: General government - - 500 - - Police services - - 176 - 140,002 Maintenance services 5,495 - 8,558 239,374 - Development services 740,525 990,256 - 38,719 - Administrative services 1,377 1,683 - 1,659 486 Recreation, arts & community services - - - 12,768 - Capital outlay - 91,074 - - 109,645 Total expenditures 747,397 1,083,013 9,234 292,520 250,133 REVENUES OVER (UNDER) EXPENDITURES (115,400) 631,534 17,130 55,496 (28,479) OTHER FINANCING SOURCES (USES): Transfers in - - - - - Transfers out - - - - - Total other financing sources (uses)- - - - - NET CHANGE IN FUND BALANCES (115,400) 631,534 17,130 55,496 (28,479) FUND BALANCES: Beginning of year 2,290,340 2,722,879 281,220 2,960,459 683,812 End of year 2,174,940$ 3,354,413$ 298,350$ 3,015,955$ 655,333$ (Continued) Special Revenue Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2024 97 DRAF T 10.30. 2 0 2 4 Low and Old Town Solid Waste Moderate Asset Asset Parking In- Vehicle Impact Income Replacement Replacement Lieu Fees Housing General Library REVENUES: Special assessments -$ -$ -$ -$ -$ Other taxes - 911,401 - - - Charges for services - - - - - License and permits - - - - - Development fees - - - - - Intergovernmental - - - - - Use of money and property 11,585 - 40,035 97,816 19,238 Miscellaneous - - - - - Total revenues 11,585 911,401 40,035 97,816 19,238 EXPENDITURES: Current: General government - - - - - Police services - - - 345,175 413 Maintenance services - - - - - Development services - 175,148 - - - Administrative services 385 - 2,342 - - Recreation, arts & community services - - - - - Capital outlay - - - 39,720 20,764 Total expenditures 385 175,148 2,342 384,895 21,177 REVENUES OVER (UNDER) EXPENDITURES 11,200 736,253 37,693 (287,079) (1,939) OTHER FINANCING SOURCES (USES): Transfers in - - - 175,000 - Transfers out - - - - - Total other financing sources (uses)- - - 175,000 - NET CHANGE IN FUND BALANCES 11,200 736,253 37,693 (112,079) (1,939) FUND BALANCES: Beginning of year 624,016 3,069,529 1,923,793 3,191,726 814,431 End of year 635,216$ 3,805,782$ 1,961,486$ 3,079,647$ 812,492$ (Continued) Special Revenue Capital Projects Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2024 98 DRAF T 10.30. 2 0 2 4 Northeast Road Tassajara Sycamore Improvements Ranch Valley Civic Park Special Assessment Assessment Facilities Facilities Assessment District District REVENUES: Special assessments -$ -$ -$ -$ -$ Other taxes - - - - - Charges for services - - - - - License and permits - - - - - Development fees - - - - - Intergovernmental - - - - - Use of money and property 12,697 64,101 167,474 410 179 Miscellaneous - - - - - Total revenues 12,697 64,101 167,474 410 179 EXPENDITURES: Current: General government - - - - - Police services 278 1,633 5,791 2 2 Maintenance services - 20,056 - - - Development services - - 540 - - Administrative services - - - - - Recreation, arts & community services 32,150 - - - - Capital outlay 13,333 1,405,715 158,523 15,729 - Total expenditures 45,761 1,427,404 164,854 15,731 2 REVENUES OVER (UNDER) EXPENDITURES (33,064) (1,363,303) 2,620 (15,321) 177 OTHER FINANCING SOURCES (USES): Transfers in 72,480 340,000 - - - Transfers out - - - - - Total other financing sources (uses)72,480 340,000 - - - NET CHANGE IN FUND BALANCES 39,416 (1,023,303) 2,620 (15,321) 177 FUND BALANCES: Beginning of year 329,841 3,460,156 1,157,689 36,466 16,977 End of year 369,257$ 2,436,853$ 1,160,309$ 21,145$ 17,154$ (Continued) Capital Projects Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2024 99 DRAF T 10.30. 2 0 2 4 Capital Projects Total Non-Major Technology Governmental Fund Funds REVENUES: Special assessments -$ 579,341$ Other taxes - 3,318,227 Charges for services - 1,312,758 License and permits - 5,676 Development fees - 3,017,917 Intergovernmental - 1,950,285 Use of money and property - 777,246 Miscellaneous - 41,276 Total revenues - 11,002,726 EXPENDITURES: Current: General government - 25,106 Police services 3,675 497,147 Maintenance services - 1,133,284 Development services - 5,236,730 Administrative services - 15,523 Recreation, arts & community services - 44,918 Capital outlay - 1,854,503 Total expenditures 3,675 8,807,211 REVENUES OVER (UNDER) EXPENDITURES (3,675) 2,195,515 OTHER FINANCING SOURCES (USES): Transfers in - 587,480 Transfers out - (125,000) Total other financing sources (uses)- 462,480 NET CHANGE IN FUND BALANCES (3,675) 2,657,995 FUND BALANCES: Beginning of year 172,455 37,776,572 End of year 168,780$ 40,434,567$ (Concluded) Town of Danville Non-Major Governmental Funds Combining Schedule of Revenues, Expenditures and Changes in Fund Balances (Continued) For the Year Ended June 30, 2024 100 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Other taxes 82,000$ 82,000$ 60,576$ (21,424)$ Use of money and property - - 5,650 5,650 Total revenues 82,000 82,000 66,226 (15,774) EXPENDITURES: Current: General government City Clerk 32,909 42,909 24,606 18,303 Total general government 32,909 42,909 24,606 18,303 Administrative services Finance 554 554 195 359 Total administrative services 554 554 195 359 Capital outlay 252,297 252,297 - 252,297 Total expenditures 285,760 295,760 24,801 270,959 REVENUES OVER (UNDER) EXPENDITURES (203,760) (213,760) 41,425 255,185 OTHER FINANCING SOURCES (USES): Transfers out - - (75,000) (75,000) Total other financing sources (uses)- - (75,000) (75,000) NET CHANGE IN FUND BALANCE (203,760)$ (213,760)$ (33,575) 180,185$ FUND BALANCE: Beginning of year 336,577 End of year 303,002$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual PEG Special Revenue Fund For the Year Ended June 30, 2024 101 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Other taxes 1,835,172$ 1,835,172$ 2,291,551$ 456,379$ Use of money and property 14,828 14,828 122,437 107,609 Total revenues 1,850,000 1,850,000 2,413,988 563,988 EXPENDITURES: Current: Maintenance services Street maintenance 697,595 697,595 606,953 90,642 Traffic signal maintenance 234,000 234,000 252,848 (18,848) Total maintenance services 931,595 931,595 859,801 71,794 Development services Management 73,491 73,491 47,834 25,657 Capital project management 2,633,637 3,183,637 398,386 2,785,251 Transportation 379,038 398,948 346,914 52,034 Total development services 3,086,166 3,656,076 793,134 2,862,942 Administrative services Finance 5,325 5,325 6,564 (1,239) Total administrative services 5,325 5,325 6,564 (1,239) Total expenditures 4,023,086 4,592,996 1,659,499 2,933,497 NET CHANGE IN FUND BALANCE (2,173,086)$ (2,742,996)$ 754,489 3,497,485$ FUND BALANCE: Beginning of year 5,098,379 End of year 5,852,868$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Gas Tax Special Revenue Fund For the Year Ended June 30, 2024 102 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Charges for services 389,750$ 389,750$ 642,616$ 252,866$ Licenses and permits - - 5,676 5,676 Development fees 1,750,000 1,750,000 2,761,194 1,011,194 Intergovernmental - - 150,000 150,000 Miscellaneous 200 200 - (200) Total revenues 2,139,950 2,139,950 3,559,486 1,419,536 EXPENDITURES: Current: Development services Management 291,844 291,844 63,332 228,512 Planning 515,124 895,612 555,843 339,769 Building 1,486,804 1,568,202 1,397,902 170,300 Code enforcement 136,350 136,350 93,345 43,005 Total development services 2,430,122 2,892,008 2,110,422 781,586 Total expenditures 2,430,122 2,892,008 2,110,422 781,586 REVENUES OVER (UNDER) EXPENDITURES (290,172) (752,058) 1,449,064 2,201,122 OTHER FINANCING (USES) Transfers out - - (50,000) (50,000) Total other financing (uses)- - (50,000) (50,000) NET CHANGE IN FUND BALANCE (290,172)$ (752,058)$ 1,399,064 2,151,122$ FUND BALANCE: Beginning of year 5,608,384 End of year 7,007,448$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Building and Planning Special Revenue Fund For the Year Ended June 30, 2024 103 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Charges for services 301,705$ 301,705$ 667,516$ 365,811$ Development fees 500 500 4,152 3,652 Total revenues 302,205 302,205 671,668 369,463 EXPENDITURES: Current: Development services Engineering 432,436 507,194 387,986 119,208 Total development services 432,436 507,194 387,986 119,208 Total expenditures 432,436 507,194 387,986 119,208 NET CHANGE IN FUND BALANCE (130,231)$ (204,989)$ 283,682 488,671$ FUND BALANCE: Beginning of year 2,630,395 End of year 2,914,077$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Development Engineering Special Revenue Fund For the Year Ended June 30, 2024 104 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES Development fees -$ -$ 16,690$ 16,690$ Use of money and property 1,199 1,199 7,154 5,955 Total revenues 1,199 1,199 23,844 22,645 EXPENDITURES Current: Administrative services Management - - 600 (600) Finance 224 224 232 (8) Total administrative services 224 224 832 (608) Total expenditures 224 224 832 (608) REVENUES OVER (UNDER) EXPENDITURES 975 975 23,012 22,037 OTHER FINANCING (USES) Transfers out - - - - Total other financing (uses)- - - - NET CHANGE IN FUND BALANCE 975$ 975$ 23,012 22,037$ FUND BALANCE: Beginning of year 367,048 End of year 390,060$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Child Care Special Revenue Fund For the Year Ended June 30, 2024 105 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Special assessments 562,154$ 562,154$ 579,341$ 17,187$ Charges for services 1,010 1,010 2,626 1,616 Intergovernmental 45,175 45,175 3,436 (41,739) Use of money and property 9,536 9,536 46,594 37,058 Total revenues 617,875 617,875 631,997 14,122 EXPENDITURES: Current: Maintenance services Steet maintenance 164,364 169,364 5,495 163,869 Total maintenance services 164,364 169,364 5,495 163,869 Development services Capital project management 93,000 93,000 86,490 6,510 Clean water program 465,178 472,671 654,035 (181,364) Total development services 558,178 565,671 740,525 (174,854) Administrative services Finance 1,491 1,491 1,377 114 Total administrative services 1,491 1,491 1,377 114 Total expenditures 724,033 736,526 747,397 (10,871) NET CHANGE IN FUND BALANCE (106,158)$ (118,651)$ (115,400) 3,251$ FUND BALANCE: Beginning of year 2,290,340 End of year 2,174,940$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Stormwater Pollution Control Program (SPCP) Special Revenue Fund For the Year Ended June 30, 2024 106 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Intergovernmental 11,594,939$ 11,594,939$ 1,589,513$ (10,005,426)$ Other taxes - - 54,699 54,699 Use of money and property 10,139 10,139 69,135 58,996 Miscellaneous - - 1,200 1,200 Total revenues 11,605,078 11,605,078 1,714,547 (9,890,531) EXPENDITURES: Current: Development services Management 73,491 73,491 680,755 (607,264) Capital project management 11,661,810 12,311,810 157,213 12,154,597 Transportation 226,040 226,040 152,288 73,752 Total development services 11,961,341 12,611,341 990,256 11,621,085 Administrative services Finance 1,637 1,637 1,683 (46) Administrative services 1,637 1,637 1,683 (46) Capital outlay - - 91,074 (91,074) Total expenditures 11,962,978 12,612,978 1,083,013 11,529,965 NET CHANGE IN FUND BALANCE (357,900)$ (1,007,900)$ 631,534 1,639,434$ FUND BALANCE: Beginning of year 2,722,879 End of year 3,354,413$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Measure C/J Special Revenue Fund For the Year Ended June 30, 2024 107 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Use of money and property 974$ 974$ 5,597$ 4,623$ Miscellaneous 3,760 13,760 20,767 7,007 Total revenues 4,734 14,734 26,364 11,630 EXPENDITURES: Current: General government Town Council 500 500 500 - Total general government 500 500 500 - Police services Patrol 297 26,338 176 26,162 Total police services 297 26,338 176 26,162 Maintenance services Park maintenance 3,000 3,000 8,558 (5,558) Total maintenance services 3,000 3,000 8,558 (5,558) Recreation, arts & community services Culture arts 2,000 2,000 - 2,000 Total recreation, arts & community services 2,000 2,000 - 2,000 Total expenditures 5,797 31,838 9,234 22,604 NET CHANGE IN FUND BALANCE (1,063)$ (17,104)$ 17,130 34,234$ FUND BALANCE: Beginning of year 281,220 End of year 298,350$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Donations and Contributions Special Revenue Fund For the Year Ended June 30, 2024 108 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Development fees -$ -$ 235,881$ 235,881$ Use of money and property - - 92,826 92,826 Miscellaneous 179,129 201,629 19,309 (182,320) Total revenues 179,129 201,629 348,016 146,387 EXPENDITURES: Current: Maintenance services Park maintenance 611,727 634,227 239,374 394,853 Total maintenance services 611,727 634,227 239,374 394,853 Development services Capital project management 281,152 320,652 38,719 281,933 Total development services 281,152 320,652 38,719 281,933 Administrative services Finance 3,666 3,666 1,659 2,007 Total administrative services 3,666 3,666 1,659 2,007 Recreation, arts & community services Recreation management 533,843 638,843 12,768 626,075 Total recreation, arts & community services 533,843 638,843 12,768 626,075 Capital outlay 199,199 199,199 - 199,199 Total expenditures 1,629,587 1,796,587 292,520 1,504,067 NET CHANGE IN FUND BALANCE (1,450,458)$ (1,594,958)$ 55,496 1,650,454$ FUND BALANCE: Beginning of year 2,960,459 End of year 3,015,955$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual General Development Impact Fees Special Revenue Fund For the Year Ended June 30, 2024 109 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Intergovernmental 123,000$ 123,000$ 207,336$ 84,336$ Use of money and property 1,246 1,246 14,318 13,072 Miscellaneous 1,000 1,000 - (1,000) Total revenues 125,246 125,246 221,654 96,408 EXPENDITURES: Current: Police services Youth services 140,000 140,000 140,002 (2) Total police services 140,000 140,000 140,002 (2) Administrative services Finance 297 297 486 (189) Total administrative services 297 297 486 (189) Capital outlay - 140,000 109,645 30,355 Total expenditures 140,297 280,297 250,133 30,164 NET CHANGE IN FUND BALANCE (15,051)$ (155,051)$ (28,479) 126,572$ FUND BALANCE: Beginning of year 683,812 End of year 655,333$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Public Safety Special Revenue Fund For the Year Ended June 30, 2024 110 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Use of money and property -$ -$ 11,585$ 11,585$ Total revenues - - 11,585 11,585 EXPENDITURES: Current: Administrative services Finance 563 563 385 178 Total administrative services 563 563 385 178 Total expenditures 563 563 385 178 NET CHANGE IN FUND BALANCE (563)$ (563)$ 11,200 11,763$ FUND BALANCE: Beginning of year 624,016 End of year 635,216$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Old Town Parking In-Lieu Special Revenue Fund For the Year Ended June 30, 2024 111 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Other taxes 898,424$ 898,424$ 911,401$ 12,977$ Total revenues 898,424 898,424 911,401 12,977 EXPENDITURES: Current: Development services Capital project management 2,775,000 3,595,000 175,148 3,419,852 Total development services 2,775,000 3,595,000 175,148 3,419,852 Total expenditures 2,775,000 3,595,000 175,148 3,419,852 NET CHANGE IN FUND BALANCE (1,876,576)$ (2,696,576)$ 736,253 3,432,829$ FUND BALANCE: Beginning of year 3,069,529 End of year 3,805,782$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Solid Waste Vehicle Impact Fee Special Revenue Fund For the Year Ended June 30, 2024 112 DRAF T 10.30. 2 0 2 4 Variance From Original Final Actual Final Budget REVENUES: Use of money and property -$ -$ 40,035$ 40,035$ Total revenues - - 40,035 40,035 EXPENDITURES: Current: Administrative services Finance 3,800 3,893 2,342 1,551 Total administrative services 3,800 3,893 2,342 1,551 Total expenditures 3,800 3,893 2,342 1,551 NET CHANGE IN FUND BALANCE (3,800)$ (3,893)$ 37,693 41,586$ FUND BALANCE: Beginning of year 1,923,793 End of year 1,961,486$ Budgeted Town of Danville Schedule of Revenues, Expenditures and Changes in Fund Balance - Budget and Actual Low and Moderate Income Housing Special Revenue Fund For the Year Ended June 30, 2024 113 DRAF T 10.30. 2 0 2 4 This page intentionally left blank. 114 DRAF T 10.30. 2 0 2 4 STATISTICAL SECTION (Unaudited) Included in this section of the Town of Danville annual comprehensive financial report is detailed information to assist in analysis and understanding of the information presented in the financial statements, notes and required supplementary information. Contents Financial Trends These schedules contain trend information to help the reader understand how the Town's financial position has changed over time. Revenue Capacity These schedules contain detailed information to help the reader assess the Town's most significant local revenue source, property tax. Debt Capacity These schedules present information to help the reader assess the affordability of the Town's current levels of outstanding debt and the Town's ability to issue debt in the future. Demographic and Economic Information These schedules offer demographic and economic indicators to help the reader understand the environment within which the Town's financial activities take place. Operating Information These schedules provide service and infrastructure data to help the reader understand how the information in the Town's financial report relates to the services the Town provides and the activities it performs. 115 DRAF T 10.30. 2 0 2 4 This page intentionally left blank. 116 DRAF T 10.30. 2 0 2 4 FINANCIAL TRENDS 117 DRAF T 10.30. 2 0 2 4 2015 2016 2017 2018 2019 Governmental Activities: Net investment in capital assets 149,697,964$ 154,909,051$ 155,792,439$ 162,998,663$ 166,215,901$ Restricted 23,655,107 26,812,236 24,437,153 23,784,733 24,398,492 Unrestricted 69,968,657 68,822,679 72,257,190 64,907,258 65,271,882 Total Governmental Activities Net Position 243,321,728$ 250,543,966$ 252,486,782$ 251,690,654$ 255,886,275$ Primary Government: Net investment in capital assets 149,697,964$ 154,909,051$ 155,792,439$ 162,998,663$ 166,215,901$ Restricted 23,655,107 26,812,236 24,437,153 23,784,733 24,398,492 Unrestricted 69,968,657 68,822,679 72,257,190 64,907,258 65,271,882 Total Primary Governmental Net Position 243,321,728$ 248,532,815$ 252,486,782$ 251,690,654$ 251,690,654$ Source: Town Audited Financial Statements Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Net Position by Component Last Ten Fiscal Years 118 DRAF T 10.30. 2 0 2 4 2020 2021 2022 2023 2024 Governmental Activities: Net investment in capital assets 174,968,722$ 177,508,851$ 188,179,513$ 188,058,533$ 188,179,513$ Restricted 26,961,172 29,438,411 40,184,242 36,500,926 40,184,242 Unrestricted 61,659,221 65,882,561 71,129,258 66,412,003 71,129,258 Total Governmental Activities Net Position 263,589,115$ 272,829,823$ 299,493,013$ 290,971,462$ 299,493,013$ Primary Government: Net investment in capital assets 174,968,722$ 177,508,851$ 188,179,513$ 188,058,533$ 188,179,513$ Restricted 26,961,172 29,438,411 40,184,242 36,500,926 40,184,242 Unrestricted 61,659,221 65,882,561 71,129,258 66,412,003 71,129,258 Total Primary Governmental Net Position 263,589,115$ 272,829,823$ 299,493,013$ 290,971,462$ 299,493,013$ Source: Town Audited Financial Statements Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Net Position by Component (Continued) Last Ten Fiscal Years 0 50 100 150 200 250 2015 2016 2017 2018 20192020 2021 2022 2023 2024 Go v e r n m e n t a l a c t i v i t i e s ( i n m i l l i o n s ) Fiscal Year Net Position by Component Net investment in capital assets Restricted Unrestricted 119 DRAF T 10.30. 2 0 2 4 2015 2016 2017 2018 2019 Expenses: Governmental activities: General Government 1,527,466$ 1,592,763$ 1,658,023$ 1,821,906$ 1,648,107$ Police Services 8,565,667 8,914,297 9,107,939 9,668,148 9,908,945 Maintenance Services & Lighting & Landscape 7,589,476 8,262,373 7,963,358 7,824,106 8,512,749 Development Services 14,348,084 5,233,296 8,568,817 12,113,185 12,589,561 Administrative Services 3,244,813 4,080,262 3,690,675 3,511,181 3,625,899 Recreation Services 3,877,829 3,847,434 4,129,417 4,016,368 4,273,896 Interest on long-term debt 369,274 364,866 345,931 345,473 325,210 Total governmental activities expenses 39,522,609 32,295,291 35,464,160 39,300,367 40,884,367 Total primary government expenses 39,522,609$ 32,295,291$ 35,464,160$ 39,300,367$ 40,884,367$ Program Revenues: Governmental Activities: Charges for Services: General Government -$ 10$ 30$ 30$ 1,126$ Police Services 429,625 424,470 314,597 295,805 308,210 Maintenance Services, Lighting & Landscape 3,033,384 3,036,737 3,142,080 3,060,686 3,046,475 Development Services 4,196,817 4,285,454 3,575,751 3,792,303 4,473,140 Administrative Services - 35,186 36,308 36,400 38,126 Recreation, Arts & Community Services 2,433,110 2,079,801 2,196,610 2,058,014 2,041,182 Operating grants and contributions 1,110,167 950,437 911,003 1,205,123 2,132,610 Capital grants and contributions 1,676,661 1,276,567 2,591,351 2,521,475 3,880,922 Total governmental activities program revenues 12,879,764$ 12,088,662$ 12,767,730$ 12,969,836$ 15,921,791$ Total primary government program revenues 12,879,764$ 12,088,662$ 12,767,730$ 12,969,836$ 15,921,791$ Net (Expense)/Revenue Governmental activities (26,642,845)$ (20,206,629)$ (22,696,430)$ (22,696,430)$ (24,962,576)$ Total Primary Government, Net Expenses (26,642,845)$ (20,206,629)$ (22,696,430)$ (22,696,430)$ (24,962,576)$ Source: Town Audited Financial Statements Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Net Position Last Ten Fiscal Years 120 DRAF T 10.30. 2 0 2 4 2020 2021 2022 2023 2024 Expenses: Governmental activities: General Government 1,988,737$ 1,727,404$ 2,773,284$ 2,999,255$ 2,432,702$ Police Services 9,824,261 9,141,598 9,972,541 10,594,467 11,971,294 Maintenance Services & Lighting & Landscape 9,400,476 8,999,904 8,990,730 11,973,823 10,525,094 Development Services 5,769,904 6,231,119 7,246,100 6,931,034 15,427,297 Administrative Services 3,816,145 3,632,890 3,558,462 3,798,969 4,468,171 Recreation Services 3,794,136 2,722,675 3,137,966 4,096,414 4,359,029 Interest on long-term debt 325,210 282,675 256,521 234,055 204,389 Total governmental activities expenses 34,916,610 32,738,265 35,935,604 40,628,017 49,387,976 Total primary government expenses 34,916,610$ 32,738,265$ 35,935,604$ 40,628,017$ 49,387,976$ Program Revenues Governmental Activities: Charges for Services: General Government -$ -$ 10$ 15,923$ 23,184$ Police Services 296,126 187,548 179,616 173,594 189,558 Maintenance Services, Lighting & Landscape 3,059,330 3,047,952 3,050,308 3,611,916 3,641,347 Development Services 3,374,462 3,738,947 4,471,835 4,386,782 4,484,293 Administrative Services 31,693 28,145 570,388 297,553 297,553 Recreation, Arts & Community Services 1,427,112 846,805 1,378,764 1,719,893 1,875,843 Operating grants and contributions 1,873,835 2,271,372 3,445,191 2,367,059 3,876,515 Capital grants and contributions 1,358,781 2,169,054 1,542,184 5,050,477 3,759,810 Total governmental activities program revenues 11,421,339$ 12,289,823$ 14,638,296$ 17,623,197$ 18,148,103$ Total primary government program revenues 11,421,339$ 12,289,823$ 14,638,296$ 17,623,197$ 18,148,103$ Net (Expense)/Revenue Governmental activities (23,495,271)$ (20,448,442)$ (21,297,308)$ (23,004,820)$ (31,239,873)$ Total Primary Government, Net Expenses (23,495,271)$ (20,448,442)$ (21,297,308)$ (23,004,820)$ (31,239,873)$ Source: Town Audited Financial Statements Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Net Position (Continued) Last Ten Fiscal Years 121 DRAF T 10.30. 2 0 2 4 2015 2016 2017 2018 2019 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes 13,593,483$ 14,153,561$ 13,978,818$ 14,629,253$ 15,354,728$ Sales taxes 4,098,412 4,569,470 5,546,298 5,914,835 6,126,449 Motor Vehicle taxes 17,857 17,629 19,203 22,821 21,310 Franchise Taxes 2,215,165 2,299,491 2,419,118 2,588,989 2,609,820 Other taxes 391,856 404,744 371,237 362,196 390,562 Investment earnings 636,474 1,265,876 296,610 368,995 3,028,554 Miscellaneous 1,559,647 741,674 1,235,646 854,998 834,318 Gain (loss) on sale of capital assets - - - - - Transfers from Successor Agency 769,972 780,818 772,316 792,316 792,456 Special item - 3,195,604 - - - Total governmental activities 23,282,866$ 27,428,867$ 24,639,246$ 25,534,403$ 29,158,197$ Total primary government 23,282,866$ 27,428,867$ 24,639,246$ 25,534,403$ 29,158,197$ Change in Net Position Governmental activities 3,076,237$ 4,732,437$ 1,942,816$ (7,796,128)$ 4,195,621$ Total primary government 3,076,237$ 4,732,437$ 1,942,816$ (7,796,128)$ 4,195,621$ Source: Town Audited Financial Statements Note: The Town of Danville does not have any business-type activities. (Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Net Position (Continued) Last Ten Fiscal Years 122 DRAF T 10.30. 2 0 2 4 2020 2021 2022 2023 2024 General Revenues and Other Changes in Net Position Governmental Activities Taxes Property taxes 16,025,356$ 17,210,607$ 18,033,848$ 18,937,827$ 19,905,678$ Sales taxes 5,753,805 6,653,905 7,443,450 7,467,848 6,799,187 Motor Vehicle taxes 35,829 32,180 50,723 44,757 53,934 Franchise Taxes 2,836,124 3,044,834 3,252,012 3,383,163 3,502,709 Other Taxes 367,376 338,449 340,497 341,405 360,676 Investment earnings 3,183,434 174,503 (2,626,475) 998,731 5,392,910 Miscellaneous 1,838,208 1,447,189 563,904 2,501,924 2,879,111 Gain (loss) on sale of capital assets 345,523 (1,568) - - - Transfers from Successor Agency 812,456 789,051 785,175 825,175 867,219 Special item - - - - - Total governmental activities 31,198,111$ 29,689,150$ 27,843,134$ 34,500,830$ 39,761,424$ Total primary government 31,198,111$ 29,689,150$ 27,843,134$ 34,500,830$ 39,761,424$ Change in Net Position Governmental activities 7,702,840$ 9,240,708$ 6,545,826$ 11,496,010$ 8,521,551$ Total primary government 7,702,840$ 9,240,708$ 6,545,826$ 11,496,010$ 8,521,551$ Source: Town Audited Financial Statements Note: The Town of Danville does not have any business-type activities. Fiscal Year Town of Danville Changes in Net Position (Continued) Last Ten Fiscal Years (Accrual Basis of Accounting) 123 DRAF T 10.30. 2 0 2 4 2015 2016 2017 2018 2019 General Fund Nonspendable -$ 10,427,986$ 9,427,986$ 8,427,986$ 7,325,019$ Restricted 809,718 809,504 809,820 813,965 820,547 Committed 17,067,689 18,374,622 17,249,253 17,868,716 19,005,310 Assigned 9,397,184 344,844 313,036 169,060 117,735 Unassigned - - - - - Total General Fund 27,274,591 29,956,956 27,800,095 27,279,727 27,268,611 All Other Governmental Funds Special revenue funds Restricted 24,215,659 26,129,555 23,594,077 22,970,768 23,577,945 Assigned - - - - 2,469,321 Debt service fund Restricted 813,511 - - - - Capital projects funds Restricted 356,953 - - - - Committed 39,887,688 38,430,064 42,743,649 36,532,398 37,060,728 Assigned 2,183,781 2,364,889 2,507,297 2,574,079 - Unassigned (deficit)- - - - - Total all other Governmental Funds 67,457,592 66,924,508 68,845,023 62,077,245 63,107,994 Total Governmental Funds 94,732,183$ 96,881,464$ 96,645,118$ 89,356,972$ 90,376,605$ Source: Town Audited Financial Statements (Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Fund Balances of Governmental Funds Last Ten Fiscal Years 124 DRAF T 10.30. 2 0 2 4 2020 2021 2022 2023 2024 General Fund Nonspendable 5,167,108$ 4,064,888$ 2,976,418$ 1,915,461$ 846,011$ Restricted 815,484 809,518 809,649 827,765 848,842 Committed 20,401,468 28,158,818 22,299,041 24,829,286 33,807,639 Assigned 190,888 402,500 491,770 268,150 295,266 Unassigned - 1,100,000 1,100,002 1,100,000 1,100,000 Total General Fund 26,574,948 34,535,724 27,676,880 28,940,662 36,897,758 All Other Governmental Funds Special revenue funds Restricted 26,145,688 28,628,893 30,841,349 34,859,241 38,406,783 Assigned 2,617,844 2,845,856 2,621,578 3,019,810 3,113,454 Debt service fund Restricted - - - - - Capital projects funds Restricted - - - - - Committed 34,072,908 30,013,137 35,607,373 36,955,042 33,951,008 Assigned - - - - - Unassigned (deficit)- - - - (218,086) Total all other Governmental Funds 62,836,440 61,487,886 69,070,300 74,834,093 75,253,159 Total Governmental Funds 89,411,388$ 96,023,610$ 96,747,180$ 103,774,755$ 112,150,917$ Source: Town Audited Financial Statements (Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years 125 DRAF T 10.30. 2 0 2 4 2015 2016 2017 2018 2019 REVENUES: Property taxes 13,593,483$ 14,153,561$ 13,978,818$ 14,629,253$ 15,354,728$ Sales taxes 4,080,378 4,558,712 5,535,422 5,910,069 6,124,320 Special assessments 4,033,766 3,270,354 3,264,713 3,645,895 3,581,582 Gas & other taxes 3,574,570 3,590,353 3,554,065 3,775,380 4,310,196 Charges for services 2,792,321 2,752,180 2,859,100 2,874,896 2,867,332 Licenses and permits 391,856 404,744 371,237 362,196 396,710 Development fees 3,166,893 3,705,128 3,096,371 3,275,723 4,286,391 Intergovernmental 547,347 1,026,474 1,918,820 1,735,441 2,853,143 Fines and forfeitures 242,325 267,732 163,825 167,822 187,979 Uses of money and property 1,379,939 2,024,361 995,448 1,054,042 3,924,193 Miscellaneous 1,589,780 1,155,013 897,019 279,040 424,954 Reimbursement from Successor Agency - - - - - Total Revenues 35,392,658 36,908,612 36,634,838 37,709,757 44,311,528 EXPENDITURES: Current: General government 1,526,324 1,591,047 1,622,521 1,830,739 1,624,096 Police services 8,356,060 8,691,261 8,881,254 9,426,989 9,690,883 Maintenance services 3,728,641 4,381,322 3,686,266 3,339,317 3,305,068 Lighting and landscape 3,105,346 3,127,403 3,374,354 3,644,177 4,067,377 Development services 14,097,237 4,986,759 8,186,500 11,741,330 12,346,910 Administrative services 3,362,284 4,000,431 3,536,546 3,472,727 3,555,297 Recreation, arts & community services 3,523,333 3,467,371 3,693,259 3,697,618 3,920,497 Capital outlay 5,102,019 6,466,296 2,102,572 8,692,182 4,781,767 Debt service: Principal - - - - - Interest and fiscal charges - - - - - Total Expenditures 42,801,244 36,711,890 35,083,272 45,845,079 43,291,895 REVENUES OVER (UNDER) EXPENDITURES (7,408,586) 196,722 1,551,566 (8,135,322) 1,019,633 OTHER FINANCING SOURCES (USES): Proceeds from sale of assets - - - - - Proceeds from debt issuance - - - - - Transfers in 6,300,714 8,710,450 9,937,410 7,276,333 8,765,719 Transfers out (6,300,714) (8,710,450) (9,937,410) (7,276,333) (8,765,719) Total other financing sources (uses)- - - - - Extraordinary/Special item*- 3,195,604 - - - NET CHANGE IN FUND BALANCES (7,408,586)$ 3,392,326$ 1,551,566$ (8,135,322)$ 1,019,633$ Debt service as a percentage of noncapital expenditures 0.00%0.00%0.00%0.00%0.00% Source: Town Audited Financial Statements * Extraordinary/special item in 2016 was for assets transferred from the former Community Development Agency (CDA) of the Town of Danville subsequent to a due diligence review by the State of California subsequent to the dissolution of California Redevelopment Agencies. Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Fund Balances of Governmental Funds Last Ten Fiscal Years 126 DRAF T 10.30. 2 0 2 4 2020 2021 2022 2023 2024 REVENUES: Property taxes 16,025,356$ 17,210,607$ 18,033,848$ 18,937,827$ 19,905,678$ Sales taxes 5,740,046 6,652,729 7,442,726 7,467,848 6,799,187 Special assessments 3,594,673 3,611,436 3,610,222 3,601,630 3,630,298 Gas & other taxes 4,722,089 4,828,113 5,223,367 5,487,702 5,902,893 Charges for services 2,021,562 1,495,953 2,682,710 3,136,401 3,343,396 Licenses and permits 367,376 338,449 340,497 347,072 394,611 Development fees 2,471,063 2,941,817 2,571,419 3,243,440 3,141,447 Intergovernmental 1,208,170 1,659,443 2,980,425 5,233,454 5,275,078 Fines and forfeitures 128,312 86,104 76,848 105,729 144,658 Uses of money and property 4,265,728 1,771,567 (2,007,851) 1,897,626 6,684,393 Miscellaneous 944,642 587,430 731,381 1,238,293 1,815,777 Reimbursement from Successor Agency 812,456 789,051 785,175 825,175 867,219 Total Revenues 42,301,473 41,972,699 42,470,767 51,522,197 57,904,635 EXPENDITURES: Current: General government 1,922,014 1,732,686 2,764,179 2,983,036 2,413,686 Police services 9,658,510 9,065,799 9,909,768 10,437,966 11,668,630 Maintenance services 4,411,816 3,816,120 3,537,339 6,821,100 5,042,665 Lighting and landscape 3,703,613 3,903,054 4,181,235 3,913,128 4,306,195 Development services 5,549,402 6,065,680 6,671,315 6,692,216 10,090,876 Administrative services 3,777,435 3,606,353 3,503,165 3,678,558 4,346,711 Recreation, arts & community services 3,508,153 2,470,377 2,866,846 3,831,445 4,097,971 Capital outlay 13,198,230 3,911,357 7,542,018 6,094,256 6,694,520 Debt service: Principal 480,000 500,000 520,000 615,307 651,855 Interest and fiscal charges 332,456 289,051 265,175 243,866 215,364 Total Expenditures 46,541,629 35,360,477 41,761,040 45,310,878 49,528,473 REVENUES OVER (UNDER) EXPENDITURES (4,240,156) 6,612,222 709,727 6,211,319 8,376,162 OTHER FINANCING SOURCES (USES): Proceeds from sale of assets 3,274,939 - 13,843 600,000 - Proceeds from debt issuance - - - 216,256 - Transfers in 11,932,028 3,797,793 13,967,014 8,126,594 3,817,697 Transfers out (11,932,028) (3,797,793) (13,967,014) (8,126,594) (3,817,697) Total other financing sources (uses)3,274,939 - 13,843 816,256 - Extraordinary/Special item*- - - - - NET CHANGE IN FUND BALANCES (965,217)$ 6,612,222$ 723,570$ 7,027,575$ 8,376,162$ Debt service as a percentage of noncapital expenditures 0.00%2.57%2.35%2.24%2.07% Source: Town Audited Financial Statements (Modified Accrual Basis of Accounting) Fiscal Year Town of Danville Changes in Fund Balances of Governmental Funds (Continued) Last Ten Fiscal Years 127 DRAF T 10.30. 2 0 2 4 This page intentionally left blank. 128 DRAF T 10.30. 2 0 2 4 REVENUE CAPACITY 129 DRAF T 10.30. 2 0 2 4 Property Motor Business Fiscal Property Sales Franchise Transfer Vehicle License & Year Tax Tax Tax Tax Tax Other Taxes Total 2015 13,076,172$ 4,098,412$ 2,215,165$ 517,311$ 17,857$ 391,856$ 19,223,095$ 2016 12,534,667 4,569,470 2,299,491 568,870 17,629 404,744 20,316,773 2017 13,392,392 5,546,298 2,419,118 586,426 19,203 371,237 20,394,871 2018 13,980,610 5,914,835 2,588,989 648,643 22,821 362,196 22,334,674 2019 14,740,670 6,126,449 2,609,820 614,058 21,310 390,562 24,502,869 2020 16,360,607 5,753,805 2,836,124 850,000 35,829 367,376 26,203,741 2021 17,210,607 6,653,905 3,044,834 850,000 32,180 338,449 28,103,216 2022 17,020,160 7,443,450 3,252,012 1,013,688 50,723 340,497 29,120,530 2023 18,421,172 7,467,848 3,383,163 516,655 44,757 341,405 30,175,000 2024 19,339,061 6,799,187 3,502,709 566,617 53,934 360,676 30,622,184 Source: Town Audited Financial Statements Town of Danville Governmental Activities Tax Revenues By Source Last Ten Fiscal Years (Accrual Basis of Accounting) 130 DRAF T 10.30. 2 0 2 4 Fiscal Year Less: Total Taxable Total Ended Tax Exempt Assessed Direct June 30 Secured Unsecured Secured Unsecured Property Value Rate 2015 10,526,929,712$ 44,289,615$ 2,298,728$ 45,995,923$ 169,288,561$ 10,450,225,417$ 0.07752% 2016 11,231,575,805 49,320,732 3,732,903 42,680,915 170,375,283 11,156,935,072 0.07758% 2017 11,904,105,603 47,645,411 3,290,428 43,296,151 172,930,520 11,825,407,073 0.07763% 2018 12,497,304,292 48,065,757 3,371,837 45,354,774 176,396,870 12,417,699,790 0.07767% 2019 13,131,043,886 53,546,262 5,685,542 48,122,854 184,522,193 13,053,876,351 0.07769% 2020 13,815,833,911 53,545,615 5,301,255 49,668,729 176,668,847 13,747,680,663 0.07772% 2021 15,100,093,985 50,900,862 5,470,622 51,204,460 188,744,738 15,018,925,191 0.07774% 2022 16,250,530,439 63,082,569 5,281,835 48,291,089 190,505,017 16,176,680,915 0.07775% 2023 17,203,527,256 64,829,758 5,293,380 49,385,188 177,631,946 17,145,403,636 0.07777% 2024 18,001,816,440 70,758,118 5,923,057 48,191,698 201,385,802 17,925,303,511 0.07780% Note: In 1978 the voters of the State of California passed Proposition 13 which limited basic property taxes to a total maximum rate of 1% based upon the assessed value of the property being taxed. Each year the assessed value of property may be increased by an "inflation factor" (limited to a maximum increase of 2%). With few exceptions, property is only reassessed at the time that it is sold to a new owner. At those times, the new assessed value is the purchase price. The estimated market value of taxable property is not available. Source: County of Contra Costa Town of Danville Assessed Value Last Ten Fiscal Years (Modified Accrual Basis of Accounting) Assessed Value Real Property Personal Property 131 DRAF T 10.30. 2 0 2 4 Total San Ramon Bay Area Direct & Fiscal County Valley Unified Rapid Transit Overlapping Year Danville Wide 1 School District (BART) Miscellaneous Rate 2015 0.07752% 1.00% 0.0651% 0.0045% 0.0121% 0.07752% 2016 0.07758%1.00% 0.0624% 0.0026% 0.0125%0.07758% 2017 0.07763%1.00% 0.0652% 0.0080% 0.0152%0.07763% 2018 0.07767%1.00% 0.0552% 0.0084% 0.0135%0.07767% 2019 0.07769%1.00% 0.0750% 0.0070% 0.0131%0.07769% 2020 0.07720%1.00% 0.0750% 0.1200% 0.0282%0.07720% 2021 0.07774%1.00% 0.0750% 0.1390% 0.0175%0.07774% 2022 0.07767%1.00% 0.0750% 0.0060% 0.0196%0.07767% 2023 0.07777%1.00% 0.0657% 0.0140% 0.0220%0.07767% 2024 0.00000%1.00% 0.0544% 0.0134% 0.0203%0.07780% Notes: 1 Countywide rate of 1% is levied with the proceeds distributed to all taxing agencies according to formulas specified by State legislature. 2 Individual agencies' rates are for payments of voter approved indebtedness. Source: County of Contra Costa Town of Danville Direct and Overlapping Property Tax Rates Last Ten Fiscal Years (Rate Expressed in Percentage) 132 DRAF T 10.30. 2 0 2 4 Fiscal Total Tax Year Levied and Delinquent Ended Collected for Percentage Tax Collected Percentage June 30 Fiscal Year of Levy Collections Amount of Levy 2015 14,171,661$ 100% n/a 14,171,661$ 100% 2016 14,736,156 100% n/a 14,736,156 100% 2017 14,430,722 100% n/a 14,430,722 100% 2018 14,629,254 100% n/a 14,629,254 100% 2019 15,928,730 100% n/a 15,928,730 100% 2020 16,678,857 100% n/a 16,678,857 100% 2021 17,330,169 100% n/a 17,330,169 100% 2022 18,204,149 100% n/a 18,204,149 100% 2023 19,616,343 100% n/a 19,616,343 100% 2024 20,531,904 100% n/a 20,531,904 100% Notes: 1. The data in this table includes basic and supplemental city property taxes, Redevelopment Agency tax increments, ERAF refunds, property tax in-lieu of motor vehicle license fees and the sales tax triple flip. 2. Contra Costa County assesses, bills, collects and distributes property taxes to all taxing entities including the Town. Under a State law, known as the Teeter Plan, the County remits the entire amount levied to the Town. The County handles all delinquencies and retains all interest and penalties. Source: County of Contra Costa Last Ten Fiscal Years Collected Within the Fiscal Year of the Levy Total Collections To Date Property Tax Levies and Collections Town of Danville 133 DRAF T 10.30. 2 0 2 4 Taxable Percentage of Taxable Percentage of Assessed Total Taxable Assessed Total Taxable Employer Value Rank Assessed Value Value Rank Assessed Value MM Danville Apartments, LLC 103,142,308$ 1 0.60% Davidon Homes 55,570,169 2 0.32% Danville Livery & Mercantile 54,595,103 3 0.32% 41,808,358$ 1 0.38% Reg8 Tassajara Crossing, LLC 43,517,833 4 0.25% 36,724,712 2 0.33% Danville Park Apartments LLC 43,350,000 5 0.25% ROIC California, LLC 38,000,000 6 0.22% Costco Wholesale Corporation 31,569,281 7 0.18% 23,321,038 3 0.21% Rose Garden Associates Danville, LLC 30,050,955 8 0.17% 21,333,000 4 0.19% Carl A and Jan A Cox Trust 22,227,479 9 0.13% 115 TWN and County DR INVST LLC 20,808,000 10 0.12% KB Home South Bay, Inc.29,074,991 5 0.26% Alamo Group Iron Horse, LLC 19,981,000 6 0.18% Danville Park RE LLC 17,760,233 7 0.16% Rassier Properties Danville Medical Ctr.15,300,000 8 0.14% Montair Associates, LLC 14,974,907 9 0.14% JKDSQ, LLC 13,084,644 10 0.12% Totals 442,831,128$ 2.56% 233,362,883$ 2.12% Notes: The amounts shown above include assessed value data for both the Town and the Successor Agency. Because of the many ways a business or individual can hold title, the above list is an approximation of the top taxpayers within the Town of Danville. Source: HdL Companies Town of Danville Principal Property Taxpayers Current Year and Nine Fiscal Years Ago 2024 2015 134 DRAF T 10.30. 2 0 2 4 DEBT CAPACITY 135 DRAF T 10.30. 2 0 2 4 Certificate Total Percentage Fiscal of Subscription Primary of Personal Per Year Participation1 Liabilities2 Government Income Capita 2015 8,860,000$ -$ 8,860,000$ **202.79$ 2016 8,055,000 -8,055,000 **187.92 2017 7,635,000 -7,635,000 **178.12 2018 7,195,000 -7,195,000 **167.85 2019 6,735,000 -6,735,000 **148.77 2020 6,255,000 -6,255,000 **140.16 2021 5,755,000 -5,755,000 **131.08 2022 5,235,000 -5,235,000 **119.23 2023 4,690,000 145,949 4,835,949 **110.35 2024 4,110,000 74,094 4,184,094 **98.29 Notes: 1. COP is paid with property tax increment of the Property Tax Trust Fund. 2. Subscription liabilities came about from implementation of GASB 96 in 2023. ** Not available Town of Danville Ratios of Outstanding Debt by Type Last Ten Fiscal Years Governmental Activities 136 DRAF T 10.30. 2 0 2 4 General Tax Less: Amount Fiscal Obligation Allocation Available in Year Bonds Bonds Debt Service Fund Total (net) 2015 -$ -$ -$ -$ 2016 - - - - 2017 - - - - 2018 - - - - 2019 - - - - 2020 - - - - 2021 - - - - 2022 - - - - 2023 - - - - 2024 - - - - Note: The Town of Danville does not have any General Bonded debt. Town of Danville Ratios of General Bonded Debt Outstanding Outstanding General Bonded Debt Last Ten Fiscal Years 137 DRAF T 10.30. 2 0 2 4 This page intentionally left blank. 138 DRAF T 10.30. 2 0 2 4 2023-2024 Assessed Valuation:17,208,248,236$ Redevelopment Incremental Valuation 591,174,439$ Adjusted Assessed Valuation: Total Debt Town's Share of OVERLAPPING TAX AND ASSESSMENT DEBT:6/30/2024 % Applicable (1)Debt (6/30/2024) Bay Area Rapid Transit District 2,445,575,000$ 1.704% 41,672,598$ Contra Costa Community College District 618,770,000 6.435% 39,817,850 San Ramon Valley Unified School District 347,840,000 27.348% 95,127,283 East Bay Regional Park District 144,520,000 2.678% 3,870,246 SUBTOTAL OVERLAPPING TAX AND ASSESSMENT DEBT 180,487,977$ DIRECT AND OVERLAPPING GENERAL FUND DEBT: Contra Costa County General Fund Obligations 171,495,000$ 6.414% 10,999,689$ San Ramon Valley Unified School District General Fund Obligations 13,171,586 27.348% 3,602,165 San Ramon Valley Fire Protection District - COP 50,484,000 27.497% 13,881,585 Town of Danville subscription liability 74,094 100% 74,094 Town of Danville Certificates of Participation (COP) 4,110,000 100% 4,110,000 SUBTOTAL DIRECT AND OVERLAPPING GENERAL FUND DEBT 32,667,533$ Less: Contra Costa County obligations supported from revenue funds (2,727,545) TOTAL NET DIRECT AND OVERLAPPING GENERAL FUND DEBT 29,939,988$ OVERLAPPING TAX INCREMENT DEBT (Successor Agency) 1,470,000$ 100% 1,470,000 TOTAL DIRECT DEBT 4,184,094 TOTAL GROSS OVERLAPPING DEBT 210,441,416$ TOTAL NET OVERLAPPPING DEBT 207,713,871 GRAND TOTAL DIRECT AND OVERLAPPING DEBT (2) 214,625,510$ NET COMBINED TOTAL DEBT 211,897,965$ (1) (2) Ratios to 2023/2024 Assessed Valuation: Total Overlapping Tax and Assessment Debt 1.05% Total Direct Debt ($5,235,000)0.03% Gross Combined Total Debt 1.25% Net Combined Total Debt 1.23% Ratios to Redevelopment Successor Agency Incremental Valuation ($557,378,782): Total Overlapping Tax Increment Debt 0.25% Source: California Municipal Statistics, Inc. Note: This schedule presents fiscal capacity and debt for overlapping governments. It is intended to demonstrate the total property tax burden on the taxpayers within Danville and the total debt that their property taxes will be expected to pay. This schedule excludes tax and revenue anticipation notes, revenue bonds, mortgage revenue bonds, tax allocation bonds, obligations, lease and subscription obligations. Town of Danville Direct and Overlapping Governmental Activities Debt Current Year The percentage of overlapping debt applicable to the Town is estimated using taxable assessed property value. Applicable percentages were estimated by determining the portion of the overlapping district's assessed value that is within the boundaries of the Town divided by the district's total taxable assessed value. Excludes tax and revenue anticipation notes, enterprise revenue, mortgage revenue, and non-bonded lease and subscription obligations. 139 DRAF T 10.30. 2 0 2 4 2015 2016 2017 2018 2019 Debt Limit 391,883,453$ 418,385,065$ 443,452,765$ 465,663,742$ 489,520,363$ Total net debt applicable to limit - - - - - Legal debt margin 391,883,453$ 418,385,065$ 443,452,765$ 465,663,742$ 489,520,363$ Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% Note: The Government Code of the State of California provides for a legal debt limit of 3.75% of gross assessed valuation. Source: County of Contra Costa Town of Danville Legal Debt Margin Information Last Ten Fiscal Years Fiscal Year 140 DRAF T 10.30. 2 0 2 4 2020 2021 2022 2023 2024 Debt Limit 515,538,025$ 563,209,695$ 606,625,534$ 642,952,636$ 672,198,882$ Total net debt applicable to limit - - - - - Legal debt margin 515,538,025$ 515,538,025$ 606,625,534$ 642,952,636$ 672,198,882$ Total net debt applicable to the limit as a percentage of debt limit 0.00% 0.00% 0.00% 0.00% 0.00% Assessed Value 17,925,303,511$ Add back: exempt real property 201,385,802 Total assessed value 18,126,689,313$ Debt Limit (3.75% of assessed value) 672,198,882$ Total net debt applicable to limit - Legal Debt Margin 672,198,882$ Note: The Government Code of the State of California provides for a legal debt limit of 3.75% of gross assessed valuation. Source: County of Contra Costa Legal Debt Margin Calculation for Fiscal Year 2024 Town of Danville Legal Debt Margin Information (Continued) Last Ten Fiscal Years Fiscal Year 141 DRAF T 10.30. 2 0 2 4 Fiscal Tax Tax Year Increment Principal Interest Coverage Increment Principal Interest Coverage 2015 -$ 395,000$ 404,973$ - -$ 105,000$ 255,739$ - 2016 - 410,000 388,256 - - 120,000 246,570 - 2017 - 420,000 370,819 - - 130,000 236,383 - 2018 - 440,000 352,316 - - 140,000 225,380 - 2019 - 460,000 332,456 - - 155,000 213,359 - 2020 - 480,000 311,356 - - 165,000 200,289 - 2021 - 500,000 289,051 - - 180,000 186,261 - 2022 - 520,000 265,176 - - 195,000 170,638 - 2023 - 545,000 243,866 - - 210,000 153,425 - 2024 - 580,000 215,364 - - 230,000 134,725 - Source: Town Audited Financial Statements Debt Service Debt Service Town of Danville Pledged-Revenue Coverage Last Ten Fiscal Years Certificates of Participation Taxable Revenue Bond 142 DRAF T 10.30. 2 0 2 4 DEMOGRAPHIC AND ECONOMIC INFORMATION 143 DRAF T 10.30. 2 0 2 4 Median Persons per Per Personal Public Household Household Capita Income School Unemployment Year Population 1 Income Unit 2 Income (in thousands)Enrollment 3 Rate 4 2015 43,691 140,809$ 2.79 **** 31,954 4.1% 2016 42,865 **2.97 **** 32,255 3.9% 2017 43,355 ******** 32,425 3.5% 2018 44,396 ******** 32,504 2.9% 2019 45,270 ******** 32,138 2.7% 2020 44,626 ******** 31,911 10.0% 2021 43,906 ******** 30,726 4.7% 2022 43,352 ******** 30,068 6.5% 2023 42,823 ******** 29,680 4.2% 2024 42,567 ******** 29,235 4.1% Note: Per Capita Income and Personal Income is for County of Contra Costa since reliable Town-specific data is not available. Sources: 1. California State Department of Finance 2. U.S. Department of Commerce Census, Bureau American Community Surveys 3. California Department of Education (Schools within the San Ramon Valley Unified School District) 4. California State Employment Development Department **Figures not available Town of Danville Demographic and Economic Statistics Last Ten Fiscal Years 144 DRAF T 10.30. 2 0 2 4 Number of % of Number of % of Employer Employees 1 Rank Top 10 Employees 1 Rank Top 10 Costco 435 1 47.1%437 1 43.9% Trader Joe's 86 2 9.3%77 4 7.7% Marshalls of Danville 77 3 8.3% Lunardi's Market 60 4 6.5%82 3 8.2% Brookdale Danville Diablo Road 58 5 6.3%50 7 5.0% Safeway 48 6 5.2%43 10 4.3% Face Reality Acne Clinic 47 7 5.1% Walgreens 39 8 4.2% Piatti Restaurant 37 9 4.0%43 9 4.3% Smart and Final 36 10 3.9% Common Interest Management Services 106 2 10.6% Sunrise Assisted Living of Danville 58 5 5.8% Danville Nursing & Rehabilitation Center 51 6 5.1% Lucky 49 8 4.9% Total Employees: 923 996 Note: 1. Data complied from Town of Danville Business License Division. Town of Danville Principal Employers in the Town of Danville Current Year and Previous Year 2024 2023 145 DRAF T 10.30. 2 0 2 4 This page intentionally left blank. 146 DRAF T 10.30. 2 0 2 4 OPERATING INFORMATION 147 DRAF T 10.30. 2 0 2 4 Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Legislative 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Administration 6.75 6.50 8.25 8.25 7.75 7.75 6.75 6.75 6.25 7.00 Legal 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 1.00 Police Services* 36.75 37.75 37.75 37.75 37.75 37.75 37.75 37.75 37.75 38.75 Development Services 25.50 29.75 27.00 27.00 26.50 25.50 23.50 23.50 23.50 23.50 Transportation Services 4.25 3.25 3.75 3.25 3.00 3.00 3.00 3.00 3.00 3.00 Community Services Maintenance 29.00 31.00 31.00 31.00 31.00 31.00 31.00 31.00 31.00 31.75 Recreation, Arts & Community Services 37.75 37.75 38.25 38.25 42.00 42.00 42.00 42.00 42.00 41.00 Finance 5.25 5.25 5.25 5.25 5.00 5.00 5.00 5.00 5.00 4.00 Support Services 4.50 4.50 4.50 4.50 4.50 4.50 4.50 4.50 6.00 6.00 Community Events 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 0.50 Human Resources 2.00 2.50 2.50 2.50 2.25 2.25 2.00 2.00 2.00 2.00 Total 119.75 154.25 160.75 160.75 160.25 161.25 158.00 158.00 159.00 159.50 Source: Adopted Town Budgets Town of Danville Full-Time Equivalent Town Government Employees by Function Last Ten Fiscal Years Fiscal Year 148 DRAF T 10.30. 2 0 2 4 Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Police:1 Arrests 618 515 500 447 391 281 165 229 250 328 Traffic violations 5,345 3,875 2,605 3,702 2,786 2,482 1,177 959 3,093 3,684 Parking violations 1,619 1,625 1,774 1,367 1,593 1,346 482 868 1,380 1,086 Public works: Street resurfacing (miles) 14.2 24 15.2 5.9 5.5 10.23 0 6.2 6.4 16.3 Pot holes repaired 111 181 249 84 309 149 163 84 547 109 Parks and recreation: Course registration 17,176 18,147 20,352 19,174 18,146 13,593 4,592 12,912 15,763 20,539 Facility rentals/permits 2 816 716 804 786 638 538 8 97 172 540 Picnic rentals 460 241 413 406 354 205 130 545 590 530 Note: 1. Police Statistics are reported end of calendar year 2. Facility rentals were previously tracked by the number of bookings, which may have included multiple bookings on one rental permit. As a result of the implementation of Active Network, a new registration software, rentals are now tracked only by rental permit. Source: Various Town departments Town of Danville Operating Indicators by Function Last Ten Fiscal Years Fiscal Year 149 DRAF T 10.30. 2 0 2 4 Function 2015 2016 2017 2018 2019 2020 2021 2022 2023 2024 Police: Stations 1111111111 Patrol units 13 12 13 13 13 13 13 13 13 13 Public works: Street (miles) 144.6 144.6 144.6 144.6 157.89 158.15 158.15 158.28 158.49 158.49 Street lights 1,417 1,417 1,417 1,158 1,158 1,158 1,158 1,158 1,158 1,182 Signalized intersections 52 51 52 54 54 54 54 54 54 54 Parks and recreation: Parks acreage 312.5 312.5 312.5 312.5 312.5 312.5 312.5 312.5 312.5 312.5 Parks 5555555555 Swimming pools 0000000000 Tennis courts 10 10 10 10 10 10 10 9 9 9 Pickleball courts 0000002222 Community centers 3333333333 Source: Various Town departments Town of Danville Capital Asset Statistics by Function Last Ten Fiscal Years Fiscal Year 150 DRAF T 10.30. 2 0 2 4 REPORT ON INTERNAL CONTROL OVER FINANCIAL REPORTING AND ON COMPLIANCE AND OTHER MATTERS BASED ON AN AUDIT OF FINANCIAL STATEMENTS PERFORMED IN ACCORDANCE WITH GOVERNMENT AUDITING STANDARDS Independent Auditors’ Report To the Mayor and Members of the Town Council of the Town of Danville Danville, California We have audited, in accordance with the 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, the financial statements of the governmental activities, each major fund, and the aggregate remaining fund information of the Town of Danville, California (the “Town”), as of and for the year ended June 30, 2024, and the related notes to the basic financial statements, which collectively comprise the Town’s basic financial statements, and have issued our report thereon dated November 19, 2024. Report on Internal Control Over Financial Reporting In planning and performing our audit of the financial statements, we considered the Town’s internal control over financial reporting (internal control) as a basis for designing audit procedures that are appropriate in the circumstances for the purpose of expressing our opinions on the financial statements, but not for the purpose of expressing an opinion on the effectiveness of the Town’s internal control. Accordingly, we do not express an opinion on the effectiveness of the Town’s internal control. A deficiency in internal control exists when the design or operation of a control does not allow management or employees, in the normal course of performing their assigned functions, to prevent, or detect and correct, misstatements, on a timely basis. A material weakness is a deficiency, or a combination of deficiencies, in internal control, such that there is a reasonable possibility that a material misstatement of the entity’s financial statements will not be prevented, or detected and corrected, on a timely basis. A significant deficiency is a deficiency, or a combination of deficiencies, in internal control that is less severe than a material weakness, yet important enough to merit attention by those charged with governance. Our consideration of internal control was for the limited purpose described in the first paragraph of this section and was not designed to identify all deficiencies in internal control that might be material weaknesses or, significant deficiencies. Given these limitations, during our audit we did not identify any deficiencies in internal control that we consider to be material weaknesses. However, material weaknesses or significant deficiencies may exist that were not identified. DRAF T 10.30. 2 0 2 4 To the Mayor and Members of the Town Council of the Town of Danville Danville, California Page 2 152 Report on Compliance and Other Matters As part of obtaining reasonable assurance about whether the Town’s financial statements are free from material misstatement, we performed tests of its compliance with certain provisions of laws, regulations, contracts, and grant agreements, noncompliance with which could have a direct and material effect on the financial statements. However, providing an opinion on compliance with those provisions was not an objective of our audit, and accordingly, we do not express such an opinion. The results of our tests disclosed no instances of noncompliance or other matters that are required to be reported under Government Auditing Standards. Purpose of this Report The purpose of this report is solely to describe the scope of our testing of internal control and compliance and the results of that testing, and not to provide an opinion on the effectiveness of the Town’s internal control or on compliance. This report is an integral part of an audit performed in accordance with Government Auditing Standards in considering the entity’s internal control and compliance. Accordingly, this communication is not suitable for any other purpose. Walnut Creek, California November 19, 2024 DRAF T 10.30. 2 0 2 4